Transcript Kenya`s Experiences With Competition Law & Policy

Kenya’s Experiences With
Competition Law & Policy
Institute of Economic Affairs
Agenda
Background on Kenya
Operational laws and policies
Experiences
Illustrative cases
Challenges for Reform
Conclusion
Background
Classified as developing nation
GDP = US$ 11.4 B, PC Income US$ 360
GDP per head in PPP ( US is 100)= 2.8
56% of Kenyans living BPL
Private consumption 74.2% of GDP
Public consumption 17.4% of GDP
Development Strategies emphasized import
substitution and price control
Competition Law and Policy
Liberalization commenced late 1980s
RTPMPC Act came to force in 1989
Established the MPC- (advisory role )
Price control component is now redundant
Cap 504 major instrument for enforcing policy
Lack of elaborate competition policy
Scope of law: RTP, merger control,
monopolies
Experiences
Wide exemptions place a large part of
economy outside law
Poor design of appeals tribunal
Promotion of competition not a central pillar
of regulatory policy
Commitment to privatization (?)
Inability to counter cartel behavior
Insufficient autonomy for MPC
Little competition in public procurement
Illustrative Cases
1. PWC Merger- Disregard of findings by MPC
Reversal of decision
2. Coca- Cola SabcoConcentration of economic power
3. EABL and Castle Brewing
Take over and market division
Nationalistic sentiments
4. GoldenbergMonopoly compensation
Reform Challenges
Taking account of new political and economic
dispensation
Slow pace of law reform
Cross-border competition effects
Protectionist hang ups
Poor consumer advocacy
Securing the autonomy of MPC
Using CP & law as poverty and welfare
enhancing tool (agricultural reform)
Conclusion
CPL must be dynamic
Cartel control requires multi-lateral
approach
CP most effective if informed by rational
economics and not politics
Winning against vested interests
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