Deputy Minister of Trade and Industry Herbert Krapa reiterated the need for an effective competition policy to safeguard the achievements of the African Continental Free Trade Area (AfCFTA) and directly fuel the country’s industrial transformation .
He noted that for the internal market to harness the benefits of the AfCFTA while ensuring that trade liberalization is not undermined by cross-border anti-competitive behavior, an effective competition protocol is relevant.
“As companies seek to maximize their profits, various practices – some anti-competitive – are emerging: including cartels, vertical restraints, mergers and acquisitions, merger regulation and abuse of dominant position. In the absence of safeguards regulating anti-competitive practices, companies – domestic and foreign – can abuse their dominant market position through price-fixing cartels, predatory behavior that eliminates local competition and other agreements market sharing.
“Ghana, like many others on the continent, must overcome ever-evolving cross-border anti-competitive issues. We bear the brunt of international mergers and acquisitions and anti-competitive practices by foreign companies in our national markets; and there is also often a lack of capacity to address these challenges, and in many cases a lack of national competition laws as well,” he said.
Mr. Krapa argued that such anti-competitive practices reduce choice and increase prices, thereby depriving consumers and excluding some producers from the benefits of trade liberalization.
He made the remarks at the Third University of Professional Studies Accra (UPSA) Roundtable on “The Relevance of AFCFTA Competition Protocols to Ghana’s Industrial Transformation”, where he underlined the need to ensure that consumer welfare is not impaired. but rather ultimately protected and promoted.
He believes that national competition policy will also foster and support new industries, especially small and medium-sized enterprises (SMEs).
“Establishing competition rules and competition adjudication institutions to guard against anti-competitive behavior is an imperative requirement for the development of a free and prosperous market economy. A national competition policy is also necessary to facilitate national implementation of the ECOWAS Supplementary Act on Community Competition Rules,” he added.
The country is currently developing a competition policy as well as laws to protect domestic investments.
The AfCFTA and competition protocols
The Deputy Minister said that the decision to also launch a continental competition policy chapter in the African Continental Free Trade Area provides an opportunity to fill national gaps and compel national competition authorities to address collectively the extraterritorial effects of anti-competitive behavior by firms.
According to him, the AfCFTA competition protocol currently under consideration is expected to enhance competition in the African market and improve market efficiency, inclusive growth and facilitate the transformation of African economies.
He said that when used effectively, the policy will ensure fair prices for producers and consumers, guarantee the best product quality and enable markets to employ more favorable incentives.
“It will strengthen the ability to deal with anti-competitive practices that have international and cross-border implications; harmonize minimum standards of business conduct; provide a continental platform for consultation, cooperation and coordination on competition policy and law.
“It will also improve the governance and transparency of industrial and competition policy in Africa; and manage the interrelationships of competition regimes and sectoral regulatory laws at the national, regional and continental levels,” he noted.
In view of this, he said, Africa needs functioning national and regional competition and consumer protection laws and policies anchored in continental rules and regulations and incorporated in the protocol on the AfCFTA’s competition policy.
“The benefits of free trade can only be realized where regulatory trade barriers, once removed, are not replaced by artificial trade barriers erected by businesses operating in the market,” he said.
The Deputy Minister also urged State Parties to gradually eliminate tariff and non-tariff barriers to trade in goods; gradually liberalizing trade in services; cooperate on all trade-related matters, including customs and trade facilitation measures, investment, intellectual property rights and competition policy to effectively realize the success of the AfCFTA.
AGI and competition policy
“For us, as an association, we believe in competition. I think when competition is well structured, it benefits consumers and the industry as a whole. It will support the development of SMEs and start-ups. It is therefore necessary to regulate and clean up the system to guarantee its effectiveness. As far as we are concerned, we are in favor of any measure that will support industrial development,” said the Director General of the Association of Ghana Industries (AGI), Seth Twum-Akwaboah.
He added that competition is crucial for industrial development, but what AGI frowns upon is when people come together to create huge mergers that create monopolies and prevent others from entering the space. .