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Competition Regime in Ethiopia: Preliminary Country Paper for the Capacity Building on Competition Policy in Select Countries of ESA (7UP3 PROJECT).


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Competition Regime in Ethiopia: Preliminary Country Paper for the Capacity Building on Competition Policy in Select Countries of ESA (7UP3 PROJECT) Prepared for the Launching Meeting of 7UP3 Project Held on March 22-23, 2005 in Entebbe, Uganda By Gebremedhine Birega
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Rivalry Regime in Ethiopia: Preliminary Country Paper for the Capacity Building on Competition Policy in Select Countries of ESA (7UP3 PROJECT) Prepared for the Launching Meeting of 7UP3 Project Held on March 22-23, 2005 in Entebbe, Uganda By Gebremedhine Birega Ethiopian Consumer Protection Association Tel. 251-1-57 08 58; fax. 251-1-57 56 22 E-mail: gebremedhinbirega@yahoo.com

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Road Map I General Background Information on Ethiopia II Social and Economic Policies Affecting Competition III Nature of Market/Competition IV Competition Law V Regional Integration VI Consumer Protection Law VII Sectoral Approach A. Pharmaceuticals B. Utility/Power C. Monetary Services VIII Conclusion

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I. General Background Geographical Location on the Globe 3'and 14' 8" Latitude and 33' and 48' Longitude In the Horn of Africa, eastern past of the mainland area bolted nation; Shares outskirts with five neighboring nations; Size and present populace of 71 million, with a yearly populace development rate of around 2.7 percent female 35.66 million (50.22%) male 35.34 million (49.78) gainful populace assessed at 35.6 million.

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General Background (2) Present GDP, According to 2003 estimations, all out GDP at Current Market Price was 54,585.9 Million Birr, in wording obtaining force equality it was $ 46.81 billion, with genuine development rate of - 3.8%. Gross domestic product per capita is generally about $100, GDP Per Capita, PPP is $ 700. sectoral commitment to GDP Agriculture 46.0% industry 12.6% administration 41.4%.

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General Background (3) Present proficiency rate: 42.7% are proficient regarding sex conglomeration, out of the educated populace: 53.3% of male populace and 35.1% of female populace are educated. Present unemployment rate: real number of unemployed is inadequate with regards to, unemployment showed by underemployment. Open unemployment is packed in urban zones. Youth unemployment has been a noteworthy social issue .

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General Background (4) Brief investigation of Socio-politico-financial history: Ethiopia's economy is agrarian, Agriculture represents: a large portion of GDP, 60% of fares, and 80-85% of occupation. youthful business sector economy of supreme administration, was stopped amid the order economy of the military administration. since the present government took power in 1991: Ethiopia sought after a business sector arranged financial improvement system; and actualized strategies that started the movement from a state-controlled to a free market economy. wary system of monetary change, including exchange liberalization, privatization of open undertakings and streamlining the organization.

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General Background (5) some accomplishment in settling the economy and supporting the move to a free market framework. improvement procedure has concentrated on horticultural advancement as the impetus for financial development. oppressive assessment, credit, and remote exchange treatment of the private area were killed and endeavors to improve bureaucratic regulations and techniques. 1998-2002, yearly normal monetary development rate of around 4.2% and yearly expansion rate found the middle value of – 0.4%. 2002/03, GDP fell by 3.8 percent and swelling rose by 15.1%, because of decrease in horticultural yield by 12.2 percent created by a serious dry spell. 2003/04 11.6% development evaluated by the IMF and the Government, farming division 18.9 percent in FY, yet from lower bases. significance of private area recognized, numerous protests on gathering claimed undertakings control of the business sector and contrarily influencing the opposition administration.

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II. Social and Economic Policies Affecting Competition 2.1 Industrial Policy Based on Industrial Development Strategy, since August 2001 key standards of the methodology Recognizing the private segment as a motor ADLI (Agricultural Development Led Industrialisation) system, concentrates on guaranteeing fast mechanical advancement that delivers inputs and utilization merchandise that are suitable for the agrarian area, and increasing the value of farming items, which thusly is accepted to ensure in reverse and forward linkages in the middle of horticulture and industry; Export Led Industrialization, quality change, work escalated generation; co-ordinated remote and residential speculation; and Coordination of open and the private segment. Consequently, hopeful to acknowledge rivalry and aggressiveness.

