When President Cyril Ramaphosa appointed Trudi Makhaya as his economic advisor, she is reported to have laid the blame for our new ailing economy on a lack of competition (or on over concentration which favours conglomerates) and on a lack of skills to unlock development.
These oft expressed sentiments by economists and commentators have become widely accepted as uncontested truths.
According to Makhaya, a former deputy head of the Competition Commission these are the main issues that continue to constrain the economy: “We have some great companies, but in in general I don’t think the environment for doing business is all that great.”
It has often been argued that our banking system is too concentrated in the hands of four major players, yet I would counter that this has not stopped new entrant like Capitec from making huge inroads and really shaking up the industry, or Investec and more recently Discovery Bank. Relative to the size of our economy, I would contend that we have a highly efficient and competitive banking and financial system.
The mining industry was heavily concentrated in the hands of Anglo-American, which at one stage prior to 1994 controlled over 75% of the capitalisation of the JSE. The situation now is much more fragmented and decentralised.
If we are to rectify our economy and attract the $100 billion in investment into the country over five years, that we need to break the recession into which we have fallen, we need to be clear about what the issues or problems are, and I beg to challenge these widely held opinions.