COMESA COMPETITION COMMISSION
ANNUAL PERFORMANCE REPORT
December, 2015
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INTRODUCTION
The COMESA Competition Commission is established under Article 6 of the COMESA Competition
Regulations (“the Regulations”). The Regulations were promulgated by the COMESA Council of
Ministers (“Council”) in 2004 under Article 55 of the COMESA Treaty.
1. Pursuant to Article 2 of the Regulations, the purpose of the Regulations is to promote and
encourage competition by preventing restrictive business practices and other restrictions that
deter the efficient operation of markets, thereby enhancing the welfare of the consumers in
the Common Market, and to protect consumers against offensive conduct by market actors.
2. In order to ensure that its programmes satisfy the broader needs of the Member States, the
Commission, during the year 2015, devised its work programme to cover such crucial pillars
as competition enforcement; competition advocacy; institutional coordination; technical
assistance and capacity building.
3. During the year in focus, the Commission undertook various activities to support Member
States in the four pillars. The activities covered almost all the Member States of COMESA.
The Commission has also registered success in its advocacy work in Member States which
is critical to enhancing competition culture in the Common Market and ensuring that Member
States fulfil their Treaty obligations with regard to the domestication and implementation of
the Regulations.
ACHIEVEMENTS
4. The following are the major achievements of the Commission under the four pillars for the
year in focus:
Competition Enforcement
5. Competition enforcement involves the assessment of mergers and other forms of
acquisitions, investigation of anticompetitive business practices, and investigations
pertaining to consumer welfare violations within the Common Market. Under this pillar, the
Commission has registered substantial success in the number of mergers assessed as well
as investigations/policy opinions offered regarding the restrictive business practices and
consumer welfare violations. Stakeholders have continued to respond positively to the
merger control enforcement efforts of the Commission. In the year 2015, the Commission
has received more than 16 mergers and acquisitions transactions with more than 40% of the
mergers and acquisitions taking place in the insurance sector while the remaining number of
cases took place in various economic sectors. The Commission has since inception
reviewed more than 75 Mergers with a combined turnover in the Common Market of more
than US$50 billion as at 20 October 2015.
6. The insurance sector has not only dominated the number of mergers handled by the
Commission this year but has dominated the number of mergers handled by the Commission
from inception with 11.69% of the total number of mergers handled by the Commission from
inception coming from the insurance sector. The energy and construction sectors are in
second position at 10.39% each. The table below depicts the distribution of the number of
mergers handled by the Commission per sector from inception to date:
Table 1: Distribution of Mergers Handled by the Commission from Inception to Date
Sector
Percentage
Agriculture
5.19
Electronics
2.6
Pharmaceutical
5.19
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Energy
Automotive
Construction
Mining
Insurance
Logistics
Information Technology
Airline
Hospitality
Telecommunications
Banking
Academic Publishing
Packaging
Payment System
Water Treatment
Retail
Beverage
Commodity Trading
Textile
Total
10.39
7.79
10.39
5.19
11.69
2.6
6.49
1.3
2.6
7.79
3.9
2.6
1.3
1.3
1.3
3.9
2.6
1.3
1.3
100%
7. It is worth noting that parties to a merger do pay a merger notification fee relative to 0.1% of
their combined turnover or value of assets whichever is higher in the Common Market with a
ceiling at US$200 000. This is provided for under Rule 55 of the COMESA Competition
Amendment Rules, 2014. The Commission retains 50% of these fees for merger
assessments while the remaining 50% is shared among the affected Member States on a
pro-rata basis, i.e. relative to the amount of turnover derived by the parties in each affected
Member State. The status of the distribution of the merger fees to the respective Member
States is depicted in the table 2 below.
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CONSOLIDATED TABLE FOR TOTAL AMOUNTS PER COUNTRY
COUNTRY
Burundi
FEES FROM
FEES FROM FEES FROM
JANUARY
FEB 2013 TO MARCH 2014
2015 TO
AMOUNTS UNDISBURSED
FEB 2014
TO DEC 2014 AUGUST 2015 DISBURSED
AMOUNTS
USD$
USD$
USD$
USD$
USD$
3,510
854
854
-
5,218
449
17
342
-
809
225,651
139,172
6,180
-
371,004
13,280
456
157
-
13,893
Egypt
544,629
401,036
66,291
Eritrea
100,143
174
1,364
Ethiopia
260,803
8,863
11,847
(281,513)
0
Kenya
625,272
140,933
281,103
(1,047,308)
0
Lybia
47,429
32,689
6,823
-
86,941
Madagascar
22,377
16,422
1,619
-
40,418
Malawi
318,115
57,870
109,139
(485,124)
0
Mauritius
111,889
30,263
33,468
(175,620)
0
Rwanda
88,178
32,500
17,601
(138,279)
0
Seychelles
18,120
638
150
(18,908)
0
Sudan
57,625
11,596
15,586
Swaziland
159,258
21,631
130,114
Uganda
183,622
180,842
185,937
Zambia
554,602
272,484
225,522
(1,052,608)
0
Zimbabwe
340,989
256,603
106,134
(703,727)
0
3,675,943
1,605,044
1,200,233
(5,226,046)
1,255,174
Comoros
Democratic
Republic of Congo
Djibouti
TOTAL
(1,011,956)
-
(311,002)
-
0
101,682
84,808
0
550,401
The undisbursed amount of USD 1,255,174 is due to the non submission of bank account details to
the Commission by the concerned member states.
