Capacity Building on Competition Policy in Select Countries of
Eastern and Southern Africa
7Up3 Project
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7 Up3 EnewsLetter Vol. VIII
Project Progress
Country Research Reports (CRRs) on competition regime in the seven project countries have been readied by the country partners, and are being reviewed by the project advisory committee members of the 7Up3 project. Subsequent to the review, advisers would provide their comments on the CRRs, which would be passed on to the partners for incorporation, prior to finalisation. CUTS has also been reviewing the reports independently and have been in constant touch with partner organisations, providing guidance on fine-tuning the reports and filling in the information gap wherever the need has been felt.
Findings from the CRRs are being collated into a draft Synthesis Report by CUTS. This report would draw lessons from the project countries and comprise of the following chapters:
- Introduction – to provide a brief about the project outline including its implementation methodology and elucidate the objective of the synthesis report.
- Political Economy Context – to be an overview of the state of political economy in the project countries from the perspective of competition administration, the pros and cons.
- Market & Competition – to be a primer on the market in the project countries and competition therein.
- Sectoral Regulation and Competition – to deal with the interface between competition and sectoral policies in select sectors that have bearing on consumers’ interests.
- Anti-competitive Practices – to provide an overview about the prevalent anti-competitive practices in the project countries.
- Perspectives on Competition Policy – to present a brief comparative account of the perspectives of business, government and consumers on competition policy in the 7 project countries.
- Conclusion – to sum up findings and provides recommendations for the policy community and other stakeholders concerned towards operationalising competition in the project countries.
The project has been facing difficulties and delays in Mozambique, one among the seven countries. To conclude the process of drafting the CRR, a CUTS representative from CUTS Africa and based in Lusaka, spent a couple of weeks in Maputo; gathering relevant information for developing the report, undertaking some field surveys to fill information gaps, and then assisting the researcher to draft the Country Research Report of Mozambique.
The next phase of the project would encompass finalisation of the CRRs and developing the draft Synthesis Report that would be peer reviewed by an external reviewer before finalisation. A Country Advocacy Plan would also be developed capturing the activities proposed for the Stage-II of the project, which would conclude in March 2007.
News from project countries………
COUNTRY
BOTSWANA
ETHIOPIA
MALAWI
MAURITIUS
MOZAMBIQUE
NAMIBIA
UGANDA
REGIONAL NEWS
NEWS
Smokescreen
Tobacco companies mislead smokers by promoting cigarettes, which they claim contain low tar and fruity flavours. This stymies efforts made by the smoker to quit on smoking, as they resort to apparently milder versions/ brands
The Botswana government has made clear that it would take actions against such companies that aim to benefit from the low awareness of smokers in the country (as in other poor countries) by bewildering them through such misleading claims.
Cocktail of Reactions
There have been mixed reactions from various concerned to the regulations that have been proposed under the Liquour Act.
The government has clarified that the increasing habit of consumption of alcohol, especially among the youth, was a cause for concern that has called for the new regulations to control consumption of liquour.
Various local administrators have suggested that in addition to controlling consumption in bars, hotels, bottle shops, etc. the government should lead by example by regulating its consumption at the National Assembly lounge and police messes.
Plummeting House Rent
Rental for high and medium cost residential houses have plummeted in Gaborone, with supply surpassing demand for houses on rent. As a result, tenants are able to negotiate rentals with house owners for a fair deal.
Observers attribute the reason to the exodus of various multi-national corporations (MNCs) from Gaborone, which meant that they moved out along with their staff vacating a lot of houses they were paying high rentals.
A Case of Copyright
The Trade Practice Investigation Commission (TPIC) has received a complaint from Nuqul Brothers Ltd. – a Dubai-based company producing tissue papers under the brand name Fine.
The company has alleged that an unauthorised company from China is selling tissue paper under the same brand name, Fine, in Ethiopia. This is one of the recent cases that are pending a decision before the TPIC.
Closing Horizons
It is an allegation that at the behest of Kenyan Airways (KQ) the Kenyan government has upset the plans of the Ethiopian Airlines (EAL) to resume its flight from Nairobi to Entebbe by wedging in traffic restrictions on EAL.
KQ is being charged of working against the spirit of free competition to maintain its monopoly in the Nairobi-Entebbe sector, where it faced price competition from EAL.
The Ethiopian government is negotiating with the Kenyan government to remove the restriction following the provisions of the Common Market for Eastern and Southern Africa (COMESA) open sky agreement to which both governments are signatories.
Striving for a ‘Shared Vision’
The focus of a recent international conference titled Shared Vision for Private Sector-led Growth in Ethiopia was on analysing the value chains in select domestic industry sectors and thereby provide insights on ways for the government to increase the competitiveness of the country’s private sector.
The discourse led to the identification of certain impediments that affect the country’s competitiveness in floriculture, construction and roads, leather, and textile and garments sectors.
Inviting Competition
The Malawian government has announced its plans of opening up the landline segment in the country’s telecom sector for competition by introducing a second service provider.
This move comes after the controversial privatisation of the government owned and profit making MTL, which many claim was sold below par to a private consortium THL.
Urged to Invest
Zimbabwean companies have been urged to invest in Malawi on account of the country’s productive agricultural sector.
