South Africa’s economic growth remains stagnant, with first-quarter 2025 growth at just 0.1% following a revised 0.4% in the previous quarter. While the country’s competition policies appear sound in theory, their implementation creates significant barriers to investment and growth.
Investment drought and declining competitiveness
Speaking at a recent GIBS and Competition Commission Forum, GIBS Professor Adrian Saville warned that current competition laws are deterring foreign investment, which is crucial for sustained economic growth. South Africa has experienced an investment drought since 2010, coinciding with declining global rankings. The country dropped from 30th to 81st place in ease-of-doing-business rankings, while Rwanda improved from 100th to 20th position.
Industrial complexity – the diversity and sophistication of production – is also declining, hampering long-term economic health. South Africa needs stronger enforcement and faster resolution of competition matters through capacity building among regulators, judges, and economists.
“Competition really matters. It fosters innovation, keeps prices in check and is essential for long-term economic health. We need more of it,” said Saville.
Business concerns
Business Leadership South Africa CEO Busisiwe Mavuso expressed frustration with the inconsistent application of competition laws, rather than the laws themselves. Key issues include lengthy delays in merger approvals, unclear costs, and vague “public interest” definitions that deter investment. These inefficiencies undermine South Africa’s positioning as Africa’s investment gateway.
Legal and regulatory challenges
Legal expert Leana Engelbrecht identified unpredictability as the primary challenge, extending beyond competition law to broader regulatory issues.
“You are seeing increasingly complex regulation layered on industries, including competition regulation, which raises the cost of doing business, even for companies eager to comply, often at great legal expense,” she said.
The path forward
Experts agree that competition is vital for driving growth, employment, innovation, and consumer benefits. However, South Africa must reform implementation processes, improve regulatory agility, and enhance collaboration between stakeholders. Without addressing these systemic issues, the country risks continued economic stagnation and further decline in investment attractiveness, ultimately missing opportunities for inclusive growth.
