15 May 2018

Africa: Governments Tipped on Policies That Spur Competition

Photo: New Times
Michel Sebera, the Permanent Secretary at the Ministry of Trade and Industry (C), speaks during the presentation of a new report by World Bank Group’s International Finance Corporation (IFC), on competition, as Francis Kariuki, the Director General of Kenya Competition Authority (left) and Ignace Rusenga Mihigo Bacyaha, IFC’s Resident Representative in Rwanda, look on.

Governments across Africa should share best practices and develop competition policies that allow more openness in the market, experts at the World Bank Group have said.

The message was delivered in Kigali on Monday at the East Africa region dissemination of a report by World Bank Group's International Finance Corporation (IFC) in partnership with the African Competition Forum (ACF).

The report, titled "Breaking down Barriers: Unlocking Africa's Potential through Vigorous Competition Policy", reviews the status of competition frameworks and implementation in 19 African countries and three African Regional Economic Communities.

It focuses on three sectors that are considered critical for Africa's competitiveness which are cement, fertilizer, and telecommunications but it also explores competition issues in road freight, air transport, and retail.

Overall, the report found that the range of competition policy frameworks in place across Africa as well as the richness of experience in enforcing those frameworks highlights the great potential for peer-to-peer learning, both within the African region and across sub-regions.

It calls on national and regional competition authorities to increase their impact through taking a regional perspective when assessing cases within their jurisdictions.

Ignace Rusenga Mihigo Bacyaha, IFC's Resident Representative in Rwanda, told The New Times in an interview that one of the challenges for African countries is to be able to establish sound competition laws that would end monopoly in certain areas and open up markets without hurting consumers.

"When there are more people in the field and the right competition laws that help to ensure quality, it's the end-users, the consumers who benefit," he said.

Among the main areas that need improvement as highlighted by the report include the enforcement of competition laws and policies, the assessment of mergers and acquisitions of corporations, as well as regulation targeted at specific critical sectors such as telecommunication, retail of staple foods like rice, milk, sugar, or wheat among others.

"There is still room for improvement," said Philana Mugyenyi, Competition Policy Specialist at World Bank Group in Nairobi, Kenya.

Regarding the need to improve assessments for mergers and acquisitions, Mugyenyi said that when big corporations merge, sometimes they can control prices on the market and that might affect consumers.

"By assessing mergers the objective is to ensure that sectors remain competitive," she said.

She also said that consumers and competition authorities should better work together to ensure that there is effective competition on the market.

Both Michel Sebera, the Permanent Secretary at the Ministry of Trade and Industry, and Francis Kariuki, the Director General of Kenya Competition Authority, highlighted the need for national competition laws to cater for regional dimensions.

Kariuki called for countries within the East African Community to keep working together to lower prices of key services such as in the area of telecommunication given its potential to facilitate trade.

"We have to think whether we are a community in paper or whether we are a community focused on enabling trade," he said at the meeting yesterday.

The report dissemination event in Kigali, yesterday, was followed by a two-day training of competition regulators from different African countries about strengthening capacity to design and implement pro-competition regulations in the telecommunications sector.

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