This article was written by Rahul Saha and Cameron Firth.
COMESA: An overview
What is COMESA?
The Common Market of Eastern and Southern Africa
(COMESA) is a supra-national organisation with 19
Member States – Burundi, Comoros, Democratic
Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia,
Kenya, Madagascar, Malawi, Mauritius, Namibia,
Rwanda, Seychelles, Sudan, Swaziland, Uganda,
Zambia and Zimbabwe.
What is the COMESA Competition Commission?
The COMESA Competition Commission (CCC)
commenced operation on 14 January 2013,
enforcing a merger control and antitrust regime
under the COMESA Competition Rules (Rules) and
COMESA Competition Regulations (Regulations).
Merger Control Developments
Following the CCC’s commencement, an immediate
impact was felt in the area of merger control. Its Rules
and Regulations created a requirement for every business
operating in the region to consider whether a COMESA
merger filing was necessary when entering into an M&A
transaction or joint venture. The CCC’s failure to set any
financial thresholds for notification, and the lack of clarity
on operating procedures, created significant uncertainties
for businesses in the region.
In response to calls for greater clarity and legal certainty,
the revised CCC Guidelines on the merger control rules
(Revised Guidelines) were published on 31 October
2014. The main changes brought about by the Revised
- the introduction of turnover and asset value thresholds
for merger notification; and
- clarification that the CCC has exclusive jurisdiction over
transactions that meet the turnover thresholds.
After the introduction of turnover and asset value
thresholds, the number of transactions reviewed by the
CCC fell significantly: 66 transactions were reviewed by
the CCC in 2014, but only 15 in 2015. The transactions
reviewed have been across a wide variety of sectors
including insurance, food additives, water treatment,
agro-chemical, banking, telecommunication, non-alcoholic
beverage, publishing, packaging and retail.
Although the introduction of turnover thresholds was
a welcome development, it is uncertain whether the
significant decline in CCC filings resulted from this.
Commentators have speculated whether the reduction in
filings could be attributed to some legal advisers taking the
view that, at this stage, a failure to make a COMESA filing
does not attract significant penalties.
The CCC’s exclusive jurisdiction to examine transactions
is also subject to significant uncertainty. When the Revised
Guidelines were first published, it was reported that the
Kenyan Competition Authority took the view that domestic
merger control rules continue to apply even if a filing must
be made to the CCC. This position was supported at
the 2016 ABA Antitrust Spring Meeting, where a former
COMESA Competition Commissioner indicated that the
CCC does not have exclusive jurisdiction over cases within
its jurisdiction. This is likely to create issues for transacting
parties who may have to make multiple filings in different
COMESA Member States and the issue of where to file
requires careful consideration taking into account the
specifics of any particular transaction.
Having concentrated on making improvements to its
merger control regime throughout 2013 and 2014, the
CCC’s executive director, George Lipimile, indicated in
August 2015 that the CCC would be commencing a series
of antitrust investigations. These investigations would
include a sector inquiry into shopping malls, as well as
investigating cartels in the fertiliser, bread and construction
industries. Investigations into all these industries are
already being carried out by the more developed
competition authorities in Africa (e.g. the South African
authority and Botswanan authority).
In February 2016, the CCC announced that it had
commenced the sector inquiry into shopping malls.
Looking to the future
While the CCC has had significant teething problems,
recent developments indicate that the COMESA Member
States are making a substantial effort to prioritise
competition law enforcement and ensure that the CCC is
regarded as a serious competition authority.
As it continues to develop its practices and procedures,
the CCC will look for opportunities to assert itself and
businesses operating in the region will increasingly need to
consider the impact of the Rules and Regulations on their