More competition needed in SA’s economy, especially food, energy, NHI sectors

South Africa’s economy needs competitive markets and inclusive participation. Picture: Mark Stebnicki

South Africa’s economy needs competitive markets and inclusive participation. Picture: Mark Stebnicki

Published Oct 2, 2023


South Africa’s economy needs greater support of regulatory measures to tackle prevailing concentration challenges that shut out potential competitors, particularly Small, Medium, and Micro Enterprises (SMMEs).

Such regulations are required across the board, but the 17th Annual Competition Law, Economics, and Policy Conference highlighted the energy, national health insurance (NHI), and food sectors as requiring special focus.

Market concentration is not just a matter of economic policy, but a fundamental prerequisite for fostering innovation, ensuring fair competition, and safeguarding the interest of consumers and businesses alike, says Competition Commission (CCSA) deputy commissioner Hardin Ratshisusu.

For this reason, the Commission has an important role to play in shaping a fair and competitive economic landscape.

The conference, opened by Commissioner Doris Tshepe, emphasised the critical need for fostering competitive markets that benefit all participants and addressed the persistence of high concentration levels in the economy. Despite the diligent efforts of the Commission and the Competition Act, the high concentration levels within South Africa’s economy remain an ongoing challenge.

The primary objective of the conference was to engage stakeholders from diverse sectors, including business, government, labour, lawyers, and economists, to strategise methods for promoting competitive markets. Particular emphasis was placed on fostering participation, especially from SMMEs and firms controlled by historically disadvantaged persons (HDPs).

Food inflation was a key focus at the conference, specifically its impact on low-income consumers. Strategies to address rising inflation, and the adoption of a competition protocol by African governments to facilitate cross-border trade, while ensuring competitiveness, were issues discussed.

In her keynote address on day two of the conference, Competition Tribunal chairperson Mondo Mazwai delved into competition law and its crucial role in promoting inclusive markets and public interest in merger assessments. She cautioned that the journey towards fostering competitive and inclusive markets in South Africa may not yield immediate economic transformation or substantial SMME and HDP involvement, but said the persistent efforts of competition authorities, albeit gradual, play a vital role in shaping progress. By embracing a context-aware, transformative approach consistent with the Act's framework, Mondo says competition authorities can make meaningful contributions to South Africa's transformation objectives, one case at a time.

The energy and the national health insurance (NHI) sectors were also key discussions, with panellists discussing how the energy sector faces challenges related to the country’s ongoing energy crisis. They agreed that there was a need to foster inclusive growth within the sector encompassing equitable pricing considerations for renewable energy components such as inverters and solar panels – ultimately, there is the need to ensure competitive markets that benefit all South Africans.

In summary of the conference, Tshepe emphasises the importance of inclusive growth and highlights the tools at the Commission's disposal, including market inquiries, to address concentration levels and remove barriers to entry. She cites the ongoing market inquiry into the fresh produce market as an example of efforts to promote competitiveness and inclusivity in the economy.

“The Commission remains committed to its mission of creating competitive markets that work for the benefit of all stakeholders.”

IOL Business