South Africa’s Trade and Competition Minister Patel to Exit Cabinet After Election

South Africa’s Trade and Competition Minister Patel to Exit Cabinet After Election
Photo: Gallo Images 28.05.2024 969

Ebrahim Patel has headed the ministry since 2019 and has consistently promoted the idea of using antitrust regulation to solve social problems.

South Africa’s trade, industry and competition minister Ebrahim Patel said on Friday he will retire from cabinet after the May 29 national election, the latest longstanding economics figure from the ruling African National Congress to step down from government.

Patel’s department oversees a number of regulatory and financial development agencies, including the competition commission which would have a say in any potential new bid by BHP Group BHP.AX for Anglo American AAL.L.

Last week, Anglo gave BHP additional time to present a binding offer, after rejecting three takeover proposals which it said undervalued the company and would be difficult to execute. The BHP-Anglo deal would be the biggest in the mining industry in years. 

“It has been a great honour to serve my country as a member of cabinet for 15 years and three terms of office,” Patel said in a statement. “I have advised the President that I will conclude my service in cabinet at the end of this third term.”

President Cyril Ramaphosa appointed Patel as trade minister in 2019. Prior to this, he was the Minister of Economic Development.

Patel recognised the importance of competition law and policy in a modern government and a modern economy. As State Capture swept through the corridors of State power, the competition authorities “maintained their institutional integrity — carefully defended by Patel, who saw them as one of the few viable instruments for State intervention in the market,” says Richard Calland is a visiting adjunct professor at the Wits School of Governance and Director of the University of Cambridge Institute for Sustainability Leadership (CISL)’s Africa Programme.

The Industrial Policy and Strategy Review that was published by Patel earlier this month proudly cites the ‘wins’ of Patel’s more strategic use of competition law and policy. South Africa’s competition law is distinctive because the “public interest” is a criterion that must be met when determining whether a merger should proceed, as well as more traditional considerations about market dominance and reduced consumer choice.

The paper describes the benefits of increased use of public interest commitments on mergers: 

 “Through a series of high-value interventions, [the Competition Commission] secured over R68-billion in investment pledges, R58-billion in equity participation for about 200,000 employees, R17-billion in local procurement commitments, and R4-billion in supplier development funds. These figures represent very significant wins for the public interest and promotion of structural change in South Africa’s economy.”

Back In 2017, at the annual competition commission conference Patel called to focus on the public interest consequences of mergers and acquisitions, specifically on employment, small business development, ownership by black South Africans and local industrial capability.

He noted that one of the challenges of competition policy is to address unemployment and develop a more inclusive economy.

“In 1994, at the start of the democratic era, the new incoming government identified high levels of economic concentration as a critical challenge. Today, some 23 years later, the public discussion has returned to this issue,” 

stressed Patel.

Sources: CNBC Africa, Daily Maverick

South Africa 

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