Frequently Asked Questions | Namibian Competition Commission

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Frequently Asked Questions

As part of its strategic focus, the Commission engages the media to advocate its mandate and respond to pertinent questions on developments within the Commission. This section of the FAQs comprises some of the questions posed by the media, in this case, with regard to basic commodity prices, and the Commission’s response to such. Should you require more clarity with regard to the Commission’s responses, kindly contact the Economics & Research Division at 061-224622.

Questions

In terms of Section 67, the Commission is under obligation to cooperate with sectoral regulators which have competition powers. The Commission has thus far concluded Memoranda of Understanding (MOUs) with the Communications Regulatory Authority of Namibia (CRAN), Namibia Ports Authority (Namport) and the Bank of Namibia (BoN). It should be noted that the MOUs are not aimed at sharing competition responsibilities. It is rather aimed at formalising cooperation to improve efficiency and avoid duplication of processes.

Collective bargaining activities or collective agreement negotiated or concluded in terms of the Labour Act, 1992 (Act 6 of 1992 as amended);

Concerted conduct designed to achieve a non-commercial socio-economic objective;

In relation to goods and services which the Minister, with the concurrence of the Commission, declares, by notice in the Gazette, to be exempt from the provisions of the Act. In this regard, (1) any undertaking or association may apply to the Commission to be exempted from the provisions of Parts I or II of Chapter 3, in respect of:

  1. Any agreement or category of agreements;
  2. Any decision or category of decisions;
  3. Any concerted practice or category of concerted practices.

An application for an exemption under Subsection (1) must

  1. be made in the prescribed form and manner;
  2. be accompanied by such information as may be prescribed or as the Commission may reasonably require.

The Commission must give notice in the Gazette of an application received in terms of Subsection (1)

  1. indicating the nature of the exemption sought by the applicant; and
  2. calling upon interested persons to submit to the Commission, within 30 days of the publication of the notice, any written representations that they may wish to make in regard to the application.

Rising commodity prices, especially of basic items not luxurious ones are a source of concern for everyone as this could impact on our pressing matters of concern-inequality and poverty.

The defining issue is at the end of the day- competitiveness- in terms of production. Given our small economies of scale, our local products for most part will at times have to be sold at higher prices to reflect the cost structure of producing them.

The NACC, as relayed to the public in various forms, is developing a price monitoring regime to assess and review, on a constant basis, the price and cost structure of certain industries that are amenable for industrialization schemes such as the Infant Industry Protection. This is not regulation or price control, rather it is monitoring to ensure that the end price derived at their farm gate or factory price truly reflects the cost structure.

Input prices to produce the local products are an important determinant of high end product prices, especially where such inputs are sourced internationally. Secondly, there also seems to be some price premiums extracted during the distribution channel of the product to the shops. Thirdly, the pricing relations between producer and retailer might also give way to some pricing rent extractions. The question then is whether such pricing rent extraction or what they call marketing margins are efficiently priced or whether the country could look at other alternatives, such as subsidized transportation by say TransNamib from farm gate to retail shelf. The NACC will delve deeper into the distribution channel and issues of buyer power between producer and retailer next year.

The NACC can only engage in price monitoring, not price controls. The appropriate authority to ponder on price controls and regulations aspects is the Ministry of Trade and Industry.

There could be a danger that imposed prices by a government authority could render the producer much more inefficient, thereby leading to unsustainability and thereby rendering our industrialization ambitions to naught.

Economic Benefits: efficient resourc allocation, growth, innovation

Consumer Welfare Effects: lower prices, better quality, greater choice

Governance: less need for Government intervention, reduced regulation

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