1 / 39

Pro – POOR ADVOCACY GROUP

Pro – POOR ADVOCACY GROUP. Garba Jahumpa Road, Bakau, K.S.M.D. The Gambia. * Tel: (220) 494338 Fax: (220) 494219.

zachary-mccoy
Download Presentation

Pro – POOR ADVOCACY GROUP

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Pro – POOR ADVOCACY GROUP Garba Jahumpa Road, Bakau, K.S.M.D. The Gambia. * Tel: (220) 494338 Fax: (220) 494219 Strengthening Constituencies for Effective Competition Regimes in Select West African Countries Country Research Report: The GambiaPresented by: Omar Ousman Jobe7UP4 Project Mid Term Review MeetingBanjul 29th-30th July 2009

  2. Pro – POOR ADVOCACY GROUP Garba Jahumpa Road, Bakau, K.S.M.D. The Gambia. * Tel: (220) 494338 Fax: (220) 494219 General Country Background: • The Gambia: one of the Least Developed Countries • Ranked 155 out of 177 countries according to the UNDP Human Development Index (2006). • Small Population (about 1.5 million) with a predominantly agricultural economy with little potential for value addition – The country is still a groundnut garden • An industrial sector that is struggling to emerge due to numerous structural and financial constraints and a vibrant service sector. • Small domestic market size – role of the re-export trade (Strategic positioning: disparities in currencies, tax regimes etc) • The country’s economy is largely tax-based (around 85% of GLF) • 58% of the population are considered poor (PRSP) • Reached HIPC completion point in January 2008 and is now eligible for debt relief

  3. Pro – POOR ADVOCACY GROUP Garba Jahumpa Road, Bakau, K.S.M.D. The Gambia. * Tel: (220) 494338 Fax: (220) 494219 General Country Background (Cont’d): • The Gambia is in the middle ranking of the widely used indicators of business climate and competitiveness. • In the 2007 World Bank Doing Business Indicators, The Gambia is ranked 113th out of 175th countries, performing better than most of its West African neighbors, (except Ghana and Nigeria), in terms of ease of dealing with licenses and permits, and for enforcing contracts and on labor regulations.

  4. Pro – POOR ADVOCACY GROUP Garba Jahumpa Road, Bakau, K.S.M.D. The Gambia. * Tel: (220) 494338 Fax: (220) 494219 Social & Economic Policies affecting Competition • The structural adjustment programmes of the 1990s paved the way for the liberalization of the economy and the Gambia government is committed to free market policies and a vibrant private sector-led growth (Vision 2020 blueprint) • Second Poverty Reduction and Strategy Paper (PRSP II) covering an implementation period of 5 years (2007 – 2011), outlines The Gambia’s overall policy framework for Growth and Poverty Reduction. This second PRSP focuses on the needs to eradicate poverty in The Gambia and serves as main reference for policy and programme designers in public and private sector and development partners

  5. Pro – POOR ADVOCACY GROUP Garba Jahumpa Road, Bakau, K.S.M.D. The Gambia. * Tel: (220) 494338 Fax: (220) 494219 Social and Economic Policies Affecting Competition (cont’d): • The Gambia’s choice of economic ideology is based on free market principles. • The Gambia has various laws governing trade and customs regulation: The Gambia Free Zone act (2001); The Gambia Investment Promotion act (2001); • The launching of the Gambia Gateway Project funded by the World Bank (2002) • The government set up The Gambia Investment Promotion and Free Zones Agency (GIPFZA), whose primary task is to establish and manage Free Economic Zones (FEZs) • GIPFZA is a one-stop-shop for investment

  6. Pro – POOR ADVOCACY GROUP Garba Jahumpa Road, Bakau, K.S.M.D. The Gambia. * Tel: (220) 494338 Fax: (220) 494219 Background (Cont’d): • Other laws affecting business and investment are the Companies Act of 1955 and the Business Registration Act of 2005. • The judicial system upholds the sanctity of contracts • Market forces determine exchange rates • There are no restrictions on the transfer of funds by investors into and out of The Gambia.The Gambia Investment Promotion Act of 2001 provides the legal ground for transfer of funds. • Protection of intellectual property rights is guaranteed; A Government procurement Act is also in place. • There are no limits on foreign ownership or control of businesses except in the television broadcasting and defense industries which are closed to private sector participation. • There are no laws or regulations that limit or prohibit foreign investment, participation or control.

