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Competition Reforms: Emerging Challenges in a Globalizing World African Competition Regimes in the Global Landscape of Competition Scenario Third CUTS-CIRC.

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Presentation on theme: "Competition Reforms: Emerging Challenges in a Globalizing World African Competition Regimes in the Global Landscape of Competition Scenario Third CUTS-CIRC."— Presentation transcript:

1 Competition Reforms: Emerging Challenges in a Globalizing World African Competition Regimes in the Global Landscape of Competition Scenario Third CUTS-CIRC Biennial Conference 18 th -19 th November, New Delhi Omar O Jobe Director/Project Manager

2 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

3 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

4 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

5 ‘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 CPL - not a neutral instrument! ‘There is no one size fits all competition law’;

6 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.

7 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

8 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.

9 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.

10 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

11 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

12 Thanks You for Your Kind Attention


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