The International Monetary Fund (IMF) on Monday said it will assist the 19-member Common Market for Eastern and Southern Africa (Comesa) to implement market competition guidelines.

IMF Competition Policy Sub-Saharan Africa Coordinator Tania Begato told a media briefing in Nairobi that the rules will prevent mergers of firms operating in the bloc that will negatively affect consumers.

“The objective is to protect consumers from being exploited by dominant firms through higher prices and reduced choices,” Begato said during the launch of the Comesa Merger Assessment Guidelines.

The guidelines will form a key component of the Comesa region’s merger control system and play a vital role in promoting competition.

“We will assist Comesa to create a transparent and predictable regulatory framework for firms seeking to engage in a merger,” she said.

The IMF official said mergers and acquisitions are an essential part of healthy markets.

“They benefit the economy by allowing companies to become more efficient by reducing production or distribution costs. However in some cases mergers can substantially weaken the incentives of firms to engage in competition,” she said.

Begato added that a robust merger control policy will be effective in blocking anticompetitive mergers that can have significant benefits for consumers.

“They also play a role in ensuring the efficient functioning of regional markets,” she said. World Bank Group East and Southern Africa Head of Investment Climate Catherine Masinde said her organisation will help Comesa align its merger rules with best international practices.

Masinde said an effective merger control policy should focus on mergers that are likely to affect a significant number of consumers, adding that with the deepening of regional integration, the volume of cross border transactions is set to grow.

“It is therefore becoming increasingly important that cross-border cooperation between national competition authorities and regional competition bodies is strengthened,” she said.

The World Bank official stressed that the size of markets of most African states is small and therefore not attractive to big global players. “We are therefore encouraging regional integration, through opening up of markets,” she said.

Comesa Head of Mergers and Acquisitions Willard Mwemba said Comesa Competition Regulations will be applied with the objective of single market integration in mind.

Mwemba said the regional integration can only be realized by through the proliferation of strong competition culture, noting that effective merger rules will help to reduce the cost of goods in the region.

Under the new Comesa rules, regulatory approval will be required whenever any firm that operates in two or more Comesa states mergers with another one that operates in two or more Comesa states, if both their annual turnovers are at least five million U.S. dollars.

He said that since the beginning of the year, the Comesa Competition Commission has received 57 notifications for mergers. He said that firms operating in Kenya, Swaziland, Egypt and Zambia are most active in mergers and acquisitions.