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									Private Anti-Competitive Practices in
        Africa: An Inventory
Dr. Simon J. Evenett and Professor Frédéric Jenny
                September 2004
          CRC conference, Cape Town

                                                    1
         Overview of this presentation
• Motivating questions.
• Construction of the inventory.
• Current findings from the inventory.
• Case studies with considerable development impact.
• Implications for research and policy.




                                                       2
                Motivating question.
• Should SSA nations enact and enforce competition
  laws? If so, which elements of these laws should be a
  priority?
   – Is there a problem to be solved?
   – Prioritisation of policies towards business environment.
   – Relevance for capacity building programmes.
   – Relevance for discussions in regional and international fora.

                                                                     3
    Precise questions addressed here.
• Which, if any, anti-competitive practices are prevalent in
  SSA?
• Which, if any, types of firms that operate in SSA engage
  in anti-competitive practices more often?
• Which, if any, lines of business are susceptible to anti-
  competitive practices in SSA?

                                                              4
             Assembling the inventory.
• Principal source: Factiva.
• Searched Factiva for articles containing 40 or so terms that
   relate to anti-competitive practices.
• Identified over 6,500 pages of documentation. 2,500 pages
   reviewed to date.
• Identify allegations against private firms (specifically, line of
   business/country affected/date).
• Steps taken to reduce double counting.
                                                                      5
                   Important caveats.
• Veracity of allegations.
• Consistency of news reports.
• Duplication of entries.
• Imprecise or incorrect allegations.
• Different use of search terms.
• Language of publication.
• Interim nature of statistics presented here.


                                                 6
     Key dimensions of the database on
     allegations of anti-competitive acts.
• 120 distinct allegations.
• 14 types of anti-competitive practices identified.
• 68 lines of business affected.
• 12 SSA nations affected.
• Year coverage: 1995-2004.




                                                       7
More reported allegations since 2000

25

20

15

                                                    %
10

 5

 0
     1995 1997 1998 1999 2000 2001 2002 2003 2004

                                                    8
Country composition of inventory

                        34%




        66%




  South Africa   Other SSA nations

                                     9
Country composition of inventory
           24%

                            35%




       12%



              12%      17%
   South Africa         Kenya
   Malawi               Zimbabwe
   Other SSA nations
                                   10
            Who makes allegations?
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
 5.00%
 0.00%
         Purchasers   Government      Civil Society   Competitors     Other

                      All nations   All nations except South Africa

                                                                          11
 Domestic firms are accused more often
           than foreign firms
                  Foreign firms (%)        Domestic
Sample                                       firms
               Named and      Liberal     accused (%)
                accused      definition
All sample        27.5         40.0        60.0-72.5

All except       25.6          41.0        59.0-74.4
South Africa
Post 2001        27.5          33.3        66.7-72.5
                                                       12
          Acts alleged: cartels dominate
Alleged act          All sample (%)   All sample, except
                                       South Africa (%)
Cartels                  37.9                51.9
Collusion                 8.6                9.9
Abuse of dominance        7.9                3.8
Predatory conduct         7.1                6.2
Anti-competitive          5.7                3.8
merger                                                13
          Acts alleged: cartels dominate
Alleged act           Foreign firms,    Domestic firms
                     liberal defn (%)       (%)
Cartels                    43.1            34.4
Collusion                  5.9              10.0
Abuse of dominance         5.9              10.0
Predatory conduct          5.9               7.8
Anti-competitive           7.8               4.4
merger                                                   14
         12 lines of business appear to be
        susceptible to anti-competitive acts
.
    Line of business   Number of SSA nations affected
    Beer                             6
    Petroleum                        5
    distribution
    Cement                           4
    Sugar                            4
    Cellular phones                  3
                                                        15
           Lessons learned so far
• Anti-competitive practices are NOT restricted to
   – Certain lines of business.
   – Foreign firms or their subsidiaries.
   – Richer or poorer SSA nations.
• Allegations of cartelisation predominate—whereas
  accusations against abuse of dominance are far fewer
  than expected.


                                                         16
           Lessons learned so far
• Government and civil society are important sources of
  allegations in countries without active competition law
  enforcement regimes.
• Where anti-competitive practices recur across the
  region they are in lines of business that are likely to
  have substantial impact on the poor, the rural sector,
  and on small business.
• Please remember the earlier caveats!
                                                            17

								
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