Need for continental laws to curb anti-competitive practices: CTC

Judith Phiri, Business Reporter
THE Competition and Tariff Commission (CTC) says that there is need for continental governance to ensure that anti-competitive practices with cross border effects do not negate the benefits of trade and investment liberalisation.

Speaking during a training workshop for businesses on the African Continental Free Trade Area (AfCFTA), CTC assistant director for Restrictive Business Practices Division, Ms Cecilia Mashava said that under the AfCFTA there was the need to come up with measures which would effectively address restrictive practices across the continent.

AfCFTA is an ambitious undertaking that brings together 1,3 billion people in 55 African countries to create the world’s largest free trade area as measured by the number of participating member States. It was founded in 2018, through the African Continental Free Trade Agreement. Ms Mashava said there was merit for development of modalities for AfCFTA parties to cooperate in redressing restrictive practices.

“Article 4 (c) of the agreement establishing the AfCFTA states that member states shall cooperate on competition policy. Cooperation framework maybe binding or non-binding. Also, once there is cooperation on certain aspects of competition law and policy depending on situational analysis of the existing competition policy and law frameworks, this becomes a merit for development,” she said.

In terms of competition policy and law in the AfCFTA, she said an important principle adopted by member states in Article 5 of the agreement is the “preservation of the acquis”, which protects existing markets from extra-Regional Economic Communities (RECs) competition.

Ms Mashava said for competition policy that means building on what exists already in the RECs.

“There is considerable variation across RECs, in terms of level of ambition and institutional arrangements, ranging from cooperation among national competition authorities to regional laws (or regulations) and in some cases regional competition authorities. Competition law and policy is crucial to open up markets, remove barriers to entry into new markets. It also fosters efficiencies and innovation critical for the AfCFTA to realise the anticipated growth,” she said.

In a presentation on mergers and acquisition, CTC assistant director for the Competition Division, Mr Benjamin Chinhengo said for the AfCFTA, businesses should take advantage of different types of mergers.

“Take advantage through vertical integration for constant supply of inputs, for producers and guaranteed markets (customers). Horizontal integration helps you develop stamina and be able to stand competition from foreign multinationals. Additionally, merge with partners willing to bring in capital (equipment) into the country and establishing branches in other African countries,” said Mr Chinhengo.

The workshop was conducted by the Zimbabwe National Chamber of Commerce (ZNCC) in conjunction with the United Nations Development Programme (UNDP).