  7. Pro – POOR ADVOCACY GROUP Garba Jahumpa Road, Bakau, K.S.M.D. The Gambia. * Tel: (220) 494338 Fax: (220) 494219 Measures already taken: • Reducing the extent of state ownership of public enterprises • Elimination of price controls • The adoption of a divestiture policy • The establishment of a Divestiture Agency • The creation of a system of licensing the public utilities (with the expectation of greater private sector involvement) • Trade liberalization programmes

  8. Pro – POOR ADVOCACY GROUP Garba Jahumpa Road, Bakau, K.S.M.D. The Gambia. * Tel: (220) 494338 Fax: (220) 494219 Regulatory Mechanisms: • The Central Bank of The Gambia • The Gambia Divestiture Agency (2001) – set up to carry out the government's divestiture program in several sectors such as energy, communication, transportation, agriculture, pension funds, and housing finance • The Public Utilities Regulatory Authority (2004) set up to regulate the activities of providers of certain public utilities such as electricity, water and sewage services, petroleum and gas, telecommunications, broadcasting, and postal services • Gambia Civil Aviation Authority

  9. Pro – POOR ADVOCACY GROUP Garba Jahumpa Road, Bakau, K.S.M.D. The Gambia. * Tel: (220) 494338 Fax: (220) 494219 The Competition Act • The Competition Act of 2007 was assented to by the President on the 5th day of October and gazetted the 19th October, 2007. • The Overall Objective of the act is to foster a viable competition culture that favours investment, fair trade, growth and poverty reduction.

  10. Pro – POOR ADVOCACY GROUP Garba Jahumpa Road, Bakau, K.S.M.D. The Gambia. * Tel: (220) 494338 Fax: (220) 494219 The Specific Objectives of the act: • To promote competition in the supply of goods and services by among other things: Prohibiting collusive agreements and bid rigging; Providing for investigation and control of other types of restrictive agreements. • To promote and protect the free functioning of the markets that are open to competition, including the markets previously subjected to restraints imposed by government. • To give confidence to those wishing to invest in the Gambia • To demonstrates the government’s commitment to a free-market economy • To guard against the risk that enterprises with dominant market power will choose to erect private barriers to competition and exploit customers

  11. Pro – POOR ADVOCACY GROUP Garba Jahumpa Road, Bakau, K.S.M.D. The Gambia. * Tel: (220) 494338 Fax: (220) 494219 The Regulatory Authority: • The Public Utilities Regulatory Authority (PURA) was established by Government (in 2004) to provide the legal framework to regulate the activities of providers of public utility services. • PURA now concentrates on the Telecommunications, Electricity and Water utility sectors.

  12. Methodology: • Perception Survey: A sample size of 150 respondents was considered suitable to capture the perception of competition in The Gambia • Purposive Sampling Techniques • The Criteria of Classification therefore give us three groups, namely, (a) Private business, (b) Government, and (c) Civil Society. • 5 Sector Regulators were interviewed: PURA, CBG, GPPA, Civil Aviation • A sample of 12 farmers was also randomly selected from households close to the residence of the enumerators • Plus 5 seed firms and 3 fertilizer firms

  13. Pro – POOR ADVOCACY GROUP Garba Jahumpa Road, Bakau, K.S.M.D. The Gambia. * Tel: (220) 494338 Fax: (220) 494219 Methodology: • The seed and fertilizer firms are few in number, hence, the known ones were listed and subsequently covered during the interview. Five seed firms and 3 fertilizer firms were interviewed.

