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 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

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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