Monday, July 15, 2024

Has Competition Authority lived up to its billing?

There was a lot of fanfare when the Competition and Consumer Authority was established.

The Authority was created to foster fair competition and fight the use of excessive market advantages and market concentration.

Left unregulated, there is a natural inclination among players to abuse their dominant market position.

This market abuse, other than undermining competition often also fuels risk aversion, innovation and does not always translate in benefits for shareholders.

But the loser is almost always the consumer.

The Authority was supposed to be a focal point of commercial competition that would monitor transactions of  market abuse through such things as Mergers and Acquisitions – among others.

The Authority was supposed to boost competition.

Those things have not happened.

The hope at the time was that the Authority was going to be an independent body that would be impartial and quasi-judicial.

Years later, doubts have emerged over the quality of services offered by the Authority.

In fact to the cynical, the opposite has been the case about the Authority.

The Authority has done pretty little to enhance competition.

This weakness is literally stealing the future of other deserving economic players as well as robbing the country of a much needed economic dynamism.

As things stand, it would seem like the Authority lacks a sense of responsibility and does not fully grasp the weight of its mandate, as provided for in the founding Statute.

In fact the Authority needs a reboot. There has to be renewal.

This is because the Authority has steadfastly resisted to keep pace with fast changing trends in commercial transactions in so far as they relate to competition.

There are still companies that are a law unto themselves mainly on account of their relationship with politicians.

For a great part, these companies or their owners are financiers of the ruling party.

These companies make mergers that are not competitive that undermine consumers and the Authority consistently turn a blind eye.

The law that governs Competition Authority is as sufficient as a law can be.

But it is the officials who do not seem to have a grip on competition matters.

Either they are differential to politicians who still appoint a CEO and of course the Commissioners, or they simply do not understand just why that body was created.

What has happened to the investigations undertaken years ago surrounding the monopoly of chicken.

The chicken barons have since grown more powerful and they literally decide who can survive in that space.

The end result is that small breeders, who for the grater part are indigenous Batswana have been wiped out.

Competition Authority is failing to hold these cartels accountable.

The Authority is failing to enforce competition rules.

There is a lot of unfair play in the market much of it perpetrated by the same clique of business people who have become untouchable.

There is no compliance among these companies. And certainly no respect for the Competition Authority, not least because they are always able to circumvent the rules, either through the use of commissioners or through the use of proximity to politicians.

The Competition authority needs to get back on a proper footing.

There are serious issues to address at Competition Authority.

What happens at the Competition is key because the economy of Botswana has now become advanced.

Ploughing on as if everything is fine is not only wrong but unsustainable too.

It will not be easy to turn the Authority’s fortunes around and get it to outgrow the now endemic malaise, not least because there is no political will.

The only way the Authority can reclaim its mandate is if politicians can commit themselves to respect and recognise the Authority’s mandate and with that undertake to keep their distance.

But they cannot because they keep getting money from the business community who in turn nudge on the Authority to turn a blind eye on their competition transgressions.

What has happened to DCEC (Directorate on Corruption and Economic Crime), which is in effect dead and unlikely to ever come back to life is exactly what we now see playing out at the Competition Authority.

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