Advocating for a Functional Competition Regime in Ghana-COMPAD

About the Project

CUTS with support from the Business Advocacy Challenge (BUSAC) Fund is implementing a 15 month project entitled: “Advocating for a Functional Competition Regime in Ghana” referred to as the COMPAD Project.

The goal of the project is to facilitate the process towards evolution of a national competition regime in Ghana, through an informed process, incorporating views of key actors and with support from Ghanaian business and consumers.

The objective of a functional competition regime is to promote competition, and contribute towards increased efficiency as well as curb anti-competitive practices in the market. It aims to ensure wider consumer choice in markets for goods and services, through innovation and efficient resource use by players in the market to promote economic welfare. Further, it endeavours to stimulate effective price competition among suppliers, and deter anti-competitive behaviour, which helps both producers and consumers. If passed and implemented effectively, empirical evidence and country experience suggests that an effective competition regime can promote private sector development, economic growth and poverty reduction in both developing and least developed countries.

Several studies have corroborated this hypothesis, and the understanding motivated a large number of countries from Africa and Asia to embrace competition law/policy in the last decade or so. Eminent economist like Nobel Laureate Joseph Stiglitz (2001) asserts that, “Strong competition policy is not just a luxury to be enjoyed by rich countries, but a real necessity for those striving to create democratic market economies.”

Anti-competitive practices including cartels, abusive monopolies, predatory pricing, collusive tendering, exclusive market sharing agreements, etc. has negative effects on both consumers and producers, reducing both consumers and producers surplus. Certainly, a well-enforced competition regime reduces uncertainty for businesses and is an important element of a regulatory package for private sector development.

In competitive environments, firms are pushed to innovate and find better and more efficient ways to produce and distribute goods and services. Businesses tend to benefit from a well-enforced competition law, for instance, through cheaper (not overpriced) inputs and indirectly through the impact of competition law and policy in creating a good investment climate.