Companies doing business in Africa need to be aware that African countries are increasingly adopting competition law, and that merger control is on the rise. One of the main challenges faced by business expanding operations throughout the African continent is monitoring different competition law developments which are taking place to the regulatory regimes of a number of African countries. Continent-wide competition law training and compliance is becoming essential.
Namibia for instance
One merely has to look at the progress that the Namibian Competition Commission has made over the past two years and the impact that it is having on mergers, joint ventures and acquisitions to get an indication of what is to come. The Namibian Commission has already reviewed mergers in a variety of sectors, including in the mining, banking and finance, cementitious products, telecoms, retail and hardware sectors. No financial thresholds for merger notification have been prescribed in Namibia as yet, so all mergers involving Namibian entities, or which have an effect within Namibia, are technically required to be notified at present. The effect of this is significant, as a merger may not be implemented in Namibia until it has been approved by the competition authority. The process can take more than three months to complete.
The Namibian Commission has also started to flex its muscles in relation to anti-competitive practices. It recently launched an investigation into the Namibian cement industry, apparently as a result of recent settlements reached with the South African Competition Commission by cement producers in South Africa.
The Mauritian Competition Commission has also been relatively active since it opened its doors in 2009. In the past year alone, it has investigated potentially anti-competitive conduct and mergers in the new vehicle distribution market, the insurance sector, the medical health scheme sector, telecoms, cementitious products, secondary books and magazine sectors.
Other African states
Botswana has also taken further strides to implement its competition law, having recently published thresholds for merger notification and considered merger notifications relating to industries like mining and liquid fuels.
Other African jurisdictions which are implementing competition legislation include Algeria, Burkina Faso, Egypt, Kenya, Malawi, Mauritius, Morocco, Senegal, Swaziland, Tanzania, Tunisia, Zambia and Zimbabwe.
Co-operation between authorities
One can also expect to see additional co-operation between competition agencies across the continent, as more of these authorities are formalising their relationships in agreements such as the Southern African Customs Union Agreement, the COMESA Competition Regulations and the 2009 Southern African Development Community Declaration on regional co-operation and competition. The African Competition Forum was launched in Kenya last year, with the principal objective of promoting the adoption of competition principles in the implementation of economic policies in member countries. The steering committee of the forum comprises a number of heads of competition agencies throughout Africa, with South Africa’s Competition Commissioner, Mr Shan Ramburuth, being appointed as vice-chairperson of the Forum.
Companies doing business in Africa therefore need to be aware of these developments and implement comprehensive competition law training and compliance monitoring programs. Where merger transactions need to be notified in more than one jurisdiction, parties need to co-ordinate filings and allow sufficient time to obtain clearance in the various jurisdictions. It would be also wise for companies to review business practices in all jurisdictions which recently enacted competition legislation, in order to ensure that they are not exposed to fines and protracted and costly litigation proceedings with competition authorities.
Written by Jason van Dijk is an associate at Norton Rose SA.
For further information please contact:Anusha Mudhai, communications co-ordinator, Norton Rose South Africa
Tel +27 11 685 8947; Mob: +27 84 911 2535