Government cannot expect township and rural businesses to create jobs while maintaining rules that make it harder for them to trade. Entrepreneurs need access to customers, competitive suppliers, and affordable places to do business. Yet the Competition Commission’s recent Rural and Township Economy Project Research Report shows how these businesses remain excluded from some of South Africa’s most valuable markets. The government should respond by simplifying its own rules and tackling the barriers that protect established firms from smaller competitors.

According to the Competition Commission’s research report, 53% of respondents in rural towns, 47% in large townships, and 39% in metro townships live in households that earn less than R3 500 a month. This means that small businesses are operating from an already precarious base.

The report also shows precisely where these businesses get stuck: procurement channels that favour big chains, and formal retail spaces such as malls that remain out of reach. Knowing the obstacle is only useful if it points to what can remove it. Five practical steps could change this picture, and the Democratic Alliance (DA), for whom I serve as an MP, is already implementing each where it governs or has committed to doing so in policy.

The first is working capital that is not a bank loan. A trader who can access reasonable finance can buy in bulk and negotiate like a chain does, instead of accepting whatever price a fragmented, informal supplier offers. The DA’s national economic policy commits to exactly this: microfinance partnerships modelled on schemes that have worked in Bangladesh to Kenya, and platforms that connect small businesses to alternative capital such as crowdfunding or JSE-style listing routes for small and medium enterprises (SMEs). Bringing these to scale would let township and rural traders build the buying power that currently keeps them locked out of competitive procurement.

The second is a real foothold in formal retail space. This means identifying new, functional trading spaces in high-foot-traffic zones, deliberately including middle- and higher-income areas where demand is strongest, not just the areas traders already occupy. These sites come paired with basic services on site, water, sanitation, lighting, and Wi-Fi, and simplified e-registration for trading permits. This is not theoretical: the DA-run City of Cape Town’s online trading-permit platform already shows what accessible, low-friction registration looks like in practice, and it is a model the DA is rolling out to other municipalities it governs.

The third is by-law enforcement that does not ruin livelihoods. Commit to fair and consistent enforcement, with the impounding of goods reserved for serious offences only, so that a trader who makes an administrative mistake is not wiped out overnight. This is a small administrative commitment with an outsized effect on whether informal businesses survive long enough to formalise.

The fourth is a single, simple front door for support. Small business owners spend too much time hunting across departments for the same basic information. Expand one-stop-shops nationally, paired with a practical business starter toolkit of checklists, templates, and step-by-step guidance. Where DA-run governments have already piloted investment-readiness toolkits for larger infrastructure projects, coordinated, single-point facilitation has genuinely sped things up. The same model can be built for a spaza shop owner registering a business for the first time.

The fifth is a competition watchdog with a well-resourced mandate. The Commission’s own report names exclusionary leasing arrangements, discriminatory supply terms, and procurement conditions that favour incumbents simply because they are incumbents. These are textbook abuses of market power. The Commission does its job best when it is focused squarely on identifying and mitigating them, rather than a mandate stretched thin across every socio-economic objective at once. A Commission with that properly resourced core mandate is best placed to finish the outstanding follow-up work from its 2019 Grocery Retail Market Inquiry, work that would open the retail floor space this report shows is currently closed off.

None of these five things is a moonshot. Each is either already working in a DA-run government or already committed to in DA policy, and each draws on models proven elsewhere in the world.

Together, they answer the question the Competition Commission’s report leaves open: not just why township and rural businesses are stuck, but what it actually takes to get them moving, and who is already doing the work. That is the standard I want every level of government to be held to, because the businesses this report is about have already shown they have the ambition. What they are still waiting for is the door.

Mlondi Mdluli is a Member of Parliament, and the Democratic Alliance spokesperson on small business development.