Implementation of the National Competition Policy in

Report
IMPLEMENTATION OF THE NATIONAL
COMPETITION POLICY IN BOTSWANA
by
Thula Kaira - CEO
Presentation to CUTS National Seminar on Need for National
Competition Policy for India: How to overcome challenges
18th February 2014
Le Meridien Hotel, New Delhi, India
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PRESENTATION OUTLINE
1. Introduction
2. Genesis of the National Competition Policy
3. Key Government Actions to implement NCP
4. Challenges
5. What Lessons from Botswana???
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1. INTRODUCTION
FACTS on
Botswana
• POPULATION: 2 million (2012)
• GDP: US$ 14.14 billion (2013
3rd quarter)
• PER CAPITA GDP: (US$ 7,191)
• MAIN EXPORTS: Diamonds,
copper, nickel, soda ash, beef
and textiles
• GOVERNMENT STYLE: Multiparty Democracy
• INDEPENDENCE: Since 1966
• SOURCE: CSO Botswana
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The Government of Botswana adopted the
National Competition Policy for Botswana in
July 2005
The Policy was preceded by an Economic
Mapping for Botswana (2002) that noted high
levels of structural impediments to industrial
growth. Almost at the same time, a Legislative
Inventory of Botswana Laws Relevant for a
Competition Policy was undertaken
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2. GENESIS OF THE NATIONAL COMPETITION
POLICY
 At the turn of the century, the Govt of Botswana
realised that industrial growth was not as expected
and the economy largely dependent on mining
 Government, in conjunction with UNCTAD,
contracted the Botswana Institute for Development
Policy Analysis (BIDPA) to map out the economic
structure of Botswana in order to identify the key
constraints on competition in all sectors of the
economy
 BIDPA’s detailed Economic Mapping (EM) of the
Botswana of market in 2002 informed Govt on
policy reform. Key EM findings follow below:
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2.1. KEY FINDINGS FROM THE EM
 EM confirmed Govt concerns that:
→Conditions in the economy were not conducive to
sustainable growth & development
→Economic diversification had failed to remove focus
on diamond and beef, leaves Botswana vulnerable there was need for a broad-based economic
structure
→A more diversified economy was generally better
able to respond & adjust to shocks
→There was lack of a competitive market structure,
with entry difficult in key sectors (with high
concentration levels in manufacturing sector with
CR3 of 70% in most sub-sectors)
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KEY FINDINGS FROM THE EM cont’d
→The private sector had to play an increasing role
in development
→For the private sector to thrive, competition had
to be promoted and encouraged
→There was need for a more comprehensive
policy and national strategy to develop SMMEs
→The non-fuel import bill was too large
→There was need for more affirmative citizen
economic empowerment initiatives
→Government procurement system was not
overly supportive of local industry development
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KEY FINDINGS FROM THE EM cont’d
→While funding of citizen-owned businesses was key
to ensuring an effective spread of benefits,
competition policy was vital to sustainable citizen
economic empowerment initiatives
→Competition policy should not only ensure the
effective implementation of empowerment policy,
it should also ensure that citizen economic
empowerment is implemented in a competitive
environment
→Structure & functions of regulatory & legislative
environment should be aimed at promoting
competition
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KEY FINDINGS FROM THE EM cont’d
→Competition policy should play a crucial role to help
ensure the proper functioning of the economy
→Competition policy should also be consistent with
other policies on e.g.,SMMEs, Privatisation,
Industrial Development Policy
→Botswana should adopt a comprehensive national
policy on competition and a law
→ In addition to the EM, Govt sought UNDP support to
carry out another parallel review of the inventory of
policies, laws or regulations that had a bearing or
impact on competition
[ see Inventory of Botswana Laws Relevant for Competition Policy by Prof. Clement Ng’ong’ola of
University of Botswana, March (2002)]
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KEY LAWS THAT NEEDED TO BE REVIEWED
1. Companies Act
Efficient registration system for local &
foreign firms
2. Industrial Development Act
Review of the Industrial Licensing
Authority & Minister’s arbitrary powers
to issue general and exclusive
manufacturing licences and revise ID
Policy. Review of reservation of certain
licenses to citizens
3. Trade & Liquor Act
Review the Minister’s powers to revoke a
license without reasons/appeal. One
year licence span. Manager to be on cite
4. Botswana Meat Commission Act
Grants statutory monopoly status to BMC
over export of fresh and canned meat
and live cattle
