President Cyril Ramaphosa seeks much-accelerated investment and wishes to create a conducive environment with increased opportunities for investment. Such opportunities multiply when new goods and services, new modes of production or new forms of business organisation replace existing ones.

Investment related to this "creative destruction" requires open, competitive markets. Policies that promote competition are therefore critical to the investment drive and the recent review and revision of competition policy would appear to be a welcome development. Regrettably, the new Competition Amendment Bill, which seeks to amend competition law in fundamental ways, may worsen competitive outcomes and inhibit investment.

The South African competition policy regime counts among the most effective internationally, because it is data-driven and subject to scrutiny. The bill weakens this focus. If competition authorities investigate a merger or potentially anticompetitive behaviour, they must defend their case in the Competition Tribunal or other courts. Defendants also have the opportunity to explain their behaviour. This review process is essential to effective competition policy.

Evidence-based review limits the influence of ideology. The new bill envisages that competition authorities would be able to launch market inquiries and impose changes to firm structures or compel behaviour changes, without having to prove their case. Competition policy not guided by evidence could weaken dynamism and investment or prevent accelerated investment.

Even if one were to argue that competition in South African markets is limited, it seems legislators do not appreciate that competition policy alone cannot achieve more competition.

The data-driven scrutiny inherent to the competition policy regime is compatible with the broader aim of dealing with SA’s unhappy past. Competition law allows for "public interest" criteria, including the promotion of black-owned businesses, to guide a merger judgment. The bill introduces a politically appointed panel that may override or influence the merger decisions of the competition authorities on the basis of vague criteria. This leaves the door open for special-interest groups to prevent mergers that would increase competition and attract investment.

Insufficient review preceded the tabling of the bill. Policy overhaul should commence with an assessment of whether existing policy achieves its ends. In a weak attempt to do so, legislators cite a single in-house study, in which they argue that the economy remains highly concentrated and that mergers contribute to this. The data for this study is neither publicly available, nor has it been scrutinised, while older research does not support a firm conclusion that concentration levels are increasing in the economy.

Economists are sceptical of studies that purport to cover an entire economy, given the complexity and differences of various sectors. Even if concentration levels were rising, economists internationally are neither in agreement that this implies weaker competition, nor that such rising levels signal ineffective merger control.

Even if one were to argue that competition in South African markets is limited, it seems legislators do not appreciate that competition policy alone cannot achieve more competition. It is the coherence of the policy framework that ensures economic dynamism: one cannot ignore the competitive effects of ill-advised mining, agricultural, tele-communications, financial and other sectoral policies. One of the key premises of competition policy internationally is that its primary aim is not the engineering of more competition, but the prevention of competitive abuses.

The latter focus indirectly serves to increase dynamism and long-term investment. Competition authorities have successfully prosecuted collusion in a number of markets, in which increased competition is already benefiting consumers and businesses. A policy focus aimed at preventing competitive abuse is also not outdated. Competition policy internationally is remarkably resilient in dealing with new forms of business or firm behaviour. Some changes in the bill arguably reflect developments in economics, even if some, such as the new excessive pricing provisions, are controversial.

Yet it appears that legislators believe that more can be achieved with competition policy. But even a more activist competition policy must surely be codifiable and subject to proper scrutiny. It is not clear that the bill meets these conditions. These changes suggest it will impede rivalry and ultimately constrain accelerated investment.

• Boshoff is co-director of the Centre for Competition Law and Economics at Stellenbosch University.