  14. Limitation of the Survey • Enumerators were trained to complete the questionnaires through personal interviews using structured questionnaires • institutions insisted that the enumerator should leave the questionnaire with them • private sector institutions, particularly banks, were reluctant to participate in the survey • The survey did not cover the whole country due to limited resources and was therefore restricted to the Greater Banjul Area: Banjul City Council, Kanifing Municipality and Brikama Area Council.

  15. Research Findings: Awareness Issues • The survey revealed that the majority of the respondents (about 41% of them) have no idea about the existence of a competition laws in the Gambia. • 77.8% of the respondents from the government maintain that there are competition laws in the Gambia. • 42.7% of the total respondents said that they do not know whether there is a consumer protection law in The Gambia. • 52.7% of the respondents reported that they know of an agency that protects consumer’s interests in The Gambia

  16. Research Findings: Awareness Issues • 70% of the respondents believe that competition issues are not understood in The Gambia because of lack of publicity about competition issues. • Civil Society actors are less nuanced in their appreciation of the situation. For them, there is absolutely no competition in the power sector, being a natural monopoly, the recent emergence of Independent Power Plants notwithstanding. • All the groups reported that the level of competition in the retail consumer goods sector is high (55.4% of the respondents

  17. Pro – POOR ADVOCACY GROUP Garba Jahumpa Road, Bakau, K.S.M.D. The Gambia. * Tel: (220) 494338 Fax: (220) 494219 Research Findings: Awareness Issues • The level of competition within the transport sector is generally perceived to be high by 42.7% of the respondents).

  18. Pro – POOR ADVOCACY GROUP Garba Jahumpa Road, Bakau, K.S.M.D. The Gambia. * Tel: (220) 494338 Fax: (220) 494219 Perception of the Prevalence of Anticompetitive Practices • Anticompetitive practices are quite frequent. • That is the view of 44.8% of the respondents, attributing it to the following factors in descending order of prevalence: price fixing, market sharing and price.

  19. Perception on level of Competition • Overall, the level of competition in the country is described as moderate by 44.7% of the respondents • private business group (63.3%) and civil society group (54.9%) believe that the level is high, whereas, those from the government 44.4 % describe the level as moderate. • About 59% of the respondents asserted that the level of competition in the telecommunication sector is high • The respondents unanimously agree that the level of competition in the power sector is low (34.9% of the respondents),

  20. Perception on Enforcement • Most respondents (49.1%) asserted that actions are sometimes taken when competition laws are violated. • Very few (7.5% of them) reported that no action is taken when competition rules are violated and apportion blame for this inaction on the lack of enforcement of the relevant laws.

  21. Pro – POOR ADVOCACY GROUP Garba Jahumpa Road, Bakau, K.S.M.D. The Gambia. * Tel: (220) 494338 Fax: (220) 494219 Perception of the role of media • the media’s understanding of competition issues is very limited and this renders them ineffective in disseminating competition related information and issues. That is the view of 63% of the respondents

  22. Independence of Regulatory Authorities • The 4 Regulatory Authorities that were enumerated: PURA, Central Bank, Public Procurement Authority and GCAA are categorical ­ • Totally Independent • Their senior staff are autonomous in terms of decision making • Though appointed, they cannot be easily dismissed • All say they enjoy a good degree of budget autonomy except GPPA • Only PURA admitted that there are possible political interferences on award of licenses, since they only have an advisory role

  23. Pro – POOR ADVOCACY GROUP Garba Jahumpa Road, Bakau, K.S.M.D. The Gambia. * Tel: (220) 494338 Fax: (220) 494219 The State Monopolies • Water • Electricity: Expensive because of type of generation Plants in use • Television Services • Defense related industries

  24. Pro – POOR ADVOCACY GROUP Garba Jahumpa Road, Bakau, K.S.M.D. The Gambia. * Tel: (220) 494338 Fax: (220) 494219 The Agriculture Sector

  25. Pro – POOR ADVOCACY GROUP Garba Jahumpa Road, Bakau, K.S.M.D. The Gambia. * Tel: (220) 494338 Fax: (220) 494219 Agricultural Production: • Cash Crops: Groundnuts, Cotton; Sesame • Food Crops: Millet, Maize, Sorghum, Rice, Horticulture, Cassava, Sweet Potato