5. Control of Goods, Prices & Other
Charges Act
Licence applications for goods & pricing
as determined by the Minister
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3. KEY GOVT ACTIONS
 NCP was adopted in 2005
 A Competition Act was passed in 2009
 An Economic Diversification Drive (EDD) was
established as a dept in the Ministry of Trade & Industry
 A review of the National Development Plan (NDP 10)
was undertaken
 Local Enterprise Authority (LEA) was set up
 The Citizen Entrepreneurial Development Agency
(CEDA) was set up
 Trade & Liquor Acts were revised to address concerns
 Telecommunications Act has been repealed & replaced
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KEY GOVT ACTIONS cont’d
 Various Committees formed, including:
→National Doing Business Committee
→Technical Committee on Competition Policy
→National Economic Diversification Council
→High Level Consultative Council
 Quarterly progress reports sent to the office of Minister
of Trade, National Strategy Office and the Office of the
President
 CA given express mandate to advise government on
matters of competition (Sect. 5 of the Comp. Act)
 Review of the National Development Plan (NDP 10)
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High level affirmations
 Botswana has established a Cabinet Sub-Committee on Doing Business
and Global Competitiveness to oversee the work of the National Doing
Business Committee, and are mandated to coordinate applicable
reforms. Competition Authority ensures that businesses do not engage
in price-fixing, market allocation and bid-rigging: Lt. Gen. S. K lan
Khama, President, Botswana
 Anti-competitive environment makes life difficult for new entrants,
especially small and medium sized businesses… Competition Authority
has to ensure that new entrants do not have to put up with undue
impediments by existing operators, including laws and regulations :
Dr Ponatshego Kedikilwe , Vice- President, Botswana
 …Government is committed to ensuring fair competition. Creating a
culture of competition is one of the pre-cursors to competitiveness.
There is a growing concern that there should be some form of
prohibition of large firms from entering certain market segments:
Dorcas Makgato-Malesu, Minister of Trade and Industry, Botswana
4. CHALLENGES
 Assuring the local business community that NCP
is in their interests as well, including the SMMEs
 There are generally still protectionist tendencies
from the local business community, in particular
the SMMEs, where they desire and lobby for a
discriminatory application of the NCP
 Reform process and legal review are matters
that are subject to long debates and
bureaucracy and may take a long time to be
adopted and implemented
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CHALLENGES cont’d
 There is general resistance to review policies, laws
and regulations that may have been working well
for a large or small powerful group of citizen-owned
businesses (as happened in the retail and
traditional beer sector in Botswana)
 The understanding of industrial policy and
competition policy and intervention therefrom may
bring about different and perhaps conflicting
strategies and outcomes
 Public expects tangible results from any reform
process and this may not be easy to show in the
short-term e.g. SMME entry into the supply chain to
big businesses or Government procurement
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5. WHAT LESSONS FROM BOTSWANA???




NCP needs the highest political & government
support in order for the reform process to be
comprehensive and sustainable
Civil Society, academia, industry experts and
associations, SMMEs, etc must form part of the
constituent
consultative
assembly
when
developing an NCP
There are some things that are difficult to change
and time must be allowed to take its course and
ensure that consensus is reached - where possible
Reform process may require too many
committees being formed and Govt of Botswana
is currently considering merging some of them
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WHAT LESSONS…??? cont’d
 NCP should clearly and deliberately fuse into
other policies, laws and regulations that impact
on competition and industrial growth
 A policy and legislative inventory of all polices
and laws that impact on competition and create
barriers to growth and development must be
undertaken
 A national support base must be created for the
NCP to be successful - Civil society involvement
in advocacy is key
 International benchmarking is also an important
pre-requisite
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KE A LEBOGA…
FOR FURTHER INFORMATION:
Thula Kaira - CEO
Competition Authority
Plot 28, Matsitama Road, Main Mall
Private Bag 00101
Gaborone, BOTSWANA
Tel: +267 393 4278
Fax: +267 312 1013
Email: [email protected]
[email protected]
Website: www.competitionauthority.co.bw
Facebook: Competition Authority – Botswana
Twitter: CompetitionBots
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