Editors Note: Quarterly Review May 2015

Thando Vilakazi

In March, CCRED partnered with the Zimbabwe Competition and Tariff Commission to host the inaugural Annual Competition and Economic Regulation (ACER) week at the magnificent Victoria Falls in Zimbabwe. The 5-day programme included a series of applied core and advanced short learning programmes on competition and regulation, and a two-day conference with contributors and participants from regulators, competition authorities, the legal profession and economists from several countries. The real success of the week was in combining rigorous training led by regional and global experts, with a conference programme that was designed with inputs from authorities in the region to make sure it was topical and directly relevant. As such, the discussions were especially vibrant and the subject matter of particular relevance to solving the challenges of enforcement and growth for agencies. It is worth reflecting on some of these areas. 

A contentious issue in the life of regulatory bodies is institutional design and independence. To the extent that competition and economic regulation often deal in sectors with long-standing vested interests of firms and governments, the ability to maintain objectivity and fairness in enforcement is critical. Through the framing of legislation, regulatory bodies are typically designed to be independent with various appellate bodies and tribunals in place to reinforce this and ensure adherence to administrative procedures. However, in practice this does not preclude the public and policymakers from taking an interest in particular matters or advocating for certain views. One view, which is discussed later in this Review, is that  agencies deal in very sensitive sectors of a developing economy, and it should be expected that policymakers will take a strong view on competition and regulatory matters, as long as fairness in the adjudicative processes is maintained. This issue ties in with the role of universities and academics in supporting institutions in the region, which was also discussed. In so far as universities have the capacity to conduct research and make public commentary on the areas of work of regulatory bodies, they can play a role in critically assessing the progress and impact of authorities and interventions, and providing inputs to aid their work. 

This last point is important. Several of the papers presented dealt with issues related to cartels, penalties and settlement; the implementation of and experience with market inquiries; regulatory and competition issues in mobile money and energy; and the very recent debates on excessive pricing. Each of these areas is complex, and there is a clear need to develop a body of knowledge and literature which originates from the experiences of countries in the region rather than an express reliance on international precedent and learnings. One example of this, was the paper which reflected on the poor translation of cartel findings in South Africa, into follow-on investigations and prosecution in neighbouring countries in SACU and SADC, and damage claims based on an assessment of the overcharge to consumers across borders. Our emphasis going forward will be on developing even more African case studies for both training and knowledge-sharing purposes. 

These issues are of interest from both an academic and practitioner’s perspective, and in terms of regional economic development where countries in the region often face the same challenges of small, concentrated markets where barriers to entry are especially high and where the resources to enforce against anticompetitive conduct are limited. In this Review, we reflect on some of these topics discussed at ACER week, including the issue of penalties, and institutional independence. We also assess the state of affairs in the regional airline industry, and profile ongoing work on retail chains and their role in local supplier capabilities development. We trust that you will find this Review interesting, and relevant to your work.

The PDF copy of this editorial is available here.