The new authority will take over competition-regulation functions from the Ministry of Trade and Regional Integration as Ethiopia opens its economy to more domestic and foreign investors.
Ethiopia is set to establish a new autonomous competition authority, restoring independent institutional oversight of market competition as the country opens more sectors of its economy to private and foreign investors, BirrMetrics has learnt.
The new authority is expected to assume competition-regulation functions currently exercised within the Ministry of Trade and Regional Integration, marking another institutional shift in Ethiopia’s competition and consumer-protection regime.
The planned authority would be responsible for overseeing anti-competitive practices, market concentration and other conduct that could restrict competition as economic liberalisation brings new entrants into banking, logistics, energy, agriculture and other sectors.
The planned restoration would reverse an institutional restructuring carried out in October 2021, when the Ethiopian Trade Competition and Consumer Protection Authority (TCCPA) was dissolved during a federal executive reshuffle. Its core responsibilities — including consumer protection, merger reviews and enforcement against anti-competitive market practices — were transferred to the Ministry of Trade and Regional Integration, where they have since been handled through internal directorates and desks rather than an autonomous regulator.
The Authority’s adjudicative functions were separately moved into the regular judicial system. The creation of the new authority would therefore restore a standalone competition watchdog nearly five years after the previous institution was abolished. The planned creation of a new autonomous authority would separate those regulatory responsibilities from the ministry again.
The precise governance structure, leadership arrangements and institutional mandate of the planned authority have yet to be publicly detailed. It is also not immediately clear whether the new regulator will retain the combined competition and consumer-protection responsibilities of the former authority or operate under a narrower competition mandate.
The change comes as Ethiopia’s market structure undergoes significant transformation.
Foreign investors have been allowed to enter the banking industry, a securities market has begun operations and restrictions on private participation have been eased across logistics and other sectors. Further market openings are also being pursued in energy, petroleum supply, agricultural inputs and infrastructure.
The entry of additional domestic and foreign companies is expected to increase the importance of merger control, market-concentration assessments and enforcement against abuse of dominant market positions.
Ethiopia’s existing Trade Competition and Consumer Protection Proclamation prohibits agreements that substantially prevent or lessen competition and provides mechanisms for regulating abuse of market dominance and reviewing mergers that could harm competition.
Competition scrutiny has already become relevant to major corporate transactions as Ethiopia’s private sector consolidates.
Large acquisitions can require authorities to assess whether the resulting company would control a significant share of a market or have the ability to restrict competition.
The issue is expected to become more prominent as foreign investment and merger and acquisition activity increase following the opening of previously restricted industries.
The creation of an autonomous regulator also comes as Ethiopia advances negotiations for membership in the World Trade Organization and implements broader reforms aimed at increasing private-sector participation in the economy.
Greater competition oversight is particularly relevant in markets transitioning from state dominance or restricted entry, where liberalisation can bring new competitors while simultaneously creating risks of concentration among a small number of large operators.
An autonomous authority would be expected to provide dedicated institutional oversight of those developments.
The new regulator could also become increasingly important to Ethiopia’s emerging capital market, where acquisitions, corporate combinations and changes in ownership could create new competition-review requirements as the market develops.
Further details are expected to determine how the authority will be funded, how its leadership will be appointed, the extent of its enforcement powers and how existing responsibilities and cases will be transferred from the Ministry of Trade and Regional Integration.
Source: Birr Metrics
