Govt plays hardball with SA retailers
Isaac Pinielo | Friday August 26, 2016 15:06
In a statement released this week, PrimeTime said about 30% of the targeted tenants, who are South African retailers, have not been able to secure exemptions to trade in businesses reserved for locals. According to the Trade Act of 2003 businesses such as auctioneers, car wash, cleaning services, curio shop, fresh produce, general clothing, general dealer and hairdresser are exclusively reserved for citizens.
However, many SA retailers have up to now been able to sell these goods after securing exemptions from the Minister of Trade and Industry. Although PrimeTime did not identify the affected South African retailers, an official at the Ministry of Investment, Trade and Industry told BusinessWeek that five household names that are in the clothing retail business have been affected.
According to PrimeTime, 30% of the 7,500 square-metre retail shopping centres have been let to South African national retailers who have not yet been able to obtain trading licences as of Monday (August 22, 2016).
“At the current time the company does not know if and/or when the required licences will be granted,” read the statement.
The mall is scheduled to be opened on September 22, 2016.
PrimeTime noted it has been actively working with the retailers in order to obtain the required licences over the last few months, which has included liaising with the government at the highest levels. The company said if the situation persists it would negatively impact on the forecast profitability of the centre, which can only be reliably quantified once the centre is trading.
Last month, the permanent secretary in the Ministry of Investment, Trade and Industry, Peggy Serame told BusinessWeek that PrimeTime had written to the Ministry requesting for exemption of some non-citizen retail stores that are currently operating reserved business activities and allow them to expand their operations in the same line of trade.
“The company (PrimeTime) was responded to in clear terms that government reserved certain trades of business activities for citizens or companies wholly owned by citizens as yet another initiative on citizen economic empowerment,” she said.
She also noted that as government has the obligation to drive this initiative, a decision has been taken to suspend the granting of exemptions to non-citizen companies to expand and/or open new retail stores in the reserved business space.
She said such companies would be required to demonstrate meaningful participation or involvement of citizens in their businesses as a way of citizen economic empowerment before they could be granted the exemption.
When contacted for comment, PrimeTime managing director, Sandy Kelly said with “the sensitivity of the matter, we would prefer not to say more than what the BSE (Botswana Stock Exchange) and press release says”.
Earlier on, Kelly was quoted as saying that the construction of the mall is on programme and that it was due to open subject to resolution of the licensing issues with the Ministry.
“We are hopeful that an amicable solution can be reached. Since we are in consultation with the ministry, we do not wish to make undue ‘waves’ at this juncture, other than to say that we are hopeful that an amicable outcome can be obtained, which would be for the benefit of all, communities, tenants and investors,” he said.