Rwanda, Uganda and Burundi stand between the region and a competition authority that was to kick off in July, after they failed to submit names of commissioners to sit on the board.

“We have written to the three partner states to do so for approval by the EAC ministers in November, but so far none has responded,” said Denis Kabbale, EAC competition officer at the Secretariat.

The Competition Authority will be charged with enforcing laws that protect and promote free and fair competition among businesses with a cross-border presence.

It is expected to control or eliminate restrictive measures on companies seeking to invest in other partner states, and control mergers and acquisitions as well as the abuse of dominant positions of market power.

EAC trade ministers had in May directed partner states to confirm their nominees for the posts of commissioners by July 15.

READ: EAC to set up authority to push for free, fair trade

The EAC Competition Authority has been structured to be headed by a board of commissioners one from each of the EAC partner states. It will however rely heavily on national competition authorities for effectiveness.

The EAC is evaluating whether the Competition Authority will be an independent institution operating under the EAC as in the European Union, or a full EAC institution.

However, Wang’ombe Kariuki, Director-General of the Competition Authority of Kenya, says the challenge is the existence of a parallel regional competitions authority — that of the Common Market for Eastern and Southern Africa (Comesa) — of which all the East African countries except Tanzania are members. For example, conflicting rules in resolving cross-border issues are likely to cause problems.

“The main problem with the Comesa Competitions Authority is the high merger fee set for companies in the region,” said Mr Kariuki.

The Comesa Secretariat last year revised its rules, which now require companies looking to expand through acquisitions, and having a combined turnover of $5 million, to pay a $500,000 fee.

“The EAC Competitions Authority should set the merger fee based on the cost and not be guided by revenue generation,” said Mr Kariuki.

READ: Comesa relaxes rules on mergers and acquisitions

Tania Begazo, senior economist at the competition policy cluster, trade & competitiveness in the World Bank Group said that for the Competition Authority to be successful, the EAC partner states should remove merger restrictions on the number of firms, tackle cartel agreements that raise the costs of key inputs and final products, eliminate controls on prices and other market variables that increase business risk.

The EAC has no specific mandate on pre-merger notification for all mergers. Decisions can be appealed at the Council and firms have the power to influence regulation, and champion competition reforms.

Also, the EAC Competition Act 2006 being implemented by the partner states includes provisions on subsidies, but no regulations on this area.

“The Act has to be amended to guarantee a level playing field and non-discriminatory treatment against certain firms, remove restrictions on choices or information available to market players and control state aid [subsidies] to avoid favouritism and ensure competitive neutrality,” said Ms Begazo.

In EAC, Tanzania and Kenya have the most advanced competition regimes in the region, with fully functioning, independent competition authorities. Tanzania, Rwanda, Burundi and Kenya have competition laws in place while Uganda has a draft law.

“Currently, many cross-border anti-competitive practices are going unchecked due to the absence of an overall regional regulator to deal with cross-border competition, leaving weaker market players and consumers exposed to unfair business conduct by dominant firms,” noted Ms Begazo.

She said that the EAC Competition Regulations were adopted in 2010 but certain government policies and practices encourage anti-competitive outcomes.

Also, the enactment of the EAC Competition Act 2006 as a foundation for a regional competition regime has been laid, but implementation of the EAC Competition Act has not seen much progress.