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State of Competition Regime in Ghana Preliminary Country Paper National Reference Group meeting (NRG I) September 19, 2008 La Palm Royal, Accra. Outline. Background Privatisation & Regulatory Reforms Nature of Competition Sectoral Policies Anti-Competitive Practices
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State of Competition Regime in GhanaPreliminary Country PaperNational Reference Group meeting (NRG I)September 19, 2008La Palm Royal, Accra
Apart from owning development corporations in all ten regions, it wholly owned several enterprises in the manufacturing, mining and services sectors, and had gone into joint ventures with many other private firms and persons.
It also owned several boards and commissions, which were performing services in competition with or which could have been easily provided by the private sector.
The SOE reform agenda entailed two principal components: divestiture, which involved transfer of ownership of assets or management of enterprises to the private sector; and liberalisation, which implied exposing enterprises to more competition.
By end of 2000 nearly 300 SOEs had been privatized and by end of 2003 18 more had been divested.
Despite ongoing privatization, state-owned enterprises continue to play a significant role in the economy, notably in the electricity, petroleum, and transport sub sectors.
There is no centralized consumer protection law and/or policy in Ghana.
What exists currently is a group of public institutions mandated to oversee specific aspects of consumer protection.
These institutions included:
Ghana Standards Board (GSB)
Food and Drugs Board (FDB)
Public Utilities Regulatory Commission (PURC)
National Communications Authority (NCA)
Environmental Protection Agency (EPA).
Consumer Protection Policy
Some production plants have closed down because of their inability to cut production costs to enable them stay in the markets.
Government has been supporting domestic private enterprises with financial incentives to make them more competitive.
However, manufacturers contend that the country’s tariff structure places local producers at a competitive disadvantage compared to imports from other countries.
In recent times, there have been several efforts by the government to enhance the capacity and competence of Ghanaian firms through the ff:
provision of micro credit
venture capital and export credit
business support and training.
Nature of Competition in Ghana
Ghana led the way in telecommunications liberalization and deregulation in Africa when it privatized Ghana Telecom in 1996.
Reforms have been stalled so far, leaving the door open for anti-competitive practices by operators.
Although there is still significant scope for improvement, Ghana has made huge progress in telecommunications services over the past decade or so.
Significant effort has been made to stimulate competition and scale economies.
In 1997, for example, WESTEL, originally owned by the GNPC, was floated in an IPO, awarded a second network operator licence, and granted a 5-year duopoly on basic telecommunications services alongside Ghana Telecom, to allow for greater competition and improved efficiency.
The overall regulatory body is the Bank of Ghana (BoG) and one of its key roles is ensuring that there is fair competition among banks in Ghana.
Competition in the banking sector is becoming increasingly stiff, particularly with the recent entry of a number of Nigerian banks such as Guaranty Trust Bank, Zenith Bank and United Bank for Africa.
Not surprisingly, the degree of market concentration, as measured by assets of the top five banks, has fallen steadily – from 77.6% in March 2000 to less than 55% in 2008 (Stanley, 2008).
This is much lower than in South Africa, where the top five banks have a concentration ratio of more than 80% but is higher than the SSA average.
Financial Services Sector
Anti-competitive practices include price fixing, market sharing, bid rigging, exclusive dealing, tied selling, misuse of dominant market positions and unfair trading practices.
They also deny the consumer the wider benefits that competition can bring (such as lower prices, higher quality and more choice).
Likely to have detrimental long term effects on growth and employment.
Ghana does not have legislation on anti-competitive practices although a bill has been under consideration for several years.
The Ministry of Trade, Industry, Private Sector Development and President's Special Initiatives (PSIs) however oversees all trade dealings and practises including unfair trade practises.
Anti-competitive practices – Some evidence
Publication: The Ghanaian Chronicle
Date: Wednesday, October 1 2003
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