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Competition Advocacy
8. Council at its 32nd Meeting held in Kinshasa, Democratic Republic of Congo, in February,
2014, directed the Commission to intensify sensitization and advocacy work in Member
States to enhance the enforcement of the COMESA Competition Regulations. The
Commission, in this regard, has continued to intensify its advocacy activities mainly through
enhancing public awareness of the benefits of competition in Member States. The advocacy
work involved creating awareness to governments, businesses, consumers and other
stakeholders to appreciate the benefits of the regional competition enforcement regime.
9. Subsequent to the directive of Council at the last Summit in Kinshasa, Democratic Republic of
Congo, that the Commission should intensify advocacy work in Member States, the
Commission carried out a number of advocacy and awareness activities to enhance the
enforcement of the Regulations. The Commission has since the last Summit undertaken the
following advocacy and awareness activities:
a) Organized a regional workshop for business reporters which took place in Livingstone,
Zambia on 16-17 July, 2015. The workshop provided an opportunity for the business
reporters to understand the provisions of the Regulations and their role in enhancing
competition culture in the region. Suffice to mention that this was the 2nd consecutive
year such a workshop was taking place. The Commission is alive to the fact that the
business reporter are critical both in the enforcement of the Regulations and raising
awareness about the Commission in the respective Member States.
b) National Competition Sensitisation Workshop and Round Table Meeting which took
place in Antananarivo, Madagascar on 24-25 September 2015. The objective of the
workshop was to raise awareness of the COMESA Competition Regulations among key
stakeholders in Madagascar and for the Commission to familiarise itself with the
progress being made by Madagascar and devise the appropriate strategy.
c) Public Discussion in Egypt on the new COMESA Competition Regulations held in
Cairo, Egypt on 18th March 2015. The workshop was attended by the business and
legal community and the national competition authority of Egypt. It was aimed at raising
awareness and the obligations of the stakeholders under the Regulations. The public
discussion was also aimed at sensitizing the stakeholders on the provisions of the
Regulations and their implementation framework as well as the progress made by the
Commission in merger control.
d) Public Discussions with the DRC Bar Association. This workshop was held on the 19
June 2015 in Kinshasa; Democratic Republic of Congo. The objective was to create
stakeholders awareness on the Member States Treaty obligations and the provisions of
the COMESA Competition Regulations, 2004 (the Regulations) and to clear
misunderstandings that have existed since the COMESA Competition Commission (the
Commission) commenced operations as regards the provisions of the Regulations.
10. In addition to the Member States, the Commission has devoted significant efforts to
international advocacy activities to highlight the progress made by the institution during the
maiden year of its operations. The Commission has to this effect made key-note addresses
at the following functions:
a. Africa Competition Law Conference which took place in Johannesburg, South Africa
on 6th February, 2015;
b. Second Annual Symposium on Competition Policy and Economic Regulation which
took place in Nairobi, Kenya on 21 August 2015;
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c.
International Competition Network conference which took place on 24-25 September
2015.
Institutional Coordination
11. The Commission made strides to enhance its working relationship with the national
competition authorities of the Member States in the enforcement of the Regulations at
Member States level mainly through the negotiations of the bilateral enforcement
cooperation agreements to ensure the effective enforcement activities while the
domestication of the Regulations by the Member States remains work in progress. The
Commission has since 4th September 2015 signed a memorandum of understanding (MoU)
with the Competition and Fair Trading Commission of Malawi on cooperation in the
application and enforcement of their competition laws making Malawi the first Member State
to sign the MoU. The other Member States that are ready sign the MoU include Kenya,
Swaziland, Seychelles and Zambia. The Commission also engaged firms in instituting an
enforcement regime that contributes to easing the cost of doing business in the Common
Market. This has resulted in the issuance of the merger assessment guidelines which offer
clarity on some pertinent issues regarding the Regulations. The process has also resulted in
the in the reduction of the merger filing fees by as much as 60% and a substantial increase
in the notification thresholds.