  26. Competition issues in the Agriculture Sector • The most common anti-competitive practices encountered at the stage of buying by 33.3% of the farmers are (in order of prevalence): collective price fixing, market sharing, and bid rigging. • The group which is mostly engaged in anticompetitive practices in the seed production and supply market is farmers as reported by 60% of the seed firms. • anticompetitive practices are mostly encountered in the seed production/supply market are: production, selling to retailers, and selling to farmers. This view is maintained by 40 % of the seed firms

  27. Competition issues in the Agriculture Sector • The impact of anticompetitive practices on the farms is felt in both the output and quality of farm produce. • Increased prices of crops, as an impact of anticompetitive practices, was reported by 20% of the seed firms. • Anticompetitive practices, in particular, price fixing, have been reported in the production and supply of fertilizers in The Gambia.

  28. Perception on Prevalence of Anticompetitive Practices • Anticompetitive practices are quite frequent. That is the view of 44.8% of the respondents, attributing it to the following factors in descending order of prevalence: • Price fixing • Market sharing • and Price

  29. Pro – POOR ADVOCACY GROUP Garba Jahumpa Road, Bakau, K.S.M.D. The Gambia. * Tel: (220) 494338 Fax: (220) 494219 Challenges: • Lack of expertise in competition administration • Weak institutional environment that hinder the implementation of a regulatory regime; • Capacity building and human resource development is necessary to ensure that regulatory agencies can fulfill their mandate effectively • Need for a regional approach involving R.E.Cs and the development of regional standards • Absence of Strong Consumer Awareness and Consumer Groups to contribute to the regulatory process and the presence of stakeholders who are ill-prepared to accept the rules of engagement. • Insufficient funding for regulatory activities and the lack of sector specific laws for the water sectors.

  30. Challenges (Cont’d) • The lack of sector specific (water) laws continues to inhibit our regulatory effectiveness in the sector. • These legislations are required to supplement the PURA Act by giving it the specific mandate within the sectors and delineate the complementary policy and regulatory roles and responsibilities of all stakeholders. • Donors such as the World Bank are not keen to commit funds to a sector that does not have any legal framework. • There are potential conflicts between the Competition Commission and the other regulators like PURA

  31. Pro – POOR ADVOCACY GROUP Garba Jahumpa Road, Bakau, K.S.M.D. The Gambia. * Tel: (220) 494338 Fax: (220) 494219 Challenges (Cont’d) • Sector regulators like PURA and officers of the emerging Competition Commission need to be shielded from undue interference by policymakers, lobby groups, political clients and other actors driven by their vested interest. • Absence of regulatory enforcement instruments

  32. Pro – POOR ADVOCACY GROUP Garba Jahumpa Road, Bakau, K.S.M.D. The Gambia. * Tel: (220) 494338 Fax: (220) 494219 The Way Forward: • The strengthening of the Competition Commission • Total Financial Independence • Finalization of the Competition Policy • Building capacity of National Stakeholders (With Technical Assistance from CUTS International) • That strengthening of regulatory institutions: The Divestiture agency, The Central Bank and the Public Utilities Regulatory Authority (PURA), the Competition Commission etc

  33. Pro – POOR ADVOCACY GROUP Garba Jahumpa Road, Bakau, K.S.M.D. The Gambia. * Tel: (220) 494338 Fax: (220) 494219 The Way Forward: • The promotion of a strong political will to foster a healthy Competition Culture • The development of a Consumer Policy • Constructive competition and consumer advocacy engagements with State and non-State actors • PURA is developing consumer codes, which will establish minimum acceptable standards of service provision. These are geared towards ensuring that consumers get the services they are paying for.

  34. Pro – POOR ADVOCACY GROUP Garba Jahumpa Road, Bakau, K.S.M.D. The Gambia. * Tel: (220) 494338 Fax: (220) 494219 THANK YOU FOR YOUR ATTENTION ! !

More Related