Gaomab II defends Infant Industry Protection
The Chief Executive Officer of the Namibian Competition Commission (NaCC) has come out in defense of the Infant Industry Protection regime.
Mihe Gaomab II said this week that caution should be taken by those suggesting that Government’s Infant Industry Protection policy is responsible for increases of basic foodstuffs and commodities, such as poultry, meat and dairy.
He said the Commission is cognizant that local participation and local ownership of business is important for the economy to go forward. “The Commission would thus be considerate that local businesses, especially SMEs, are safeguarded and protected from extensive foreign competition in terms of the Competition Act.”
Gaomab II said the recent food price increases are not directly attributed to the infant Industry protection measures as a policy instrument by the Ministry of Trade and Industry, adding that the Commission will ensure that consumers are not over charged for items such as poultry, meat, and dairy products.
“Where excessive pricing would be proven in court, the Commission would be in a position to penalize businesses and companies who are engaged in predatory pricing i.e. charging so low to drive other businesses such as SMEs out or excessive pricing i.e. charging so high, way above to make super normal profits at the expense of consumers.”
Gaomab II suggested that the recent price increases of basic commodities are as a result of price increases worldwide. He said food prices are expected to rise 3 to 4% in 2014 and will continue rising until 2018 representing a 12 to 15% increase over a four year period.
Gaomab II said: “There are global factors at play that can have repercussions on food prices. The El Niño drought impact of 2012-2013 withered crops in the fields. As a result, prices for agricultural goods and agro- processing products will tend to rise. Since it usually takes several months for these commodities prices to translate to the food we buy, most of the drought’s price effect will occur in 2014 as it is happening currently in Namibia.” He also said higher prices of agricultural inputs will directly affect the cost of meat and any other animal-based product. “Also hardest hit will be cereals, baked goods and other grain-based food. The current exchange rate depreciation from around 8-plus to the US Dollar in 2012 to around 10 plus in 2014 will also cause the price of imported food to increase in line with the depreciation impact of the exchange rate.”
Namibia is not alone!
The NaCC CEO said Namibian consumers should take cold comfort in the fact that they are not alone in this as all countries would be affected. He said as net importer of most basic foodstuffs, rising food prices in global markets will be transmitted into Namibia automatically.
“The rising food prices are exacerbated by rising global civil and military unrests of countries across Europe and Asia Ukraine, Turkey, Egypt, Nigeria, Egypt and Central African Republic. These unrests do cause interrupted supply of global food shortages along the global distribution chains and causes prices to rise of basic food items.”