a tripartite report - Unctad

ZAMBIA
fees are becoming a major source of funding for
competition authorities, particularly those in developing
countries but also in some developed
countries. The competition activities of most, if not
all, developing countries are grossly under-fund-
go a long way in assisting in the meeting of the
high costs of merger review and examination. It
of mergers with motives other than pro-competi-
high compared with those charged in other countries
in the region. The fees are calculated at 0.1
per cent of the combined annual turnover or assets
in Zambia of the merging parties, whichever
is higher, with a cap of maximum fee of 16 666
667 fee units 161 , which translate to K3 billion (or
162 The high fees go beyond their
intended purpose of defraying the Commission’s
costs of merger examination, and are a major
source of income for the Commission. It is there-
constitute over 60 per cent of the Commission’s
income, far outstripping the government grant,
which should be the major source of the Commission’s
operational funds. This presents two major
tion
fees increase the transaction costs of merger
on the merging parties who in most cases enter
into merger transactions for economic and viability
reasons. Secondly, it would not be prudent for
tion
fees for the funding of its operations since
such fees are not a stable source of income.
It is therefore recommended that the
Zambia be revised and lowered from
the very high $600 000 in line with
practice in the region.
mission
under the old Act also used to charge an
extra fee for expediting its examination of mergers.
The charging of the extra merger examination
expedition fees is however no longer provided for
in the Regulations to the new Act since the Act
145
deadlines. The Commission has therefore discontinued
the practice.
The Act also provides that the Minister of Finance
to the Commission to be retained by the Commission.
The Commission has made proposals that it
be approved by the Minister. The Ministry is of the
view that such requests should be made on a case
requirements of the Commission. It is not surprising
that the Commission’s proposals to retain as
approved by the Ministry of Finance given the fact
terprises’
annual turnovers can be very high. The
retention by the Commission of a percentage of
sions
of the Act adversely affects the Commission’s
prioritization of its activities, and it has already
been recommended that the relevant provisions
of the Act be removed.
Based on the Commission’s budgetary performance
in 2010, total employment costs of about
est
expenditure, at 72 per cent of total recurrent
141). Table 4 below shows the breakdown of employment
costs during that year, excluding allowances
directly related to operations, such as travel
per diem allowances.
Table 4: Employment Costs in 2010
Employment
Cost
Actual Expenditure 2010
Jan-Nov
ZMK $
Personal Emoluments 2 297 262 414 473 272
Employees Pension Scheme 134 215 314 27 650
Medical and Funeral Expenses 27 854 880 5 739
NAPSA Contributions (national
social security)
79 682 637 16 416
Staff Welfare 7 132 602 1 469
178 840 071 36 844
Total Employment Costs 2 724 987 918 561 390
Source:
220. While having employment costs as high
as 72 per cent of total recurrent expenditure might
ZAMBIA