Capacity Building on Competition Policy in Select Countries of
Eastern and Southern Africa
7Up3 Project
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7 Up3 EnewsLetter Vol. VII
Project Progress
One of the unique features of the research undertaken in the project is recording perceptions of different stakeholders, viz. consumers, business and government on the need for a competition policy and law in the beneficiary countries; and related structural and functional aspects of the competition enforcement agencies. In countries with an established competition agency e.g., Ethiopia, Malawi, and Namibia, these views are expected to help the policymakers in undertaking useful reforms in connection with competition. While in countries that do not have an agency e.g., Botswana, Mauritius, Mozambique, and Uganda – this information would help the line Ministry/government department to draw the contours of the competition agency.
Country partners have been busy with the process of carrying out the above exercise in the project countries. The exercise involved addressing a questionnaire (questionnaires are available at www.cuts-international.org/7up3.htm) to select respondents from the three stakeholder groups mentioned above. Results of the analyses of the questionnaires would be incorporated in the ‘Country Research Reports’.
Of late, participatory engagement of civil society in developing and implementing functional competition regimes in their respective jurisdictions has been discussed at various platforms, including at the review conference on competition policy of the United Nations held in November 2005 in Antalya (Turkey).
CUTS has attempted to bring together viewpoints of various stakeholders (especially – competition scholars, practitioners and the civil society) from across African countries, on how (in what ways) should the civil society get engaged with the process of developing a functional competition regime in their home. This exercise started with a discussion on ‘Promoting a Healthy Competition Culture – How to Move Ahead in Africa’ held during the regional conference of the 7Up3 project in Addis Ababa in March 2006 (http://www.cuts-international.org/pdf/7Up3_RC_RoundTable.pdf). Subsequently, a roundtable discussion on the sidelines of the International Competition Network (ICN) Fifth Annual Conference (in Cape Town, May 2006) on ‘Civil Society Participation in Evolving a Functional Competition Regime’ was also organised, which brought important issues expressed by academicians, competition administrators, development partners and civil society to the fore (http://www.cuts-international.org/7up3/Roundtable_C_Town(f).doc)
There appeared convergences on the points that have been elucidated:
- Given the current political economy situation in the project countries, it is not only essential but desirable for civil society organisations (CSOs) to engage on competition policy and law issues – especially in raising wider public awareness and support on the need for a competitive market, and the right enabling environment.
- Competition Authorities should co-operate with civil society organisations on competition advocacy.
- There is a need for raising the capacity of civil society in Africa to engage meaningfully on competition issues. Expertise from other developing countries would be useful in this regard, especially from those having experience in dealing with similar socio-economic-political circumstances.Development partners should realise the necessity for civil society organisations to engage on competition advocacy issues, especially in consumers’ interests and support initiatives of credible CSOs.
- Development partners should realise the necessity for civil society organisations to engage on competition advocacy issues, especially in consumers’ interests and support initiatives of credible CSOs.
News from project countries………
COUNTRY
BOTSWANA
ETHIOPIA
MALAWI
MAURITIUS
MOZAMBIQUE
NAMIBIA
UGANDA
REGIONAL NEWS
NEWS
End to a Monopoly
The monopoly in Botswana’s digital satellite pay TV market is over, with the entry of Black Earth Communications into the market. Competition is all set to heighten, as the new entrant will be focusing on the black middle class clientele.
No Flesh on the Bone?
The minister of Agriculture has appealed to the farmer to do their part in the nation’s interest by selling their cattle to the BMC, even after a 40 percent increase in prices was unable to persuade farmers to sell their cattle. Farmers had earlier alleged that BMC was abusing its dominant position in that it offered low prices for cattle.
Skewed, Somewhat
Private media has once again raised the issue of commercialisation of the state media in Botswana, and asserts that the sector is in any case tilted in favour of government media companies.
Ethiopian Invite
Ethiopian Prime Minister Meles Zenawi has encouraged Indian firms to invest in the Horn of Africa countries. A delegation of Indian investors welcomed the invitation and agreed to meet Ethiopian officials to discuss possible joint venture initiatives.
Open-ended Rewards?
A research undertaken by the National Bank of Ethiopia explores the possible costs and benefits of opening the banking sector to foreign competition in Ethiopia. The study has revealed both positive and negative impacts of opening up the sector to foreign companies.
Empty of Sugar
A reduction in sugar supply combined with speculation is causing ever-rising sugar prices in Addis Ababa. Sales of imported sugar have risen but still many are left without it due to the high prices of the commodity.
Tapping the Flow
The new Malawi-Mozambique power interconnection, which will tap power from River Zambezi, promises to be a main artery of energy supply in the South African Development Community (SADC) area. The interconnection will benefit Electricity Supply Commission of Malawi, by raising its revenues.
