Ramaphosa Pushes for Red Tape Reforms to Boost Small Businesses and Attract Investment

President Cyril Ramaphosa has called for sweeping reforms to cut bureaucratic red tape at municipal level, warning that administrative inefficiencies are stifling small businesses, discouraging investment, and limiting economic opportunities—especially in townships.

Addressing the National Local Economic Development (LED) Summit 2026 at the Birchwood Conference Centre, the President said improving the ease of doing business must become a central priority for local governments.

Red Tape Hindering Growth and Investment

Ramaphosa highlighted that excessive bureaucracy—particularly delays in approvals and licensing—is one of the biggest barriers to economic growth.

"Cutting red tape is crucial both to attract large-scale investments and also to enable informal traders and small township entrepreneurs to succeed," he said.

He noted that while some municipalities have made progress in streamlining processes such as zoning approvals, construction permits, and digital licensing systems, these remain isolated examples.

"I worry that these municipalities are the exception rather than the rule," the President said.

Licensing Backlogs Blocking Small Enterprises

A major concern raised was the backlog in issuing business licences, which is preventing micro and small enterprises from accessing government support and formalising their operations.

"There are backlogs in issuing business licences… This must change," Ramaphosa stressed.

He warned that such delays not only hinder entrepreneurship but also discourage both local and foreign investors from committing capital.

Call for Municipal-Led Reform

While acknowledging national policy efforts such as the Business Licensing Bill and the Red Tape Reduction Framework, the President made it clear that municipalities must take ownership of reform implementation.

"We call on local government to drive its own red tape reduction reforms," he said.

The President emphasized that municipalities are on the frontline of economic activity and must actively remove obstacles that prevent businesses from starting, expanding, and thriving.

Ease of Doing Business as a Competitive Advantage

Ramaphosa underscored that investment flows toward regions that offer a business-friendly environment.

"Investment will always gravitate towards municipalities that make it easy to do business," he said.

He urged municipalities to adopt clear systems, timelines, and accountability measures to ensure efficient service delivery to businesses.

Strengthening Public-Private Collaboration

The President also called for deeper engagement between local governments and the private sector, including business associations and local forums.

"We need continuous engagement so that we may understand their frustrations and address their concerns," he said.

He encouraged established companies to play a more active role by:

• Developing local suppliers

• Investing in skills development

• Opening up value chains to smaller enterprises

Unlocking Township and Informal Economy Potential

Special emphasis was placed on township economies and informal traders, who often face the greatest regulatory barriers despite being key drivers of employment and grassroots economic activity.

By simplifying processes and improving access to services, municipalities can unlock significant untapped potential in these sectors.

From Dialogue to Action

Ramaphosa urged stakeholders to ensure that the summit results in concrete outcomes with clear timelines and deliverables.

"We must leave this summit with a programme of action that binds us to clear deliverables and timelines," he said.

A Vision for an Inclusive Entrepreneurial Economy

Concluding his address, the President reaffirmed South Africa's strong entrepreneurial spirit and the need to create an enabling environment for it to flourish.

"South Africa is a country of entrepreneurs. Our task is to unleash their potential and build an inclusive economy that creates opportunities for all," he said.

The call for red tape reduction marks a critical step toward revitalising local economies, attracting investment, and empowering small businesses—key pillars for sustainable and inclusive growth.