Malawi celebrating World Competition Day under the theme ‘Role of Competition in Enhancing Economic Recovery’

* There will be a live broadcast this evening of a panel discussion that will be aired on Zodiak Radio and TV from 18:00hrs

* Recent economic shocks have led to significant disruptions in Malawi’s markets—CFTC

* Resulting in price hikes and coordinated efforts among businesses to overcome disruptions in their value chains

By Duncan Mlanjira

In recognition of the recent economic shocks — following challenges posed by the CoVID-19 pandemic, Cyclone Freddy and the devaluation of the kwacha — Malawi is celebrating this year’s World Competition Day under the theme ‘Role of Competition in Enhancing Economic Recovery’.

And the commemoration will be enhanced this evening through a live broadcast of a panel discussion that will be aired on Zodiak Radio and TV from 18:00hrs — whose panelists will include Executive Director of Competition and Fair Trading Commission (CFTC), Secretary for Trade & Industry, Director & Chief Executive Officer of the COMESA Competition Commission (CCC) and president of Economics Association of Malawi (ECAMA).

A statement from CFTC Executive Director, Lloyds Vincent Nkhoma says recent economic shocks “have led to significant disruptions in Malawi’s markets resulting in price hikes and coordinated efforts among businesses to overcome disruptions in their value chains”.

“Concurrently, concerns have risen regarding various anticompetitive conduct and unfair trading practices, affecting competition and innovation in various sectors.”

Internationally, the World Competition Day will be commemorated under the theme: ‘Prioritising Socially Sensitive Sectors’ but Malawi has chosen its own theme following trade trends after the realignment of the local currency in which manufacturers, traders and supplies exponentially increased prices of their goods and services — some evening raising prices of old stock.

This prompted President Lazarus Chakwera to order the Ministry of Trade & Industry and CFTC to intensify investigations of any perceived unjustified price increases and to apply appropriate penalties to offenders in order to protect the citizenry against the current skyrocketing prices of goods and services.

The CFTC came up with a preliminary report of their findings, that indicated that while it is obvious that any devaluation of the currency may trigger an upward adjustment of the pricing of goods or services, some traders are indeed using the realignment of the local currency as a scapegoat to exploit consumers — which is a gross violation of the Competition and Fair Trading Act (CFTA).

Nkhoma further says as part of the same commemoration activities, the CFTC will also carry out sensitisation meetings for businesses in selected districts of the country with the aim of enhancing awareness and compliance with the CFTA.

From the price monitoring exercises in the major cities and towns, the CFTC has observed that some prices depicted “a trend of possible opportunism through excessive price increases” using the devaluation of the kwacha effected on November 7 by the Reserve Bank of Malawi.

In a public notice issued by Nkhoma last month indicated that the CFTC formally approached 19 manufacturers and suppliers of products and services to explain the rationale behind such high price adjustments.

The Commission also engaged the relevant regulators, saying this was the normal first step in the due process that the CFTC always follows before commencing a full investigation where the evidence points to a possible violation of the CFTA.

The exercise is being done in collaboration with the Ministry of Trade & Industry as well as Ministry of Local Government, Civic Education & Culture — thus expanding the price monitoring exercise to the districts and rural trading centres of the country to establish and gather evidence of possible violations of the CFTA.

CFTC continues to urge the business and the general public that any supplier of goods and services found to be engaging in excessive pricing contrary to the CFTA, the authority “will not hesitate to issue relevant penalties and sanctions for such conduct as provided for under the law.”

The CFTC further encourages consumers to report any suspected violation of the CFTA through its toll free line 2489 or send a WhatsApp message to 0987738749.

The World Competition Day, which is observed on December 5, dates back to 1980, when the United Nations adopted the international standard  for competition laws known as the ‘Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices’ commonly referred to as the United Nations ‘Set of Principles and Rules on Competition’.