Competition agencies must work together to create a healthy business environment in Africa - Bowmans
The safeguarding of competition amongst businesses operating in the African market is key to inclusive growth on the continent. A lack of competition will reduce growth and increase poverty and so it is essential that competition agencies work together to ensure healthy business practices.
This is according to Claire Reidy, a partner in the Competition Practice at pan-African law firm Bowmans. She was speaking at an African competition law conference held at the law firm at the end of February 2017.
"Encouraging and safeguarding competition in African markets, through the active involvement of competition authorities - and cooperation between agencies (both national and regional) - is one of the critical components for sustainable development in Africa. A lack of competition would lead to a stifling of economic growth and welfare distribution," she noted.
Reidy noted further that the treaties in Africa aim to facilitate economic integration between participating member states and typically cover arrangements in relation to trade liberalisation, customs cooperation, monetary affairs, finance, and economic and social development.
Reidy said that the necessary regional integration in Africa was a huge challenge, requiring the alignment of various regulations, legislation and incentives across countries and regions in Africa.
She noted that, in recent years, not only had there been an increased introduction of competition laws and enforcement agencies across Africa, but also active regional or supranational competition agencies such as the Common Market for Eastern and Southern Africa (COMESA) Competition Commission. COMESA also overlaps with two other trade blocs, the East African Community (EAC) and Southern African Development Community (SADC).
"The role of the supranational agencies is extremely important when it comes to dealing with cross border activity, such as merger control, and the detection of anti-competitive practices in Africa," she said.
Over the past 18 months, more than 10 memoranda of understanding (MoUs) have been signed by 25 competition regulators in Africa and BRICS, to facilitate the cooperation between competition regimes on issues of competition policy and enforcement. COMESA has recently signed MoUs with Egypt, Kenya, Madagascar, Malawi, Seychelles, Swaziland and Zambia, among others.
"These MoUs are aimed at aligning the various competition authorities in terms of the decisions and remedies that they implement in a transaction, so that deals can proceed smoothly and efficiently. This is good news for investors," she explained.
Reidy said the key to the success of both regional and national competition authorities is maintaining the integrity of the agencies. This includes the adoption of an engaging, rather than an adversarial or unreceptive, approach to market participants.
"It also involves implementing a substance over form approach in appropriate circumstances; as well as sharing positive aspects of a transaction, and not only concerns, with other agencies and with the businesses themselves," she added.
