Capacity Building on Competition Policy in Select Countries of
Eastern and Southern Africa
7Up3 Project
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EnewsLetter Vol. 1
Project Progress
CUTS Centre for Competition Investment and Economic Regulation (CUTS C-CIER) recently embarked on a unique trilateral development cooperation (TDC) initiative through a project entitled, ‘Capacity Building on Competition Policy in Select Countries of Eastern and Southern Africa’. Referred to as the 7Up3 Project, this initiative aims to utilise the capability of CUTS in designing and implementing a multi-country project on competition policy and law in seven developing countries of Eastern and Southern Africa, namely: Botswana, Ethiopia, Malawi, Mauritius, Mozambique, Namibia and Uganda, with assistance from the Norwegian Agency for Development Cooperation (NORAD), Norway, and the Department for International Development (DFID), UK.
The project encompasses the principles of TDC, where a Southern ‘provider’ extends technical assistance to a Southern ‘recipient’ with assistance from a Northern ‘donor’.
The implementation strategy for this project is consistent with earlier initiatives of CUTS on competition policy and law, involving ‘partnership’ with selected civil society organisations in each of the project countries, and adopting a research based advocacy process to execute project activities. For this purpose a leading research organisation has been identified as the ‘research partner’, and a NGO/consumer association as the ‘advocacy partner’ in each of the project countries.
A two-day meeting organised at Entebbe, Uganda marked the official launch of the 7Up3 project. The occasion drew scholars from other parts of Africa, experts on competition from various countries around the globe, and representatives of competition authorities, in addition to representatives from the project partner organisations.
Generic concepts of competition policy, and their implications for developing countries, especially from the region were discussed through presentations made in three sessions over a seminar on the first day of the project. These sessions saw experts present their views on: Competition Policy and Economic Development, Competition Concerns in the region, and Competition and Regulation Interface.
On the second day Preliminary Country Papers (PCP) prepared by the research partner were presented. The PCPs highlighted the prevailing competition regime and regulatory framework in the project countries, and stimulated interactions across the table.
In the workshop that followed, the project coordination and management unit (PCMU) representatives from CUTS International, project partners, project advisory committee members and the development partners discussed the 7Up3 project implementation structure, and tried to evolve a common understanding of the process of executing the project.
The researchers partners have since been involved with fine-tuning the PCP with comments and suggestions received during the meeting. The advocacy partners on the other hand have been busy trying to identify key stakeholder representatives to constitute National Reference Groups (NRGs), and make arrangements for the first round of national consultations.
In these national consultations, i.e., NRG meetings, a group of diverse stakeholders would be sensitised of the objectives and anticipated outcomes of the project. The PCP prepared by the research partner would also be discussed with this group for their comments, and to give the research outcome wider ownership nationally. The NRG meetings are scheduled from end May 2005.
News from project countries………
COUNTRY
BOTSWANA
ETHIOPIA
MALAWI
MAURITIUS
MOZAMBIQUE
NAMIBIA
UGANDA
NEWS
Consumer empowerment needed
Consumer welfare and fair access to basic goods and services are severely lacking in most African nations, mainly due to the lack of comprehensive consumer protection policies and laws. This was the observation of the delegates who participated in a meeting organised jointly by the Botswana government and the Regional Africa Office of Consumers International (CI-ROAF). The Minister for Trade and Industry of Botswana expressd the government’s plan of enacting a competition law soon to ensure consumer welfare in the country.
Beef export monopoly to continue
Farmers in Botswana have urged the government to liberalise the sale of live animals and their products outside the country for better returns. Botswana Meat Commission (BMC), the government agency solely responsible for exportation of live animals and their edible products has been observed to have monopolised the trade in the country.
Ethiopia fears business prospects in Djibouti
The govt. of Djibouti has introduced a Finance Law that lays down strict requirements for insurance companies to continue operating in Djibouti. This law discriminates between national and foreign companies, an attitude that the government has developed recently towards foreign businesses. This law and similar legislations that are expected to follow soon would definitely upset business prospect of neighbours like Ethiopia, which has had a long history of trade ties with Djibouti.
Move to attract foreign firms lauded
Events like the recently held ‘Trade Fair’ organized by the Addis Ababa Chamber of Commerce (AACC), is expected to enhance the extent of international trading in the country, thereby leading to greater competition among the players in the market. Companies representing 31 countries showcased their products in the fair.
Need to improve business environment in the country
At a recently held workshop on the implementation of industrial zones at Addis Ababa, private investors complained about lack of infrastructure and other problems, which made it hard for them to expand, or even start production and services. It emerged as recommendations that the government should improve the social and physical infrastructure in the country and enhance the regulatory regime to evolve a level-playing field for attracting investors’ attention.
