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The Establishment of a Competition Policy Centre of Excellence at SBS

  Nov 20, 2015
 

Strathmore Business School (SBS) in partnership with Sauder School of Business, Canada, is developing a Resource Centre in Competition Policy, in preparation for the envisaged heightened interest in Mergers and Acquisitions.

At a time when market competition has failed, we believe this is the time to re- ignite the conversation about developing Centres of Excellence where research, teaching and business advise can reflect the special characteristics of the region. Economists and policy-makers recognize that, with respect to effective competition policy “one size does not fit all”. Hence, it is important that expertise and research in competition policy be distributed widely, so as to better take into account local environments and contexts.

To officially kick start the initiative a Competition Policy Breakfast Session was held at the Business School on Monday 16th November, during which Professor Thomas Ross of Sauder School of Business (University of British Columbia, Canada) delivered the key note address covering all major issues of market regulation and policy. He pointed out the importance of Competition Policy to the modernizing Kenyan economy. Then after him the audience was addressed by Mr. Francis Kariuki, the Director General of the Competition Authority of Kenya (CAK), who delved into the role of the regulatory body in Kenya its history, guidelines, and the future role of the Authority in shaping competition policy, both in Kenya and in the greater Sub Sahara Africa region.

The Centre of Excellence will be a working group, led by highly qualified faculty members, whose main objectives are to push forward the boundaries of both the theoretical and practical knowledge in the field of competition policy, especially in Kenya and the rest of East Africa, while sharing its findings widely and publicly.

The activities of the Centre of Excellence will include the following:
• Development of applied research that influences opinion in the academic and business worlds and society at large
• Organizing research seminars and conferences
• Research publishing
• Organizing debate fora between academics and business executives
• Running of postgraduate programs
• Holding Symposia
• Publishing books and book collections

Competition policy has adopted a dynamic nature, a global trend which cuts across many growing economies, especially in the emerging markets of developing nations and Prof. Thomas Ross applauded the Kenyan competition policy regime, aided by vigorous trading in a free market state.
The Competition Authority of Kenya has generally borrowed from global best practices. It has, despite its short existence, performed brilliantly with activities covering issues in major areas of modern competition law, such as:
• Anticompetitive agreements
• Abuse of market dominance and predatory behaviours
• Corporate mergers and acquisitions
“Most often the goal is to stop the creation of a dominating market power which stifles competition from other market players, consequently leading to monopolistic industries” remarked Prof. Thomas Ross.
Mr. Francis Kariuki dug deep into the workings of the regulatory body, putting emphasis on the broader alignment of competition policy with the greater economic good. “Competition policy should be aligned to the country’s economic agenda and an advocacy approach is key to enhancing the adherence to such policies. Therefore, with this in mind, a culture of competition should be encouraged, but not imposed.”
“A bad policy can create costly burdens for business: Erect barriers to entry and effective competition, which can be used as a weapon by firms not prepared to compete on merit,” added Prof. Ross.
However, as with any new law, the original CAK statute is only the beginning of the policy. Full effects are influenced by: Guidelines issued by the Competition Authority of Kenya, Prosecutorial discretion exercised by the CAK, Early cases and decisions by the CAK tribunal courts, and lastly, Amendments of the original laws to suite emergent trends in the market.

Mergers in competition policy are a booming trend and are, theoretically, aimed at stopping the build-up of monopolies. Most mergers are about attempts to achieve efficiencies or create synergies and the key provision of mergers in the law is that they should exclude the likelihood of preventing or lessening competition, acquisition of a dominant position and measurable benefits to the public consumers.

The challenges in developing rigorous competition policies in developing markets should not be underestimated. Developing countries, where many emerging markets are, face challenges such as: lack of adequate talent, dealing with defaulters of competition policy in industry groups and pre-existing demands for special treatment, while recognizing other legitimate policy interests.

The competition policy ecosystem in Kenya needs a learning and research environment, customizable to reflect the economic development history of the country and it is the hope of the Business School that with the full support of all the pertinent stake holders, as this is an agenda that SBS cannot undertake alone, the envisaged Centre of Excellence will truly blaze a trail in the development of competition policies in Kenya and in the greater Sub Sahara Africa region.



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