A competition law aimed at safeguarding and promoting competition in the country is in the pipeline, Trade and Consumer Affairs acting director John Matsheng has announced.
Matsheng regards the proposed law as the key to a number of things, including diversification.
The proposed law would also create an authority to be known as the Competition Commission of Botswana (CCB).
The commission will establish a system of merger control by facilitating competition advocacy, and providing for incidental matter.
It will also prohibit certain restrictive agreements and the abuse of dominant position.
According to the draft bill, the main purpose of the law would be to maintain and promote competition in Botswana. It is envisaged that this would help enhance economic efficiency and promote consumer welfare.
The law will also provide for action against unfair business practices that deny business and consumers the benefits of unfettered access to freely functioning markets.
It will recognise the need of citizen owned small, micro and medium sized enterprises to have an equitable opportunity to participate in the economy.
The draft says the competition commission would act as an advocate for competition in the country and offering ongoing advice to government.
The proposed law is also going to prohibit certain business practices. Although there has been no competition law in the country, there is a policy that was adopted in 2005. The competition policy was formulated as a strategy for enhancing the country's ability to promote free entry in the market place by investors and all firms, irrespective of size.
One of the objectives of the policy was to prevent and redress unfair practices adopted by firms against consumers and small businesses. It was also aimed at removing unnecessary constraints on the free play of market forces.
The formulation of the policy was preceded by an Economic Mapping Survey that took into consideration factors such as the policy's likely impact on unemployment. Other factors that were looked into included the increasing dominance of foreign companies in the country's economy and the development of citizen owned small and medium scale enterprises.
The survey revealed that there is a market-dominance in the meat, cement, and sugar industries, beverages, mining and the motor vehicle distribution sectors.
Firms in these sectors enjoyed substantial market power where tendering for public procurement may be opened to collusion amongst bidders in their respective markets.
The survey also pointed that there is a rapid increase in the number of supermarkets/chain stores and a rise in franchising as well as the proliferation of forms of distance selling, which exclude local firms.