VP warns Botswana’s competition safeguards are failing to prevent concentrated franchise ownership, price collusion and alleged tender manipulation in key sectors
BONGANI MALUNGA
The Vice President and Minister of Finance Ndaba Gaolathe has raised the alarm over weaknesses in Botswana’s competition framework, warning that regulatory gaps are leaving room for concentrated franchise ownership and cartels to manipulate prices, markets and government tenders.
Speaking at the Local Authorities Budget Pitso in Maun last Tuesday, Gaolathe argued that stronger institutions and more aggressive enforcement are required if Botswana is to create a genuinely level playing field for businesses.
His remarks put the spotlight on whether the country’s existing competition architecture is sufficiently equipped to prevent excessive market concentration and coordinated conduct by businesses that can squeeze out competitors and ultimately leave consumers paying more.
ROBUST FRAMEWORK NEEDED
“If our anti-competitive infrastructure or framework or our institutions’ competition boards were robust and capacitated, then we shouldn’t have the same person owning the same franchise. We need to make the framework more robust and put more energy in this framework and executing the idea of anti-competitive behaviour. Including mafias in medicine (procurement) because there’s a way they collude to control prices, markets and tenders,” Gaolathe noted.
While ownership of several units under the same franchise is not automatically prohibited, Gaolathe’s intervention suggests that the government is concerned about the broader consequences where ownership becomes heavily concentrated in the hands of a small number of operators.
ACCUMULATING GREATER CONTROL
The concern is that without stronger safeguards, established businesses can accumulate greater control over particular brands or markets, narrowing opportunities for new entrants and potentially weakening competitive pressure.
His warning over medicine procurement was even sharper, pointing to suspected collusion among suppliers seeking to influence prices, markets and tender outcomes.
Botswana already has a Competition and Consumer Authority mandated to investigate practices including price-fixing, market allocation, bid-rigging and abuse of dominance. The Authority can also conduct market inquiries where it suspects competition is being restricted or distorted.
Gaolathe’s comments, however, suggest that the government believes the problem may no longer simply be the existence of competition rules but whether the institutions responsible for enforcing them are sufficiently empowered, capacitated and aggressive.
The Vice President’s position suggests a shift towards Botswana placing tighter rules governing market concentration, stronger scrutiny of franchise ownership patterns and tougher surveillance of sectors exposed to procurement collusion.