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Call for other mechanisms to deal with business monopolies

Jul 24, 2018
Call for other mechanisms to deal with business monopolies

Small Business Development Minister, Lindiwe Zulu, has called for other mechanisms to address monopolies in business.

“It’s not just about charging [businesses] for the monopoly. We need to go further than that.... so it’s important for us to look for other mechanisms [to deal with monopoly],” Zulu said.

Addressing the Third BRICS Medium, Small and Micro Enterprises (MSME) Roundtable meeting on Monday in Johannesburg, the Minister said South Africa is at the forefront of trying to break monopolies as it does not help the nation.

Zulu said the Department of Economic Development and the Competition Commission have been looking at different sectors where there is very strong monopoly.

“We understand that big business depends on interests and profits, therefore while they are doing that, [they must] bring in other people into the mainstream. They must be able to open opportunities for small businesses. We do want the acceleration to access markets,” she said.

She further encouraged big businesses to open opportunities for Small, Medium and Micro-sized Enterprises (SMMEs).

“As a Department of Small Business Development we think it is important to have a properly coordinated approach to supporting SMMEs. Local structures, provincial structures and national structures must not work in isolation,” said Zulu.

She urged the three spheres of government to work together and to not compete against each other.

“We are determined to strengthen the small business sector to enable it to occupy its rightful place in the mainstream economy and to demonstrate that small business is the big business of the future and working together we can indeed achieve more,” Zulu said.

BRIC membership yielding positive results

According to the Minister, the BRICS membership is beginning to show its potential benefits to the local economy.

“Intra-BRICS trade has grown from US$567 billion in 2010 to $744 billion in 2017. South Africa-BRIC trade has grown from $28 billion to $35 billion over the same period. Both SA exports to and imports from other BRICS countries have grown at a rate faster than South Africa’s global trade, thus increasing the importance of other BRICS countries in South Africa’s trade basket.

“Combined, the BRIC countries account for 15.4% of South Africa’s global exports, and 25.4% of the country’s imports,” she said.

Zulu said the key focus for BRICS should be to change the structure of trade and promote value-added trade so as to contribute to the structural transformation of BRICS economies.

She said the SMME sector in many of the BRICS economies contribute up to nearly half of their exports, manufacturing output and Gross Domestic Product (GDP).

“Together we are addressing key barriers/impediments faced by SMMEs and the need for cooperation among the BRICS countries to effectively address the barriers to trade and investment amongst the SMMEs,” Zulu said.

The key objective of the Roundtable meeting is to enhance collaboration and co-operation among BRICS members on issues of small business development and promotion.

Participants included business organisations, government representatives, MSMEs, cooperatives organisations and other relevant stakeholders. – SAnews.gov.za