Competition law comes to the fore in West Africa

Posted in Western Africa Blog post

Although competition law enforcement in Africa has primarily been limited to Eastern and Southern Africa, two recent developments have brought competition law to the fore in West Africa. The first of these is the signing into law earlier this year of the Nigerian Federal Competition and Consumer Protection Act (FCCPA), and the second is the establishment of the competition authority for the Economic Community of West African States (ECOWAS), on 31 May 2019. Both developments could have a fundamental impact on businesses operating or investing in West Africa, however, much will depend on ongoing political support to ensure that the new authorities are properly equipped to effectively deliver on their broad mandates.

In Nigeria, the adoption of the FCCPA in January 2019 was long awaited, with draft competition legislation having been first proposed in 2002. The FCCPA introduces a comprehensive regime covering restrictive practices, abuse of dominance, consumer protection, price regulation and monopolies. In particular, the FCCPA repeals the previous limited merger control regime of the Investment and Securities Act (ISA) and implements a broad regime with thresholds and filing fees that will be published in due course.

The Federal Competition and Consumer Protection Commission (the Commission) is taking shape with the appointment of the Chairman and other members of the Board of the Commission. It is anticipated that draft rules and regulations will be published shortly for consultation to give effect to the FCCPA. In the interim, the Commission has announced that the ISA merger control regime will continue to apply as a transitional measure.

The implementation of the FCCPA coincides with the recent launch of the ECOWAS Regional Competition Authority (ERCA) in Banjul (Gambia). ECOWAS is a regional trading bloc with fifteen members: Benin, Burkina Faso, Côte d'Ivoire, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo.

Although it was formally adopted in 2008, no steps have previously been taken to operationalise the ECOWAS competition regime. This regime is broad in scope covering restrictive practices, abuse of dominance and state aid. The ECOWAS competition rules provide for a mandatory merger control regime for mergers that result in an abuse of dominance. In this regard, it is not clear whether thresholds will be adopted or whether the regime is suspensory in nature.

Measures are being taken to give practical effect to the ERCA, such as the appointment of its first Executive Director. Consultants have also been appointed to develop an operational framework for the ERCA, accompanying regulations and technical support for capacity building. It would be anticipated that the ERCA will have to address many of the issues that faced the COMESA Competition Commission (CCC) when the COMESA competition regime, Africa’s first regional regime, became operational in January 2013. The CCC had to then address its jurisdiction in terms of the supremacy of regional law over national law as well as the focus on cross-border issues. ERCA will also have to contend with the fact that five of its members (Benin, Burkina Faso, Côte d'Ivoire, Mali, Niger, Senegal and Togo) are also signatories to the West African Economic and Monetary Union, another regional trading bloc with its own competition regime.

The adoption of the FCCPA and the launch of the ERCA undoubtedly represent an increased focus on competition law in West Africa. While these developments could have a significant effect on businesses operating or investing in the region, much will depend on ongoing political support. The introduction of competition regimes in Africa have, in some instances, proved to be transformational where critical success factors have been addressed on a sustainable basis. In this regard, both the Commission and the ERCA will need material capacity building and budgetary support in order to deliver on their broad mandates.

The Inside Africa team would like to thank Susan Bisset, Candidate Attorney, for her contribution to this blog post.

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