The "License to Fail"? How the New Business Bill Could Stifle South Africa's Economy

 

The Department of Small Business Development has gazetted the draft Business Licensing Bill, a piece of legislation that proposes a radical overhaul of how commerce is regulated in South Africa. At its core, the Bill seeks to repeal the Business Act of 1991 and introduce a mandatory national registry for every business operating in the country—from the largest corporate retailer to the smallest street hawker.

While the Department argues this will "professionalize" the sector and clamp down on illicit trade, economic analysts and civil society groups are raising alarm bells. Here is why the Bill is being viewed as a dangerous step backward and how it specifically threatens the livelihoods of informal traders.

 Why the Bill is Bad for Business

The primary criticism of the Bill is that it attempts to solve economic stagnation with more red tape. In an environment where South Africa desperately needs to remove barriers to entry, this legislation erects new ones.

• Bureaucratic Overreach: The Bill grants municipal officials and police sweeping powers to inspect businesses and seize goods without a warrant. This "warrantless search" provision is arguably unconstitutional and opens the door to abuse and corruption.
• Administrative Nightmare: It forces every single business to apply for a license valid for only five years. Critics argue that municipalities, many of which are already collapsing under dysfunction, simply do not have the capacity to process millions of new license applications efficiently.
• Vagueness and Uncertainty: The criteria for granting licenses are broad and include "preferential" conditions that are ill-defined. This creates uncertainty for investors and gives officials too much discretion, which is a breeding ground for bribery.

 

How Informal Traders Will Lose

The informal economy—the lifeline for millions of unemployed South Africans—stands to suffer the most under this new regime.

• Criminalization of Livelihoods: Currently, many informal traders operate legally without needing complex licenses. This Bill effectively criminalizes anyone trading without a permit. A grandmother selling vegetables to survive could theoretically face fines, jail time, or have her stock confiscated simply for not being on a national database.
• Barriers to Entry: The cost and complexity of compliance (filling out forms, paying fees, renewing licenses) favor established, formal businesses with legal teams. Informal traders often lack the time, literacy, or funds to navigate this bureaucracy, forcing them to close down or operate illegally underground.
• Harassment and confiscation: By empowering inspectors to seize goods from "unlicensed" traders, the Bill legitimizes the harassment often faced by street vendors. For a trader living hand-to-mouth, the confiscation of stock is not just a setback; it is an economic death sentence.
• Xenophobic Undertones: The Bill places strict limitations on foreign nationals, requiring valid visas for business licenses.      In the informal sector, where many refugees and asylum seekers trade to survive, this is seen as a targeted attempt to purge foreign-owned spaza shops, potentially fueling social tension rather than solving economic issues.

 Conclusion

By treating every small hustle like a major corporation requiring state sanction, the draft Business Licensing Bill risks strangling the very entrepreneurial spirit South Africa needs to survive. Instead of support and development, it offers regulation and punishment.

 

Note: This article is an opinion piece based on the draft version of the Bill. Readers are encouraged to review the official Government Gazette for full legal details.

Is the AI bubble about to burst? What to watch for as the markets wobble

 

Phonlamai Photo/Shutterstock

The global investment frenzy around AI has seen companies valued at trillions of dollars and eye-watering projections of how it will boost economic productivity.

But in recent weeks the mood has begun to shift. Investors and CEOs are now openly questioning whether the enormous costs of building and running AI systems can really be justified by future revenues.

Google’s CEO, Sundar Pichai, has spoken of “irrationality” in AI’s growth, while others have said some projects are proving to be more complex and expensive than expected.

Meanwhile, global stock markets have declined, with tech shares taking a particular hit, and the value of cryptocurrencies has dipped as investors appear increasingly nervous.

So how should we view the health of the AI sector?

Well, bubbles in technology are not new. There have been great rises and great falls in the dot-com world, and surges in popularity for certain tech platforms (during COVID for example) which have then flattened out.

Each of these technological shifts was real, but they became bubbles when excitement about their potential ran far ahead of companies’ ability to turn popularity into lasting profits.

