Competition policy can open up SA’s economy, says Cyril Ramaphosa
Black people ‘found there was very little space to play so they bought up shares in existing companies and became appendages’
Competition policy is a great instrument to "undo the wrongs of the past and make our country a better place", Deputy President Cyril Ramaphosa said on Friday at the annual Competition Conference in Johannesburg.
In the context of growing urgency for "radical economic transformation", competition policy — which outlaws collusion among firms and the abuse of dominance by large players — is increasingly seen by government as a tool to enable new, black entrants into the economy.
SA’s economy is among the most highly concentrated in the world, with 70% of economic sectors dominated by a few big players, a recent study by the Competition Commission found.
"Anticompetitive behaviour prevents the economy from realising its potential. Competition policy must effect fundamental economic and social change; it has a pivotal role to play in addressing the injustices of the past," he said.
In the South African context, market dominance related not only to specific sectors but also to the economy as whole, as black people were deliberately prevented from participating in their own economy.
"Inclusivity is now top of mind and competition policy needs to address this. It needs to be proactive and needs to look at market dominance," he said.
Ramaphosa said that after 1994, when black people were finally able to participate in the economy, they found that the market had been carved up by a minority.
"They found there was very little space to play so they bought up shares in existing companies and became appendages. Competition policy should open that space so that new companies can be created," he said.
Ramaphosa’s comments followed those of Economic Development Minister Ebrahim Patel on Thursday, who said the structure of the economy was diminishing both growth and social inclusivity.
"Markets plagued by over-concentration and untransformed ownership will need to be identified, investigated and appropriate measures applied to remedy these market features," said Patel.