This was announced by South African President Cyril Ramaphosa at the Black Industrialists and Exporters Conference.
Government will be setting a target for the Competition Commission to undertake market inquiries in more strategic sectors of the economy over the next few years to address high levels of economic concentration by major companies and low participation by small- to medium-sized enterprises, President Cyril Ramaphosa has said.
“We need to open up the economy and make it more inclusive. This means that we need to address features of the market structure that inhibit the participation of black industrialists in the economy,”
he said at the Black Industrialists and Exporters Conference, in Sandton, on March 20.
Ramaphosa said that the International Monetary Fund and the World Bank both agreed that one of the key problems with the South African economy was the high level of concentration, ownership, control and market dominance by large companies.
“If you look at our own economy, you will find that, if you go around various cities of our country, you'll find the same firms dominating business all around the country. And they are few, they’re white-owned, and they have enormous market dominance. This is precisely what we now need to change,”
he said.
The South African president also addressed the problem of difficult access to finance for black entrepreneurs. Under the R200-billion Covid-19 loan guarantee scheme for SMEs, which was to be guaranteed by the government, only R20-billion had been allocated, Ramaphosa said.
“We found that the [banks] were setting onerous conditions, almost impossible conditions that black businesses could not attain. Those onerous conditions must be reformed. Many of them must be dropped.”
He blamed the problem on the financial institutions responsible for allocating the funds.
“Our economy has been highly financialised. Financial institutions have a lot of money. They hold the money, and they don't deploy that money to productive initiatives or productive assets,”
Ramaphosa complained.
He said government would need to relook at how it can incentivise or even compel financial institutions to support small- to medium-sized black-owned businesses.
The President also emphasised the need to bolster manufacturing and beneficiation in South Africa, noting that, for too long, South Africa has exported raw materials only to import manufactured products made from those materials. “We must stop exporting rocks, dust, and soil. We must now export finished products,” Ramaphosa said.
To facilitate this, he said government would set a target for the number of black industrialists who will need to be supported and assisted through the black exporters network to get into export markets over the next five years.
He explained that these targets would guide the work of economic sector regulators, development finance institutions, and government departments.
Source: Engineering News