Technical Assistance and Capacity Building
:
12. The Commission provided technical assistance to Member States that wish to initiate,
establish and enhance the implementation and the enforcement of their respective
competition laws in the respective countries. For example, on 5 - 6 August 2015, the
Commission visited Rwanda and held consultative meetings with key stakeholders in order
to facilitate the implementation and enforcement of the national competition law and the
COMESA Competition Regulations in Rwanda. The Commission also carried out capacity
building initiatives in support of the national competition agencies through training. To this
end, the Commission held a Regional Training Workshop on the COMESA Merger
Assessment Guidelines on 16-17 September 2015. The aim of the workshop was to train the
national competition authorities on the assessment of mergers to ensure consistency and
certainty in the enforcement of the Regulations.
13. Realising the importance of South Africa to the enforcement activities of the Commission, the
Commission held consultations with the Competition Commission of South Africa on 5 th
September, 2014 aimed at concluding the MoU on enforcement cooperation and capacity
building. Further negotiations have continued be held in 2015.
14. In addition to the negotiations regarding the MoU with the Competition Commission of South
Africa, on 22-26 June 2015, the Commission visited the Competition Tribunal in South Africa
in order to familiarise itself with the procedural and substantive operations of the Tribunal
and apply these at the Commission especially to the Committee Responsible for Initial
Determinations under the Regulations.
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15. In addition to the above four pillars, the Commission made the following other achievements
in the year under review:
Formulation of Enforcement Instruments
16. In 2015, the Board recommended for the approval of Council, the revised COMESA
Competition Rules relating to merger notification thresholds and merger notification fees.
These were the two merger related issues which attracted the most attention from the users
of the system. These Rules were approved by Council on 26 March 2015 and are now in
force. The enforcement of these Rules have contributed to the credibility of the COMESA
Competition Commission and its acceptance to the stakeholders.
Recruitment of Staff
17. Having been in operation for close to three years now, the Commission intends to embark on
full enforcement of other parts of the Regulations especially Part 3 dealing with
anticompetitive business practices. In this regard, the Commission intends to recruit four (4)
economists at grade P3 to enhance the enforcement capacity of the institution. A budget for
recruitment was set aside from the merger filing fees to cater for the salaries of the
successful applicants for the period of three (3) years. In addition, the implementation of
the leniency programme pertaining to the enforcement of cartels is expected to increase
revenue collection through fines imposed by the Board of Commissioners as per the
provisions of Rule 45(2) of the COMESA Competition Rules. To this end, the four
economists have since been interviewed and selected and shall be joining the Commission
immediately they finalise the notices they need to serve to the institutions they are coming
from. The successful candidates are from Malawi, Mauritius, Rwanda and Swaziland.
Corporate Governance in Decision Making Process
18. In order to adhere to the principle of separation of power between the investigative and
adjudicative arms of the Commission, the Commission held three (3) Board of
Commissioners Meetings during the financial year and five (5) Committees of Initial
Determination Meetings.
ISSUES FOR COUNCIL DECISION
Council will recall that after the presentation of the enforcement challenges being encountered by the
Commission to its previous sittings in Kinshasa, Democratic Republic of Congo and reiterated in
Lusaka, Zambia Council made the following decisions:
(i) Urged Member States to give the Treaty and COMESA Competition Regulations the force of
law in their respective jurisdictions.
(ii) urged Member States to comply with the provisions of Articles 5(2) and 10 (2) of the Treaty
by enacting appropriate legislation at national level to give effect to the COMESA Treaty and
confer upon the COMESA Competition Regulations the force of law and the necessary legal
effect in their territories.
Given the importance of the implementation of these decisions by the Member States to the effective
implementation of the regional integration programs, Council is requested to make the following
decision:
Urge the following Member States to implement the Kinshasa decisions expeditiously:
Burundi; Comoros; Djibouti; Democratic Republic of Congo; Egypt; Eritrea; Ethiopia; Libya;
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Kenya; Madagascar; Malawi; Mauritius; Rwanda; Seychelles; Sudan; Swaziland; Uganda;
Zambia and Zimbabwe.
FOCUS FOR THE YEAR 2016
19. The Commission will intensify its technical assistance and capacity building role in Member
States with particular focus on the training of the national competition authorities on the
enforcement of the Regulations. Further focus shall be on advocacy in order to sensitize
national governments and other stakeholders on the provisions of the Regulations and the
need for domestication of the Treaty and Regulations. The Commission will also work to
conclude negotiations on the MoU on enforcement cooperation with other major competition
enforcement agencies. Above all, the Commission is expected to enhance its efforts to
enforce Part 3 of the Regulations.
EXPECTED RESULTS
No
Expected Results
Indicators
1
Full enforcement of the Regulations at Member
States Level
Activation of Part 3 of the Regulations
dealing with anti-competitive business
practices
Increased number of anti-competitive
business practices cases handled by the
Commission
2
Sensitized National Governments and other
stakeholders on the provisions of the
Regulations and the need to domesticate the
Treaty and the Regulations
The process of domesticating the
Regulations commences in respective
Member States.
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