Better Laws for Africa

This chapter explores the core and limits of competition law and policy in terms of the values of inclusive development and poverty alleviation in sub-Saharan Africa. A pro-outsider, pro-inclusive development antitrust policy would value a free and open marketplace without privilege or favor. This perspective is especially critical for African nations and market players without economic power and especially for those populations in societies ruled by a few privileged families or firms, or by autocrats. Pro-outsider competition policy may be implemented not only through competition law enforcement of manageable rules and standards but also through advocacy by the competition authority with partners such as the World Bank, and collaboration with neighbors. The elements of good policy form an interdependent virtuous circle.

Perspectives from Four Stages of Development

This chapter identifies four clusters of nations based on state of development, in order to highlight significant qualitative differences that may call for different law and policies. The first cluster comprises the least developed sub-Saharan African countries with the most resource-challenged competition authorities, such as Benin and Togo. The second cluster compromises nations that have advanced economically to a perceptibly higher level. The third cluster is a “group” of one—South Africa. With all of its challenges, the South African competition regime is as close to a gold standard as there is in sub-Saharan Africa. Finally, for comparison, the fourth cluster comprises the developed countries, led in particular by the European Union and the United States. These nations have open economies, fairly robust markets, good infrastructure, and good institutions. The chapter proceeds to identify, from the point of view of each of the clusters, the most fitting competition framework nationally and globally. The chapter proposes how the divergences can be brought into sympathy.

South Africa

This chapter explores South African competition law. South Africa has the most sophisticated system of competition law and policy in sub-Saharan Africa. It has a mission to expand economic opportunity and facilitate inclusive development. In the wake of the UN Millennium Development Goals and the follow-on Sustainable Development Goals, there is a new world consciousness of the need to combat deep systemic poverty and to reverse the tide of increasing inequality of wealth, income, and opportunity. If there is any nation in the world whose competition law mandates integration of equity and efficiency, it is South Africa, and its policymakers are intent to address this need. The chapter looks at the South African Competition Act and highlights selected cases to illustrate the law and its implementation, including the effort by the Competition Tribunal to give serious regard to the equality and inclusiveness values that animated the statute.

Conclusion

This concluding chapter draws together the threads of development, opportunity, markets, and competition in sub-Saharan Africa. It reflects on the potential of the various sets of nations and of the promise of regionalism and cooperation. It offers three main conclusions: 1) context, needs and capabilities really matter. 2) There is no good substitute for freeing up markets to work for the good of the people and for the growth of the economy. And 3) There is a virtuous agenda for the competition authorities. Success in its implementation requires overcoming daunting forces of corruption, cronyism, and bad governance, and opening markets and opportunity for left-out majorities; but with commitment, the nations can do it.

West Africa

This chapter details how eight nations of Western Africa—Senegal, Mali, the Ivory Coast, Benin, Togo, Niger, Burkina Faso, and Guinea Bissau—transformed from government-controlled economies to market economies. The French West African states have adopted laws to open markets and protect competition, often at the behest of the World Bank and the International Monetary Fund (IMF). However, the project has been set back by political and economic instability, the lack of human and financial capital, and regional preemption of domestic competition law. It is a striking fact that there is virtually no competition law enforcement in French West Africa and no merger control law. The obstacles may ultimately be overcome with focus, leadership, will, and a reset of the institutional environment to allow national law to work hand in hand with regional law.

Competition Law and the Global Landscape

This chapter assesses the global landscape. Antitrust law originated in the United States with the passage of the Sherman Act in 1890 as a response to the industrial revolution, the growth of giant enterprises, and the great disparity of wealth that seemed to emerge overnight. In the 1970s, the world trading partners negotiated lower trade barriers under the aegis of the General Agreement on Tariffs and Trade (GATT), and as a result, world trade soared. The World Trade Organization (WTO) then developed as the umbrella over the GATT. Meanwhile, developing countries and regions are seeking out conversations and collaborations of their own that have particular relevance to their context and their state of development. African free trade areas and common markets have formed and are forming, and the more informal African Competition Forum is facilitating cross-fertilization, cooperation, better rules and standards, and discovery of modes of operation suitable to the African countries and peoples.

Developing Countries, Economic Development, and Markets

This chapter discusses economic development and markets in developing countries, with a focus on sub-Saharan Africa. Developing countries, especially lower-income developing countries with low rates of growth, share key characteristics and challenges. Huge portions of their populations live below the poverty line. The markets are generally highly concentrated with high barriers to entry, and state ownership—with privileges granted by the state—is pervasive. In order to provide the people with the necessities of life, developing countries need economic growth; in order to provide equity and spur development, they need inclusive, sustainable economic growth, consistent with equity. The chapter then describes two forms of market policy: antitrust law, which prohibits and removes restraints by market actors who engage in harmful conduct such as conspiracies to raise prices and bar entry by competitors, and surrounding restraints that are not violations of law but do the same thing: raise prices, barricade entry, and favor vested interests.

Regional Arrangements

This chapter studies regional coordination in sub-Saharan Africa. Regional arrangements occupy a significant part of African competition policy. The most integrative form of arrangement is a common market, wherein member states tear down trade barriers between and among them, create supranational authorities to oversee trade and competition, and even create monetary unions. The chapter then discusses selected regional groups; namely, the Common Market of Eastern and Southern Africa (COMESA), the Southern African Development Community (SADC), the East African Community (EAC), the West African Economic and Monetary Union (WAEMU), and the Economic Community of West African States (ECOWAS).

Eastern and Southern Africa

This chapter focuses on the competition policies of selected countries in Eastern and Southern Africa, specifically Kenya, Namibia, Botswana, Tanzania, Zambia, Zimbabwe, Malawi, and the island of Mauritius. The eastern and southern countries’ competition authorities span a range of functionality, from very high to almost inert. Even the highest functioning competition authorities face severe challenges in terms of financial and human capital, corruption, political pressure to favor government cronies and vested interests, and sometimes war and bankruptcy. Other challenges that competition authorities face concern the privileges of state-owned enterprises (SOEs), corruption through government procurement, and a plethora of not always transparent cross-border restraints. Even though their agendas are crowded by mandatory duties of vetting mergers and authorizing agreements, the best of agencies carve out precious time to identify the most harmful market obstructions and develop strategies to solve them.