Competition policy and economic concentration

Structural transformation, competition and economic power: the need for better policies

Pamela Mondliwa, CCRED, University of Johannesburg on 13 March 2018
Reads 1,254

The economy remains highly concentrated and existing firms have substantial advantages over entrants and smaller rivals. These firms can use their power to block rivals, also by influencing regulations in their favour. Changing the structure and the ownership of the economy simultaneously requires a package of measures to tackle the abuse of market power by large firms, change regulations to open up markets, and effectively support the development of the capabilities of smaller firms.

‘You can’t bite the hand that feeds you’: Contracts between SME suppliers and the large supermarkets

Marlese von Broembsen, University of Cape Town on 9 May 2017
Reads 2,450

This article examines the implications of the contracts between the four main South African supermarkets and their SME suppliers. Supermarkets’ procurement practices, in particular their practice of charging suppliers a substantial ‘rebate commission’ as well as requiring suppliers to comply with private, rather than public, production and health standards, have a significant impact on the ability of new SME suppliers to enter the market and to create jobs. This has important policy implications.

How structural inequality limits employment and self-employment in poor areas (or: Why South Africa’s informal sector is so small)

Kate Philip, Advisor to the Presidency on Short-term Strategies for Employment Creation on 16 November 2012
Reads 12,103

Given South Africa’s high levels of unemployment, the relatively small size of the micro-enterprise sector is a conundrum. This article argues that structural inequality is the reason for this – in particular, inequality in the structure of the economy, the legacies of spatial inequality and the continued inequalities in human development. Their combined effect is to limit the scope for poor people to escape poverty via self-employment. This explains the limited extent and small range of informal employment.