Tackling red tape: Competition Commission’s regulatory review

We keep asking why investment hesitates and why small firms struggle to scale. Often the answer is not a lack of ideas or ambition. It is, among others, the slow grind of licensing, permitting and other regulatory requirements. These rules are designed for the public good, but they are too often implemented in ways that block entry and protect new market entrants. When that happens, regulation stops being a safeguard and starts acting as a gatekeeper.

The Kearney 2026 Foreign Direct Investment Confidence Index puts it plainly. In emerging markets, the efficiency of legal and regulatory processes is the second-most important factor shaping investment intentions. Investors do not only look for good opportunities. They look for a system that is predictable and workable.

The International Monetary Fund recently reached a sobering conclusion. South Africa has one of the most restrictive business environments compared with its peers. In practice, this means lengthy approval processes, complex licensing regimes and uncertainty in how rules are applied. The IMF points, in particular, to burdensome government regulation, including licensing and permitting requirements. It also flags weak procurement practices and limited competition in some markets. Together, these factors can depress confidence and investment, slow innovation and raise compliance costs. The economy pays the price in weaker growth and fewer jobs and reduced global competitiveness.

None of this is an argument against regulation itself. Rules exist to protect consumers, workers and the environment, and to ensure fair and orderly markets. The risk is not that South Africa regulates, but that it sometimes regulates in ways that are unnecessarily complex, slow or inconsistently applied. When that happens, the burden does not fall evenly. Larger, established firms are better able to absorb delays and compliance costs. Smaller and emerging businesses are not.

In his 2026 State of the Nation Address, President Cyril Ramaphosa highlighted the need to reduce red tape and improve the ease of doing business. That call is echoed in the Competition Commission’s market inquiries and by business stakeholders who want a regulatory system that is streamlined, modern and predictable. The goal is not deregulation for its own sake, but smarter regulation that achieves public policy objectives without shutting out new entrants. That is how SMEs enter and expand in markets. It is also how South Africa improves its international competitiveness.

This is where business, regulators and government departments have a choice. They can treat red tape as background noise. Or they can build a clear, evidence-based picture of what is blocking entry, raising costs and limiting competition, and what better rules would look like.

This is the context for the Competition Commission’s regulatory review project. At its core, the project asks a straightforward question: which rules are still necessary, and which are holding the economy back? The purpose is to assess regulations that may act as barriers to competition and to the entry or expansion of firms, particularly SMEs. If South Africa is serious about inclusive growth, improving the ease of doing business and strengthening competitiveness, this is core economic reform.

The review will examine sector policies, licensing frameworks and procurement rules. It will test whether regulations still serve their intended purpose and whether they can be redesigned to achieve that purpose with fewer barriers to entry. It will also consider market concentration, the effects of vertical integration and what meaningful participation by historically disadvantaged persons looks like in practice. The aim is practical: to identify changes that lower regulatory compliance costs, reduce delays and open markets to more participants.

The commission has already shown how targeted reforms can reduce unnecessary burden. A clear example is merger control. Stakeholders raised concerns about lengthy approval times and low notification thresholds. The commission responded by increasing thresholds and committing to faster turnaround times. The result is fewer transactions requiring approval, quicker decisions on those that do, and lower compliance costs for business, without weakening oversight where it matters.

This is why the call for submissions should not be treated as a box-ticking exercise. It is an opportunity to shape practical reforms. The commission is asking businesses, regulators and government agencies to identify specific regulatory barriers and propose workable alternatives. The most useful submissions will be concrete: what is the rule, what does it cost in time or money, who does it exclude and how could it work better? Submissions can be emailed to regulation@compcom.co.za by 5 June 2026.

The commission will assess submissions and determine whether specific regulations pose barriers, and whether they can be improved without compromising their purpose. It will then publish recommendations and advocate for implementation. The work will be phased, starting with reforms that can be implemented quickly, followed by those requiring legislative change. If we want inclusive growth, we should treat those phases as a timetable, not a filing cabinet. DM