• Set target falls short by 8 percent
• CA to outsource some internal duties
• CA in dire shortage of qualified experts
Established four years ago, the Competition Authority (CA) still faces a debilitating shortage of qualified experts, and operates with only 50 percent of the needed staff compliment. This week, founding Chief Executive Officer (CEO), Thula Kaira admitted that the authority failed to meet performance target because of financial and human resource constraints. Kaira said the authority employs only 33 people, but was supposed to work with a staff compliment of at least 60 staff members to effectively drive the duties of the authority.
Responding to inquiries by The Business Weekly & Review, Kaira said they suffered a shortage of qualified investigators. One of the core duties of CA is to investigate anti-competitive behaviour among businesses which, he said, needs highly qualified investigators. Kaira said they currently have only four of the eight investigators needed by the authority. Further, it appears, the CA also has an acute shortage of inspectors, who, according to Kaira, work hand in hand with investigators to collect information across the country. “Because of that shortage, the authority has to incur unnecessary costs sending officers around the country to carry out investigations and inspections,” explained Kaira.
As if the authority’s challenges were not enough, its two legal units; the contractual and prosecutions units, are manned by only three staff members. “The authority needs a minimum of 10 legal officers,” said Kaira.
Consequently, the authority has lost about P500 000 to outsourcing some services as a result of staff shortage. Tebelelo Pule, Director of Corporate Services at CA, told this publication that “the authority has been engaging external consultants for inspection purposes, which saw P50 000 being spent in 10 different areas, a cumulative sum of P500 000.” Kaira has attributed the authority’s eight percent shortfall to reach the 90 percent target to staff shortage and financial constraints.
Hotel and Tourism mergers took 10 percent of the pie while the transport and distribution sector stood at seven percent.
“The authority intervened in a number of mergers. We had set ourselves a target of 35 merger cases but only 32 were handled during the 2014/15 period, missing the target by three. Our estimations are that the authority facilitated the injection of over P145 million into existing businesses. We also facilitated technological and skills transfer, creation and retention of 740 jobs, as well as citizen empowerment,” said the CA CEO. Out of these 32 notifications, six mergers (18.8 percent) were discovered by the authority, showing an increase of 6.7 percent on proactively identified mergers as compared to the financial year 2013/2014.
Further, while 32 cases were handled, the authority only made determinations on only 26 merger notifications (out of 32) which were 27.8 percent below the 2014/15 set target. When compared to the previous corresponding period, the determination of 26 cases was also 21 percent lower. Out of these mergers, 3 were approved with conditions while 23 were without conditions. On the mergers the authority subscribed over, the mining sector related services led mergers at 22 percent, followed by the retail sector at 16 percent.
Hotel and Tourism mergers took 10 percent of the pie while the transport and distribution sector stood at seven percent. The manufacturing, financial services, ICT, and education sectors were at six percent each. Although Kaira decried financial constraints, his operating expenditure was P28.8 million, 55 percent (P15.9 million) of which went to staff costs while administration expenses took P10.2 million. Only P2.7 million was spent on other operating costs.