New licence regime cripples local traders

RYDER GABATHUSE
Staff Writer | Friday July 25, 2008 00:00

 

Speaking to Mmegi BusinessWeek in an interview, Boatile pointed out there is every likelihood that 'a good number of Batswana will find themselves out of business'.

He was particularly worried about the hiking of fees of a good number of licences, which kept a significant number of locals in business. Most importantly, the business consultant, who operates from the Monarch light industrial site, was worried about the lack of consultation with the stakeholders over the new changes.

'About four businesspeople from my stable have been thrown out of business because of the hiked fees for renewal of licences. They contend that the hike from P20 to P1, 500 is too vast to be tolerated,' says Boatile.

He says because of the government's non-committal to communicate with the stakeholders he has been in touch with business people who regularly consult him for advice about the changes.

'Already a lot of people are out of business. Those who traded in supplying chemicals, foodstuffs, books, clothing and others are no longer trading because of this new trade regime,' he lamented.

Boatile explains that the government has abolished the agent and importer/export licences, which used to cost about P20. The requirements for agent licence were an office only, whilst for importer/exporter licence was a wholesale.

The consultant says the scraping of the old licences saw the introduction of a new licence called the Distributor, which carried a fee of about P1, 500.

'The new licensing regime is likely to promote corruption because as traders fail to renew their licences, some of them would go straight to the companies that produce stationery and scan and produce the licences with the aid of some people,' says Boatile.

He also condemned the P100 fees provision for the application forms, which he says is 'torturing entrepreneurs'.

As if this experience were not enough, Boatile says the licensing committees in the districts 'subject applicants to untold torture' as they bombard applicants with unnecessary questions and there are no standard requirements set for them (applicants).

He says it is the national licensing authority in Gaborone, which tends to deal with applicants professionally. Unfortunately, this body, Boatile says, is understaffed.

Former Francistown mayor and Monarch South councillor Ignatius Moswaane, who is also a local trader, says the current arrangement does not protect the retailer because under it, wholesalers sell to everybody. He says ideally the wholesalers should sell to retailers who in turn should sell to individual customers.

'This open trade policy has crippled shops from Monarch, Donga and just everywhere in town. Majority of the shops were forced to close because of this open policy.'

Some Batswana traders generally, fear that the new Act was brought into play to impoverish them.

A local trader who has recently renewed his trade licence (distributor) and preferred to speak on condition of anonymity, pointed out that the 'new regime is going to frustrate a lot of traders and only a few are going to make it'.

He accused the government of wanting to raise revenue whilst disempowering many Batswana through its indirect taxes.

'It seems the hiking of fees was done mainly to frustrate the local traders. If you are renting premises and you are required to pay such a high fee for obtaining the trading license, then this will be too much,' lamented a local trader.

On the other hand, the new trade regime has scrapped a trading licence called Specialised Dealer licence, which was mostly utilised by foreigners like the Chinese.

Whilst the Chinese are known to be selling goods of poor quality often called 'Fong-kongs' such goods are popular on the market, as many people buy them. There is every likelihood that some of the Chinese traders could find themselves packing and leaving for their homes because the trade laws do not give them an opportunity to continue trading.

Mmegi BusinessWeek has however been informed that the Chinese whose trade licences are due for renewal, would be catered for under the Miscellaneous Trade for a period of two years 'to allow them to sort their things out' before they pack their stuff and possibly leave for home or other potential trade areas, Gaborone City Council (GCC) principal commercial affairs officer, Eric Makgatlhe, has said.

Makgatlhe said yesterday that one of the things his office is doing is to educate Batswana on the new trade regime. 'In particular, the trade fees came as a shocker to a lot of people because the government took over 30 years to revise them. The current regime is basically meant to close the gap that existed over the years,' explains Makgatlhe.

He concurred that there are traders who 'cried loudly about what they called high fees fearing that they will be thrown out of business'

'One of the problems we continue to encounter is that the Ministry of Trade has allocated some people licences to operate from their residential places even in places that have not been converted to commercial ones.'

Asked whether the Ministry of Trade and Industry was aware of the concerns of the traders, Acting Permanent Secretary Motlhware James Masisi said: ' After making the laws, we keep our ears to the ground and get feedback from the people and try to see what can be done.'

Masisi said some of the laws are generally meant to protect consumers and the good name of the country. 'Recently, the government recalled some toothpaste from the shops because it was proved to be harmful to the people.

These are some of the considerations taken when distributors in the trade equation are demanded to state how they will be able to source some of their goods,' he said.