* AfCFTA a game changer, but even with it, Africa needs a voice at the centre
The protocol on competition policy seeks to regulate competition within the African Continental Free Trade Area (AfCFTA) to prevent anti-competitive practices to ensure that the projected gains from trade liberalisation are not undermined by these practices.
Deputy Commissioner Hardin Ratshisusu made this observation this week Wednesday in his keynote address to the 2nd International Engaged Scholarship Conference – a collaboration between University of South Africa (UNISA) and University of Botswana (UB) – at Avani hotel in Gaborone.
Held under the theme, ‘Africa Free Trade Liberalisation’ Ratshisusu handled the topic, ‘Scope for the AfCFTA Competition Policy Protocol’, and found that the protocol on competition policy aspires to develop the capacity of the continent to tackle anti-competitive business practices and promote economic integration and sustainable development in the AfCFTA market.
On 21 March 2018, the Heads of State of the African Union adopted the agreement establishing the AfCFTA, which subsequently entered into force on 30 May 2019.
The AfCFTA agreement reflects the resolve for the African continent to achieve the African Union’s Agenda 2063 to realise a single continental market, where persons, capital, goods and services move freely.
Ratshisusu described AfCFTA as a “game changer for the continent,” saying it paves a path towards accelerated and sustainable development and is for trade to increase within the continent.
He said the protocol on competition policy therefore provides Africa with an opportunity to tackle anti-competitive practices and mergers that have a continent-wide impact, which is the main existing regulatory gap on the continent.
In particular, the World Bank in collaboration with the African Competition Forum released a report in 2016 entitled, Breaking Down Barriers, Unlocking Africa’s Potential through Vigorous Competition Policy.
This report made significant findings on progress on competition policy in Africa, among which were:
>It found that competition policy can play a central role in achieving the vision of a prosperous Africa.
>African markets are restricted by business practices undermining competitive dynamics and by government actions creating barriers to competition.
>Most African countries perceived to have lower levels of competition than other countries globally.
>Lack of competition in goods in African markets, particularly food items, connectivity costs and key products such as cement and fertilizer, harms households through high prices – and the poorest are hit the hardest.
>Cartels are the most harmful anti-competitive practices, but anti-cartel enforcement remains relatively weak in Africa.
The United Nations Economic Commission for Africa ARIA IX (nine) Report for Competition Policy: Assessing Regional Integration in Africa released in 2019 also made similar observations, recognising the need for a coherent competition policy for the African continent.
This report implores African countries to integrate competition principles into their economic policies, emphasising the role of competition in addressing inequalities and promoting inclusive growth.
The protocol on competition policy responds to this reality. It primarily focuses on the regulation of economic activity on the continent, targeted at seven objectives.
First, to provide for an integrated and unified African continental competition regime.
Second, to enhance competition within the AfCFTA for improved market efficiency, inclusive growth, and the structural transformation of the African economies.
Third, to ensure that gains from AfCFTA trade liberalization are not negated or undermined by anti-competitive practices.
Fourth, to develop and strengthen the capacity of State Parties to deal with anti-competitive business practices.
Fifth, to provide a continental platform for research, information exchange, capacity building, training, consultation, cooperating, and coordinating on competition policy and law in Africa. This can also be beneficial to academic institutions.
Sixth, to promote economic integration and sustainable development in the AfCFTA Market.
Seventh, to manage the interrelationships of competition regimes and sectoral regulatory laws at the national, regional, and continental levels. Ratshisusu said the adoption of this competition policy protocol introduces
prohibitions on various anti-competitive practices, abuse of dominant positions, mergers and acquisitions, and other forms of anti-competitive conduct.
Importantly, the protocol establishes the AfCFTA Competition Authority and the Competition Tribunal as enforcement bodies to ensure the effective regulation of these practices.
“This is consistent with other advanced regions such as the European Union, who have placed competition policy at the centre of market integration,” he said.
He ended by quoting Professor Eleanor Fox, a world-renowned scholar in antitrust and competition policy, who made this observation:
“Africa needs a competition voice at the centre, just as the European Union and the US each has a competition voice at the centre. The central voice should speak to both internal-market (continent-wide) problems and global problems. Absent that voice, Africa will remain uncoordinated at home and a price-taker in the world. The developed world will continue to go first, setting the rules and foreseeing the outcomes with respect to all of the megamergers, world cartels, big tech abuses, and other global restraints that significantly impact Africa.”
