SIYABULELA MAKUNGA | Authority takes on apartheid past’s economic imbalances

While more needs to be done, SA is on track in creating an inclusive and deconcentrated economy.

 Twenty twenty-four marks 25 years since the establishment of the country’s Competition Authorities (Competition Commission, Competition Tribunal and Competition Appeal Court).

Their establishment is an economic transformation milestone on SA’s path to address the economic imbalances of the apartheid regime.

That aspirational transformative intent was endorsed by the Constitutional Court in the  Mediclinic case in 2022 when the court stated: “Colonialism, neo-colonialism and apartheid orchestrated an institutionalised ownership and control of all things of consequence in our national economy along racial lines. Unsurprisingly, the commanding heights of the corporate sector are seemingly the exclusive terrain of our white compatriots.

"It is this indisputable reality and our shared commitment to ensuring that South Africa really does get to belong to all who live in it, that the constitutional imperatives, laid out in the Preamble, to improve the quality of life of all citizens and free the potential of each are realised, that the likes of the Competition Act had to and got to see the light of day.”

Notable strides have been made in opening markets and ensuring greater economic participation of historically disadvantaged persons (HDPs).

This includes a stake in ownership for 240 workers worth R58bn; R4bn committed to supplier development funds; R150bn in equity transactions involving historically disadvantaged investors; and procurement conditions worth R17bn.

These are the figures that Competition commissioner Doris Tshepe mentioned during a panel discussion at the recent Black Business Annual Summit.

These figures demonstrate a slow but impressive progression towards a deconcentrated and inclusive economy, but more needs to be done.

What needs to be done?

Firstly, we need bolder economic policies that harness inclusive and meaningful participation of HDPs in the mainstream economy. Post-apartheid, there was a major overhaul of policies and laws that sought to address this inequality and the Competition Act is no different.

At the time, the Competition Act was largely modelled on global best practices and recognised that the type of inherited economy meant its purpose was to provide regulatory oversight that would enable all South Africans to have an equal opportunity to participate in the economy.

Further, it sought to provide greater inclusivity with a broader objective of creating opportunities for black-owned businesses. Some success around inclusive growth followed but a research study by the Competition Commission and its subsequent Economy Concentration Report Tracker, published in 2021, identified that across 178 industries the market remained stubbornly untransformed.

When reflecting on policy and the policy journey of competition law, it became clear that a law informed by global practice was ill-equipped to address the concerns of SA’s inherited economy. We needed to be bolder in our economic policies. Therefore, the amendments to the Competition Act in 2019 sought to bring about more ambitious change.

What is the Competition Commission’s policy approach?

The commission is continuing its policy journey and executing its constitutional mandate by placing a strong emphasis on public interest as an active intervention to bring about an inclusive economy. Our approach to the promotion of worker ownership is broadly set out in the final public interest guidelines published on  March 20 2024.

Initially, the public interest provisions received push-back, particularly around employment and worker share ownership. The aforementioned figures illustrate that promoting worker share ownership has, however, been deployed as an effective tool for inclusive economic growth.

In addition, stipulating that mergers should not be used as a reason to retrench workers has saved jobs in these difficult economic times. We encourage merger parties to consider creative solutions to how they can be a part of creating a more inclusive and growing economy that supports worker share ownership and prioritises saving jobs.  

What else can be done?

A collaborative effort and more partnerships between regulators, departments, business and the private sector are required. The commission values the continued support and collaboration with the private and public sector, as we cannot stand alone in our shared objectives of creating an inclusive and competitive economic landscape.

The spirit of ubuntu, where we coordinate better and don’t always rely on self-regulation,  is vital. These collective efforts ensure inclusivity happens in all sectors of the economy.

What to look forward to?

The commission has embarked on a drive to engage stakeholders in different sectors ranging from the automotive and milk producer industries to educational institutions and the media industry.

This stakeholder engagement is one small, albeit important step to facilitating a holistic partnership that will foster robust discussions and efforts towards an inclusive and growing economy for all.

* Makunga is Competition Commission of SA spokesperson