Capacity Building on Competition Policy in Select Countries of
Eastern and Southern Africa
7Up3 Project
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7Update EnewsLetter Vol. IV
Project Progress
Ongoing Activities
One of the major responsibilities of the country partners in the 7Up3 project countries, (Botswana, Ethiopia, Malawi, Mauritius, Mozambique, Namibia and Uganda), is to assess the level of awareness among select stakeholder groups on competition issues, for the purpose of designing advocacy and capacity building strategies.
Perceptions surveys are, therefore, currently being carried out in five out of the seven project countries (except Namibia and Mozambique). Namibia would start the surveys in early January, while in Mozambique, the project has only begun to gather steam, with the PCP draft readied by the country partner.
Three stakeholder groups of, i.e., consumer representatives, government/regulatory authority representatives and the business community are targeted for the perception surveys. The outcomes from these surveys would be analysed and incorporated in a detailed ‘Country Research Report’ on competition policy and law, and is expected to be ready by January 2006. The research reports, once prepared, would have their findings discussed with a representative group of national stakeholders from the project countries.
Specific Project Outcomes
One of the recommendations that had emerged from the first round of national stakeholder meetings (NRG meetings), was to undertake sector-specific studies in the project countries to assess the level of competition in specific sectors. In order to initiate this process, the Project Coordination and Management Unit (PCMU) of the 7Up3 project asked the country partner to develop briefing papers on ‘Competition in Select Agricultural Produce Sector’. Some of the papers on specific agricultural products included: tobacco in Malawi, food grains in Ethiopia and sugar in Mauritius.
CUTS has prepared a policy brief on ‘Competition in the Agricultural Produce Sector in Developing Countries’ by integrating inputs from these papers, including those from the other developing countries in Africa and Asia. The brief was discussed shortly. The Institute for Consumer Protection (ICP) the advocacy partner from Mauritius, has prepared a series of ‘policy briefs’ to sensitise various stakeholders, especially the policy-makers, on the relevance of a functional competition regime in the present economic order of Mauritius. The following issues have been covered in these briefs:
- Competition Policy and Poverty Reduction;
- Competition and Consumer protection: A Hybrid Approach;
- Should the Competition Act be Reviewed Even Before Its Implementation? And
- Regulatory Law: Need for Streamlining and Accountability
News clippings, stories, articles on competition and regulatory issues of interest to the region are being regularly posted to the e-discussion group – the 7Up3Forum. The current membership base of the 7Up3 Forum is 220, and is growing.
Project Outreach and Networking
Representatives from the PCMU of the 7Up3 project participated in the Fifth Review Conference of the UN on Competition Policy held at Antalya, Turkey from November 14-18, 2005. The Conference was utilised by the representatives, among other purposes, to spread awareness among the international community (represented by delegates from over 70 countries and various experts), about the 7Up3 project and its objectives.
The participants appreciated CUTS strategy and its efforts of working with the civil society on the vital issue of competition policy and law, especially in the project countries, where there has been some movement on the issue. Discussions were held with dignitaries from Ethiopia, Malawi, Mozambique and Namibia on the sidelines of the conference. All the dignitaries met (who included senior government officials from the Ministries dealing with competition policy and law, competition authorities, etc.) were impressed with CUTS capabilities on the subject, and assured assistance in implementing the project. Botswana, Mauritius and Uganda were not represented in the meet.
News from project countries………
The following table provides a glance at some important news from the project countries, pertaining and related to, competition and regulatory issues.
News from project countries………
COUNTRY
BOTSWANA
ETHIOPIA
MALAWI
MAURITIUS
MOZAMBIQUE
NAMIBIA
UGANDA
REGIONAL NEWS
NEWS
Dangers from Poisonous Toys
Children’s toys in Botswana have been found to contain large quantities of toxic substances, like lead. These toxic substances are attributed with adverse effects. Effects that severely impinge upon health. The government is sitting idle on the issue, and is blaming the lack of testing infrastructure for the prevalence of such toys in the market.
Domestic Gas Users Still Unhappy
Liquefied Petroleum Gas (LPG) users in the capital are still complaining about the unfair practice of various dealers of supplying half- empty gas cylinders. The government has tried to address many such cases, while the remaining have been resolved by mutual understanding between the dealers and the users.
Privatisation the Catalyst
Speaking during a conference organised by the privatisation agency in the country, the Assistant Finance and Development Planning Minister announced that privatisation would lead to enhanced efficiency and a competitive market in the country. He observed that the government was committed to promoting privatisation, and ensuring a greater participation by the private sector in the country’s economic development.
Tight State Control over Advertising
Although private businesses have come into being for more than a decade and a half in Ethiopia, the advertising business is totally under the control of the government. Advertising agencies in both the print and the electronic media are state-owned, and have often been criticised of producing poor quality advertisements.
India-Ethiopia Private Sectors come Together
The Indian Embassy in Addis has facilitated an India Business Forum (IBF), comprising of young professional and representatives from Indian business houses, and private sector representatives from Ethiopia. The IBF is expected to provide a platform for partnerships between Indian and Ethiopian businesses and to catalyse private sector development through accelerated investments.
Quality Coffee from South Soon
Coffee growers from the southern parts of the country would be entering the Ethiopian coffee market with greater zeal in the forthcoming production year and posing stiff competition to the other dominant players, with better quality coffee. This was the assurance given by more than 500 farmers and representatives of coffee processors who underwent technical orientation recently.
