Structural changes and partnerships in rural and township economies are key to improving the competitiveness of local enterprises, Deputy Minister of Trade, Industry and Competition Zuko Godlimpi said.
Cited at the Annual Competition Law, Economics and Policy Conference at the Marriott Hotel in Johannesburg late last week, Godlimpi said in a statement that stronger productive capacity, greater value addition, investment, exports and sustainable employment must be pursued alongside broader economic participation.
He said the 2026 Rural and Township Economy Report, launched at the conference, was necessary for South Africa’s spatial transformation and economic inclusion.
Godlimpi said 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,” he said.
He said weak compliance and inadequate infrastructure hindered businesses’ participation in e-commerce. Regulatory barriers, including permit requirements and tax compliance, also inhibited formalisation, he added.
Godlimpi pointed to the decline of general dealers in villages, saying only a few remained operational. He also said many were run by foreign nationals.
He said the government’s ultimate goal was to resolve South Africa’s economic problems for all citizens, not only those in metropolitan areas.
Better supply-chain management and point-of-sale technology were needed to assist rural and township businesses and improve the customer experience, Godlimpi said.
“The first challenge identified is the importance of stock availability, with consumers being less likely to return if 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 said competition law should prevent firms from using market power to exclude competitors. Transformation policy should broaden ownership and participation, while competition policy should address structural barriers that prevent transformed businesses from succeeding, he added.
At a separate "empowerment event" in the Eastern Cape over the weekend, Godlimpi, in another statement, urged emerging entrepreneurs in local communities to form partnerships to gain a competitive advantage.
He said women should use their numbers and purchasing power to increase their chances of success rather than pursuing ventures individually.
“It is these strategies of scale and the use of purchasing power that have enabled foreign nationals to dominate the spaza-shop sector in townships and villages. They have mastered the art of clubbing together. Township businesses need to work together in the same way to procure from wholesalers if they wish to compete with foreign-owned spaza shops,” he said in a statement.
The conference was hosted jointly by the Competition Commission and the Competition Tribunal. It examined how market structures shape access to opportunity, productive participation, innovation and the distribution of economic power.
Competition Tribunal chairperson Mondo Mazwai said competition policy must go beyond protecting rivalry by opening markets, broadening participation and creating meaningful economic opportunities.
She said competition and industrial policy must work together to advance structural transformation and build inclusive, resilient and competitive African markets.
The Department of Trade, Industry and Competition launched a new Industrial Strategy in June in response to the rapidly changing global and domestic economic environment.
The global economy is evolving amid rising geopolitical tensions, the reconfiguration of supply chains, climate-change challenges and the digitalisation of the economy.
The new policy aims to respond to South Africa’s economic challenges, including deindustrialisation, slow growth, declining industrial capacity, reduced investment in productive sectors, structural transformation and transition, and infrastructure backlogs.
edward.west@nationalmg
The National