President Cyril Ramaphosa told a conference of black industrialists that the government wanted the Competition Commission to undertake market inquiries in more strategic sectors of the economy over the next few years “to address high levels of economic concentration by major companies and low participation by small- to medium-sized enterprises,” Engineering News reported.
The Competition Commission has in the past looked at market conditions in a number of industries, including healthcare, banking and retail. Its current investigations cover the steel, fresh produce and media and digital platforms sectors.
The recently announced inquiry into the poultry industry has drawn the ire of poultry producers. They see it as an attack on their business model in which large companies benefit from scale in order to produce affordable chicken for the populace.
Ramaphosa said the government needed to open up the economy and make it more inclusive.
“This means that we need to address features of the market structure that inhibit the participation of black industrialists in the economy,” he told the Black Industrialists and Exporters Conference in Johannesburg.
He said that the International Monetary Fund and the World Bank both agreed that one of the key problems with the South African economy was the high level of concentration, ownership, control and market dominance by large companies.
A small number of companies dominated business all around South Africa. “And they are few, they’re white-owned, and they have enormous market dominance. This is precisely what we now need to change,” he said.
Ramaphosa also addressed the concern that many black industrialist entrepreneurs at the conference voiced, that many experienced a lack of access to funding. “We must make funding available to black businesses, so that they can help and contribute to growing the economy, because the economy cannot grow without funding,” he said.
The government would need to relook at how it can “incentivise or even compel” financial institutions to support small- to medium-sized black-owned businesses.
“We must take the risk and finance businesses so that we can grow our economy. The whole economy in the end benefits from the growth and will benefit from the growth of black owned businesses,” Ramaphosa said.
The government would also work to unlock funds within the private sector through supplier development funds, local procurement commitments, and public interest conditions that are made when licences are issued, or regulatory approvals are obtained.
Image: President Cyril Ramaphosa delivers the keynote at the Black Industrialists and Exporters Conference in Johannesburg. [Photo: GCIS]