The surge in AI enthusiasm has a similar feel to it. Today’s systems are genuinely impressive, and it’s easy to imagine them generating significant economic value. The bigger challenge comes with how much of that value companies can actually keep hold of.

Investors are assuming rapid and widespread AI adoption along with high-margin revenue. Yet the business models needed to deliver that outcome are still uncertain and often very expensive to operate.

This creates a familiar gap between what the technology could do in theory, and what firms can profitably deliver in practice. Previous booms show how quickly things wobble when those ideas don’t work out as planned.

AI may well reshape entire sectors, but if the dazzling potential doesn’t translate quickly into steady, profitable demand, the excitement can slip away surprisingly fast.

Fit to burst?

Investment bubbles rarely deflate on their own. They are usually popped by outside forces, which often involve the US Federal Reserve (the US’s central bank) making moves to slow the economy by raising interest rates or limiting the supply of money, or a wider economic downturn suddenly draining confidence.

For much of the 20th century, these were the classic triggers that ended long stretches of rising markets.

But financial markets today are larger, more complex, and less tightly tied to any single lever such as interest rates. The current AI boom has unfolded despite the US keeping rates at their highest level in decades, suggesting that external pressures alone may not be enough to halt it.

Instead, this cycle is more likely to end from within. A disappointment at one of the big AI players – such as weaker than expected earnings at Nvidia or Intel – could puncture the sense that growth is guaranteed.

Alternatively, a mismatch between chip supply and demand could lead to falling prices. Or investors’ expectations could quickly shift if progress in training ever larger models begins to slow, or if new AI models offer only modest improvements.

Overall then, perhaps the most plausible end to this bubble is not a traditional external shock, but a realisation that the underlying economics are no longer keeping up with the hype, prompting a sharp revaluation across related stocks.

Artificial maturity

If the bubble did burst, the most visible shift would be a sharp correction in the valuations of chipmakers and the large cloud companies driving the current boom.

These firms have been priced as if AI demand will rise almost without limit. So any sign that the market is smaller or slower than expected would hit financial markets hard.

This kind of correction wouldn’t mean AI disappears, but it would almost certainly push the industry into a more cautious, less speculative phase.

When the chips are down. Blue Andy/Shutterstock

The deepest consequence would be on investment. Goldman Sachs estimates that global spending on AI-related infrastructure could reach US$4 trillion by 2030. In 2025 alone, Microsoft, Amazon, Meta and Google’s owner Alphabet have poured almost US$350 billion into data centres, hardware and model development. If confidence faltered, much of this planned expansion could be scaled back or delayed.

That would ripple through the wider economy, slowing construction, dampening demand for specialised equipment, and dragging on growth at a time when inflation remains high.

But a bursting AI bubble would not erase the technology’s long-term importance. Instead, it would force a shift away from the “build it now, profits will follow” mindset which is driving much of the current exuberance.

Companies would focus more on practical uses that genuinely save money or raise productivity, rather than speculative bets on transformative breakthroughs. The sector would mature. But it would probably do so only after a painful period of adjustment for investors, suppliers and governments who have tied their growth expectations to an uninterrupted AI boom.

Alex Dryden, PhD Candidate in Economics, SOAS, University of London

This article is republished from The Conversation under a Creative Commons license. 

G20 and the civil society elite: spectacle instead of meaningful action

 

Behind the talk of fighting inequality at the group of 20 most powerful economies in the world, the G20, lies a carefully staged show – one that manages dissent rather than redistributes power.

Inequality is at the top of the G20 agenda this year, with South Africa holding the presidency. President Cyril Ramaphosa has said that if the G20 wants to tackle major global economic challenges, it must act fast to reduce inequality.

Well-funded non-governmental organisations like Oxfam have praised this stance, saying that the G20 is:

giving a voice to people crushed by inequality. They are showing that another world is possible: ruled not by and for billionaires, but by and for the rest of us instead.

