Competition Is Needed To Ensure Market Efficiency
“In a competitive market both consumers and producers are presented with affordable and wider choices of quality goods and service and this brings about efficiency in allocation of resources, thus the benefits of a competitive market cannot be overlooked. In a an emerging economy like Ghana, it is important to embrace the need for a functional competition regime,” said Professor Justice Samuel Kofi Date-Bah, retired Justice of the Supreme Court of Ghana and Board Chair, CUTS Ghana.
He was speaking at this year’s World Competition Day Celebration in Accra under the theme: Cement Market: Issue of Competition or Unfair Trade Practice. Justice Date-Bah was of the view that the recent agitations in the cement industry should serve as an indication to policy makers the need for a fully functional competition and unfair trade practice law to regulate the conduct of the market players.
Mr. Appiah Kusi Adomako, the Centre Coordinator for CUTS Ghana in his presentation indicated that consumers desire to have quality cement at an affordable price and one way of achieving this is through the presence of multiple players in the market competing among themselves. He mentioned that the era of dominance, monopolies and oligopolies in the sector is over. He quoted data from the Ghana Statistical Service (GSS) that indicates that the prices of cement have remained fairly stable compared to the past. Current price war in the sector is unprecedented. He added that sometimes it is helpful to protect local producers but is also fair to ensure that consumers get the opportunity to have quality products at affordable prices as well as options in the market. This he believed can be achieved effectively through the enactment of Competition Policy and Law.
A Trade Policy Analyst at CUTS Ghana, Mr. Abubakari Zakari in his presentation titled, “Barriers to Trade, and Unfair Trade Practices” explained the World Trade Organization (WTO) rules on import permits and import license and the various redress channels that government can deploy to reduce the effects of subsidies and dumping in the local market. Mr Zakari stressed on the important role that the government plays in ensuring affair and competitive market through the application of the WTO measures. He called for the full operationalization of the Ghana International Trade Commission (GITC) to investigate the claims being made by the local cement manufacturers.
Mr. Fredrick Ghartey, an Assistant Commissioner, Design and Monitoring at the Ghana Revenue Authority (GRA), and also a member of the Cement Monitoring Committee in remarks mentioned that the country has in place the necessary installed capacity to meet the local demands and that it is important that the local industries are supported to make sure they produce to meet the demands for the market.
Mr. Samuel Amegayibor, Executive Secretary of the Ghana Real Estate Development Association (GREDA) on his part explained that competition in the cement industry is very much needed; however, the local industry needs to be protected and well supported by the government to ensure that they are well able to compete in the market.
Mr. Komla Buami, Media Relations Manager at the Dangote Cement mentioned that Dangote’s presence in the market has set the standard high for the production of quality cement grades in the country. Further, he explained that the low prices of Dangote cement is not as a result of the alleged subsidy that but rather due to the bonus structure that has been set up firm by the firm. Currently, Dangote’s ex- factory price for cement is GHC 29.30 and that of GHACEM is GHC 28.60. Distributors reduce the price of the Dangote cement at the retail level in order to sell more quantities and earn bonus.
Mr. Moses Agyemang from the Private Enterprise Federation (PEF) raised the issue of efficiency of cement producers in the country. He lamented that local companies have the habit of producing at low efficiency and blaming others for beating them in the market. He cited example that power that Ghana imports from Cote d’Iviore is cheaper than the one that the local power companies sell to the grid. He suggested that CUTS and the relevant agencies to work together to better understand the efficiency gaps in the sector and come up with ways to support the local cement producers to meet its innovative challenges and thus better enable them to compete.
The World Competition Day Celebration is observed on 5th December every year worldwide to generate awareness about the need for competition reforms. CUTS has been advocating for the implementation of a competition law and policy in Ghana. This policy dialogue series was attended by officials from the various cement manufacturing firms and associations, Association of Ghana Industries (AGI), Ghana Real Estate Developers Association (GREDA), Private Enterprise Federation (PEF), Ghana Standard Authority (GSA), Ghana Revenue Authority (GRA), Ghana Chamber of Commerce and Industries (GCCI), academia, professional associations, civil societies and the private sector.
CUTS Ghana is a policy think tank which works in the areas of consumer protection and education economic regulation, trade and development, regional integration, competition policy and law, etc.
For more information about CUTS, and competition policy and law related issues, please contact, CUTS International (Ghana), P O BOX AN 6156, 30 Oroko Avenue (Near Accra Central View Hotel and ATTC Kokomlemle), Accra, Mobile + 233-24-392-0926 | Office: +233-30-224-5652 | Email: [email protected] , [email protected] , Website: http://www.cuts-international.org/ARC/accra