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Home » Abolish harmful monopolies in the economy

Abolish harmful monopolies in the economy

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THE Competition Act (“the Act”) was passed almost a decade ago in 1996 after government had awakened to and realised the harmful nature of monopoly situations in our economy.
At the time, our economy had spent 16 harsh years dominated by underperforming, mismanaged, loss-making, corruption riddled private and public conglomerates.
It remains to be seen whether government was sincere in its endeavour to dismantle the hazardous dominance of monopolies in whatever from the face of the economy. The preamble of this valuable statute portrays a noble objective.

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President Emmerson Mnangagwa

It provides that the purpose of the Act among other things, is to promote and maintain competition in the economy and to prevent and control monopolies. Before we venture to investigate and expose manifest government hypocrisy in this controversial area, it is important to acknowledge that certain areas deemed of strategic national interest must always as of necessity remain either exclusively in the hands of the State, or be allowed limited State control.
This is because in capitalist economies like ours, a wholesale liberalisation might leave the public open to abuse by undisciplined greed obsessed corporations.
An illustration is the transport industry, which since the collapse of ZUPCO and NRZ has seen random fare increases hardly justified by prevailing economic circumstances.
Drawing examples from countries closer to us and further afield, it can be observed that road, air and railway transport as well as broadcasting and telecommunication services can be left to full or limited State control.
Some of these sectors are not only sensitive, but are of vital national interest and cannot be surrendered to private players alone.
While State participation in the economy is essential, it must not be exercised unreasonably and unfairly to the detriment of the economy and the public. State involvement in key sectors must be driven by sound economic principles that bring positive spin-offs to the State and the economy at large.
However, the history of our economy has proved that State involvement in certain sectors has overall been responsible for the collapse of parastatals and State-controlled private corporations.
A case in point is the NOCZIM saga that through rampant corruption, incompetence and economic recklessness pulled Zimbabwe into the quandary we found ourselves in as regards matters of fuel.
The Cold Storage Company likewise, gobbled billions of taxpayers’ money and now exists in name with no meaningful business being transacted. The NRZ, ZISCO and ZUPCO are other sorry examples of how apathetic State control of parastatals can kill former lucrative corporations.
In fact, the illustrations are many to mention, and it is only wise to stop here for the sake of avoiding further embarrassment to the powers that be.
The Act provides for the establishment of a Competition Commission which has various responsibilities one of which is to investigate monopoly situations which exist or may come into existence.
Since, the commission is a creature of statute, it cannot investigate other statutory monopolies like the NRZ and the GMB. These exist by virtue of Acts of Parliament and until such Acts are repealed, they shall continue to enjoy unhindered dominance of their respective sectors.


It can however, be argued here that the unholy monopoly of the GMB in the agricultural sector is unwelcome. It goes contrary to the spirit of genuine empowerment of the public.
Evidence abound that most farmers who benefitted from land reform are failing to reap dividends they deserve from their farming because the insensitive and bankrupt GMB cannot offer them competitive prices for their produce.
As long as purchasing of grain and other agricultural produce is not deregulated, the peasants and a host of other newly resettled farmers shall remain impoverished and destitute.
Government policy in this sector must forthwith allow new players so as to promote competition that in the long term will facilitate growth of the farming sector.
A few years ago, government introduced an informal affirmative action policy that saw many indigenous people taking control of key sectors of the economy that had hitherto been dominated by foreigners and other perceived undesirable.

The main objective of this policy was to open up the economy to new local people as a way of creating local wealth.
However, this policy only benefitted a few individuals and has not wholly taken care of monopolies controlled by government.
The Competition Commission must promptly investigate the ZBC strangle on all television broadcasting services.

This is because this, poorly managed institution is giving the nation a disservice, with the daily doses of political propaganda, the nauseating, repetitious news bulletins, the amateurish-clownish local dramas, the irritating poorly-recorded new local music and the incompetent often untrained presenters all starkly portray the degeneration of the once proud professionally run public broadcaster.
Only an introduction of vibrant able and capable new players can make ZBC rise from its deadly slumber.
Where the Competition Commission has no control over, the government, parliamentarians and other stakeholders like the Privatisation Agency of Zimbabwe must oversee the abolishment of harmful monopolies.
This must include both public and private dominant conglomerates and government departments like the Department of Roads which controls national roads, and a plethora of other performing, gullible, exploitative business organisations.
Those parastatals that for national interest cannot be dismantled must be made to account to Parliament about their performance.
Where monopolising State enterprises are seen to be loss making, incapable individuals at their helm must be shown the door.
In well-managed countries, parastatals make profit and pour their dividends to national treasury, for creation of capital projects. By Vote Muza

Muza is a Harare-based legal practitioner. He writes in his personal capacity and can be contacted on muzalaw@gmail.com.

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