The Competition Commission's move signals a concerted effort by regulators to create a more enabling environment for SMEs, widely recognised as critical drivers of employment and economic dynamism in South Africa.
Image: Henk Kruger/Independent Newspapers
The Competition Commission has launched a sweeping review of regulations that may be stifling competition and preventing small and medium enterprises (SMEs) from entering or expanding in key markets, in a bid to reduce red tape and boost inclusive economic growth.
The initiative, announced on Wednesday, forms part of broader national efforts to improve the ease of doing business and create a more competitive economic environment.
It follows calls by President Cyril Ramaphosa in his 2026 State of the Nation Address to streamline regulatory processes and remove unnecessary administrative burdens that hinder business activity.
Ramaphosa reaffirmed government’s intention to push ahead with the Business Licensing Bill, despite mounting opposition from business groups, civil society organisations, and small business owners who warn it could stifle entrepreneurship and deepen red tape.
The proposed law seeks to establish a uniform legislative framework for business licensing across all spheres of government. It aims to reduce administrative burdens, promote economic inclusion and enhance regulatory efficiency by replacing the outdated Business Act of 1991 with a modernised system.
The Competition Commission's move signals a concerted effort by regulators to create a more enabling environment for SMEs, widely recognised as critical drivers of employment and economic dynamism in South Africa.
If successful, the review could mark a significant step toward reducing bureaucratic hurdles, fostering entrepreneurship and ensuring that smaller businesses are better positioned to participate in and benefit from the country’s economic recovery.
Last month, the International Monetary Fund (IMF) advised that simplifying South Africa’s regulatory framework for small businesses could unlock entrepreneurship, stimulate investment and create much-needed jobs, though critics warn that proposed new licensing rules could have the opposite effect.
IMF economists said excessive and fragmented regulations remain a major obstacle to business growth in South Africa, particularly for the SME sector that is responsible for most job creation.
While regulations are designed to protect consumers and ensure market stability, the Commission on Wednesday concurred that poorly designed or implemented rules can have the opposite effect—raising compliance costs, delaying market entry and limiting opportunities for smaller firms.
This, in turn, reduces competition, dampens innovation and ultimately constrains job creation.
The review will examine a wide range of regulatory frameworks, including licensing regimes and sector-specific policies, to determine whether they are necessary and proportionate or overly restrictive.
Particular focus will be placed on how current rules affect SME participation, market concentration and the ability of historically disadvantaged businesses to compete effectively.
Among the barriers under scrutiny are complex and lengthy licensing processes, restrictive permit conditions, and rules that entrench monopolies or artificially limit the number of suppliers in a market.
The Commission will also assess whether certain standards and compliance requirements are unnecessarily onerous or inconsistently applied, leading to delays and uncertainty for businesses.
In addition, the review will consider the impact of vertical integration and potential exclusionary practices that may disadvantage smaller or non-integrated firms, further limiting competition.
The Commission has called on businesses, industry bodies and other stakeholders to submit evidence of regulatory obstacles they have encountered.
Submissions should detail the specific regulations in question, explain how they restrict competition or expansion, and propose practical reforms that would ease compliance while maintaining essential protections.
Stakeholders have until 5 June 2026 to provide input, which will inform a set of recommendations aimed at simplifying or removing barriers to entry and growth.