Africa

At LEX Africa’s June seminar on developments in competition law in Africa, speakers discussed the increasing trend of governments to try and use competition law as an important part of their industrial policy.

Chairing LEX Africa’s seven-member panel on the topic, Pieter Steyn — director at South African LEX Africa member Werksmans and chairperson of LEX Africa — started off the session with insight into South Africa’s competition law developments.

Steyn said competition law in South Africa was very developed and the country has had a very active Competition Commission since 1999. The authority, he said, has handled cases concerning mergers, but also increasingly focused on investigating conduct, especially cartels and abuses of dominance. Cartel conduct was criminalised from May 1, 2016. Proposed amendments to the South African Competition Act would increase both penalties for contraventions and the Commission’s powers.

Peter Njeru, a partner at Kenyan LEX Africa member Kaplan & Stratton said: “In 2000 only 13 countries [in Africa] had competition laws in place. As of 2015 this figure had nearly doubled to 32 countries of which 25 jurisdictions have operational competition authorities.”

He said that regional competition regulation and authorities is also increasing including the Common Market for Eastern and Southern Africa Competition Commission and the East African Community Competition Authority as well as in the Central African Monetary and Economic Community, the West African Economic and Monetary Union and Economic Community of West African States.

On future trends in competition law in East Africa, he said the East African Community Competition Authority could be fully operationalised by 2019 and that regulatory bodies could increase the number of dawn raids to root out anti-competitive practices like cartels. This is currently the case in countries like South Africa, Kenya, Zambia and Namibia, said Njeru.

Neuza Dias, a partner at LEX Africa’s Angolan member FBL said the government had accepted the need to implement principles and rules which safeguard healthy competition. She said this was “definitively mandatory to the improvement of Angola’s business environment.”

In 2015, under the oversight of the finance minister, the Competition and Prices Institute was created and the recent creation of the Competition Regulatory Authority has had a positive effect.

In Mozambique, competition law is relatively new and undeveloped. Celia Francisco, lawyer at Mozambican LEX Africa member CGA, said legislation regarding the issue was enacted in 2013 and 2014 and in August 2014, the government created the Regulatory Authority of Competition.

The country’s competition law applies to all activities and focuses on prohibited acts that are considered anti-competitive. Francisco said attention is also paid to “enterprise concentration in order to avoid anti-competitive conducts that result in distortions or restrictions of healthy and fair competition”.

Sydney Chisenga, partner and specialist in dispute resolution and competition at LEX Africa member Corpus, advised that the government had replaced the 1994 competition law by the 2010 Competition and Consumer Protection Act.

Under this Act — which is enforced by the Competition and Consumer Protection Commission (CCPC) — mergers and cartel conduct is regulated, raids are conducted and penalties are issued.

In terms of recent trends in abuse of dominance, Chisenga said a firm is considered to be dominant if it has 30 percent market share. “The concept of collective dominance also exists if not more than two enterprises have a market share of 60 percent.”

He said while being dominant was not illegal, there were clearly defined parameters which constituted an abuse of dominance. This included applying dissimilar conditions to equivalent transactions, excessive, unfair and/or discriminatory pricing, denying any person access to an essential facility and selling goods below their marginal or variable cost.

In Africa’s largest economy, Nigeria, nine bills have previously been submitted before the National Assembly to establish a legal framework for competition law in the country. Yemi Kehinde from Nigerian LEX Africa member Giwa-Osagie & Co, said the Federal Competition and Consumer Protection Bill was passed by the National Assembly in December 2017 and was with the president to be signed into law. If signed, this will supplement and in certain circumstances override existing sector-specific legislation regulating competition and anti-competitive conduct.

The Bill establishes two bodies, the Federal Competition and Consumer Protection Commission and the Federal Competition and Consumer Protection Tribunal. Tribunal decisions may be appealed to the Federal High Court. Mergers, Price fixing, bid rigging and other anticompetitive conduct is regulated. Fines of up to 10 percent of annual turnover may be imposed.

Steyn concluded by noting the landscape of competition law in Africa is fast changing and must be monitored by business. African competition law is combining internationally accepted precedent with local factors like public interest issues in an effort to use competition enforcement as a developmental tool. The significant penalties (including personal liability for directors and managers) makes it essential for business to ensure compliance.

LEX Africa is an alliance of law firms with over 600 lawyers in 24 African countries formed in 1993. More information may be found on www.lexafrica.com.

