Transcript State of play on competition regimes in Africa

Competition Reforms: Emerging Challenges in a
Globalizing World
African Competition Regimes in the Global Landscape
of Competition Scenario
Third CUTS-CIRC Biennial Conference
18th-19th November, 2013 -New Delhi
Omar O Jobe
Director/Project Manager
State of African Economies:
Despite continued challenges on many fronts, there is
enough evidence to show that:
• Over the past decade, Africa has seen sound
macroeconomic management, improved and
strengthened PFM systems, tax administration reforms
that have led to improved revenue collection;
• The environment for doing business has improved;
• Political governance is improving and there are positive
and visible signs of democracy being consolidated.
• But despite these developments, little transformation is
taking place and the phenomenon of “jobless growth”
continues to prevail.
• Economic transformation, internalization of VC is urgent.
• Improvements in competition policies, laws and
institutional arrangements is critical for inclusive growth
ACF Groupings:
• The ACF tiered African countries into three (3)
bands, in terms of competition law
development, as follows:
• (i) countries with no competition law (22);
• (ii) Country with competition law and no
competition authority (1) - Rwanda
• (iii) countries with competition laws and
functional competition agencies (29).
• For all the benefits that CPL brings (E & S value)
– a stark message to all countries: be part of the
movement or be driven by it
The State of Play:
• A number of CAs have been in existence for some
time, (Kenya, Senegal, SA for more than 15 years).
• Many African countries taking on competition laws
and agencies more recently (Gambia, Seychelles,
Botswana, Mauritius etc).
• Important countries like Nigeria and Ghana with a
significant weight in intra and extra-regional trade in
Africa are yet to promulgate a Competition Law.
• Countries in different regional groupings with
provisions that are divergent
• Those with a CL do not have a CP, except Botswana
CPL - not a neutral instrument! ‘There is no one size fits
all competition law’;
‘Every country should have the flexibility to order its own
competition regime to suit its genius, goals and aspirations’
Professor Frederick Jenny
• It
is worth noting that: models of African Competition
Regimes are borrowed from outside the continent
•Competition rules contained in Association Agreements
between the EC and its African regional partners were
meant to prevent anti-competitive practices in trade
•But in some instances did not address domestic market
competition issues at the outset
Focus of Competition Regimes in Africa:
1. Anti-competitive practices prohibited include:
Anticompetitive agreements (all laws); Abuse of Dominance
(all laws); Anticompetitive Mergers (most laws)
2. Competition Advocacy
• The promulgation and enforcement of Regional Competition
Statutes by Regional Competition Authorities to deal with
extra-territorial violations.
• CUTS through the 7UP model has played an important role in
strengthening constituencies in Africa; offering policy advice
services, evidence-based researches that inform advocacy
strategies and policy reforms
• The idea of an African Specific Competition Forum (to be
part of the infrastructure of competition regimes in Africa)
was first proposed by CUTS and later on picked up by DFID
and the IDRC.
Instruments and Structures:
The Instruments:
1. Competition policy/law - to deal with structural issues
(market concentration) and behavioural issues (conduct
of firms) in the different competition regimes
2. Regional Competition Law (to promote regional trade
and investments)
The Structures:
1. Competition Authorities/Commissions: Main functions –
investigative
2. Regional Competition Authorities (EAC law enacted in 2006 but
no authority as yet to implement it); COMESA, ECOWAS etc
3. Competition Tribunals: Function - adjudicative
4. Supreme Court: Decisions taken could be challenged in higher
courts
African Competition Regimes:
• Hybrid laws: where the competition law also include
provisions relating to consumer protection issues
– E.g. Zimbabwe
• Hybrid agency: where there are two different laws on
competition and consumer protection, but the laws are
enforced by one institution.
– The Gambia and Botswana are currently considering
such a model; already applied by Zambia, Tanzania &
Ethiopia among others
• Two separate institutions - competition authorities
handling competition issues while consumer protection
institutions handle consumer interest issues
– South Africa, the Competition Commission and the
Tribunal for competition Act, 1998 while a National
Consumer Commission enforces the Consumer
Protection Act.
Issues in competition Regimes:
• Current jurisdictions (CA/Sector regulators)
• Leniency programmes for whistle blowers
• Provisions for the Commission to retain fines
imposed on firms (The Gambia)
• Pressure on CAs in small countries/economies
• At the supra-national level, WAEMU took the
decision making powers from the Competition
Commission of member states
• The Commission gives its opinion based on the
complaints brought to its attention; conducts
investigations, but it is WAEMU that takes the
decisions. In that respect, the powers of the
Commissions are constrained.
Competition Issues in the continent:
• Vested interest and the misapplication of the law
• Market failures and related distortions making
entry and exit conditions difficult, thus
significantly constraining the number of players
in the markets.
• General lack of a strong competition culture and
weak supportive institutions compounded by an
overbearing executive in some jurisdictions.
• Non-transparent public procurement procedures
resulting in bid rigging is still an issue
Cont’d:
• The independence of Competition Authorities is
constantly under threat.
• Vulnerability of CAs: depend on their national
governments for funding and as a result, grapple
with recurrent resource constraints.
• Decisions by CA are prone to being overturned by
the line ministry.
• The lack of judges with litigation experience; the
time it takes to conduct cases
• Lack of awareness and understanding of
competition policy and law;
• Problems of implementing and enforcing
competition law; interface problems between sector
regulators and Competition Authorities
Thanks You for
Your Kind
Attention