The Malawian government had earlier opened its doors to investment from Zimbabwe and is expected to continue the trend, especially in the processed agricultural products sector.
In Assistance of Tobacco Farmers
Tobacco constitutes the backbone of the Malawian economy comprising 13 per cent of the country’s Gross Domestic Product (GDP). Farmers in the country have long been complaining of the low prices their products have fetched in the auction floors.
This year the government has resolved to improve the situation by ensuring that the farmers get paid for their products in accordance with quality.
The country’s Agricultural Research and Extension Trust (Aret) is equipping Malawian farmers with the requisite knowledge and resources to help them raise quality products this season.
Pricey Edible Oil
The price of edible oil has been increased by 4.5 per cent recently by the oil importing company. This hike is attributed to the global price rise of crude oil.
While observers believe that the Mauritian edible oil market is a quasi- monopoly led by Moroil, they opine that there is not enough evidence to suggest that the price rise is due to Moroil’s abusive behaviour.
Quite a Black Monday!
July 3 would remain a black Monday on account of the government’s decision that day to increase the price of consumer goods like bread, flour, rice, cement, fuel, and oil – all at one go.
The Institute for Consumer Protection (ICP), the prominent consumer organisation, has observed that these price increases have been arbitrarily decided without prior consultation with the concerned stakeholders (as has been the earlier trend).
Increases, especially that of cooking gas, have been made at the behest of the International Monetary Fund (IMF) and in line with their recommendations to remove subsidies, done without consideration of its impact on the family budget of middle-low income families.
Wedged Between
Potato farmers have been complaining that their products are meeting with fierce competition from the potatoes imported by the Agricultural Marketing Board (AMB) of Mauritius. AMB imports potatoes from India, Madagascar, and South Africa in order to meet supply, which cannot be met by the farmers in the country alone, thereby controlling the price of the produce. Indian potatoes cost less and hence local farmers have been expressing resentment towards AMB. But, consumers feel that AMB has been instrumental in keeping the price of potatoes from skyrocketing.
Cribbing and Complaining
One of the country’s richest men, Momade Bachir Suleimane, has expressed resentment at the government decision to build a shopping centre next to the site that was allotted to him for a similar project.
Without understanding the good intention of the authorities to usher in competition, the business tycoon has opined that the government should have allotted plots in different regions in Maputo to these two ventures.
Set to Sign
Mozambique is all set to sign the South African Development Community (SADC) Protocol on Finance. The government is embarking on this plan as part of its mission to integrate into the global economy.
However, it calls for proper measures to be in place as the country’s gears to face fierce competition as it enters the prospective SADC capital market.
Staved Off
In spite the government’s indication towards a rise in fuel prices across the country, the situation was averted on account of a strong Metical – the Mozambican currency against the weakening US dollar.
Barring the exception of diesel, prices of petrol, kerosene, and LPG have stabilised. Consumers can breathe easy now.
Walvis: Leading to the World
The Walvis port is expected to act as the gateway for trade between SADC member countries and the rest of the world.
With the Namibian government committed to developing the Walvis bay and the port as the cornerstone of Namibia’s economic development through international trade, the country is all set to encash from its strategic positioning with connections through the Atlantic and the Indian Oceans to other continents.
Lot to Complain About
Various Namibian manufacturers are complaining that South African companies, especially those manufacturing or trading in pet foods, dairy products and toilet papers are resorting to anti-competitive practices like exclusive dealing with local agents to let their products prevail over the Namibian counterparts in the country’s market.
Local manufacturers have raised the issue with the Ministry of Trade to look into the matter.
Better Prices for Lambs?
Namibia Allied Meat Company (Namco), a newly formed company, has announced that one of its main objects would be to ensure that Namibian smallholder farmers get better price for their products, i.e. lambs.
In an attempt to help small farmers accrue better returns, the company has also called upon them to stake shares in Namco.
Bottled Water: In Flux and Flow
There has been a sharp increase in the consumption of bottled water in Uganda.
While some say that the rise in the consumption of bottled water would affect the sale of aerated drinks sold by giants like Coke/Pepsi, industry experts opine that consumption of bottled water is prevalent with a fraction of the society, namely the urban elite and would therefore not harm the markets of the Cola giants.
Concerns have however been expressed with regards the quality of the bottled water and the fate of the huge volume of plastic bottles that is generated from the trade.
Fuel: Prices Aflame
The country’s budget could be badly hit, on account of the steadily rising fuel prices.
In addition to the price of crude oil in the international market skyrocketing, the productivity in several industries could also be hit by increasing power tariff on account of low supply.
All of this would invariably trickle down to the consumer who would then feel the heat of the high prices.
Pricing Agro-products
The Common Market for Eastern and Southern Africa (COMESA) is keen to facilitate the establishment of a mechanism for pricing agricultural products across member countries, such that farmers are able to get better prices for their products. Concurrently, countries with a lack of supply would be able to benefit from the surplus of a neighbour.
Attempting Better Accreditation
The East African Community (EAC) is keen to establish an agency for accreditation of quality of goods and services.
A protocol to this end has been readied and would require all the three member countries to have their national standardisation agencies established and then coalesced to form the regional standardisation authority.
While efforts to establishing the national standardisation agency is completed in Kenya and at an advanced stage in Tanzania, it is still at a very juvenile stage in Uganda.