According to Godlimpi, informal businesses face significant procurement challenges, including higher prices and limited access to formal distribution channels.
“Consumers in townships and rural areas face higher effective prices due to limited product variety and quality. High rental costs, exclusivity arrangements, and preferences for national brands exclude them from retail. Weak compliance and infrastructure hinder their participation in e-commerce. Regulatory barriers, such as permits and tax compliance, also inhibit formalisation,” said Godlimpi.
Godlimpi pointed out the decline of general dealers in the villages, with only a few operating often run by foreign nationals. He said the ultimate goal for the government is to resolve South Africa’s economic problems for all citizens, not just the metropolitan sector.
Godlimpi also highlighted the innovation and technology in rural economies and the need to better supply chain management and point-of-sale technology to improve customer experience.
“The removal of restrictions on African mobility in urban centers has complicated the competitiveness of township enterprises. The first challenge identified is the importance of stock availability, with consumers being less likely to return if the items are out of stock. The second challenge is the convenience of point-of-sale technology, with consumers preferring seamless transactions similar to those in major retailers,” he said.
Godlimpi also said that the structural changes and partnerships are key in improving the competitiveness of local enterprises.
“The task before us is therefore not simply to grow the economy. We must transform the economy while growing it. We must expand productive capacity while broadening participation. We must create an economy that is globally competitive while ensuring that the benefits of growth are more widely shared,” stressed Godlimpi.
He noted that the government requires industrial policy because markets alone will not necessarily build the productive capabilities required for long-term development.
“The relationship between industrial policy and competition policy must therefore be complementary. Industrial policy should support the development of productive and competitive firms. Competition policy should ensure that markets remain sufficiently open to enable new firms to emerge and grow. Industrial incentives should encourage investment and capability development,” he explained.
Godlimpi believes that competition law should prevent firms from using market power to exclude competitors. He added by saying transformation policy should broaden ownership and participation, while competition policy should address structural barriers that prevent transformed businesses from succeeding.
Distributed by APO Group on behalf of The Department of Trade, Industry and Competition, South Africa.
This website uses cookies.
