The Minister of Trade, Industry and Competition, Mr Parks Tau, says his department has made it its priority to de-concentrate the South African economy through the national Industrial Policy.
He was speaking at the ceremony to receive the second report of the Competition Commission focused on Concentration at the headquarters of the Department of Trade, Industry and Competition in Pretoria.
Tau said South African’s evolving Industrial Policy anchored on Diversification, Decarbonisation, and Digitalisation is designed to open new sectors, create new entry points, and shift the balance of economic power.
The study upon which the report is based, drew data from 450 000 tax-registered firms across 228 sub-sectors of our economy and focused on the period from 2017 to 2021.
It revealed that concentration in South Africa’s economy remains high with around one-third to one-half of the 228 sub-sectors highly or moderately concentrated.
The report shows that most highly concentrated sub-sectors are in manufacturing, mining, energy, and transport. Notably, since 2017, the share of highly concentrated sub-sectors has declined by 5 percentage points, with ten sub-sectors shifting from “high” to “moderate” concentration.
The Competition Commission noted that high and persistent concentration can undermine growth, job creation and competitiveness, also indicating that the legacy of apartheid-era market structures is one of the key contributing factors.
In response to the revelations, Tau labelled the report as much needed diagnosis and a call to action as it aligns directly with the Medium-Term Development Plan’s objective of de-concentrating the South African economy.
“The report is correct in emphasising that supporting MSMEs is not sufficient on its own. We must simultaneously dismantle the barriers that prevent them from growing. That means confronting private sector market access barriers — buyer power, exclusive dealing, predatory pricing. And it means turning a hard eye on government-created barriers too: licensing regimes, permit systems, operating standards that have, too often, been weaponised to protect incumbents rather than serve the public interest,”
He added that there is an urgent need to conclude the framework for scaling township and rural enterprises through avenues such as the Transformation Fund so that small and medium enterprises are not permanent supplicants to dominant firms, but genuine competitors and market-shapers in their own right.
Minister Parks Tau addressing officials at the handover of the second Concentration Report of the Competition Commission hosted at the headquarters of the Department of Trade, Industry and Competition (the dtic) in Pretoria.
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