But such organisations don’t directly represent grassroots constituencies. In commenting on inequality, they risk making blanket statements which do not reflect the local reality and politics of ordinary people on the ground.

South Africa is still the most unequal country in the world. My research on grassroots democracy in townships and informal settlements shows that most residents have been silenced in the name of democracy. The ANC government’s market-based policies turned basic needs like water and electricity into commodities and reinforced the private property system inherited from apartheid.

Economic inequality has deepened in the post-apartheid era, since 1994. As a result, one of South Africa’s union federations objected to the South African government even talking about inequality because of the government’s role in creating it.

As a sociologist who researches protest and civic responses to inequality, I have found that participation, when stripped of confrontation, becomes a technology of legitimacy. In other words, including grassroots communities in discussions about governance, public services, and other social and economic issues becomes a polite consultation.

This justifies existing power structures instead of challenging them. People may appear to have a voice, but the outcomes are already decided.

I argue that the G20’s inequality agenda is simply a way of governing through spectacle or political theatre – a show in which leaders can appear to respond to serious problems faced by the working class while protecting the system that benefits elites.

My own research points not only to the exclusive nature of forums similar to the G20, but also suggests that these forums can be genuinely transformed through disruptive acts or protests led by democratic grassroots organisations with a socialist vision.

The G20’s claims of partnership with civil society

The G20 was formed in the aftermath of the 2008 financial crisis when the collapse of major banks and housing markets exposed deep cracks in the global economy.

The G20 was created to restore confidence and show that leaders were listening to ordinary people. It presented itself as a forum of inclusive global governance, where the world’s major economies come together to “listen” to civil society and address crises collaboratively.

As part of the G20’s process of consulting different sectors of society ahead of its annual summits, elites (such as heads of state and finance ministers) hold joint press conferences with non-profit organisations and dialogues with civil society.

Working groups of activists and elites are formed and consensus statements are issued. But there’s no handover of power or action taken to dismantle capitalism which keeps poverty and inequality in place. In other words, minor but important reforms can potentially be made to the benefit of the working class such as minimum wage laws and universal health care – which we should support – but the underlying process of development – based on a capitalist mode of production – relies on extraction of resources, destruction of the environment and exploitation of those with the least.

How the G20 uses public participation as a performance

My book, The Participation Paradox, offers a lens through which the G20’s current performance of “participation” can be viewed.

In the book, I argue that governments and international institutions now routinely invite communities into participatory forums. But these gestures often depoliticise struggle. In other words, they appear to be a space where the powerful include working class and impoverished communities, allowing them to have a say. However, these forums often reproduce top-down power. They do this by setting the agenda, controlling who gets to speak, and limiting what can actually change.

In this way, participation becomes less about empowering ordinary people to take part in important decisions about public spending, governance, service delivery and other pressing issues and more about legitimating decisions already made.

This is done through a performative “listening” designed to stabilise, not subvert, the capitalist order. In other words, it is mostly for show. The G20 reaffirms the system of capitalism which reproduces inequality and puts profit before people.

In this sense, the process works as a spectacle – a public performance where those in power put on a show of listening and action to make things look democratic, even though very little actually changes.

I’ve also done research in Thembelihle, an informal settlement in Johannesburg, South Africa. I found there that public consultations gave the appearance that government was including communities in decision making. However, there were no changes to structural inequalities – the system of capitalism and private property. These were left undisturbed. What appeared democratic was, in fact, a way to manage people’s discontent.

Where opposition emerges: the Civil 20

The Civil 20 (C20), an official civil society engagement group for the G20, seems to offer an alternative. It is made up of representatives of over 3,000 organisations worldwide. Its objective is to hold the G20 to account. But does it have any real power?

The C20 2025 Declaration states:

The path ahead must be grounded in participation, redistribution, and environmental justice … Let this be the year civil society was not simply heard, but heeded.

Being heard, however, is not the same as wielding authority. As the G20 summit unfolds, we are likely to witness the C20 being used as window-dressing.

