Following the announcement of a general price hike by sachet water producers, concerns have been raised about the limits of business groups and associations in Ghana.
This debate has been reignited by the West Africa Regional Director of CUTS International, Appiah Kusi Adomako, Esq, who maintains that the latest development is a manifestation of Ghana’s lack of a comprehensive competition law.
In his latest article on the development copied to The High Street Journal, the legal practitioner explained that at the heart of the issue is a tension embedded within the country’s legal and economic framework.
Ghana’s 1992 Constitution guarantees freedom of association, allowing businesses to organize, advocate, and lobby collectively. Groups like the National Sachet and Packaged Water Producers Association (NASPAWAP) operate within this right, often positioning themselves as defenders of industry sustainability.
“The 1992 Constitution protects freedom of association, allowing businesses to form groups like NASPAWAP or others for legitimate advocacy and lobbying,” he observed.
However, he notes that when coordination begins to resemble uniform price adjustments across competitors, concerns shift from advocacy to collusion.
Consumer protection advocate, who is also a competition economist, further reveals that this is not a new problem. As far back as 1776, Adam Smith cautioned in “The Wealth of Nations” that traders rarely gather without outcomes that disadvantage the public.
Interestingly, more than two centuries later, Ghana is confronting the real-world consequences of that warning, without the legal tools, such as comprehensive competition laws, to respond decisively.
Unlike many advanced economies, where competition laws clearly criminalize price-fixing and cartel behavior, Ghana operates in a legal grey zone. Outside the downstream petroleum sector, regulated under the National Petroleum Authority Act, there are no explicit prohibitions against coordinated pricing among firms.
This gap has resulted in what we see today, where business groups and associations meet and decide on prices to the disadvantage of the welfare of consumers.
“When associations move from advocacy to coordinating prices or output, it becomes problematic. Ghana currently lacks a comprehensive competition law. Only the petroleum downstream sector has explicit prohibitions on cartelization and price-fixing under the National Petroleum Authority Act (Sections 43-44). Technically, there is no law in Ghana that can criminalize the actions of the NASPAWAP,” he noted.
When sachet water producers, cement manufacturers, or other essential goods suppliers adjust prices in near unison, consumers are left with little choice. In competitive markets, price increases by one firm create opportunities for others to undercut and gain market share.
But in a coordinated environment, that competitive pressure disappears. The result is simple: higher prices, fewer alternatives, and increased financial strain on households. As he indicates, for low-income families in urban and peri-urban Ghana, water is not a luxury but a necessity, and this translates directly into reduced purchasing power and heightened vulnerability.
Appiah Kusi Adomako, therefore, indicates that while Article 19(11) of the Constitution prevents the state from criminalizing actions not defined by law, it also exposes a critical weakness, such as harmful market behavior.
In practice, this means government responses are limited to persuasion rather than enforcement. Authorities can engage, appeal, and negotiate, but cannot penalize.
He further noted that, “This legal vacuum leaves consumers exposed. Businesses in sachet water, cement, or other sectors can fix prices with limited recourse, unlike in mature competition regimes where such conduct attracts fines, cease-and-desist orders, or prosecutions. This is where Ghana is missing out. The absence of the law has led to some business associations conspiring against consumers.”
He believes that a comprehensive competition law would fundamentally change the dynamics. It would draw a clear line between legitimate industry advocacy and anti-competitive conduct. It would empower regulators to investigate suspicious pricing patterns, impose fines, and issue cease-and-desist orders. Most importantly, it would restore confidence that markets in Ghana operate fairly, not just freely.
For him, the current vacuum, by contrast, risks normalizing coordinated pricing across sectors. Today it is sachet water; tomorrow it could be food staples or building materials.