Malawi scores poorly in business climate
Malawi has scored poorly in the World Economic Forum’s Global Competitiveness Report prepared for 102 countries, in terms of prevailing business and macroeconomic climate there. This has, however, not come as a surprise for the country’s business community, who have been urging the government to make investment incentives clear and transparent. Observers nevertheless are hopeful and assert that the country needed to get rid off disincentives like unreliable water and electricity supply, high transport cost and policy on expatriates to improve its investment climate.
Malawi digs its heels over its tobacco industry
Malawi has made it clear that the country would not ratify the WHO’s global convention, Framework Convention on Tobacco Control. The country’s Agriculture Minister, Gwanda Chakuamba expressed that tobacco contributed 70% of its exports and 15% of the GDP. Under the circumstance, ratification of the convention would jeopardise the livelihoods of over 2 million people who depended on the cashcrop.
Tobacco prices – a national worry
Experts have warned that illegal cross-border tarde in tobacco could become rampant, if its prices continue to remain low in Malawi. Farmers would be forced to resort to such practices to get fair returns. Further, continuing low prices of the crop could even spell disaster for the share markets, as tobacco is the highest forex earner for the economy. The government should realise the situation and announce appropriate steps.
Mauritius Strengthens its Textile Industry
Mauritius launched ‘Enterprise Mauritius (EM)’, to support its textile industry, which faces stiff competition after the abolition of quotas under the Multi Fibre Agreement. EM targets promotion of appropriate technology usage and aims to stimulate exports to ward off competition China and Co. The government has lareay geared up to counter the situation by setting up a Textile Enterprise Support Team.
Mauritius Plans to Become Duty-Free Island
Tourists in Mauritius would soon have much to fill up their bags with, and not remain restricted to the beaches of this paradise to get that envied ‘tan’ only. The government of this island nation has embarked on a plan to make the island ‘duty-free’ and transform it into a ‘shoppers paradise’. This project would be accompanied by incentives for local and foreign businessmen to set up massive retail outlets here.
Competition Brews up in Beer Market
The beer industry in Mauritius is ready for a complete makeover, with the introduction of two new brands by Universal Breweries. The company is all set to thwart the monopoly status that Phoenix Beverages has been enjoying, and promises to capture 25% of the market within the first year. Phoenix has already prepared itself for the onslaught through its extensive ad campaign, aimed at highlighting the issue of foreign ownership of the new company.
Alleviation Depends on Growth
Poverty alleviation through economic growth was particularly dependent on the ability of Mozambiquan business to compete in the international market. His was the opinion expressed by the Minister of Industry and Trade, Antonio Fernando at the opening ceremony of Mozambique Business Forum. He further observed that the country needed to introduce appropriate trade and investment policies and remove impediments, to facilitate the emergence of a vibrant private sector. The challenge was to produce quality goods at competitive prices to gain foothold in the international market.
Mozambique Among Investors’ Favourites in Africa
The World Bank’s Multilateral Investment Guarantee Agency (MIGA) has noted a steady increase in investors’ interest in Mozambique. The agency has ranked the country as its sixth largest recipient, on account of assistance regarding various projects in the manufacturing and infrastructure sectors. It is believed that the industrial policy, and availability of cheap labour has facilitatede enhanced investment here.
Namibia and the Textile Industry- Golden Fleece or Threadbare Hope?
Recet closure of a textile manufacturing unit in Namibia has brought forth the kind of challenges that the textile sector would face in the post-quota regime. Critics are apprehensive of the industry being able to compete with players like China, Indonesia and Pakistan. However, the government is confident of being able to pull through, especially on account of the preferential market access the country enjoys in US and EU in light of the AGOA and the Cotonou Agreement respectively.
ECB Announces 6% Hike in Bulk Electricity Tariff
The Electricity Control Board (ECB) has announced a 6% increase in the tariff of bulk electricity, approving an application by NamPower, the national power utility of Namibia. SADC has witnessed a growth in power demand in the recent past. The government has called for a closer association between the power generators and investors to raise the production level in the country.
Celtel Advocates Fair Competition
Celtel’s Managing Director, Tim Bahrani, has promised improved service delivery at cheap rates in the near future in the country. The company has however, expressed resentment over the government decision to impose (10%) tax exclusively on mobile phones.
Electricity Body Defends Self on Tariff Rise
The Electricity Regulation Authority defended itself over power tariff hikes saying that it would help generate revenue to improve capacity and cope up with power shortages, among other reasons.
Launch of Simu 4 U Takes Rural Communication on New Level
Uganda Telecom Ltd. has launched Simu 4 U, a public payphone service designed for low-income sections, and remote habitations in the country. Rival phone companies are engaged in cutthroat competition in the country, and constantly on the lookout for innovative ideas to attract consumer.
Ugandan Business Council Established in Dubai
The Ugandan Business Council was recently launched in Dubai at a ceremony hosted by the Dubai Chamber of Commerce and Industry. A move that is expected to further the mutual cooperation between the two countries. Dubai is expected to help attract foreign investments to Kampala, through its experience in organising diversified trade exhibitions.