HomeBusinessCross-border cartels cost govt billions

Cross-border cartels cost govt billions

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Zimbabwe is losing $1 billion annually through cross-border cartels in public procurement, while small-to-medium enterprises have little space for growth due to artificial barriers and impediments created by dominant firms, a government official has said.

BY TARISAI MANDIZHA

Minister of Industry and Commerce Mike Bimha
Minister of Industry and Commerce Mike Bimha

Speaking at a sensitisation workshop on Common Market for Eastern and Southern Africa (Comesa) competition law, Industry and Commerce minister Mike Bimha said to show commitment to facilitate a level playing field, the government recently reviewed and drafted a new national competition policy, which was approved by Cabinet early this year.

He said the government was now working to ensure a new competition law, which will assist the Competition and Tariff Commission (CTC), deals more effectively with matters related to abuse of dominant positions and cartels.

“The new law is also part of enhancing the ease of doing business, as it also seeks to reduce the number of days taken by CTC in merger examination from 90 to 60 days,” Bimha said.

“We believe this will expedite the implementation of brownfield investment in the country.

“The proposed law also aims to set out clear rules on anti-cartel enforcement as well as anti-competitive conducts in public procurement.

“This way, the government will save millions of dollars that are potentially lost through cartelisation in key markets, especially of huge construction projects.”

CTC is a statutory body established under the Competition Act [Chapter 14:28].

The current Commission is a product of the merger in 2001 of the former Industry and Trade Competition Commission (ITCC) and Tariff Commission (TC).

Studies undertaken, particularly in the Sadc region on competition, point to strong possibilities of cross border cartels and other anti-competitive conducts that may retard effective growth in the region

Bimha said there is a clear position within government to drive the whole economy towards a level playing field, which facilitates the development of markets that provides for equal opportunities among people.

“More so, these competition infringements have a negative direct impact on the foreign direct investments (FDI), as investors are becoming increasingly conscious of the positive correlation that exists between the level of competition and returns on investments,” he said.

“These violations have a negative impact on the potential of countries to create more jobs for their people, which in turn affect the aggregate demand.

“FDI is, thus, a vital cog that boosts the circulation of income leading to multiplied expansion of output.”

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