Tuesday, September 22, 2020

Business community wants proposed Competition Authority to be independent

As Botswana continues to enter into various trade agreements such as Economic Partnership Agreement (EPA’s), SADC Trade Protocol and other WTO inspired arrangement, it has become imperative to create conditions that would enhance investors’ confidence.

The introduction of the Competition Bill for many represents a giant stride in that direction.

“The bill will go a along way towards ensuring equilibrium between interests of both business and protection of consumers,” Maria Machailo-Ellis, Executive Director of Botswana Confederation of Commerce and Industry Manpower (BOCCIM) said in an interview with the Sunday Standard.

But one of the things that BOCCIM considered important was the need to allow the Competition Authority to remain truly independent.

So that people appointed to the commission and authority would be identified on the basis of expertise and sound experience on matters that appertain to their mandate.

In that sense, according to Machailo-Ellis, the commission and authority shall be free from any political or other influences.

BOCCIM also believes that, if properly implemented the Bill has the potential to elevate Botswana to the level of highly developed market driven economies such as the United Kingdom (UK) and South Africa.

It was further stated that the Competition Authority and Commission as proposed by the Bill, is one of the very important features of the most developed economies of the world, “thus the new dispensation could take our country to greater heights,” said Machailo-Ellis excitedly.

Apparently, the bill which was gazetted on 2nd October, 2009 and expected to be passed at the November session of Parliament, comes after an economic mapping survey that resulted in the formation and approval of a Competition Policy in 2005.

One of the factors identified by the survey was the increasing dominance of foreign companies in the economy and the need to promote the growth of citizen owned business.

The need for a sound economic diversification strategy was also highlighted by the survey.

It was revealed by the report emanating from the survey that there was market dominance in certain sectors of the economy.

“Since firms in the said sectors enjoy such substantial market power, this poses a risk in tendering for public procurement as they may be open to collusion amongst bidders in their respective markets,” part of Proposed Competition Bill No 17 of 2009 read.

Notwithstanding this fact, Oitlogetse Rantaung, Chairman of the Retailers Association of Botswana, welcomed the development with reservations.

He said, “While this is a positive movement in the right direction, I am worried that those who flaunt the policy seem to be ecstatic about the bill placing Botswana on the international plane, with little or no regard for the effect it will have on small and medium enterprises.

Rantaung expressed concern that despite many schemes in place purportedly intended for citizen empowerment, Government still seems keen on attracting foreign direct investment at the expense of small scale citizen owned businesses.

Moreover, inspire of the existence of many pieces of legislation such as the PPADB Act, aimed at citizen empowerment, there continues to be practices, and additional laws that undermine the prospects of success of such good intentioned initiatives.

For instance, “in the construction industry, it has become common knowledge that big companies, who for the most part would be foreign owned from South Africa or China tend to be predestined to win huge tenders worth millions,” lamented Rantaung.

He argued that instead, it would be reasonable if Government considered structuring projects in such a way as to allow for a portion of the contract or tender to be given to small or medium companies, rather than give all the money away to foreign economies.

This could mean things like local tipper trucks providing sand, and other basic construction requirements offered to locals rather than foreigners.

Another instance cited as a going concern involves, where government schools are to be supplied with food, and rations for destitutes and people with special circumstances, in the rural areas, where Rantaung queried that big companies which he was reluctant to call by names predominate.

“In my view, there should be a deliberate policy and monitoring to ensure, positive discrimination in favour of small and medium enterprises,” posited Rantaung.

The new companies act was also lambasted for creating a monopoly for Chartered Accountants in the sense that for one to be a company secretary they have to be Chartered Accounts, despite the fact that there have been people who by way of exposure and long term experience, have developed such an enviable acumen for the job.

As a result of this misdirected provision, many chartered accountants earn a lot of money through the services of their ‘uneducated fellows”, in exchange for appending their signature.

By the same token there is a provision that stipulates the requirement of an audited financial statement for some specified turnover.

Again a closer examination of how the authorities arrived at the figures does not seem to suggest any semblance of critical consideration of the interests and weaknesses of small and medium entrepreneurs.

In the same light, BOCCIM Executive Director, cautioned against laxity in the hope that it will be all systems go.

She said, as a country Botswana is renowned for grand ideas, but always falls short when it comes to implementation.

For that reason, Machailo’s-Ellis emphasized that it is very critical to have the right capacity and skills and competencies, if the competition commission is to bring about the desired difference.

It is generally expected that the Bill will further complement government initiatives in policy, such as industrialisation policy, SMME and Privatisation Policy.

To that end, BOCCIM is acknowledged that they have an equally important role to play by complementing the relevant minister’ efforts to reach out and educate the public so as to maximize the derived benefits.

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