South Africa’s ruling party, the African National Congress (ANC), has called on the country’s parliament to fast track the processing of the Competition Amendment Bill which promises to introduce drastic measures of tackling the domination of the key sectors of the country’s economy by a few firms.
Key propositions from the bill include enhancing the powers of the competition authorities to address economic concentration and economic inclusion. This includes enhancing the ability of the Competition Commission to make divestiture orders, the power to break up firms in sectors which are found to have unhealthy ownership concentration levels.
The bill also provides for consideration of national security in cases of mergers and acquisitions that involve foreign firms.
In a statement released today the ANC says “We call on Parliament to fast-track consideration of the Bill as the country urgently needs bold economic transformation.
“This important Bill addresses the principles outlined in the 54th ANC Conference Resolutions in relation to economic concentration, which noted that the high level of concentration of ownership in many sectors of our economy is dysfunctional to growth, entry of black South Africans in the economy and effective competition, and that the penalties for uncompetitive behaviour must be increased.
“The Bill provides for enhancements which gives powers to the competition authorities to address economic concentration and economic inclusion. It focuses on the actions by dominant firms which limit small and medium businesses from participation in the economy, particularly those owned and controlled by black South Africans.
“The Bill also includes stronger penalties for dominant firms which abuse their power, and is a clear signal to firms that abuse their power that the authorities will take appropriate action.”
The ANC notes that many studies on the South African economy have indicated the high levels of economic concentration in different sectors. “This has a negative impact on innovation, investment, growth and job creation. It also leads to higher prices for consumers, and limits the opportunities for small and medium businesses to participate.”
“The Bill provides the Competition Commission with the powers to conduct market inquiries in sectors where ownership and market share have become highly concentrated. It propose remedies which can lead to greater economic participation, and lower prices for consumers.
“It also provides for powers which allows the competition authorities to impose conditions on mergers which result in a greater spread of ownership in companies, particular Black South Africans and workers in those companies. This is in line with the call by the ANC National Conference to promote greater worker ownership in the economy and is part of the bold vision of economic transformation that our country needs.
“The ANC further welcomes the provisions which provide for the executive to intervene in mergers by foreign firms which impact national security interests in the Republic. The requirement for the Executive and Parliament to uphold national security is clearly laid out in the Constitution and the proposed amendments provide the framework for the Executive to fulfill this mandate.”