For Common Ground
Malawi’s Information and Tourism Minister, Patricia Kaliati, has reiterated the importance of Information and Communication Technologies (ICT) and highlighted the necessity of a common policy and interface for the members of the Common Market for Eastern and Southern Africa (COMESA). COMESA members have also been discussing adopting the UN model law on e-commerce and the accession to World Trade Organisation’s (WTO’s) IT Agreement.
Hardly any Puff
Even after the official price of tobacco was raised at the behest of President Binguwa Mutharika, pressure groups like Actionaid have said that the increase was still not sufficient. For opposite reasons, the Tobacco Exporters Association of Malawi who has expressed resentment at the introduction of the concept of ‘minimum price’ has contested the rise in prices.
Meaty Prices Indeed!
Any benefits from liberalisation of cattle import has been stifled by the monopoly company Socovia in Mauritius. Consumer watchdogs have alleged that the company has abused its dominant position in the beef market by raising the prices of beef, and urged the government to conduct an enquiry into the issue.
Raising Questions
A draft Bill on Competition for Mauritius has raised some critiques, especially concerning the independence of the competition agency. Observers believe that the bill in its present form would weaken the powers of the competition agency and make the process of competition enforcement long and tedious. In order that competition brings benefits to both consumer and business, the Bill would need to be reviewed.
Another Route
South Africa based Grindrod company has acquired its stake in the Maputo Port Development Company. This, observers believe would prove to be a landmark move enabling South African cargo to move through Maputo port.
In Search of Solutions
Top priority in the SADC region is to find solutions to the energy deficit that the region suffers from, which is expected to rise, given growing demands.. A gleam of hope comes from Mozambique, which is endowed with a rich potential for hydropower generation.
The countries need to work out strategy for co-operation and integration of the power grids in order to harvest and equitably distribute the benefits, the work that needs to be done under the aegis of the Southern African Power Pool.
Dissipating Smoke
The government’s plan to encourage tobacco companies from undertaking processing within Mozambique, suffered a set back when Alliance One decided to wrap up its operations in the country.
The tobacco giant had not shown any intent of developing a domestic processing unit, which led the government withdraw its concessions to the company. The concessions were given to Mozambique Tobacco Leaf instead, who had responded to the government’s call by building the second largest tobacco processing unit of Africa in Tete province.
Could be in the Top Five
Mobile Telecommunications Ltd (MTC) launched another innovation that would place Namibia in the top five African countries offering a range of high-quality mobile commercial services. Tele-density has undergone considerable improvement in Namibia over the last few years, owing to the introduction of improved technology and enabling policy instruments.
Warned of Price Rise
The Electricity Control Board (ECB) has warned of a sharp price rise if consumption of electricity is not optimised, taking it beyond the reach of the poor citizens. The government is also simultaneously exploring options to improve energy efficiency and introduce a new tariff system.
Girding up, yes?
Telecom Namibia, the monopoly company, has committed NAD $240 million to the development of infrastructure and improvement of services. Grapevine has it, that the incumbent is gearing up to face competition from a second network operator expected to enter the market subsequent to the overhaul of the communications law of the country.
Dissolving Duopoly
The duopoly in the Ugandan telecom is coming to an end. President Museveni has announced that the Ugandan Parliament would soon pass a Bill opening the telecom market to new service providers. The telecom policy of the country has been under attack from various quarters including business and consumers, on account of it restricting entry of new players in the market. While the incumbent companies have expressed their resentment on this, experts believe that the move would spur innovation and bring down prices.
Forcing Closure
Uganda’s economy is set to encounter a serious setback as problems in the power sector trigger a wave of business closures in the country. A 37 percent increase in tariff is forcing small operators close down their business – a move that would cast a big negative impact on the country’s economy.
The government’ decision to hike tariff comes in the wake of reduced generation of electricity emanating from a fall to a third of the hydropower generation capacity caused by an extended period of drought.
Clamping Down on Counterfeit
The Ugandan authorities have seized a heavy consignment of counterfeit shoe polish.
The goods marked as manufactured by a Chinese company that does not exist, were concealed with other items. The importer has been penalised heavily for the act, to warn others of consequences of such conduct.
Master Move?
The East African Community (EAC) has urged the leaders of the member countries to implement the East African Power Master Plan to stem the alarming power shortage in the region. The plan involves regional harmonisation of investment strategies in energy sector, creation of a regional power pool, joint conservation of energy resources, pursuit of alternative energy sources and co-ordination of efforts to develop better generation, transmission, and distribution infrastructures.