International Journal of Innovative Research and Development

Abstract

Independence of central bank's independence is of importance to ensure price stability and economic development. Studies show that both developing and developed nations have legally endorsed the independence of their central banks and; they have legislated specific laws to underpin enforcement of the principle of central bank's independence. The paper examines the establishment proclamation or parent act of national bank of Ethiopia from the light of common features of independent central banks; and found that the appointment process of Board of directors and governors is clearly mandated or entrusted to the political authority, prime minister. Their accountability as well made to the prime minister. Besides, the law fails to put a clear limitation up on the extent of the debt that the government could borrow from the national bank. The proclamation acknowledges, in addition to price stability, other too general purpose i.e. undertaking other related activities as are conducive to rapid economic development. These gaps of the parent act call for reevaluation and rewriting of the parent act.

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Abstract

Enforcement of competition regime and ensuring fair competition in a free market economy depends, among others, up on the effectiveness of competition authority. Existing studies reveal that establishment of autonomous competition authorities is the most effective way to implement competition regimes and ensure market competition. Despite Ethiopia's effort to legislate three times in a decade and improve autonomy of competition authority, still the competition legal regime have gaps that will negatively affect autonomy of the competition authority, which directly affects enforcement of competition legal regime. This article assesses the gaps in the existing competition legal regime from the perspective of the competition authority's autonomy. Common features and practices of effective enforcement strategies and institutional designs for autonomous competition authority, and experiences from some countries based on their success and relevance to Ethiopia are used as benchmarks. It is argued that there are some provisions within the proclamation, which would affect the authority’s autonomy. These are: the competition authority’s accountability to the ministry of trade; the power of prime minster to appoint judges of the authority; the application of the civil service law to judges of the authority; and the power of council of ministers to approve annual budget of the authority (source of the authority’s budget) would directly or indirectly affect the autonomy of the authority. Based on such findings, the writer recommends the sort of measures that the government shall take in order to ensure autonomy of competition authority and competition in the nation.

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