Assessing impacts of
competition – experience from
ODI research
Karen Ellis
Head of Private Sector & Markets Programme, ODI
Project assessing economic
impact of competition and
related policy
Policy context &
market
environment
Degree of
competition
Market
outcomes
Countries and markets analysed
Countries:
Markets:
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Bangladesh
Vietnam
Ghana
Kenya
Zambia
Sugar
Cement
Mobile phones
Beer
The sugar market
Country
Number of
firms (sugar
mills /
refiners)
State
ownership
Market shares
of leading firm
Imports as %
domestic
consumption
Kenya
8
Yes, the state
owns nearly all
mills
54% (firm with
most private
sector
participation)
15%
Zambia
3
No
93%
0%
Ghana
0
N/A
N/A
100%
Vietnam
40
Yes, high
degree of state
ownership
9%
4%
Bangladesh
16 SOE mills &
4 private
refiners
Yes, State
owns nearly all
mills
47%
10%
Comparing efficiency
Average sugar production
(tonnes produced per hectare of sugar grown)
Zambia
15.3
Vietnam
5
Bangladesh
1.4
Kenya
1
0
5
10
15
20
Sugar Retail Price (USD)/kg at
PPP rates (2007 figures)
Cement market structure
Country
Number of
firms
State
Ownership
Estimated
market
shares of
leading firm
Head of
population
(millions) per
cement
company
Kenya
3, but with joint
ownership
1 SOE
65%
13.6
Zambia
3
No
85%
4.42
Ghana
2
No
64%
12.2
Vietnam
90
33 SOEs
40%
0.99
Bangladesh
34
1 SOE
12%
4.8
Retail Cement Price Per 50kg
Bag (in US$) , 2007/8 figures
5.61
Bangladesh
Vietnam
3.46
Ghana
9.34
Zambia
18.57
Kenya
10.31
0
2
4
6
8
10
12
14
16
18
20
Cement: percentage change
in price between 2007 and
2010
0.2
0.15
0.1
0.05
0
Kenya
-0.05
-0.1
Zambia
Ghana
Vietnam
Bangladesh
Mobile telecoms benefits
Mobiles market
Average per minute mobile
tariff (2007 figures in USD)
Zambia´s International
Gateway Problem
• Only one international
gateway exchange
operated by monopoly
• State charged v. high
price for international
gateway licence
• $18 million, compared to
$214,000 in Kenya &
$50,000 in Uganda
• Drove up prices and
distorted whole mobiles
market, increasing the
costs of doing business in
the country.
Peak rate 1 minute call to the
USA in 2007
Average per minute mobile tariff
(2007 figures in USD)
Director for Mergers and
Monopolies at the Zambian
Competition Commission:
‘Many times it becomes very difficult to actually
show the benefits. Of course, a report like this
makes it much easier to advocate to the
government. With our persistence, we kept
going to the government and highlighting the
benefits of competition, showing them the
statistics as such a report has done. And
eventually we have gotten through to the
government. And the fee for the international
gateway has fallen ...’
The Impact
• June 2010, Govt reduced
license fee to $350,000
• Licences awarded to the 2
private operators
• Within 1 month, both
private operators reduced
international tariffs by 4080%
• “I think it’s a huge benefit
to the Zambian consumers
and also to the business
community.” (Director of
Regulation, ZICTA)
Thank you
k.ellis@odi.org.uk