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Red Tape Reduction Roll-out the dti, CoGTA & SALGA. Contents. Foundation and current status of RTR within the country National Roll-out of LRTR objectives overview Symptoms of Red Tape Rationale for Red Tape Reduction at local government

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  • Foundation and current status of RTR within the country
  • National Roll-out of LRTR objectives overview
  • Symptoms of Red Tape
  • Rationale for Red Tape Reduction at local government
  • Variables/indicators for Red Tape Reduction assessment
  • Approaching Red Tape Reduction from different perspectives
  • Red Tape Reduction Programme Cycle
  • Broad steps for developing Red Tape Reduction Plan
  • Positive attributes of Reducing Red Tape from one case study
  • RTR linkages between National, Provincial and Local Government
the 10 year strategic approach 2004 2014

Strategic Pillars for the SMME Strategy

Strategic Pillar 1:

Strategic Pillar 2:

Strategic Pillar 3:

Creating demand for small enterprise products and services

Reduce small enterprise regulatory constraints

Increase Supply for financial and

non-financial support services

  • Collaborative approaches;
  • Streamline resources from the public sector and crowd-in private sector resources
  • Public sector procurement strategy as a lever for increased demand
  • BEE codes of good practice as a lever increased demand

Establish a regulatory impact assessment framework and monitoring mechanism

foundation and current status on red tape reduction
Foundation and current status on Red Tape Reduction
  • Comprehensive reviews conducted within government to assess the regulatory environment as per Cabinet directive since 2005
  • Different departs mandated to conduct regulatory assessments impacting SMMEs - taxation, labour, tourism, ( the dti and dplg: focus on municipalities)
  • Training manual cutting red tape, Improving local business environment, pilot on improving the regulatory environment (2006 – current). Regulatory review reiterated by Cabinet in 2013.
  • The vision for 2030 regarding SMME development as outlined on NDP highlights the need to have a simplified regulatory environment and better coordination of SMME policies and programmes
  • How do we effectively contribute towards this vision? creating a conducive environment for SMMEs by ensuring continuous assessment of regulatory and institutional environment within the different sectors (access business opportunities)
  • Partnership between the dti, cogta and salga guidelines for reducing municipal RTR - 12 municipalities within the country based in 6 provinces.

Access to Business Opportunities by SMMEs

Improved Regulatory Reform


Effective utilisation of the guidelines


New local municipalities buy-in

Coordination of the Roll-out Process (clustering)

Processes Methodology Tools Sessions


Encourage benchmarking and networking

Initiate Roll-out in new Municipalities

Support Provincial Red Tape Reduction Initiatives

Stakeholder mobilisation and awareness creation

Solicit Partnerships with the Private Sector

Highlight success stories

Assess Action Plans Variables (12 Piloted)

Provide Support & Address Challenges



objectives of the national roll out

Objectives of the national roll-out

Enhance best practice and lessons learned on Municipal Red Tape Reduction

LED to define itself as an economic actor within the local economy (provincial and local govt. policies, regulations and strategies)

Target specific sectors for investment and economic growth

Encourage local procurement

Availability of services and infrastructure for economic development

Simplify regulation and by-laws to stimulate economic development

Non-financial Regulations (Town Planning, Business Licensing, Informal trading) vs. Financial Regulations (Property Rates, Supply Chain Management, Debt and Credit Control)

Sustain capacity and implementation of Local Red Tape Reduction Processes

Encourage Public Private Partnership initiatives that prioritise SMME development

Relationships between business and supporting institutions can affect stimulation of the local economy

The intensity of the dialogue quality, depth, sustainability

Impact of municipal regulations on SMMEs: 2006

objectives of the national roll out1

Objectives of the national roll-out

Improve the Local Business Environment via Red Tape Reduction

Many concerns within LBE result in constraints to growth of SMMEs (regulatory systems, improving govt. services, effective management of informal sector)

Improvement of LBE to incorporate within the RTR Programme i.e. local business climate/context, business retention and expansion

Initiate the institutionalisation of Red Tape Reduction Practices at local government level

a. Long-term sustainability depends on guidelines adoption, RTR incorporated within performance of institutions and eventual institutionalisation

Current programme initiated RTR at local govt. level (local municipalities) ultimate goal conduct RTR within all spheres including enterprise development agencies utilising multi-disciplinary approach

symptoms of red tape cont
Symptoms of Red tape cont.…

1. Why are we as government continuously reducing Red Tape?

1.1 Besides reducing duplication, long queues, endless paperwork, lengthy procedures

1.2 Red Tape hampers performance, causing inefficiencies and ineffectiveness at organisational level ultimately leading to losses within the economy

