The African Competition Forum (ACF), during its Steering Committee Meeting held on the sidelines of the OECD Global Forum on Competition (5 December), unveiled its Regional Trade Flows Study, spotlighting competition issues in Angola’s food subsector.
Regulatory Measures and Competition Concerns
Angola has implemented several initiatives under the Production Support, Export Diversification, and Import Substitution Program (PRODESI) to stabilize food prices, promote production, and support local industries. However, elements of these measures have raised significant competition concerns:
- Favors to Domestic Producers:
Presidential Decree No. 213/23 incentivizes alliances among national producers and traders but risks disadvantaging foreign operators by creating uneven market conditions. This approach could violate Angola’s Competition Law, which requires equal terms for competitors. - Restrictive Import Conditions:
The decree requires importers to demonstrate prior purchase contracts with domestic producers or guarantee future settlements, creating barriers for businesses entering the food import market. These restrictions could slow import flows and limit product availability. - Mandatory Data Sharing:
Producers and importers must provide detailed information on prices, stocks, and purchase plans to government platforms. While intended to improve market transparency, such data sharing risks facilitating collusion, raising prices, and reducing product variety. - Strategic Food Reserve Oversight:
The Strategic Food Reserve (REA) gives extensive control to its management entity, EGREA, which is vertically integrated across the value chain. This structure may distort competition by increasing dependency among operators and potentially enabling anti-competitive practices.
Broader Implications
The report also highlights broader issues impacting competition, including:
- High Fines and Inspection Overreach: Fines disproportionate to infractions are straining businesses.
- Unfair Trade Practices: Producers selling directly to consumers at distributor prices create conflicts with their supply chain partners.
- Discriminatory Access to Resources: Companies face unequal opportunities in credit access and availability of REA-managed food products.
Recommendations and Regional Trade Insights
The report calls for structural separation within REA’s operations and more balanced regulatory measures to ensure compliance with competition laws. It also points to trade disparities, such as steep customs fees for Angolan exporters at DRC borders, which disadvantage Angola’s regional trade competitiveness.
By addressing these issues, Angola can foster a more competitive and equitable food market, improving consumer access and encouraging private investment. The findings of the ACF study serve as a critical roadmap for policymakers across the region to navigate the complex interplay between regulation and competition.
Source: https://competitioncommission.mu/wp-content/uploads/2024/12/ACF-Agricultural-Report_Full_opt.pdf
