In line with its obligations under the Treaty establishing the Common Market for Eastern and Southern Africa (COMESA) (the COMESA Treaty), Seychelles committed itself to the harmonisation of the national competition legislation with the COMESA Competition Regulations with the view to remove contradiction in the enforcement of the two sets of legislations in as far as regulating business conduct in Seychelles is concerned. Considering that the existing national competition legislation came into force in the absence of a national competition policy, it has been realised that the best approach in this harmonisation process is for Seychelles to come up with a coherent national competition policy (NCP) to guide in building a broad framework of consensus in which Government responds to anti-competitive challenges in the market place.
The NCP will inform the needs for any amendment of the existing competition legislation on which basis the harmonisation process with the COMESA Competition Regulations will be done, as well as provide a platform upon which national policies can be harmonised with the national competition law.
Competition policy refers to the full range of measures that may be used to promote competitive market structures and behaviour, including, but not limited to, a comprehensive competition law dealing with anti-competitive practices of enterprises. Competition policy is, therefore, about applying rules to make sure that businesses and companies compete fairly with each other, thus encouraging enterprise and efficiency, creating a wider choice of goods and services for consumers, and helping reduce prices and improving quality of goods and services. Competition thus ensures enterprise interaction on a level playing field, and fosters entrepreneurship activity and innovation.
Effective competition is therefore a key part of the development agenda since it encourages businesses to operate efficiently to remain competitive. The developmental benefits of competition have been identified and documented by virtually all international organisations with economic and social developmental mandates, notably The World Bank, the Organisation for Economic Co-operation and Development (OECD), and UNCTAD. It has been proved that increased competition improves a country’s economic performance, opens business opportunities to its citizens and reduces the cost of goods and services throughout the economy. Competition thus is the instrument for attaining economic growth through enhanced innovation, efficiency and increased productivity, as well as ensuring social gains by overall poverty reduction and greater consumer welfare
The Fair Trading Commission (FTC) embarked on the creation of a Competition Policy in July 2014. Through the assistance of the COMESA Competition Commission, a consultant (Mr Alexander Kububa) was appointed to work on the policy. Mr Kububa being the Chairman of the COMESA Competition Commission also assisted Seychelles in the formulation of the Voluntary Peer review report. This report reviewed all the laws of the Fair Trading Commission as well as the set up and administration of the Commission. The report was presented before UNCTAD in July 2014 alongside the Peer review of Namibia.
Despite enacting several pieces of legislation aimed at ensuring the removal of barriers to free enterprise, the progress across sectors has been somewhat uneven and slow. Such laws and policies have had restraints on the competition drive in many areas of the economy and as a result, the structure of the market remains concentrated to a large extent. It is with this challenge in mind that Seychelles has come up with this coherent National Competition Policy (NCP) to guide in building a broad framework of consensus in which Government responds to anti-competitive challenges in the marketplace. The NCP will also inform the needs for any amendment of the existing competition legislation and the need for harmonisation with other national and regional competition legislations.
The enforcement of competition law in Seychelles however preceded the formulation and adoption of a comprehensive NCP. A comprehensive NCP for Seychelles is vital as an overarching policy framework to ensure multi-sectoral consensus in dealing with anti-competitive business practices in the country, thus facilitating the effective enforcement of competition law by the FTC, and guiding government intervention in taking measures to promote competitive market structures and behaviour. The prime purpose of such a policy is to promote and maintain a process of effective competition across economic sectors so as to achieve a more efficient allocation of resources. A comprehensive NCP is also a useful advocacy tool as it provides a forum for stakeholder engagement aimed at building a competition culture that is receptive to, and supportive of, the competition regime.
The fundamental role of competition policy is also to guarantee consumer welfare by encouraging optimal allocation of resources and granting economic agents appropriate incentives to pursue productive efficiency, quality and innovation.
The main benefits of such a Policy are as follows:
- enhance consumer welfare where consumers will have a wider choice and greater availability of quality goods and services at lower prices;
- improvements in the utilisation and allocation of available resources by the Government through competitive procurement process;
- the promotion of economic growth and development through enhanced productivity in the production and supply of goods and services, leading to an improved quality of life;
- increase in product/service innovation and efficiency due to the pressure generated by competition on businesses; and
- increase assurance for investors which would lead to a better environment for foreign direct investment in an actively competitive market.
National Competition Policy Receives Approval Of Cabinet
The Seychelles National Competition Policy was adopted in December 2014.
The monitoring and implementation process of the policy shall be undertaken by a Committee consisting of the Commission in partnership with the Ministry of Finance Trade and the Blue Economy, sector regulators and business and consumer associations.
Implementation of the NCP shall see the formulation of a competition impact assessment toolkit that shall be exercised when reviewing existing and proposed policies.