by: Muigai Githu, Patrick Nguri & Aida Muthoni
Introduction
Africa is on the cusp of a period of unprecedented economic integration, with the ambitious goal of uniting diverse economies under a single, coherent economic market with the aim of eliminating trade barriers, boosting intra-Africa trade and fostering competition. In March 2018, member states of the African Union signed the Agreement Establishing the African Continental Free Trade Area (“AfCFTA”), in Kigali. The AfCFTA is one of the flagship projects of ‘Agenda 2063’ seeking to accelerate economic growth and development in Africa.
Whilst some may argue that the AfCFTA is Africa’s ‘most ambitious integration’, or ‘an ambitious trade pact’, the initiative is more than just a technical and economic endeavour. As Africa moves to form the largest free trade area in the world, it is projected that a swift implementation of the AfCFTA could lead to an income boost of $450B in Africa by 2035.[1] This underscores the immense opportunities for economic growth for the state and none-state parties. However, realizing its full potential will highly depend on policy reforms and trade facilitation measures across the African signatory nations.
The AfCFTA CP: Continental Significance
The Pan-African vision of “An integrated, prosperous and peaceful Africa” took a significant step forward in February 2023, when the 36th ordinary session of the Assembly of Heads of State and Government, adopted the African Continental Free Trade Area (“AfCFTA”) Protocol on Competition Policy (“AfCFTA CP”). This Protocol represent the commitment of State Parties to ensure that competition fosters trade, inclusive growth, industrialisation, innovation and sustainable economic development across the African continent.
Article 3 of the AfCFTA CP provides for the scope of application of the AfCFTA CP. The Protocol applies to all economic activities by persons or undertakings within or having significant effect on competition in the market; and conduct with “continental dimension” and having significant effect on competition in the market. This leaves it open for the established Authority under the AfCFTA CP to determine the admissibility of claims that have a “continental dimension”.
The Protocol further makes a provision that it shall not apply to matters falling within the respective jurisdiction of the national competition authorities. On a positive trajectory towards the AfCFTA CP having a binding force, it takes precedence over regional agreements on competition law, in case of conflict between its provisions and those of regional agreements.
On the continental front, Baker Mckenzie notes that an increasing number of jurisdictions in Africa have put in place laws and regulations and ramped up enforcement through competition authorities in an effort to enforce suspected competition violations. The same applies to regional competition authorities. On 20th August 2024, the CEO of the COMESA Competition Commission (“CCC”) noted that for the first time, the CCC had prohibited an anti-competitive merger and also imposed a fine for an anti-competitive business practice. This positive trajectory in Africa within the competition realm sets the ball rolling for Parties to ratify and domesticate the AfCFTA CP. This is a huge leap in the journey towards transforming the vision of a unified African market into reality, thus encouraging the integration of the provisions of the AfCFTA CP into national laws and policies.
UNCTAD notes that the process of ratification and domestication requires stakeholder engagement, technical assistance and awareness raising. Of importance, and pursuant to the objectives of the AfCFTA Protocol on Competition Policy (“AfCFTA CP”) under Article 2 is, inter alia, the provision for an integrated and unified African continental competition regime.
Puts and Takes from the TEU and TFEU
Article 2 of the AfCFTA is akin to the Treaty on the Functioning of the European Union (“TFEU”) which recognises the removal of existing obstacles and calls for concerted action in order to guarantee steady expansion, balanced trade and fair competition; and the Treaty on European Union (“TEU”) which promotes the duty of sincere cooperation under Article 4 (3). While the TEU established a “highly competitive social market economy”, the TFEU lays down the basic competition rules.[2] These concerted efforts of cooperation have resulted in a general uniform application of EU competition law and policy.
However, it has not all been roses for the EU. In the quest to pursue the continental regulation of Competition, Africa ought to anticipate some of the issues grappling the EU in competition law and policy. These include calls for: new methods for the identification of consumer harm or benefits; and sui generis competition law regimes for specific sectors.[3] Some authors have also persuasively argued that it is time to say goodbye to National Competition Law Frameworks in the EU.[4]
Relationship between the AfCFTA CP and National Competition Laws
Making a leap towards the integration and unified regulation of competition law within Africa, the AfCFTA CP makes it mandatory for State Parties without competition law and enforcement bodies to enact competition laws and establish enforcement bodies upon entry into force of the Protocol or their accession to the Protocol. State Parties are also mandated to ensure harmonization of their competition laws to ensure alignment with the AfCFTA CP. This effectively ensures eventual standardization of competition law and policies in Africa, as each State Party designates a body as a focal point or the implementation of the AfCFTA CP. Given the foregoing calls to “say goodbye to national competition law in the EU”, we eagerly await the unfolding of the collaboration and harmonization between National Competition Authorities and the Continental Authority.
Challenges in the realization of Continental Regulation
As alluded to under the responsibilities of State Parties to the AfCFTA CP, enactments of competition laws and establishment of enforcement bodies in Africa remains a challenge to the modelling of a unified competition bloc. Kenyan competition scholar Vellah Kedogo Kigwiru notes that even where national competition laws are in existence, most of the National Authorities have either not started operationalising the Authorities or are “too young”[5]. It is therefore rational to expect weaning challenges in the rudimentary stages of enforcement of the AfCFTA CP.
Another dicey challenge in the realization of continental regulation of competition in Africa is the variable currencies across the continent. Richard Whish and David Bailey note the pricing challenge and opine that price comparisons are difficult where goods and services are sold in different and variable currencies.[6] This notwithstanding, the pricing/currency challenge ought not to affect the elimination of anti-competitive and restrictive business practices, or the quality of goods and services.
Ambitious or Modest Considerations for Africa?
As the African continent embarks on negotiations for an effective competition policy pursuant to the Agreement Establishing the AfCFTA and the AfCFTA Protocol on Competition Policy, the Member States ought to consider the purpose for which the AfCFTA Competition Policy was crafted. Kenyan competition scholar Vellah Kedogo Kigwiru argues that African countries should adopt a less ambitious institutional design that will attract business and political acceptance, taking into consideration the institutional context in which the AfCFTA CP will be established.[7] In addition to this, we opine that the considerations that ought to be made ought to focus on the promotion of trade, elimination of anti-competitive and restrictive business practices, promotion of regional and national competition laws and agencies, and protection of consumers on the African Continent. Only then will there be a realization of the achievement of a single African market underpinned by progressive trade liberalization, and, hopefully, binding precedent on competition law and policy for the African Continent, to the benefit of the populace.
Coming Up? – Exploring the Wider Scope of Emerging Jurisprudence in Competition Regulation
Stay on the lookout!
- https://au-afcfta.org/ ↑
- Article 3 (3) of the TEU (consolidated version); Article 101-109 ↑
- The Transformation of EU Competition Law: Next Generational Issues, Kluwer Law International, 2023. ↑
- Kamil Dobosz, National Competition Law – Time to Say Goodbye? ↑
- Vellah Kedogo Kigwiru, Supranational or cooperative? Rethinking the African Continental Free Trade Area Agreement Competition Protocol institutional design, Oxford Journal of Antitrust Enforcement, 2024 p. 123. ↑
- Richard Whish & David Bailey, Competition Law 9th Edition, p.53. ↑
- Vellah Kedogo Kigwiru, Supranational or cooperative? Rethinking the African Continental Free Trade Area Agreement Competition Protocol institutional design, Oxford Journal of Antitrust Enforcement, 2024 p. 95-125. ↑