a tripartite report - Unctad

174 VOLUNTARY PEER REVIEW OF CLP: A TRIPARTITE REPORT ON THE UNITED REPUBLIC OF TANZANIA – ZAMBIA – ZIMBABWE
economies of scale and scope and product
differentiation and brand loyalty) and (c)
tendering, tied sales, and allocation of market
and customers).
The study concluded that “while the combination
of a high degree of industrial concentration and
high barriers to entry does not automatically lead
to abuse of market power by monopolists and
oligopolists, the possibility for exercising market
power existed and that there was some evidence
and good reason to believe that restrictive business
practices were extensive in Zimbabwe”. Based
on this conclusion, it was recommended that there
be the adoption of competition policy and law in
Zimbabwe and the creation of a competition authority
to administer that policy and law.
The recommendations were adopted by the Government
of Zimbabwe whereby in 1996 the Competition
Act was enacted, within which the Industry
and Trade Competition Commission, the authority
to administer that policy and law was established
under section 4 of the Act. This marked the formal
adoption of competition policy and law in Zimba-
ern
and eastern Africa to do so after South Africa,
Kenya, the United Republic of Tanzania and Zambia.
As it was for other countries’ experiences, the
Act came into operation in 1998, the same year 179
that the competition authority to implement it was
established.
tion
policy and law in Zimbabwe was to complement
market forces particularly in instances where
forces of supply and demand do not give desirable
market outcomes. Given the structure of the
economy that is characterized by monopolies,
oligopolies and various forms of anticompetitive
practices, regulation becomes very important to
protect consumers and investors. Competition
policy and law was therefore adopted in 1996 as a
basic requirement for the country’s market-based
economic reforms.
A few years after adoption and commencement
of implementation of Competition law; Zimbabwe
was involved in the war in the Democratic Republic
of the Congo (1998-2002). Invariably, the Government’s
land reform programme in 1999, which had
a bad reception by actors within and outside Zim-
babwe; and resulted into imposition of economic
sanctions by some of its key trading partners. The
two factors have badly damaged the economy,
particularly the commercial farming sector which
is the traditional source of exports and foreign
exchange and the provider of 400,000 jobs. As a
result of the worsened economic situation Zimbabwe
turned into a net importer of food products.
cluding
a large external debt estimated at 241.6
per cent of GDP in 2010. In 2007 Foreign Direct
-
billion whereby the agriculture sector contributed
19.5 per cent of the total GDP, while industry and
services sectors contributed 24 per cent, and 56.5
per cent respectively. According to World Bank
data on Zimbabwe (World Development Indicators)
180 , the employment to population ratio for
the age group 15 years and above was 61 per cent
in 2009. According to Zimbabwe Statistics (Zim-
Stats), the unemployment level is between 5 per
cent and 13 per cent if informal employment is
taken into account.
Most of Zimbabwe’s contemporary economic
problems have emerged from sanctions that the
country has gone through. Invariably, like other
Sub-Saharan African countries, the economy is
characterized by features such as majority of the
workforce engagement in agricultural production,
limited formal employment, high percentage
as well as low capital formation coupled with low
is a renewed initiative in Foreign Direct Investment
through international partnerships with South Africa.
In continued efforts to manage the economy, until
early 2009, the Reserve Bank of Zimbabwe at-
economy. In February 2009, Zimbabwe adopted a
multicurrency 181 regime characterized by stoppage
of use of Zimbabwean dollars in the economy and
removal of price controls. These measures have
led to some economic improvements, including