A document reviewing the state of economic transformation in the country has blamed cartels for deliberately shutting out black-owned business out of the market, and, effectively, out of business.
In the fourth National General Council (NGC) discussion document, which Transfom SA Online reviewed, the party said monopolies (companies who have complete control in a sector) and oligopolies (where a few companies dominate a sector) dominated strategic value-chains.
According to a section on economic transformation, the party explained: “Tight knit insiders raise barriers to entry for new participants including black owned and managed firms, and lobby to protect their position through rules and regulations that favour incumbents,” the ruling party said in a section on economic transformation.
“These have served to stifle the development of downstream, labour-intensive industries, small and medium-sized enterprises, cooperatives and black-owned firms.”
The party laments that the economy continues to be dominated by monopolies and oligopolies in strategic value-chains. “Monopoly and cartel pricing directly undermines the growth of the economy by increasing prices of key products for downstream industry and those that are essential for low income consumers,” it said. It suggested that stronger steps need to be taken to address anti-competitive behaviour through competition enforcement, regulation and complementary policy measures.
