South Africa’s competition regulator warned that entrenched market concentration continues to weigh on economic growth, job creation and small business development.
South Africa’s economy remains dominated by a small number of powerful firms, with the country’s competition watchdog warning that entrenched concentration continues to undermine growth, job creation and the ability of small businesses to compete.
In its 136-page second Concentration Report released on Tuesday, the Competition Commission said between one-third and one-half of the country’s 228 economic sub-sectors remain either highly or moderately concentrated, despite some improvement since 2017.
The report paints a detailed picture of an economy where large incumbents continue to dominate key industries such as mining, manufacturing, energy and transport, while small and medium enterprises struggle to expand.
The Commission said concentration remains particularly severe in sectors tied to energy commodities, including oil, gas, coal and iron ore. State-owned monopolies in electricity and transport also continue to shape the competitive landscape alongside concentrated private markets in areas such as sea transport and waste management.
Although the report noted signs of gradual improvement, it warned that economic participation is still far from inclusive.
“Economic concentration remains high,”
the Commission said, adding that persistent market dominance can weaken competitiveness and limit opportunities for new entrants.
The findings are based on analysis of roughly 450,000 tax-registered firms between 2017 and 2021 and form part of the government's broader effort to de-concentrate the economy and stimulate inclusive growth.
The report found that the share of highly concentrated sub-sectors has declined by five percentage points since 2017, with 10 sub-sectors shifting from “high” to “moderate” concentration. Around two-thirds of highly concentrated markets recorded some reduction in concentration levels over the period.
However, the Commission warned that markets dominated by a single firm showed little movement, often because of exclusionary business practices that limit competition.
Source: IOL