1.3 Reduce the cost of doing business and improve service delivery

2. Govt. developed policies, laws and regulations

2.1 Encourage open markets, innovation and competitive economy

2.2 Some local business environments discourage investors (domestic & international)

2.3 Unfavorable regulatory environment: high costs and risks of conducting business in certain areas

benefits to reducing red tape
Benefits to Reducing Red Tape
  • Local Government:
        • Improve access to and use of services
        • Strengthen financial position and available resources for service delivery: increase municipal revenue, reduce cost of delivering services strengthen economy by retaining and/or attracting new investments
        • Improve governance procedures and address low or declining levels of trust to support stronger partnerships with private sector
  • SMMEs:
        • Save time, compliance costs and ability to stay in business and grow due to improved cash flow, efficiency, competitiveness, and sustainability
rationale for red tape reduction at local government level
Rationale for Red Tape Reduction at local government level
  • Red Tape evident within three spheres of government and some private sector space: increases with growth and complexity/specialization
  • It is the responsibility of each sphere of govt. however municipalities lead in specific jurisdictions improving LBE maximize economic opportunities
  • SMMEs interface constantly with local government for the provision of services
  • Encourage investors (local & international) by limiting high costs and risks of doing business local govt. and exacerbate favorable regulatory environment encourage innovation, growth & sustainability of SMMEs
  • Long-term: Provision of SMME services at local govt. level
variables indicators for red tape reduction assessment
Variables/indicators for Red Tape Reduction Assessment
  • Lengthy and inefficient supply chain management processes, (which affects the 30-day payment system to SMMEs);
  • Poor enforcement of Municipal Informal Trading by-law results in trading outside demarcated trading areas, unfair competition with existing businesses, food health problems, contributes towards crime which negatively impacts on CBD businesses;
  • Infrastructure maintenance and bulk infrastructure backlog costs when new developments are proposed and internal capacity and processes weak and inability to spend the capital budget;
  • Poor communication by the local municipalities of relevant business information to businesses;
  • Lack of knowledge and difficulty in accessing of small business funding available and the need for support in utilising funding effectively;
  • Limited awareness of municipal tender information and too few qualified local service providers access tenders;
  • Lack of approved municipal investment and marketing plan;
  • Land not being accessible for development;
variables indicators for red tape reduction assessment cont
Variables/indicators for Red Tape Reduction Assessment cont…
  • Challenges with the Construction Industry Development Board rating system requiring a level 7-8 accreditation where local providers can only reach level 3-4

10. Limited Intergovernmental relations in planning, EIAs and rezoning including old provincial planning legislation

11. Delegation of powers – affects timeous authorisation of SMME payments

12. Marginalisation of LED in the municipal structure

13. Recruitment of inappropriate personnel – deployment in strategic positions

approaching red tape reduction from different perspectives
Approaching Red Tape Reduction from different perspectives
  • Degree of regulation: unhealthy competition, health hazards and environmental destruction
  • Regulation that hamper the effective development of SMMEs, inappropriate or unduly restrictive regulatory conditions constrain inception, operation and growth
  • Addressing Red Tape to reduce costs related to compliance (time and money) non-compliance (fines, harassment) and barriers created by procurement procedures
  • Addressing Red Tape to improve the use of services and service delivery
  • Multi-disciplinary and no “One size fits all”. Local context, interaction within three spheres and Local PPPs.
red tape reduction programme cycle
Red Tape Reduction Programme Cycle

Sustainability & Positive Economic Outputs

Understanding Local Context

4. Evaluation Phase

Establishing mandate

Public-Private Partnerships

Celebrate Success

1. Scoping Phase

Preparing People

Measures to sustain the Process

3. Institutionalisation Phase

Setting up Processes

Consultation and Implementation

Action Research & Mobilisation

Focus Workshops, additional Research

Red Tape issue analysis and selection of Champions

2. Assessment & Implementation Phase


Benefits of Red Tape Reduction for Municipalities E.g. Steve Tshwete

  • Building plans are approved within app. 10 days (from 3 months) – if all information is correct and not paralleled by rezoning
  • Rezoning time down to 45 days (from 6 month) – if no objections – due to downward delegation of decision making power
  • Information to the public was improved to provide clarity on procedures, avoiding incorrect applications and managing expectations
  • Staff employment to avoid backlogs

Locality, sectors, different levels of growth


Pro. agencies

Prov. depts.




Nat. agencies


Nat. depts.


Fin. & non-fin


Private sector

rtr national provincial and local task teams

RTR National, Provincial and Local Task Teams

1. National RTR Task Team

Representatives: the dti, CoGTA & SALGA

Create an enabling environment for SMMEs, concern regarding performance of some local municipalities, recognition that low capacity municipalities face serious economic challenges, ensure implementation of guidelines providing practical, hands-on support to municipalities

Best Practice: addressing regulatory & compliance processes by establishing mechanisms to reduce barriers affecting SMMEs (i.e. national policy implications as identified at prov. & local govt.)

Solicit participation of relevant national govt. departments

Support Public-Private Partnerships

Sustainability & initiate institutionalisation

2. Provincial & Local RTR Task Team

Representative: Economic Dev., CoGTA, SALGA, Municipalities, Enterprise Dev. Agencies

Red Tape Reduction Plan: SMME strategy, IDP, Programmes

Assessment of regulations affecting SMMEs within LBE/ provide context

Solicit involvement of private sector

Scope of work/sectors

Monitoring and evaluation



stayed the same


More difficult



SBP 2014: Legislation, market, performance of economy