The Competition Act has served the country well since coming into effect in 2011. The past 13 years have seen the successful mainstreaming of the law as an effective tool of market regulation.
This reality invites the question: can we now work backwards from the Competition Act, towards a national policy on competition? The answer, to use Kenyan parlance, is: ‘burrofcos’! In fact, from where I sit, there is a clear benefit of legislation having preceded policy.
The information and insights gathered from enforcement of the Competition Act over the past 13 years present an invaluable repository to inform formulation of a strong policy.
The Competition Authority of Kenya (CAK)’s annual reports until June 2023, reveal that the agency investigated 334 anti-competitive practices, with the manufacturing sector leading in the number of cases.
For example, the sector led with 36 percent of all cases investigated in the financial year ending June 2021, 19 percent in the year ending June 2022 and 15.5 percent as of June 2023.
On the mergers and acquisition front, the Authority analysed 1,353 applications from virtually every sector of the national economy, giving it valuable information on the nature and structure of Kenya’s markets.
Addition of abuse of buyer power to the enforcement repertoire five years ago has afforded the CAK a microscopic look into the terrain within which micro, small and medium enterprises (MSMEs) operate.
A subsequent national competition policy would therefore be a best bet fit in supporting sustainability of these enterprises that make up a significant 98 percent of all businesses in the country and create 30 percent of all jobs, annually.
That said, I consider that two things would be most critical in the policy formulation and design process. The first is effective stakeholder engagement.
This is fundamental, given the close tie-in between public participation and the constitutional imperative of transparency and accountability by public bodies.
The array of stakeholders would need to be broad enough to include regional stakeholders such as the Comesa Competition Commission and the East African Community Competition Authority, while still reaching parties that operate from the fringes of the economic space, specifically MSMEs.
Second, the policy design would do well to prioritise monitoring and evaluation, with assessment of impacts taking precedence over activities and processes.
Within the policy should be embedded a monitoring framework that incorporates evaluation throughout the implementation process.
This is in line with the government’s move towards institutionalisation of performance management in the public service.
It will appear that, after all, there is something to be said in support of law preceding policy.
However, legislating in the absence of a public policy is equivalent to putting the cart before the horse, which, though possible, is not optimal nor effective option for setting direction, guiding and influencing decision-making.
Priscilla is the Manager, the Buyer Power Department, the Competition Authority of Kenya.
