Kenya’s Experiences With Competition Law & Policy

1. Kenya’s Experiences With Competition Law & Policy Institute of Economic Affairs

2. Agenda • Background on Kenya • Operational laws and policies • Experiences • Illustrative cases • Challenges for Reform • Conclusion

3. 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

4. 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

5. 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

6. Illustrative Cases • PWC Merger- Disregard of findings by MPC • Reversal of decision 2. Coca- Cola Sabco- • Concentration of economic power 3. EABL and Castle Brewing • Take over and market division • Nationalistic sentiments 4. Goldenberg- • Monopoly compensation

7. 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)

8. 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

9. THANK YOU.