National competition policy fills legal vacuum
Namibia recently launched its first National Competition Policy after adopting its first competition laws since independence.
“This was quite an anomaly which we are correcting with the launch of this policy. Our law was not informed by a set of policy objectives and this policy vacuum did not help much, especially when the law was found to be limited and hence amendments had to be made,” said Sikongo Haihambo, the executive director in the Ministry of Industrialisation and Trade.
Ha i h amb o sai d the need for competition policy involves applying rules to make sure businesses and companies compete fairly with each other and this in turn encourages enterprise development and efficiency, thereby creating a wider choice for consumers and also helps reduce prices and improve quality.
He further stated that compe t i t i on encourages businesses to improve the quality of goods and services they sell, with the view to attract more customers and eventually expand market share.
“With competition, it offers more choice of goods and services, as in a competitive market, businesses will try to make their products different from the rest and this results in greater choice, where consumers can select the product that offers the right balance between price and quality,” explained Haihambo.
In addition to the above, the National Competition Policy emphasises the need to protect micro, small, and medium ( MSME) sized firms in the economy. This is important because contrary to what many think, the MSME sector is one of the biggest creators of employment in any economy and therefore supporting this sector creates an enabling environment for them to flourish.
He further said the Namibia CompetitionCommission(NaCC) must be at the forefront of fighting ailments aimed at emphasising restrictions on certain activities such as combating cartels and abuse of market dominance, pricefixing, and market segmentation, amongst others.
Cartelsaremorelikelytoflourish in concentrated markets compared to competitive markets. The risk is much higher and the executive director expects the commission to respond appropriately to promote competitive markets that will lead to inclusive and sustainable economic growth and development.
Meanwhile, CEO of the NaCC, Vitalis Ndalikokule stated that even regarding tradeable goods and where formal trade barriers have been removed, competition can be affected by a host of government or other measures including regulations, standards, and licensing requirements.
“The ability of imports to discipline the exercise of market power can be affected by a wide range of anti-competitive practices of firms, for example, firms may divide up markets through pricefixing or geographic market sharing cartel agreements, or vertical market restraints,” said Ndalikokule.
Key principles of the national policy, he outlined, is to support and enhance national legislation through appropriate provisions for enhanced enforcement, developmental merger control, market inquiries, and price monitoring.