Foreigners Operating Illegal Businesses
There is an agreement between the government and civil society on the issue of the rising number of illegal businesses operated by foreigners in the country. Both have come down heavily on the licensing procedure that has various loopholes, which needs to be addressed, to resolve this malady.
Ease in Movement of Products
Malawi is all set to sign a bilateral agreement with Mozambique that would ease the movements of certain products across the border, duty free. This move comes in response to demands by Malawi’s private sector, which says high duty rates in Mozambique discourage trade between the countries.
Tea Growers Learn from Kenya
Growers have appealed to the government to help them develop partnerships with the private tea companies, in order to reap sufficient benefits from the market. Malawi has the potential of becoming the leader in tea production, given the fact, that cost of production here is three times less than in Kenya, the present leader in Africa.
The Milk of Contention
The Government’s decision to reduce the profitability on milk to 14 percent should bring back smiles to consumers. There is however, apprehension that this might lead to a situation, where small manufacturers are sifted out, and the market remains dominated by only two dominant players. Imported milk and milk products from India, might provide some relief.
Consumer Policy Being Readied
The Mauritian Government has invited the civil society as one of the stakeholders, to actively participate in the exercise for drafting a consumer policy framework for the country. Civil society organisations have suggested, that the planned policy be aligned with the UN Guidelines on Consumer Protection.
Regulating Electrical Houseware
The government has decided to adopt international standards for certain electrical devices, in order to ensure the quality of these products. A regulation is also on the cards that would make it mandatory to have high quality electrical devices installed in all homes.
The Price of Sugar
Breweries and soft drink manufacturers in Mozambique, the biggest users of sugar, are continuing to import the commodity, as sugar produced locally is more expensive. By doing so, the concerned industries are trying to pressurise the local manufacturers to lower the price of sugar.
Cashew Crushed to its Death
Once the leading cashew producer in the world, the industry’s survival in Mozambique is at stake today. Observers consider this to be the outcome of an adherence to inappropriate policies prescribed by the World Bank (WB). The liberalisation of the cashew industry has affected the farmers for the worst, while benefiting only a handful of traders.
Illegal Fishing Wreaks Havoc
It has been reported that, a few shipping boats operate illegally in the waters of Mozambique. Most of them are Chinese. Recently, one such Chinese boat was caught with an illegal catch of around four tones of fish. Such illegal fishing frenzies badly hurt the country’s economic and ecological resources.
Need for Regional Competition Policy
The Southern African Customs Union (SACU) has been called to draft a regional competition policy. Admitting the fact that domestic laws have proved ineffective in curbing cross-border competition concerns, experts have demanded a regional approach to deal with competition concerns.
Competition Act to Serve Business Interests
Small and Medium Entrepreneurs (SMEs), representatives of trade unions and financial institutions have together raised concerns about big foreign companies pushing the local ones out of business, through alleged unfair competition. The country’s Ministry of Trade and Industry has been urged to speed up the implementation of the Competition Act, and the other relevant legislation to protect the interest of local businesses.
Business Forum on the Anvil
The Ministry of Trade and Industry is planning a forum constituting private and public institutions, to act as a platform for government and other stakeholders for discussing relevant issues. This forum would have consultative and advisory functions, and would meet periodically to discuss trade and investment related topics.
Facelift for the Coffee Sector
The Ugandan coffee sector is poised for a facelift that would enhance both the level of production and the quality of the product. A system of disseminating market information to small-scale traders and micro-entrepreneurs is being put into place. Such steps are expected to help counter the decline in coffee production in the country.
Uganda Drops in Global Competitiveness
Uganda has dropped eight places in global competitiveness rankings of 2005-06 released by the World Economic Forum. However, it has performed better on account of the ‘macro economic environment’ in the country. By highlighting the strengths and weaknesses of an economy, the ‘competitiveness rankings’ offer an important tool for formulating economic policies and institutional reforms.
Commercial Laws Set for Public Scrutiny
The Uganda Law Reform Commission (ULRC) is taking out several laws, including the country’s competition law for public consultations and recommendations. The debate on these laws is expected to take some time, before they are finalised.
‘Quality Mark’ good for sales
Uganda has the lowest number of products certified by its National Bureau of Standards (UNBS). There are also complains that some companies use the quality mark illegally. The Bureau has called on more and more companies to get the ‘quality mark’, which would help them penentrate international markets, and reap substantial benefits.
Common Textile Policy Mooted for EAC
The member states of the East African Community (EAC) are in consultation for a common textile policy. This policy is expected to develop the local textile industry in the three countries of Uganda, Kenya and Tanzania, and reduce dependence on cheap imports.
Energy to Boost Investment and Growth
Member countries of the SADC are rich in natural resources, which, if properly utilised, could help generate enough power (thermal and hydro) to meet the growing demands for this ‘scarce’ resource. Given the integration of the SADC to the international economic system, the demand for power has to be urgently addressed, to facilitate economic growth and development in the region.
SADC Investment Programme
The main objectives of this EU-SADC Investment Programme are to promote investment in the region and foster regional cooperation. Grants are available for promoting businesses in selected sectors, in any of the SADC countries or the region.