Ramaphosa’s Competition Bill means more BEE and less competition – Sakeliga

Organisation says Act has ironic misunderstanding of monopoly and competition

Ramaphosa’s Competition Bill means more BEE and less competition

13 February 2019

By signing the Competition Amendment Act into law today, President Cyril Ramaphosa further expanded the pervasive influence of B-BBEE and government’s bureaucratic dictates over business. The President’s promise to improve on South Africa’s “ease of doing business” in his SONA will suffer greatly, the business organisation Sakeliga said.

“B-BBEE represents a significant drag on the South African economy. If the economy doesn’t grow and develop, South Africa and its inhabitants will be no better off – despite claims of transformation and inclusivity,” says Daniel du Plessis, Legal Analyst at Sakeliga.

Sakeliga points to the Act’s ironic misunderstanding of monopoly and competition: “Government’s idiosyncratic idea of competition is cause for concern – especially in the absence of any real pledges to break highly problematic state monopolies and regulation that hamper open markets and free competition,”

Sakeliga would have preferred, instead, for Government to allow freer rein to real competitive forces – and not a system that entrenches different rules for different racial groups.

“Much of our current woes is due to increasingly constrictive regulation by the state – this latest Act, for instance, drastically increases the state’s say over private sector resource allocation. The Act’s provisions give competition authorities the right to determine ‘fair prices’, based on the race of the parties to a transaction. In addition, the Act now purports to open an avenue to exempt certain companies from competition provisions based on the race of their owners.”

Du Plessis argues that Government seems to be ignoring the true barriers to the creation of new businesses and the growth of the economy. In this respect, South Africa’s many state-owned enterprises should shoulder much of the blame.

“This Act will likely do little to appropriately address the numerous state monopolies, such as Eskom, that survive in cosy regulatory frameworks, which, in fact, inhibit the growth and creation of new small and medium enterprises.”

Sakeliga has on previous occasions commented on the Act’s contents. See below for details:

29 August 2018 - Sakeliga makes presentation to Parliament on Competition Amendment Bill

26 August 2018 - Competition Bill heralds next wave of BEE

9 February 2019 - Afribusiness condemns Competition Amendment Bill

15 January 2019 - ANC election manifesto: expanded BEE bad news for business – Sakeliga

Issued by Moira-Marie Klopper, Head: Media and Marketing, Sakeliga, 13 February 2019