Lipimile Advocates for Foreign Direct Investment, Encouraging Acquisition-Hungry Multi-Nationals in Recent COMESA Trade Remarks
In a comment on the COMESA Simplified Trade Regime (STR) regional programme, recently being implemented locally in the border region between Rwanda and the DRC, George Lipimilie, the Chief Executive Officer of the COMESA Competition Commission, stated that the regional body’s “focus on free movement of goods has generally paid dividends resulting in  a lot of cross-border mergers and acquisitions,” according to an article in the Rwanda New Times.
It appears that the CCC chief is expressly favouring foreign direct investment into the region by way of mergers (or perhaps more accurately, acquisitions). “This is particularly so where the ‘foreign’ (presumably implying non-COMESA) multi-national entity brings with it novel technologies or R&D to improve the market position of the local competitor,” according to Andreas Stargard, a Pr1merio Ltd. competition-law practitioner.
Of interest to M&A practitioners, Mr. Lipimile is quoted as saying: “There are situations when foreign companies use acquisitions to enter the market where you find a multinational company buying a local company which is good because it comes with a lot of technology.” (Emphasis added).
Mr. Lipimile was also rather specific about encouraging FDI in the region’s raw-materials sector from nation states other than the PRC: said Lipimile, “[w]e have seen China taking advantage of our raw materials and we hope more countries can follow suit.”
We note that the domain of international trade — specifically tariffs as barriers to trade — has historically not been within the jurisdictional purview of the COMESA Competition Commission, which was designed to be a competition-law enforcement body. Technically, there exists the post of COMESA Director for Trade, Customs & Monetary Affairs, held by Dr. Francis Mang’eni and not by Mr. Lipimile. The CCC, however, “has recently emerged to take a more active role within the COMESA architecture of regional enforcement institutions,” Mr. Stargard says. He notes that Article 4 of the COMESA Treaty expressly provides that “[i]n the field of trade liberalisation and customs co-operation [the Member States shall] (a) establish a customs union, abolish all non-tariff barriers to trade among themselves”, and that the regional Competition Regulations expressly bestow the CCC with the authority to investigate and abolish all “anti-competitive practices affecting COMESA regional and international trade.”