The problem of the unwarranted concentration of economic power in foreign investment : The case of section 3(e) and section 50 of the competition act

Abstract

Competition law is instrumental in regulating markets in any jurisdiction. In Kenya, the Competition Act states the objectives of the regulation of competition which includes creating a conducive environment for both local and foreign investment. This however, has not been realized as there are other legal measures and policies in the investment sector that favor FDI over local investment. While this may lead to economic progress in the short run, which some state is debatable in itself; in the long run it results in the unwarranted concentration of economic power in FDI to the detriment of local investment which causes it to be underexploited. This leads to overdependence on FDI which is risky due to its volatility as investors are susceptible to retracting from the host country whenever the investment climate declines. Economic sustainability can be enhanced by generating legal and policy incentives that would utilize the principles of competition law to enhance local investment while continuing to sustain FDI.