‘Enact competition law to ensure market efficiency’

Professor Justice Samuel Kofi Date-Bah, a retired Justice of the Supreme Court of Ghana and Board Chair of CUTS Ghana, has stressed the need for a fully functional competition and unfair trade practice law to regulate the conduct of the market players.

“The recent agitations in the cement industry should serve as an indication to policy makers that it is about time to enact rules and regulations to control the operations of the market players in the country,” he said.

Justice Date-Bah was speaking at this year’s World Competition Day celebration in Accra under the theme, ‘Cement market: Issue of competition or unfair trade practice’. The World Competition Day celebration is observed on December 5, 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.

He said in an emerging economy like Ghana, it was important to embrace the need for a functional competition regime to ensure market efficiency.

Competitive market

“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,” he added.

Appiah Kusi Adomako, 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 was 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 was over, quoting data from the Ghana Statistical Service (GSS) that indicated that the prices of cement had remained fairly stable compared to the past.

“Current price war in the sector is unprecedented,” he said, adding that sometimes it was 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, could be achieved effectively through the enactment of a competition policy and law.

WTO rules

A trade policy analyst at CUTS Ghana, Abubakari Zakari, speaking on a title, “Barriers to Trade, and Unfair Trade Practices”, explained the World Trade Organisation (WTO) rules on import permits and import license and the various redress channels that government could 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 a fair and competitive market through the application of the WTO measures.

He called for the full operationalisation of the Ghana International Trade Commission (GITC) to investigate the claims being made by the local cement manufacturers.

Fredrick Ghartey, an Assistant Commissioner, Design and Monitoring at the Ghana Revenue Authority (GRA), and also a member of the Cement Monitoring Committee, said the country had the necessary installed capacity to meet the local demands and it was important that the local industries were supported to make sure they produce to meet the demands for the market.

Samuel Amegayibor, Executive Secretary of the Ghana Real Estate Development Association (GREDA), on his part explained that competition in the cement industry was very much needed; however, the local industry needed to be protected and well supported by the government to ensure that they were capable to compete in the market.

High standard

Komla Buami, Media Relations Manager at the Dangote Cement mentioned that Dangote’s presence in the market had set the standard high for the production of quality cement grades in the country.

Further, he explained that the low prices of Dangote cement was not as a result of a subsidy put on the product, but rather due to the bonus structure that had been set up by the firm.

Currently, Dangote’s ex-factory price for cement is GHȼ 29.30 and that of GHACEM is GHȼ28.60. Distributors reduce the price of the Dangote cement at the retail level in order to sell more quantities and earn bonus.

Efficiency

Moses Agyemang from the Private Enterprise Federation (PEF), raised the issue of efficiency of cement producers in the country, and lamented that local companies had the habit of producing at low efficiency and blaming others for beating them in the market.

He suggested that CUTS and the relevant agencies work together to better understand the efficiency gaps in the sector and come up with ways to support the local cement producers to meet to overcome their challenges and enable them to compete better.

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.

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