 

Screen Shot 2018-03-13 at 1.28.45 PM

 

 

 

 

W: www.lexafrica.com

E: lexenquiries@werksmans.com

T: (263) 4 702 561

Related Articles by Firm
Africa: The effect of Covid-19 and business resilience
Companies worldwide are, or will inevitably be, affected in the short and medium-term by the coronavirus pandemic (Covid-19). Decline in commodity prices due to the falling demand in China, travel restrictions ...
Africa: Boon for investors as Zimbabwe enacts new investment promotion law
On February 7, 2020 the Zimbabwe Government gazetted the long-awaited Zimbabwe Investment and Development Agency Act (Chapter 14;37). The new law comes in against the backdrop of promoting the ease of doing business in the country ...
Africa: Community issues and resource nationalism adding pressure on the mining industry
As if mining by its very nature is not difficult enough from a technical, financial, environmental and labour point of view ...
Opening the money taps into Africa
Akinwumi Adesina is not a name most people in Africa would recognise, yet it belongs to a man who is, arguably, doing the most to haul the continent out of a rut of underdevelopment and improve the lives of its ...
Coal-driven power train is running out of steam
The African Development Bank that it is making a surprise policy turn away from fossil-fuel investment and ploughing a new renewable energy path ...
Sun, wind and water stir up Africa’s energy mix
Obstacles to faster development of green energy abound everywhere, but the trend is clear and the momentum unstoppable.
Africa: Guinea emerging from the shadows
Recent reports from three respected international organisations sketch a relatively upbeat picture of economic prospects in the west African state of Guinea ...
AFRICA: How Nigeria is going local
Promoting “indigenisation” in the Nigerian economy was the subject of a recent Lex Africa seminar, which asked how foreign investors were forging partnerships with local players, using local content and local manufacturing capacity and transferring valuable work skills ...
Local content and participation in Ghana’s electricity supply industry
In line with the national push for a more structured approach to increasing local content and participation, the Regulations came into force on December 22, 2017 ...
One small step for Africa
On April 2 the Gambia’s parliament wrote itself into modern African history when it ratified the Africa Continental Free Trade Agreement (AfCFTA) ...
Zimbabwe’s ratification of the WTO Trade Facilitation Agreement
Recently, Zimbabwe, a member of the WTO since 1995, ratified the WTO Trade Facilitation Agreement (TFA) becoming the 139th WTO Member State to ratify this Agreement ...
African competition law developments in 2018 and the outlook for 2019
Africa is sometimes described as the “last frontier” of competition law because many African countries have only recently adopted modern competition laws ...
Blockchain, cryptocurrencies and the law in Uganda
By far the most significant headline-grabbing development in 2017 and 2018 relates to the stunning rise of blockchain ...
Tanzanian government releases Microfinance Bill
In a bid to ensure proper licensing, regulation, monitoring and supervision of microfinance business in Tanzania, the Minister for Finance has issued a draft Bill on Microfinance to be tabled in the National Assembly very soon ...
Ethiopia’s arbitration law challenges
Arbitration is perceived as one of the alternative solutions to congestion in the court system ...
Zimbabwe holds massive potential for private equity investors
The country’s infrastructure is broken, but there is room for smart investors to capitalise on its rehabilitation.
Impact of the amendment of the Legal Guarantee of Stability in respect of existing mining projects in the DRC
The Government of the Democratic Republic of Congo (DRC) commenced the review process in respect of its Act No. 007/2002 of July 11, 2002 on Mining Code (Mining Code) in 2012. The process eventually culminated in the promulgation by the President of the Republic ...
Mozambique is addressing economic reform in a big way in 2018
Significant strides in Mozambique’s legislation and policies could see a rapid turnaround in the country’s economic situation. In 2016, inflation peaked at 26 percent ...
Increasing importance of African regulatory issues for M&A, trade and investment
It is important to remember that Africa is not a country but consists of 54 sovereign states and a huge diversity of cultures, customs, languages, ethnic groups and religions ...
Related Articles
Updated standards for e-meeting security
The Emergency Decree requires that electronic meetings follow the security protocols set forth under a notification from the Ministry of Information and Communication Technology.
How eDiscovery automation is driving new ways to improve the client experience
Technology can help finance and legal firms to become more efficient as well as also offering the potential to reduce cost.
Common ways to acquire real estate projects in Vietnam
Real estate investment in Vietnam can be very challenging for foreign investors due to differences in the legal system, transaction practices, cultural barriers and other factors.
Related Articles by Jurisdiction
Royalty payments for mining operations in Tanzania
In this month’s mining briefing we consider the obligations upon mining companies to pay royalties to the Government of Tanzania (the GOT),…
Export Processing and Special Economic Zones in Tanzania
We examine the features and requirements of the EPZ and SEZ frameworks, set-out the differences and comparative advantages of each ...
Developments in competition law in Africa
At LEX Africa’s June seminar on developments in competition law in Africa, speakers discussed the increasing trend of governments to try and use competition law as an important part of their industrial policy ...
Latest Articles
HKIAC: 'Hong Kong remains a neutral and effective seat of arbitration'
"Despite recent challenges, users can remain confident in Hong Kong as a seat of arbitration" ...
Updated standards for e-meeting security
The Emergency Decree requires that electronic meetings follow the security protocols set forth under a notification from the Ministry of Information and Communication Technology.
How eDiscovery automation is driving new ways to improve the client experience
Technology can help finance and legal firms to become more efficient as well as also offering the potential to reduce cost.