Competition enforcement weak

Business Daily, May 03, 2011

By Pradeep S Mehta

Unprecedented interest and zeal on competition law issues has been noted in African countries over the last decade or so.

A number of countries have adopted laws and some have also established a competition enforcement agency.

However, when it comes to competition enforcement, most African countries still have a long way to go.

A competition enforcement agency’s task is to ensure that markets function in a fair manner – ensuring predictability and stimulating enterprise development on one hand, and on the other promoting consumers’ interests.

Both these outcomes are extremely important from a socio-economic perspective of a country, but are also marred with interference by vested interest groups.

Establishment of socio-economic harmony (in sections of the economy and the population) as expected from effective enforcement of a competition law often goes against the ill conceived notions of such groups.

In order to neutralise or at least minimise the influence of these interest groups, it is important that benefits from competition reforms is communicated to possible ‘friends of competition’ in simple and tangible terms, so that supporters of the competition reforms process outnumber and overpower its detractors.

This was one of the motivations for setting up the Africa Competition Forum (ACF) by a group of competition experts, practitioners, international organisations and donors with field-experience on competition research and enforcement across Africa.

Various networks and groups have cropped up at the international level to discuss competition issues.

There was nothing exclusively dedicated to discussing competition issues pertaining to Africa.

A rough work-plan was developed at a Stakeholders’ Meeting of ACF held in March 2010 in Nairobi and an Interim Steering Committee established.

A first activity was a ‘Needs Assessment’ exercise to assess real needs of competition agencies (and government departments handling competition issues) across Africa, for developing an ‘Action Programme’ of the ACF.

Findings from this needs assessment exercise were shared with a large community of competition experts at the First Conference of the ACF held in March 2011 once again in Nairobi.

The needs assessment report indicated that assistance required by African agencies can be predominantly segregated into the following: Strategic planning and management; practical aspects of competition law enforcement such as investigative and litigation skills and techniques; foundational training on the basics of competition law and economics; technical assistance in drafting competition policy, laws and regulations and in designing agency procedures, guidelines, and operational manuals; and advocacy and engagement with other stakeholders.

While it is important to hone skills of the competition authority staff to be able to undertake competition assessment independently and investigate cases, it is imperative to lay an equal emphasis on the need for engaging and educating other stakeholders (those who are outside the immediate world of the competition enforcement regime in a country).

Options identified above for improving competition enforcement skills are far more expensive and cannot be afforded by most African countries in the absence of external financial support.

Government-supported programmes for sensitising the stakeholders (particularly finance and planning ministries, audit agencies, procurement offices etc.) about benefits from an effectively enforced competition regime would enable winning ‘friends of competition’, who would demand for expediting and supporting competition reforms processes from within the countries.

Rijit Sengupta Associate director, CUTS International

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