16 August 2005 1

Capacity Building on Competition Policy in Namibia

Rehabeam ShilimelaNEPRU

16 August 2005 2

Overview

• Nature of Namibian markets

• National policies affecting competition

• Competition law

• Competition & economic regulation

• Consumer protection

• Concluding remarks

16 August 2005 3

Nature of Namibian markets

• A small open economy

• Linkages with South African economy

• The Common Monetary Area

• Namibia maintains several monopolies

• No subsidies, but there are other barriers

16 August 2005 4

Policies affecting competition

• Development policy

• Industrial & Investment policies

• Trade policy

• SME policy

• Labour policy

• Policy harmonisation

16 August 2005 5

Development objectives:

• reduce poverty*

• create employment*

• promote economic empowerment

• stimulate and sustain economic growth*

• reduce inequalities in income distribution*

• reduce regional development inequalities

16 August 2005 6

Development objectives (cont.)

• promote gender equality and equity

• enhance environmental and ecological sustainability

• combat the further spread of HIV/AIDS

16 August 2005 7

Industrial policy

White paper on industrial development 1992:

• Private sector to take a lead

• Govt to create environment

• Govt to attract Investment

• Consistency in policy

• Proper communication

16 August 2005 8

Industrial policy (cont.)

• Prevent further monopolies

• Limited intervention

• Value addition, exports

16 August 2005 9

EPZ policy

Foreign Investment Act (1993):

• No VAT on purchase & import of machinery

• Buildings written off at 20% (1st), 8% (10)

• Expo promotion allowance 25%

• Corporate tax abatement of 50%, 5yrs

• Others

16 August 2005 10

Trade policy

• WTO requirements

• SACU Agreement

• Diversification of exports & value addition

• Diversification of export destinations

16 August 2005 11

Trade barriers

• Tariffs on imports (SACU)

• Some equivalence to export subsidies

• Exchange controls

• Import/Export Licensing

16 August 2005 12

Labour policy & law

• Labour Act (1992, 2004)

• The SSC, 1994

• Employment policy, 1997

• Affirmative Action, 1998

16 August 2005 13

Labour policy goals

• Previously disadvantaged persons

• Equality of opportunity for women

• Promote sound Labour relations & fair employment

practices

• Some obligatory min basic conditions of service for all

• Health, safety and welfare of people at work &

prevention of child labour abuses

16 August 2005 14

Labour Act• Act of 1992 established Labour Advisory Council, Labour

courts & set out basic conditions for employment

• Act of 2004 replaced the former, but the competition Act

made reference the 1992 Act.

• Latest analyses indicates that the 2004 Act is bound to

cost firms more

16 August 2005 15

The Competition policy & law• The Regulation of Monopolistic Conditions Amendment

Act, 1958 (Act 14 of 1958)

• Objectives of the competition Act, 2003

• Application of the Act

• Namibia Competition Commission

• Restricted business practices

• Implementation

16 August 2005 16

Competition Act: Objectives• Promotion of efficiency, adaptability and dev of the

economy;

• To provide consumers with competitive prices and product

choices;

• To promote employment and advance the social and

economic welfare of Namibians;

• To expand opportunities for Namibian participation in world

markets

16 August 2005 17

Competition Act: objectives (Cont.)

• To ensure that small undertakings have an equitable

opportunity to participate in the Namibian economy;

• To promote greater spread of ownership, in particular to

increase ownership stakes of historically disadvantaged

persons.

16 August 2005 18

Application

The Act applies to all economic activity in Namibia, or

having an effect on Namibia, except the following:

• Collective bargaining activities or collective agreements

negotiated or concluded in terms of the Labour Act, 1992

• Concerted conduct designed to achieve a non-

commercial socio-economic objective; and

16 August 2005 19

Application (cont.)

• In relation to goods or services, which the Minister of

Trade and Industry, with the concurrence of NCC,

declares by notice in the Government Gazette, to be

exempt from the provisions of this Act.

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Namibia Competition Commission

Independence, powers & capacity• Appointed by the Minister, 3 year term (+)

• Approval of the minister required for key decisions

• Remuneration determined at least by 2 ministers

• Limited staff

16 August 2005 21

Restricted business practices

• Collusive practices

• Abuse of dominant position

• Some mergers

16 August 2005 22

Implementation

• Namibia Competition Act due for enforcement

• 12 month transitional period

16 August 2005 23

Competition & Economic Regulation

• Electricity Sector

• Communication and transport sectors

• The Financial sector

16 August 2005 24

Consumer protection

• NCL established in 1988

• Major traders & regulators have consumer care sections

• e.g. NAMFISA has consumer educative information

16 August 2005 25

Concluding remarks

• Need for regional collaboration on competition

• Government monopolies for other national goals,

liberalisation likely to be held back for some time

• Limited consumer protection at national level