Cartels in court, monopolies on thrones: The ironic economics of Kenya’s competition crusade

By Jerameel Kevins Owuor Odhiambo

In 2023, the Competition Authority of Kenya imposed fines totalling KES 338.85 million on nine steel manufacturers for price-fixing, output restriction, and coordinated import limits conduct that investigators traced through emails, WhatsApp exchanges, and meeting minutes spanning years. These firms controlled the vast bulk of the local steel market; their collusion inflated the cost of a material that accounts for more than 20 percent of expenses in housing and public infrastructure. That single decision stands as one of the largest cartel penalties in the Authority’s history. However, the deeper issue is not the fine. It is the enduring architecture of concentrated power that the fine, and others like it, have failed to dismantle.

Kenya’s competition regime was born in the twilight of price controls. The Restrictive Trade Practices, Monopolies and Price Control Act of 1989 emerged as the economy staggered away from state-directed pricing toward market rhetoric. It was a transitional instrument, heavy with exemptions for regulated sectors and still shadowed by the philosophy of price management. The Competition Act of 2010 repealed that framework and announced a modern ambition: to enhance the welfare of Kenyans by promoting and protecting effective competition and preventing unfair market conduct. The Competition Authority of Kenya was established to enforce it. Fifteen years later the statute remains largely intact, the Authority active, and the economic landscape stubbornly oligopolistic.

Consider the numbers that refuse to soften. In the financial year 2024/25 the Authority received 128 merger notifications and investigated 75 behavioural antitrust matters—28 involving coordinated cartel conduct, 39 concerning abuse of dominance, and eight relating to trade association agreements. Penalties across interventions reached figures reported in the region of KES 1.44 billion in certain accounts. Merger approvals unlocked investment commitments exceeding KES 25 billion. On paper the machinery turns. In practice the Authority has never prohibited a merger. Remedies, when imposed, lean heavily toward behavioural conditions and employment retention rather than structural divestitures that would reconfigure market power. Public-interest considerations routinely eclipse pure competition analysis. The result is a regulatory theatre in which cartels are occasionally fined while the larger structures of dominance remain seated.

Steel is not an isolated pathology. In retail, the operator of Carrefour stores was fined approximately KES 1.1 billion for abusing buyer power extracting non-refundable listing fees, unjustified rebates, and unilateral delistings from suppliers of edible oils and honey. In freight and warehousing, the Kenya International Freight and Warehousing Association directed members to apply minimum tariffs, conduct the Authority treated as price-fixing. Paint manufacturers earlier received multi-million-shilling sanctions for coordinating prices and transport charges. Each case is prosecuted with procedural seriousness; each leaves the underlying concentration largely undisturbed. Studies by the World Bank and OECD estimate that cartels raise prices by 20 to 25 percent. That is an invisible tax levied on every household building a home, every contractor bidding on a road, every small supplier negotiating with a supermarket chain.

The correlation is not subtle. High market concentration and weak structural enforcement move together. Safaricom holds roughly 65 percent of mobile subscriptions and over 90 percent of mobile-money transactions. Kenya’s Product Market Regulation score stands among the most restrictive in available international comparisons, reflecting barriers to entry, distortions from public ownership, and constraints on trade and investment. Electricity prices remain among the highest in the region; non-competitive allocation of power-purchase agreements and limited open access compound the burden. These are not accidents of history. They are the logical fruit of a regime that polices the visible sins of collusion while permitting the quieter accumulation of market power through mergers approved with soft conditions and dominance left largely unchallenged.

History supplies the irony. Colonial and post-independence price controls sought to protect consumers by decree. Liberalisation in the 1980s and 1990s promised that competition itself would deliver that protection. The 2010 Act was meant to police the new order. Instead we have a hybrid: the language of competitive markets married to the practice of managed concentration. The Authority investigates, fines, and advocates. Trade associations still issue tariff directives. Dominant platforms still set the terms of participation. The consumer pays the difference in higher construction costs, more expensive data, and thinner margins for the small producer who cannot refuse the buyer’s terms.

Original thought must cut deeper than institutional self-congratulation. Competition law is not merely a set of prohibitions; it is an economic constitution. When that constitution prioritizes the survival of incumbents over the entry of rivals, it converts the market into a private enclosure. The steel cartel did not invent scarcity; it organised it. The supermarket chain did not invent buyer power; it institutionalised it. Each fine is a public confession that the prior equilibrium was extractive. Nevertheless, the equilibrium reasserts itself because the law’s teeth are reserved for the most blatant agreements while the structural conditions that make those agreements profitable high barriers, limited imports, regulatory forbearance are left intact.

The emotional register of this failure is not abstract. It is the young family whose house costs more because steel prices were coordinated. It is the small oil or honey producer forced to absorb listing fees and arbitrary rebates. It is the farmer whose inputs and transport are shaped by concentrated intermediaries. It is the citizen whose data and mobile-money transactions flow through a single dominant channel. These are not externalities; they are the daily arithmetic of concentrated markets.

Categorical clarity is required. The present equilibrium is indefensible. Cartel fines, however large, cannot substitute for structural remedies. Merger review that never blocks a transaction and rarely imposes lasting structural conditions is merger review in name only. Abuse-of-dominance enforcement that focuses on buyer power in retail while leaving network effects and platform dominance largely untouched is incomplete. Public-interest conditions that protect employment for one year while allowing market power to harden for a decade are short-term political accommodations dressed as economic policy.

Action is therefore demanded from multiple actors. Parliament must amend the Competition Act to elevate structural remedies, tighten merger thresholds where concentration is already high, and clarify that public-interest considerations cannot override a finding of substantial lessening of competition. The Competition Authority must shift from behavioural settlements toward divestiture and market-opening conditions, publish full reasoned decisions as a matter of routine, and accelerate cartel investigations that currently stretch across years.

Sector regulators in telecommunications, energy, and transport must treat competition as a primary objective rather than a secondary constraint, imposing access obligations and spectrum policies that reduce incumbent advantage. The judiciary and the Competition Tribunal must insist on rigorous economic evidence and resist dilatory appeals that turn enforcement into attrition. Business associations must abandon minimum-price directives and recognise that collusion is not industry coordination but consumer taxation. Civil society and the media must treat market concentration as a public-interest story equal in gravity to fiscal mismanagement.

The alternative is continuation of the present charade: fines that make headlines, mergers that proceed, and prices that remain elevated. World Bank estimates suggest that reforms in foundational sectors could raise annual GDP growth by more than one percentage point and lift labour-compensation growth by up to two percentage points equivalent to hundreds of thousands of additional jobs at average wages. Those gains will not materialise while the law continues to fine the shadows and leave the thrones occupied.

Kenya’s competition statute was written to protect the process of rivalry, not to manage the comfort of incumbents. The steel fines, the retail penalties, the freight settlements are necessary but insufficient. They are the surface disturbances on a deeper current of concentration. Until the law is enforced as an instrument of structural openness rather than episodic chastisement, the economics of competition in Kenya will remain what it has too often been: a theatre in which the cartel is occasionally summoned to court while the monopoly keeps the throne. The cost of that theatre is measured not only in shillings extracted from consumers but in the slower growth, thinner innovation, and narrower opportunity that concentrated markets impose on an entire economy. The time for polite incrementalism has passed. The market must be made to compete, or the claim of competition law itself becomes the most elegant fiction of all.

The writer is a social commentator.

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