South Africa’s debate about red tape is too often reduced to forms, licences and queues at government offices. But for a small business, red tape is ultimately measured in something far simpler: time and money lost because a system does not work.
The unfolding crisis at the Durban Gateway Terminal provides a stark illustration. The South African Association of Freight Forwarders has warned that operational, equipment, yard and co-ordination constraints at the terminal have severely disrupted the movement of cargo, with consequences spreading through the national supply chain. The matter has become serious enough to be escalated to the Presidency.
For economists and policymakers this may appear to be a logistics problem. For a small business owner it is a cash-flow problem. A container sitting at a terminal may contain components needed by a small manufacturer to complete an order. It may hold imported stock already paid for by a retailer. It may contain machinery financed by an entrepreneur who must continue servicing that debt whether the equipment moves or not.
For exporters the consequences can be equally severe: missed vessels, disrupted contracts, unhappy customers and lost access to markets. And then comes the additional sting — storage, demurrage, detention and other charges that may continue accumulating while the business waits.
The issue escalated further recently when road freight transporters lodged a Competition Commission complaint concerning storage charges, congestion and other practices at the terminal. Among the allegations are claims that businesses are being exposed to escalating charges while containers cannot be moved because of circumstances beyond their control.
The allegations will have to be properly considered through the appropriate processes. But they raise a much bigger policy question: why should a business pay for institutional inefficiency it did not cause? That question goes directly to South Africa’s red tape problem.
Red tape has an economic price
The government frequently speaks about improving the ease of doing business, but we cannot measure that simply by counting how many forms have been removed or how quickly a company can be registered.
The real test is whether it is becoming easier, faster and cheaper to operate a business in South Africa. If we simplify one licence but an entrepreneur loses thousands of rand because a container cannot move, we have not meaningfully improved the business environment.
If we digitise an application but businesses still spend days trying to resolve problems between government agencies, municipalities, ports and other institutions, we have digitised bureaucracy rather than eliminated it.
And if businesses are charged because institutional systems have failed, we have in effect transferred the cost of inefficiency from the institution responsible to the entrepreneur least able to absorb it. For a large corporation, such costs hurt margins. For a small business, they can threaten survival.
Small businesses cannot be the economy’s shock absorber. This is particularly important because small businesses operate with limited working capital. Every rand unnecessarily tied up in storage charges, delayed stock, unpaid invoices or administrative processes is a rand that cannot be used to pay salaries, purchase inventory, service debt or expand the business.
South Africa already has a powerful example of this problem: the government’s persistent failure to pay some suppliers within 30 days. National Treasury data reported by the Public Service Commission (PSC) showed that, at the end of the third quarter of 2025/26, national and provincial departments had 90,856 invoices older than 30 days outstanding, worth R15.5bn.
The PSC correctly warned that delayed payments compromise SMME cash flow, forcing some businesses to borrow, retrench employees or even close. There is a common principle connecting unpaid government invoices and the Durban port crisis.
Small businesses should not be forced to finance institutional failure. When the government takes 90 days to pay a supplier, the entrepreneur finances the government. When goods cannot be moved because of failures outside the entrepreneur’s control while charges continue accumulating, the entrepreneur finances inefficiency in the logistics system.
The mechanism may be different, but the economic consequence is remarkably similar: working capital is extracted from productive businesses. Logistics reform is small business reform. We therefore need a broader understanding of small business policy. Access to finance matters. Entrepreneurship programmes matter. Incubation and market access matter.
But none of these interventions can compensate for an operating environment that unnecessarily increases the cost of doing business. Reliable electricity is small business policy. Functional municipalities are small business policy. Efficient border posts are small business policy. Government paying suppliers within 30 days is small business policy. And efficient ports are small business policy.
South Africa is geographically distant from many of its major export markets. We cannot change our geography, but we can change how efficiently goods move through our economy. Every unnecessary hour at a port, border post, municipal office or government department ultimately affects our competitiveness.
That is why cutting red tape must become an economy-wide discipline rather than a programme belonging to one department.
Start measuring the cost of delay
The government should begin measuring red tape differently. Instead of reporting mainly how many engagements, workshops or programmes have taken place, we should measure the outcomes businesses actually experience.
How many days does an entrepreneur wait for an approval? How long does a supplier wait to be paid? How long does cargo wait unnecessarily? How many duplicated processes have been removed? And, critically, how much money are businesses losing because government or government-linked systems are not working efficiently?
Turnaround times should become measurable performance indicators across government and relevant state institutions. Where a system failure prevents a business from complying with a deadline, there should also be clear mechanisms to prevent that business from being automatically penalised for circumstances demonstrably outside its control. That principle should apply whether the issue is a licence, an invoice, a permit or the movement of a container.
The cost of doing nothing
South Africa urgently needs economic growth and employment. Small businesses are expected to play a central role in delivering both. But there is a contradiction at the heart of our economic policy when government asks entrepreneurs to create jobs while allowing institutional inefficiencies to consume their working capital.
An entrepreneur should be spending Monday morning finding customers, developing products, negotiating contracts and employing people, not chasing an unpaid invoice, fighting an administrative system or trying to understand why a container cannot move while additional charges accumulate.
That is why the Durban Gateway Terminal crisis should not be treated simply as an isolated port problem. It is a warning about the wider cost of inefficiency in the South African economy.
Cutting red tape means removing unnecessary obstacles between an entrepreneur and an economic opportunity. Sometimes that obstacle is a form. Sometimes it is a licence. Sometimes it is an invoice that the government has failed to pay within 30 days. And sometimes it is a container that simply cannot move.
The principle is the same: we must make South Africa easier, faster and cheaper to do business in, because small businesses cannot continue being the shock absorbers for systems that fail around them.
Sithole is deputy minister of small business development.
Business Day