Over 20 African countries now have national competition laws and in the last 18 months, several countries have taken steps towards enacting competition legislation, including Ethiopia and Mozambique.
In 2013, Mozambique adopted its long awaited competition regulations, which will for the first time introduce a merger control regime in that country. In light of the current high levels of investment into Mozambique, particularly in the energy sector, businesses should take particular note of the low thresholds for compulsory merger filings and the high filing fees.
Ethiopia passed a proclamation in March 2014 to establish the Trade Competition and Consumer Protection Authority, which is set to implement new laws to address abuse of market dominance, anti-competitive agreements and other practices that lessen competition.1
The last 18 months have also witnessed the establishment of several regional African competition law agencies by organisations like the Common Market for Eastern and Southern Africa (COMESA) and the Central African Economic and Monetary Community (CEMAC), which seem set to operate alongside and in some cases, in parallel to, national regulators.
The most prominent regional body is the COMESA Competition Commission (CCC), which has attempted to overcome initial negative reactions to its unclear merger regulations and high filing fees and to establish itself as a credible body in the African competition domain. In April 2015, the CCC announced that a merger in COMESA is only notifiable if both the acquiring firm and the target firm, or either the acquiring firm or the target firm, operate in two or more COMESA Member States; the combined annual turnover or combined value of assets, whichever is higher, in COMESA of all parties to a merger equals or exceeds USD50m; and the annual turnover or value of assets, whichever is higher, in COMESA of each of at least two of the parties to a merger equals or exceeds USD10m, unless each of the parties to a merger achieves at least two-thirds of its aggregate turnover or assets in COMESA within one and the same COMESA Member State. The maximum filing fee has been substantially reduced – the filing fee is now the higher of 0.1% of the combined annual turnover or combined asset value in COMESA, capped at a maximum of USD 200,000.2
In just over 24 months, the CCC has already reviewed 49 phase two mergers (those which are classified by the CCC as likely to raise substantive concerns or which indicate a need for extensive evidentiary enquiries). The CCC also referred one merger in 2015 to a national competition authority, in the Holcim/Lafarge merger, which was referred for investigation by the Competition Commission of Mauritius (CCM) because of concerns about the particular impact of the merger in that country. This merger highlights the complexities of the referral process, as the CCM only approved this proposed merger after almost 320 days and imposed the condition that Holcim must divest its shares in its local Mauritian entity to an independent purchaser.
It is likely that the CCC will attempt to play a more assertive role in competition law enforcement in Africa in the future, with more in-depth merger investigations and more referrals of proposed mergers involving potentially anti-competitive effects to national competition authorities, particularly in jurisdictions with experienced authorities in operation like Kenya and Zambia.
CEMAC was founded in 1994 and is composed of six Central African States – Cameroon, the Republic of Congo, the Central African Republic, Chad, Gabon and Equatorial Guinea. It has enacted merger control regulations but so far, there has been little case law of interest and no action seems to have been taken against companies who have failed to notify transactions.
The East African Community (EAC) is another regional African economic organization that has enacted antitrust regulations, although it is not yet fully operating. The EAC Secretariat is in the final stages of setting up the organizational structure of the EAC Competition Authority, which will regulate competition in Burundi, Kenya, Rwanda, Tanzania, and Uganda. The authority is expected to commence operations soon. Notification of mergers will be mandatory, although the thresholds for filings and the applicable filing fees have not yet been published. It is unclear how this regime will interface with COMESA and apply in states like Tanzania and Kenya (a COMESA member state) that have their own local authorities.
These new regional antitrust regulators will play a valuable role in preventing anti-competitive conduct and concentrations which may result in a prevention or lessening of competition on the Continent—particularly in countries like the DRC, Djibouti, Eritrea, Libya, and Uganda that do not yet have a national competition authority. There is the potential for regional bodies to act as a cheaper and faster one-stop-shop for merger clearances and to build up significant economic and technical expertise, particularly in dealing with cartels and monopolies that impact cross-border trade. Countries with insufficient resources may find it more effective to rely on antitrust enforcement by these regional authorities, than to establish their own national authorities. However, particularly in relation to merger control, there currently is no attempt to clarify the relationship between the national and the regional authorities, or between the various regional authorities. Kenya, for example, belongs to both the EAC and COMESA, and Tanzania has its own local competition authority and belongs to the EAC.