SA`s regulatory environment seems to promote small and medium enterprises at the expense of big business, says investment holding company Bidvest Group.
Executive chairman Brian Joffe says in the group`s latest annual report that doing business in SA becomes more difficult every year.
"The latest amendments to the Labour Relations Act governing mergers and acquisitions are no exception, adding another layer of red tape."
He says the Competition Commission seems to be evaluating transactions more commercially rather than strictly in terms of the legal parameters, which is positive. "Free market economics should be tempered with anti-monopoly legislation, but not at the expense of entrepreneurship.
"Due to the low threshold level, meeting the resulting bureaucratic requirements of the Competition Commission places enormous administrative burdens on acquisitive companies such as Bidvest and adds to the cost of doing business."
Joffe says the compliance issues become more complex every year and serve primarily to entrench bureaucratic thinking.
He says business conditions in SA have slowly improved since the first quarter of the group`s financial year. However, crime remains a negative influence on the social fabric of South African society.
"Government`s inability to act decisively on such matters as Zimbabwe, HIV/AIDS and black economic empowerment have contributed to the negative perception of the country held by investors and international business."
However, he says these factors should not detract from the all-round performance of the South African government, which should be given credit, especially for monetary and fiscal discipline.
"Government and business need to work more closely together to promote SA as an exciting place for foreign investment."
Bidvest Group is an international investment holding company listed on the JSE, with subsidiaries listed in the UK, Australia and Luxembourg. Its strategy is to invest in companies operating in the fields of service, distribution and trading.
Joffe says the group, which achieved revenue of R41.95 billion and headline earnings of 436.2c a share in the 2002 financial year, aims to grow faster than the market in the new financial year.
One of its subsidiaries In the IT services business, networking solution provider I-Fusion, has undergone a complete restructuring and downsizing. The group expects a much improved performance from the business.
Another subsidiary, mymarket.com, is an early adopter, hi-tech business providing electronic infrastructure to facilitate trade between buying organisations and their nominated suppliers.
The group says mymarket.com, which went live in July last year, has enormous potential. "In addition to the Bidvest operations, large national organisations have committed to rolling out their procurement processes nationally through mymarket.com after the successful initial pilot projects."
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