By Hilary Mare
DELIBERATIONS at the 5th Annual Competition and Consumer Week held by the Namibia Competition Commission (NaCC) last week have given strong indication that the competition law fathers are ready to strengthen efforts to implement competition policies, laws and interventions that ensure that competition in the marketplace is not restricted in such way as to reduce economic welfare.
Delegates heard that one of the remedial steps already taken by the Commission preparing proposals on a whistleblower policy and implementing raids where necessary to rid the country of collusion and cartels.
The Commission also highlighted that it had already investigated cases related to cartels such as the public transportation industry (alleged price fixing by bus and taxi operators), health industry (alleged price fixing), insurance industry (alleged division of markets by undertakings in the insurance industry), and bid rigging by SMEs for road paving tender.
A cartel is an agreement between competing firms to control prices or exclude entry of a new competitor in a market. It is a formal organisation of sellers or buyers that agree to fix selling prices, purchase prices, or reduce production using a variety of tactics.
Acting chief executive officer of the NaCC Vitalis Ndalikokule earlier added his voice in this regard saying: “The objective of most competition laws is to protect competition, which in the process enhances efficiency in economic activity and promotes consumer welfare. It is no doubt that cartels prevent competition and cause participating firms to act collectively as a monopoly, or near monopoly. As long as they remain in this state, there is little need to innovate and hence keep the economy in a low-growth situation, while extracting higher prices from consumers.
“In almost all cases, cartels are a bad thing for consumers and for the economy”. In further deliberations Tania Begazo, senior economist for Trade and Competitiveness Global Practice at the World Bank added that Namibia needs to boost investment and well-functioning markets in Namibia through competition policy. The acclaimed economist recommended actions to enable competition in Namibian markets highlighting that Namibia needs to consolidate an inventory of all state support measure, including objectives, legal instruments, value and beneficiaries, apply good practice criteria when granting state support to firms and balance competition policy objective with other objectives stemming from industrial and black empowerment policies.
“Consider developing a framework to control state support measures that could include relevant criteria for identifying support measures, application of exemption rules in specific sectors, assessment of prohibited measures and their potential impact on competition and definition of implementation procedure and monitoring.
“Promote the streamlining of procedures on registration of businesses; particularly by improving the process of checking the uniqueness of the company name and putting in place an online system allowing doing the search and reservation of names for companies,” added Begazo. Conclusively, Begazo maintained that competition policy can help Namibia achieve Vision 2030 and the goals of the National Development Plan adding that evaluating the costs and benefits of government interventions –considering market characteristics -is key to increase effectiveness and create the right incentives for private sector to contribute to Namibia’s development.
Confidente. Lifting the Lid. Copyright © 2015