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More worryingly, youth unemployment exceeds 60%, and informal sector entrepreneurs continue to be marginalised by punitive licensing regimes and the heavy-handed enforcement of informal trade regulations.
Meanwhile, the manufacturing sector has shed more than 300,000 jobs over the past 16 years. This illustrates how our industrial policy, premised on “picking winners and losers”, has failed even those it claims to support.
The DA’s alternative vision is clear. We seek to dismantle regulatory barriers that protect oligopolies and build an enterprising economy where small businesses can thrive. This begins with a bold simplification agenda.
The DA proposes establishing one-stop opportunity centres across SA to streamline business registration, licensing, SA Revenue Service compliance, and access to small business support.
These services would be accessed through a single online form and a single registration fee. These opportunity centres would empower entrepreneurs, particularly in underserved municipalities where red tape often makes formalisation impossible.
Our regulatory philosophy is guided by what we call the “policy pyramid”. The idea is that the foundation of any sound industrial policy is not top-down directives or sectoral subsidies, but rather the delivery of basic enablers such as safety and security, quality infrastructure, effective education and a rational regulatory environment.
Current industrial policy has inverted this logic. It focuses obsessively on localisation and tariff protection, while ignoring the institutional conditions in which firms actually operate.
One of the most harmful distortions in our product markets is the arbitrary and excessive use of trade protections. The International Trade Administration Commission (Itac) has routinely imposed steep tariffs to shield local monopolies, most notably in steel, at the expense of downstream firms and broader competitiveness.
An example of this is the recent reckless and protectionist decision by Itac to impose a 52.34% tariff on corrosion-resistant steel coil imports and raise duties on transformer cores to protect one struggling firm (ArcelorMittal SA) at the expense of the broader SA steel industry.
These protectionist measures not only raise input costs for SA manufacturers, but also limit the scope for value addition and export orientation.
The DA rejects this model of corporatist protection. Instead, we propose targeted trade liberalisation, especially in inputs used by small manufacturers. We also advocate for sector-specific preferential trade agreements, such as those proposed with East Asian countries in the agricultural sector.
Trade policy must be deployed not to shield inefficiency but to harness competitive advantage, open new markets and reduce the costs of doing business.
Beyond these immediate reforms, we are committed to modernising public procurement. The OECD has rightly criticised SA’s procurement system as opaque and overly complex.
The DA’s plan includes publishing a live, searchable database of all public tenders, standardising documentation requirements and capping bid response times. These measures will accelerate procurement while safeguarding transparency.
We also recognise the immense potential of the informal economy, which accounts for 17% of employment, but is largely locked out of formal growth channels. DA-led municipalities such as Cape Town have pioneered digital e-permit systems, dedicated trading zones and municipal-level reforms that make informal trading viable and dignified.
At its core, our approach to product market reform is about restoring trust. Trust in markets, in institutions, and in the citizen’s ability to build a business without being trapped in a maze of bureaucracy or held hostage by monopolistic interests.
Critically, this approach aligns with international best practice. The OECD estimates that reducing regulatory restrictiveness in product markets to levels seen in the best-performing economies could lift SA’s GDP by up to 5% over the long term. This would be equivalent to unlocking R250bn in annual economic value, without requiring a single new tax, subsidy or bailout.
SA stands at a crossroads. We can persist with a model of industrial policy that protects vested interests, traps entrepreneurs in poverty and treats competition as a threat. Or we can choose a model based on openness, dynamism and inclusion, where the government’s role is not to micromanage markets but to make them function optimally.
Embracing reform is not simply a policy option, it is a necessity for SA’s sustainable future. Realising competitive markets demands more than regulatory tweaks; it requires a fundamental shift in governance philosophy, a commitment to institutional integrity, and an unwavering focus on empowering all South Africans to participate meaningfully in the economy. The stakes extend beyond economic metrics, they touch on social cohesion, dignity and the very fabric of opportunity in our nation.
As we confront the pivotal question of reform or retreat the choice we make today will echo through generations. It is a moment that calls for bold leadership and collective resolve to forge a path towards an open, dynamic and inclusive economy.
• Mdluli, an MP, is DA deputy spokesperson on trade, industry & competition.
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