Deputy President David Mabuza says rural and township economies should be supported by the effective implementation of regulations and by-laws in order to level the playing field.
He said this when responding to oral questions in the National Assembly on Thursday.
"All businesses, whether local or foreign-owned, must be subjected to applicable regulations and by-laws. Effective economic regulation in township and rural areas will assist in curbing and minimising the problem of counterfeit goods that are sold in our country through illegal businesses.
"More importantly, the impact of regulation must result in a fair and competitive environment for enterprises operating in township and rural villages to prevent the abuse of dominance by few monopolies.
"We have to find ways to open up markets so that new enterprises can compete fairly," he said.
ATM MP Vuyolwethu Zungula had asked the Deputy President whether, in line with his responsibility to stimulate the rural and township economy and with the current unemployment crisis, he found it to be prudent to regulate the participation of non-South Africans in the micro economy.
Mabuza said the Competition Amendment Act promulgated this year focuses on opening markets where concentration and the behaviour of dominant firms is harmful to the creation of jobs and the growth of small and medium businesses in all sectors across the economy.
He said although it is imperative to regulate the micro-economy, regulation alone is not a total solution to address the challenges of economic exclusion and structural barriers of entry into the mainstream economy for township and rural enterprises.
"Regulation must be accompanied by extensive enterprise development programmes supported by government and the private sector to develop skills, and integrate small businesses in towns and villages into major procurement value chains in government and private sector markets," he said.
Government is implementing various programmes and targeted policy interventions to stimulate and support the development of township and rural enterprises. This includes:
- Implementing a special dispensation or set-asides in the awarding of medium- and long-term contracts to small businesses, co-operatives as well as township and village enterprises to allow for a period of incubation and other support to help reduce failure rates;
- Establishing a township and village economy fund to support the productive activities and the development of industrial parks, business centres and incubation centres in those areas;
- Formalising township and village-based enterprises through an active campaign by provincial and local governments that promote the benefits of formalisation; and
- Addressing illegal trading through better regulation and implementation of by-laws.
He added that government was increasing the incubation network in rural areas and townships as part of its commitment to grow rural and township enterprises.
Government was also investing in key infrastructure and technology innovations to facilitate the ease of doing business in townships and rural villages.