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Social and Economic Policies Affecting Competition (2) Trade Policy new exchange arrangement has been set up subsequent to 1991. critical advancement toward opening up its economy; exchange changes actualized brought about a huge cut in import tax rates, a duty's lessening scattering and a decline in the level of connected rates. At present, no portions; no tax rate shares and no regular taxes, most ost of quantitative limitations have been disposed of, just to utilized garments for security and wellbeing reasons. MoTI forces confinements on importation of a few items that contend with privately delivered products, especially in the horticultural segment, while engine vehicle imports oblige approbation from the Ministry of Transport and Communications a few limitations that hamper its worldwide exchange. a) guidelines for the issue of import grants; and b) the necessity to give a leeway declaration from the National Bank of Ethiopia (NBE) to get import licenses.

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Social and Economic Policies Affecting Competition (3) Regulatory Policy Previously, government methods and research material are typically confounded and tedious, regulations have been bureaucratic, unprejudiced and rigid. 1996 far reaching common administration change program, subsequent to 2003, upgrades on business authorizing, import-send out regulations, remote trade regulations, and others have been moderately rearranged, conveyed down to one-stop-shop approaches and as result a few enhancements are enlisted in 2003/04. This in its turn is accepted to result in simple section and way out of business exercises and more pleasant rivalry. Be that as it may, in any case one can't deny that much stays to be finished.

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Social and Economic Policies Affecting Competition (4) Investment Policy: Theoretically, Ethiopia's business sector arranged financial advancement system grasps wide changes, with instigations to both household and remote private speculations. the private division is urged to put resources into all regions of economy including those parts once in the past saved for the administration, to be specific barrier commercial ventures, hydropower era, and information transfers administrations. not inconvenience of nearby substance, innovation exchange or fare execution necessities on outside speculations. no confinements on repatriation of profit, capital, charges or sovereignties. Better FDI fascination on agriculture/blossom, following 2002/2003; Telecommunications and protection, in organization with the Government. Less proactive methodologies towards these new introductions; The private segment refers to as obstructions to effectively partake in the venture of productive and gainful financial segments; and has been one element adding to hostile to focused practices.

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Social and Economic Policies Affecting Competition (5) Government Procurement arrangement: Government acquirement is by aggressive offering. no difficult regulatory methodology or uncommon report prerequisites. endeavors being made to make the methods of open acquisition more financial, proficient, more attractive, straightforward and non-prejudicial. New decree No 430/2005 on 12 January 2005, which accommodates non-segregation of competitors on the premise of nationality, race or whatever other measure not needing to do with their capability (Art.18). Be that as it may, if when determinations of edges and issuance of mandates by the MoFED is by all accounts one of the decree's impediments with respect to rivalry. Absence of execution component of the decree, as it is excessively youthful, is thought, making it impossible to be another variable influencing rivalry. Past open acquisition frameworks have been whined to be oppressive, uncalled for, against focused and in view of discretionally force of government authorities.

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Social and Economic Policies Affecting Competition (6) Labor Policy: Previously, particularly amid military administration exceptionally politicized, adversely influencing the mechanical connections; Proclamation No. 377/2003 essentially since 26 February 2004 Enabling so as to maintain mechanical peace and work both the laborers and businesses to be founded on fundamental standards of rights and commitments, through congruity and helpful endeavors have been the real goals of the approach. It has been contended that the announcement is inconformity with universal traditions and other lawful duties to which Ethiopia is a gathering. Plenitude of shoddy & taught work constrain together with the presentation of reconsidered work decree is belived to contribute towards rivalry in the division.

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Social and Economic Policies Affecting Competition (7) Development Policy: The nation's over all monetary advancement methodology has been founded on Rural and Agriculture-Centered Development as a method for advancing improvement of business sector arranged economy. Affirmation of fare drove advancement with goals to make sufficient markets to maintain development of the horticultural division, produce remote trade vital for the general financial improvement, and guarantee advancement of globally aggressive industry appears to include emphatically towards rivalry the nation. In that capacity no unmistakably seen antagonistic consequences for rivalry at arrangement level .

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Social and Economic Policies Affecting Competition (8) Policy for Small and Medium Size Enterprises (SMEs) Small and medium Enterprises are broadly recognized to contribute towards advancement and improvement of innovations, minor creations and modern plans and