ECOWAS Merger Control and Domestic Regimes. The Nigerian Perspective.

In October 2024, the regional merger control regime for the Economic Community of West African States (ECOWAS) came into effect. Since than the ECOWAS Regional Competition Authority (ERCA) accepts filings (for an overview of the new regime see our client brief on the new ECOWAS merger control regime). One question that arose with the ECOWAS regime entering into force concerns the relationship between the ECOWAS regional regime and domestic merger control regimes of ECOWAS Member States. Specifically, whether filings under the domestic regimes are still required, if a filing is made under the ECOWAS regime. The ERCA Executive Director has taken the position that ERCA has superseding jurisdiction where the ECOWAS thresholds are met. While the issue has not been forced yet, domestic enforcers such as the Nigerian Federal Competition and Consumer Protection Commission (FCCPC) have indicated that they take the opposite view and consider themselves competent to review transactions that meet the criteria for notification under their national merger control regime, even if a filing to the ERCA has been made.

Notification obligation under the ECOWAS regime

Under the ECOWAS merger control regime notification is required, if (1) the transaction leads to a change of control as defined by the Competition Rules Act and related regulations, (2) the parties are active in at least two—not necessarily the same—ECOWAS Member States, and (3) one of the following thresholds is met:

• the parties’ combined, annual ECOWAS-wide revenue exceeds WAUA 20 million (approximately USD 26.5 million); or
• at least two parties each achieve an annual ECOWAS-wide revenue of WAUA 5 million (approximately USD 6.6 million) and are active in at least two—not necessarily the same—ECOWAS Member States.

Notification obligation under the Nigerian regime

The merger control regime established by the Nigerian Federal Competition and Consumer Protection Act, 2018 (FCCPA) explicitly catches domestic and foreign-to-foreign transactions. Notification is required, where (1) the transaction leads to a change of control as defined by the FCCPA and related regulations, and (2) one of the following thresholds is met:

• the parties’ combined, annual Nigerian revenue is at least NGN 1 billion (approx. USD 650,000); or
• the target’s annual Nigerian revenue is at least NGN 500 million (approx. USD 325,000).

The thresholds can be met by local sales or exports to Nigeria.

Competing jurisdiction

Where the notification criteria of both the ECOWAS and the Nigerian merger control regimes are met, the question of how the resulting competing jurisdiction will be resolved arises. Unlike for example the COMESA merger control regulations that provide for superseding jurisdiction of the COMESA Competition Commission over transactions notified to them, the ECOWAS regulations do not explicitly address how competing jurisdiction would be resolved. The ERCA’s Executive Director in a recent public statement took the position that where the thresholds of the ECOWAS merger control regime are met, the ERCA has exclusive jurisdiction over merger control review. No notification to national enforcers of the ECOWAS Member States is required. The Executive Director did not clarify in his statement on which provision of ECOWAS law he based this position.

Still, even if one was to assume that the exclusive jurisdiction of the ERCA was based in ECOWAS law, Nigerian law arguably preserves jurisdiction of the FCCPC. Section 12 Constitution of the Federal Republic of Nigeria, 1999 provides that ‘no treaty between the [Nigerian] Federation and any other country shall have the force of law except to the extent to which any such treaty has been enacted into law by the National Assembly.’ This means, acts of international organizations Nigeria is party to must be ratified by the Nigerian National Assembly to become binding and enforceable in Nigeria. Hence, pursuant to Nigerian law, even if the Competition Rules Act would be interpreted as providing for superseding jurisdiction of the ERCA, this would only be binding for Nigeria—and, therefore, the FCCPC—after the Nigerian National Assembly ratified the Competition Rules Act.

Under ECOWAS law the matter is regulated differently. Some ECOWAS legislations are considered directly applicable in ECOWAS Member States. ECOWAS law distinguishes between the binding force of supplementary acts—such as the Competition Rules Act—and other ECOWAS regulations—such as the Merger Manual. Supplementary acts are directly binding and enforceable in the ECOWAS Member States. This concept is also embedded in the provisions governing the implementation of the Competition Rules Act. Art 15 Competition Rules Act provides that upon its publication in the official journal of the ECOWAS, the ECOWAS Member States must publish the Competition Rules Act in their national gazettes within 30 days after notification by ERCA. Art. 16 Competition Rules Act provides that the Competition Rules Act will enter into force upon its publication without further steps being required. Hence, assuming the Executive Director based his view that the ERCA has superseding jurisdiction on the Competition Rules Act, this superseding jurisdiction would be directly applicable in the ECOWAS Member Sates—including Nigeria—without any legislative act by the ECOWAS Member States.

Way forward

So far this conflict of jurisdiction between the ERCA and the FCCPC—and potentially the enforcers of other ECOWAS Member States—has not been resolved. Still, looking at for example the COMESA merger control regime and disagreements over jurisdiction between the COMESA Competition Commission and enforcers of COMESA Member States the issue may not be forced by the ECOWAS merger control regime entering into force. The COMESA Competition Commission’s superseding jurisdiction was initially ignored by several COMESA Member States. Egypt continues to reject it. These disagreements, however, did not lead to open disputes. Given that ECOWAS has similarly little means to compel ECOWAS Members States as COMESA has to compel COMESA Member States, we do not expect the question of competing jurisdiction between ERCA and domestic enforcers to result in open dispute either.

Going forward, given the unresolved conflict of jurisdiction parties must consider making notification to both ERCA as well as domestic enforcers of ECOWAS Member States where criteria for notification under both regimes are met. This will add complexity to deals. Parties and their counsel will have to manage regulatory review in several jurisdictions and cope with varying statutory review periods, procedures, and approaches by different enforcers. This will bind capacity and increase deal costs that may tempt parties to take a view on some regimes. The risk of such an approach are difficult to assess currently. The ECOWAS merger control regime has been in force for less than 6 months. Hence, there is very little experience with how actively ERCA and domestic regulators will cooperate and communicate on transactions notified to them.