My research has found that real action is more than the facade of participation and spectacle. It requires a different vision, a socialist project which puts people’s needs before the greed of “bosses”.

Until millions in townships, favelas, informal settlements, rural areas, schools and workplaces democratically take our collective wealth into their own hands, participation – like “empowerment” and “transformation,” as well as the calls for “decolonisation” – will remain catchphrases that serve elite interests.

Luke Sinwell, Professor of Sociology, University of Johannesburg

This article is republished from The Conversation under a Creative Commons license. 

A New Initiative to Fight Child Trafficking in Makause

 

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Protecting Our Future: A New Initiative to Fight Child Trafficking in Makause

In the shadows of our most vulnerable communities, a silent crisis threatens our children.

In informal settlements like Makause, poverty, unemployment, and a lack of resources create a perfect storm for exploitation. Despite national laws designed to protect them, too many children face daily risks of neglect, abuse, and trafficking.

At CLR Foundation, we believe that every child deserves to grow up free from fear. That is why we are launching a comprehensive, human rights-based initiative designed to not only protect children but to empower them to be part of the solution.

Why This Matters Now

The gap between policy and reality is where our children are falling through. While South Africa has frameworks to combat trafficking, implementation at the grassroots level is often weak.

Children in disadvantaged communities often lack strong social support systems. Without awareness and active protection mechanisms, they become easy targets for recruiters and exploiters. Our goal is to close that gap by combining our experience in digital education and youth empowerment with urgent humanitarian action.

Our Mission

The Objective is clear: To prevent and combat the trafficking and exploitation of children through community-based awareness, child-centered support services, and advocacy for stronger protection mechanisms.

We aren't just coming in to "save" children; we are building a system where the community and the children themselves are active participants in their own safety.

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How We Are Making a Difference

Our strategy is built on four key pillars:

1. Awareness through Storytelling and Education

Prevention starts with knowledge. We are rolling out workshops in schools and community centers, but we are going beyond standard lectures.

• Creative Outreach: We are using theatre, storytelling, and digital media to make prevention messages stick.

• Community Wide: From families to local authorities, everyone needs to know the signs of trafficking.

2. Giving Children a Voice (The "Safety Clubs")

We believe children are not just victims; they are powerful agents of change.

• Children’s Safety Clubs: We are establishing peer-led clubs where children lead the conversation on safety.

• Creative Expression: Through art and digital media, we are providing platforms for children to elevate their voices and contribute to solutions.

3. Building a Safety Net

When a child is identified as vulnerable or a victim, the response must be immediate and professional.

• Training the Protectors: We are training teachers, health workers, police, and community leaders to identify the subtle signs of trafficking.

• Referral Networks: We are creating a seamless link between victims and the legal, medical, and social workers who can help them.

4. Healing and Resilience

Rescue is just the first step. Long-term recovery requires support.

• Psychosocial Support: Providing counseling and safe spaces for rehabilitation.

• Digital Learning Hubs: By offering after-school digital education, we provide safe alternatives to the streets and skills for a brighter future.

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What Success Looks Like

We are committed to tangible results. Through this project, we aim to achieve:

• Empowered Youth: At least 200 children actively participating in prevention and protection activities.

• Stronger Defenders: Improved capacity for over 100 local actors, including police, social workers, and teachers.

• Systemic Change: A functional referral mechanism and strengthened advocacy for child protection laws at the municipal level.

Who We Are Protecting

Our primary focus is on at-risk children and survivors of trafficking (ages 6–18) and their families within the Makause settlement. However, the ripple effect will benefit the entire community, equipping teachers, law enforcement, and local leaders with the tools they need to defend children’s rights.

Join Us in Defending Rights

The fight against child trafficking cannot be won in isolation. It requires a community that is alert, educated, and brave. By strengthening the capacity of local actors and amplifying the voices of the children themselves, CLR Foundation is committed to making Makause a safer place for the next generation.

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The CLR FOUNDATION is making a difference.  Support our work, visit our website. CLR FOUNDATION