The Chief Executive Officer of Ghana Investment Promotion Council (GIPC), Mr. Yofi Grant, has backed the call for enactment of a National Competition Law to regulate the market’s conduct as way of creating a level playing field that accrues to the benefit of both producers and consumers.
He added: “Competition is great and necessary when you want to establish a very efficient, sustainable market, and is therefore desirable in every growing economy. However, to achieve this we need to be mindful of what competition is all about. Competition has risen in the economic sphere out of liberalised markets. The law will curb anti-competitive practices like price-fixing, cartels and abusive monopolies”.
Mr. Grant said this in Accra as part of activities to mark World Competition (Anti-trust) Day, on the theme ‘Mergers and Acquisition in the Absence of Competition Laws’. The event was organised by the CUTS Ghana, a research-advocacy and public policy think-tank, with support from the BUSAC Fund.
World Competition Day, which falls on December 5 every year, was initiated by the United Nations to raise the awareness of governments and consumers across the globe to the potential benefits of having an effectively implemented competition regime.
The Minister for Trade and Industry (MOTI), Allan Kyeremanten indicated that the ministry has been able to put together the draft framework for a National Competition Law and National Competition Policy. The policy went through stakeholder consultation, and comments and inputs from private sectors were received and synthesised. These two documents are currently ready for Cabinet, and will be policy and legislative priorities for the coming year.
He added: “Central to a competition regime is the Ghana International Trade Commission (Act 926). Very soon, his Excellency the President will inaugurate the Commission. The GITC will provide for the regulation of international trade in Ghana in conformity with rules and regulations of the World Trade system, and resolve all trade-related disputes”.
Mr. Kyeremanten said that ministry is pleased to have CUTS Ghana as a knowledge-partner on the issue of Competition, and on Consumer Protection, trade facilitation and trade negotiation.
Justice Samuel Kofi Date – a retired Justice of the Supreme Court of Ghana and Board Chair of CUTS Ghana – in his remarks indicated that Competition Law is an essential part of the ‘business-enabling-environment package’, and called for government to ensure passage of the law to guide the market’s conduct. He added that competition is essential in approving mergers and acquisitions transactions.
Speaking on behalf of the Governor of the Bank of Ghana (BoG), Mrs. Frances Sackey, the Head of the Legal Department of the BOG said that mergers and acquisitions of institutions regulated by the central bank are supervised and regulated under the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930). Section 62 of Act 930 deals with the sale of businesses, mergers, amalgamations and reconstructions of banks and specialised deposit-taking institutions.
She added: “The Bank of Ghana may request additional information during the pre-merger period. The purpose of the central bank reviewing merger documents is to ensure fairness, and also to make sure consumers and the general public as a whole are not hurt when these transactions go through. In considering whether to approve a proposed merger or acquisition, there are certain considerations the central bank takes into account. These include the financial and managerial resources; effects of the proposed transaction on competition in the banking sector; risk to the banking and financial system; and convenience in community serving”.
The BUSAC Fund Manager, Mr. Nicolas Gebara, on his part said mergers and acquisitions are not new in the Ghanaian economy. They have often taken place in two main sectors – that is, the telecom and banking sectors. The effects of these mergers and acquisitions on consumers can be positive or negative depending on the industry and market competition, as well as the degree to which how many new players are entering the sector.
At sector level, mergers and acquisitions can bring sanity to a sector by pushing for economies of scale and making products and services more efficient and competitive on the market. Mergers and acquisitions can affect consumers negatively in terms of a coordinated increase in prices and formation of monopolies in the economy.
Mr. Appiah Kusi Adomako, the Centre Coordinator for CUTS Ghana, said that over the past five years CUTS Ghana has been marking World Competition Day in Ghana. The purpose for the policy dialogue was to explore the ways by which the ongoing mergers and acquisitions can be structured so as not to result in monopolies and oligopolies, and create rent-seeking behaviour by some firms. As an organisation promoting a fair and efficient market that benefits both consumers and producers, CUTS Ghana is of the view that Competition Law is key in achieving this.
This policy dialogue was attended by the Ministry of Trade and Industry (MOTI); Ghana Investment Promotion Council (GIPC); Bank of Ghana; Security and Exchange Commission (SEC); National Development Planning Commission (NDPC); BUSAC Fund; US Embassy Accra; World Trade Centre, Accra; Private Enterprise Federation (PEF); Association of Ghana Industries (AGI); International Chamber of Commerce (ICC); law firms, financial institutions; telecom operators; Law Faculty of the University of Professional Studies Accra (UPSA), among others.