By: Nghiinomenwa-vali Hangala
A Competition Impact Assessment prepared for the country’s competition watchdog has revealed that 79% of the stakeholders and laws assessed indicate that there are anti-competitive behaviours and practices across various sectors.
The report, prepared by Inceptus Holdings, examined market distortions across 160 laws, policies, and regulations to promote competitive neutrality and growth in Namibia’s evolving economy. More guidance is needed in developing a framework for reform that promotes fair competition and said economic development. This report was presented to stakeholders early this week.
The findings revealed systemic market distortions embedded within Namibia’s regulatory architecture, requiring urgent structural reforms to promote competitive neutrality. Of the stakeholders consulted, 79% have observed anti-competitive practices across Namibian economic sectors.
According to the assessment, price fixing was the most common form of observed anti-competitive behaviour across sectors, with 28% of all who participated highlighting it as the common challenge across sectors.
The second-most common anti-competitive practice found was collusion, with 20% of those consulted placing it high. Collusive tendering was highlighted as the third-most prevalent anti-competitive practice according to the findings.
Predatory pricing and bid rigging were also found to be prevalent in the economy across various sectors.
The consumer surveys conducted by the consultant have revealed that the telecommunications, finance, and energy sectors face the highest levels of perceived market distortion, with significant concerns about monopolistic practices and barriers to entry affecting competitive dynamics.
Furthermore, the study found that 43% of the consumers believe current trade policies do not promote fair competition.
While 75% view existing policies as hindrances for new businesses entering markets, 57% believe policies could promote competition with effective implementation.
In terms of the legislative instruments, the assessment has found that state enterprises enjoy legal privileges with at least 15 laws enabling them to market privileges. These are automatic licences, tax exemptions, and guaranteed funding, which, according to the researchers, create unfair competition against the private sector.
The assessment has also found that various laws (20 plus) give discretionary executive powers in the economy, leading to “vague criteria for approvals, exemptions, interventions, enabling favours, favouritism, and regulatory uncertainty,” the study revealed.
The assessment has also found that there are regulatory capture mechanisms within 18-plus laws, which enable confidentiality powers and revenue retention by regulators.
According to the researchers, this incentivises over-regulation, and reduces transparency – giving examples of BIPA fee retention and CRAN levy powers.
With that, the researchers recommend a systematic approach to correcting market distortions through regulatory coordination, barrier elimination, and competitive neutrality measures. erastus@thevillager.com.na
