A commissioner for the Competition and Fair Trading Commission (CFTC), Jimmy Lipunga, has said vigorous competition in any economy results in lower prices and higher quality of goods and services
Lipunga, who is also chief executive officer of Public Private Partnership Commission (PPPC), said this also results in top-notch innovations leading to new products and services and wider consumer confidence.
“We all have one thing in common and that is behind our corporate positions, we are consumers of various goods and services in each other sectors. The absence of competition can be a barrier to investment as existing business operators may use their dominant market power to block new investments or business expansion into their market, in other words, abusing the market,” he said.
Without competition, it makes business operators to become less innovative and less interested to produce and market goods and services that satisfy consumer needs, observed Lipunga in Blantyre.
He was speaking in the context of anti-competitive tendencies by some companies, a development that thwarts competition and results in higher prices and poor service delivery affecting consumers.
In an economy in which firms’ monopoly is the normal, consumers are at the mercy of institutions in terms of the pricing and delivery of goods and services.
It is in this context that the Malawi Government enacted the Competition and Fair Trading Act in 1998 to create an environment in which the private sector can thrive and that businesses are complying with the competition rules.
Experts argue that no business wants to invest their money in a jungle economy with no rules and no referee to ensure fair play.
The Act resulted in the establishment of the CFTC which ensures adherence to competition and fair trading principles. And, since 2005, it has been operating as a taskforce within the Ministry of Industry and Trade, but beginning July this year, the Commission is now a statutory corporation.
According to Lipunga, this was done to ensure that it operates autonomously and effectively to meet the needs of the private sector and the consumer.
He has since appealed to the private sector to comply with the provisions the Act to reduce cases in which businesses abuse consumers.
CFTC executive director Charlotte Wezi Malonda also stressed that competition is a critical issue for any vibrant economy.
She reiterated that competition promotes efficiency and in which the ultimate beneficiary is the consumer.