Ratshisusu said the adoption of a competition policy protocol for Africa gives the continent the instrument to regulate cross-border firm conduct that significantly affect continental markets, in a coherent and coordinated way.
Deputy Commissioner Hardin Ratshisusu made this observation this week Wednesday in his keynote address to the 2nd International Engaged Scholarship Conference – a collaboration between University of South Africa (UNISA) and University of Botswana (UB) – at Avani hotel in Gaborone.
Held under the theme, ‘Africa Free Trade Liberalisation’ Ratshisusu handled the topic, ‘Scope for the AfCFTA Competition Policy Protocol’, and found that the protocol on competition policy aspires to develop the capacity of the continent to tackle anti-competitive business practices and promote economic integration and sustainable development in the AfCFTA market.
On 21 March 2018, the Heads of State of the African Union adopted the agreement establishing the AfCFTA, which subsequently entered into force on 30 May 2019.
The AfCFTA agreement reflects the resolve for the African continent to achieve the African Union’s Agenda 2063 to realise a single continental market, where persons, capital, goods and services move freely.
Ratshisusu described AfCFTA as a “game changer for the continent,” saying it paves a path towards accelerated and sustainable development and is for trade to increase within the continent.
He said the protocol on competition policy therefore provides Africa with an opportunity to tackle anti-competitive practices and mergers that have a continent-wide impact, which is the main existing regulatory gap on the continent.
In particular, the World Bank in collaboration with the African Competition Forum released a report in 2016 entitled, Breaking Down Barriers, Unlocking Africa’s Potential through Vigorous Competition Policy.
This report made significant findings on progress on competition policy in Africa, among which were:
>It found that competition policy can play a central role in achieving the vision of a prosperous Africa.
>African markets are restricted by business practices undermining competitive dynamics and by government actions creating barriers to competition.
>Most African countries perceived to have lower levels of competition than other countries globally.
>Lack of competition in goods in African markets, particularly food items, connectivity costs and key products such as cement and fertilizer, harms households through high prices – and the poorest are hit the hardest.
>Cartels are the most harmful anti-competitive practices, but anti-cartel enforcement remains relatively weak in Africa.
The United Nations Economic Commission for Africa ARIA IX (nine) Report for Competition Policy: Assessing Regional Integration in Africa released in 2019 also made similar observations, recognising the need for a coherent competition policy for the African continent.
This report implores African countries to integrate competition principles into their economic policies, emphasising the role of competition in addressing inequalities and promoting inclusive growth.
The protocol on competition policy responds to this reality. It primarily focuses on the regulation of economic activity on the continent, targeted at seven objectives.
First, to provide for an integrated and unified African continental competition regime.
Second, to enhance competition within the AfCFTA for improved market efficiency, inclusive growth, and the structural transformation of the African economies.
Third, to ensure that gains from AfCFTA trade liberalization are not negated or undermined by anti-competitive practices.
Fourth, to develop and strengthen the capacity of State Parties to deal with anti-competitive business practices.
Fifth, to provide a continental platform for research, information exchange, capacity building, training, consultation, cooperating, and coordinating on competition policy and law in Africa. This can also be beneficial to academic institutions.
Sixth, to promote economic integration and sustainable development in the AfCFTA Market.
Seventh, to manage the interrelationships of competition regimes and sectoral regulatory laws at the national, regional, and continental levels. Ratshisusu said the adoption of this competition policy protocol introduces
prohibitions on various anti-competitive practices, abuse of dominant positions, mergers and acquisitions, and other forms of anti-competitive conduct.
Importantly, the protocol establishes the AfCFTA Competition Authority and the Competition Tribunal as enforcement bodies to ensure the effective regulation of these practices.
“This is consistent with other advanced regions such as the European Union, who have placed competition policy at the centre of market integration,” he said.
He ended by quoting Professor Eleanor Fox, a world-renowned scholar in antitrust and competition policy, who made this observation:
“Africa needs a competition voice at the centre, just as the European Union and the US each has a competition voice at the centre. The central voice should speak to both internal-market (continent-wide) problems and global problems. Absent that voice, Africa will remain uncoordinated at home and a price-taker in the world. The developed world will continue to go first, setting the rules and foreseeing the outcomes with respect to all of the megamergers, world cartels, big tech abuses, and other global restraints that significantly impact Africa.”
Ratshisusu said the adoption of a competition policy protocol for Africa gives the continent the instrument to regulate cross-border firm conduct that significantly affect continental markets, in a coherent and coordinated way.
