Ver Angola


Study says that self-construction regulations can distort competition

The self-construction regulation contains provisions that could distort competition in the sector, according to the assessment of the competitive profile of public policies in the civil construction subsector, carried out by the Competition Regulatory Authority (ARC).

: Felipe Gusinski/Cohapar
Felipe Gusinski/Cohapar  

In the study consulted by Lusa, ARC considers that by establishing support mechanisms for small producers, by provincial governments, without specifying the type of support, as well as stipulating support for small producers organized in cooperatives for the production of construction materials, without considering the companies operating in the market, "creates a discriminatory criterion capable of limiting competitiveness between different economic agents”.

The competition entity argues that, in order to “minimize” the effects that measures of this kind can have on the market, “it is essential to identify the effective support that companies that are part of cooperatives can benefit from”.

The study, aimed at evaluating the effects produced by public policies on competition in the sector, used the competitive impact assessment methodology proposed by the Organization for Economic Cooperation and Development (OECD), analyzing sectoral legislation, with a view to identifying aspects capable of distort competition.

According to the regulator, the civil construction market in Angola transitioned from a paradigm of centralized (planned) economy, in which the State owned the main companies operating in the sector, to a more liberal model (market economy), characterized by the presence mass of private companies in different segments of economic activity.

The study identifies three concerns, two of which are competitive, in three diplomas, namely the Self-Construction Regulation (RAC), which provides support for small producers of construction materials, and the decree that prohibits the import of cement and clinker, as well as a “recurrent practice in public procurement procedures that limits access to the respective market by projection companies”.

ARC recommends that the Angolan Ministry of Public Works, Urbanism and Construction revoke the RAC article that restricts competition between producers and carry out a global review of this regulation, as it needs to be updated in light of the changes seen in the economy in recent decades.

The study highlights the dynamics seen in the civil construction subsector in the country, as well as its economic impact on the growth and development of Angola, considering that it “requires that it be regularly subject to competitive assessment”.

“The competitive assessment carried out in the civil construction subsector identified the existence of standards that could undermine the rules for promoting and defending competition, making it necessary to carry out reforms in order to adapt them”, the conclusions also state.

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