"Government Cannot Fix What It Cannot See": Cape Chamber Calls for Targeted Policy Reforms

Department of Employment and Labour policies and legislation that should strengthen the economy and bolster employment, appear to be doing the opposite - by stifling business growth.

This is one of several key business survey findings published today by the Cape Chamber of Commerce and Industry.

While business fights to compete with global competitors, the compliance requirements and costs are suffocating growth and hence jobs, businesses told the survey.

Almost 80% of the 23 largest employers surveyed - businesses with more than 200 staff - rated labour legislation a serious constraint, and the same group put skilled-worker shortages close behind.

The survey findings, based on 369 business respondents across every major economic sector, coincide with massive national unemployment and shortages of critical skills. Survey questions were specifically designed to pinpoint the country’s main business constraints.

The survey also confirms how sharply constraints vary by region, sector and business size. Retail & service sectors raised different issues to manufacturers, while businesses in metro areas have different constraints to those outside.

The compliance burden bites hardest not on the smallest firms but on those in the middle - the growing businesses that should be adding staff. Larger firms lead on sector-specific rules, and raise a complaint that inverts the usual red-tape argument: they want more enforcement, not less regulation, against competitors who do not comply, naming importers of counterfeit and non-compliant goods. Smaller businesses report the same pressures less sharply, across issues from employment equity to tax and rates.

Although predominantly a Western Cape survey (308 WCape respondents out of 369), a large share of the binding constraints businesses report are mostly national in origin, emanating from state-owned enterprises, regulators, and government departments, the survey found. The Port of Cape Town and the decaying freight rail network come up repeatedly, named as costs rather than assets.

But businesses also named constraints their own municipalities own. Inside the metro the biggest local problem is simply moving - traffic and public transport. Outside it, businesses point at the municipality itself: building plans described as years deep, and weak coordination with the officials they depend on. “There are many constraints that can be improved if the right stakeholders cooperate,” comments Cape Chamber CEO John Lawson. “The survey also shows us that different areas have different needs - and this helps to respond better. For example, the Killarney Gardens industrial node is concerned about traffic flows whilst businesses in Philippi prioritise crime and safety.”

“We can’t have a one-size-fits-all approach to growing the economy. We need targeted interventions that address specific concerns as they arise.”

“Electricity is not one problem but three - outages, tariffs, and the wait to get connected,” Lawson says. “And there is real frustration at the slow pace of reform of the rules that hold business back.”
“Labour rules and the skills shortage feed each other,” Lawson says. “Fix the rules and businesses can reach the expertise they need to grow - and to hire.”

The survey also names the stakeholder groups able to respond to each of these constraints, a key recommendation of the findings report (which can be found HERE).

The survey was the first Chamber survey to identify business constraints at four distinct levels: firm, precinct, sector, and province. It was commissioned by the Cape Chamber and implemented by the Bureau for Economic Research at Stellenbosch University between 20 July and 13 August 2026. Cape Town-based consultancy Impact Economix managed the design, analysis and reporting.

The survey asked respondents to rate 61 named constraints as seriously limiting, slightly limiting or not limiting at all - or not applicable - at each of the four levels. The intention is to repeat it at regular intervals, and as widely as possible, building a database that can inform economic policy and targeted interventions.
“Whilst we entrust taxpayers’ money to the public sector to provide communal services, their efforts to bolster the economy need guidance. From their offices they cannot see what the major constraints to business confidence and investment are. It is the responsibility of business, through surveys like this and other means, to clearly articulate what is needed as a priority,” Lawson says. ENDS