Mozambique: Overview

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In summary

The competition framework was introduced in Mozambique in 2013 and has, since then, been completed and complemented by a few legislative acts. Even though the new framework mirrors, to a large extent, EU and Portuguese competition law, it remains to be seen how its provisions will be interpreted and effectively implemented by the Competition Regulatory Authority. The first steps towards the operationalisation of the competition enforcer were taken in April 2020, when the Mozambican government appointed Mr Júlio João Pio as President of the Board of the Competition Regulatory Authority.

Discussion points

  • Legislative acts part of the Mozambican competition framework
  • Competition Regulatory Authority
  • EU law – and, in particular, Portuguese law – as sources of inspiration of many concepts of the Mozambican competition framework
  • Organisational structure and investigative powers of the Competition Regulatory Authority
  • Power of the CRA to request that a transaction that does not meet any of the jurisdictional thresholds is nonetheless notified
  • Fines due for infringements of competition rules

Referenced in this article

  • Southern African Development Community
  • Competition Regulatory Authority
  • Mozambican Competition Act (Law 10/2013, of 11 April)
  • Competition Regulation (Decree 97/2014, of 31 December)
  • CRA’s Bylaws (Decree 37/2014, of 1 August)
  • Amendments to the financing of the CRA (Decree 96/2014, of 31 December)
  • Charges due to the CRA (Decree 79/2015, of 5 June)

Adoption of a comprehensive competition framework

Mozambique first addressed the need to adopt competition legislation in 2007, when the Council of Ministers adopted, by Resolution 37/2007 of 12 November, the Competition Policy establishing the need for specific legislation for competition issues and for an authority with powers to enforce that legislation. At that time, several key sectors of Mozambique’s economy (such as railways, telecommunications and banking) were being liberalised.

The importance of a competition regime was reinforced a few years later when the country endorsed the Declaration on Regional Cooperation in Competition and Consumer Policies of the Southern African Development Community (SADC), signed in September 2009, according to which SADC’s member states should implement measures that promote competition and prohibit unfair business practices.

However, it was only in 2013 that Mozambique adopted its first Competition Act (approved by Law 10/2013 of 11 April), becoming the first Portuguese-speaking African country with a competition framework. At the time, Mozambique was one of the few countries within the SADC that had not enacted specific competition legislation. The legal competition regime of Mozambique applies to most economic activities in, or having an effect in, the country, as well as to both private and public companies. It foresees, nevertheless, four exceptions to its scope of application:

  • certain collective agreements entered into with workers’ organisations;
  • practices with non-commercial purposes;
  • specific agreements that result from international obligations; and
  • sectors of the economy that are subject to specific protection, in the national interest or in the interests of consumers.

The Competition Act foresees the creation of the Competition Regulatory Authority (CRA), which will be responsible for guaranteeing the application of the competition rules. The CRA was formally created in 2014 (its Bylaws were approved by Decree 37/2014 of 1 August), but the president of its board was only appointed this year (Resolution 24/2020 of 21 April).

On the last day of 2014, the Competition Act was complemented by the Regulation enabling the Competition Act, approved by Decree 97/2014 of 31 December (the Competition Regulation), establishing detailed rules for the implementation of the provisions of the Competition Act. On the same day, Mozambique also introduced amendments to the financing of the CRA (through the adoption of the Decree 96/2014 of 31 December).

The 2003 Portuguese Competition Act (largely inspired by European competition rules and superseded, in 2012, by the Competition Act currently in force in Portugal) appears – owing to the historic and linguistic ties that bind both countries – to be the main source of inspiration of the Mozambican competition regime (reference is made, by way of example, to the prohibition of economic dependence and to the combined jurisdictional threshold determining the prior notification obligation). The institutional cooperation between the Portuguese Competition Authority and the Mozambican authorities also contributed to the design of the competition regime of 2013.

The fees due to the CRA for a number of services, notably merger filings, were set out by Decree 79/2015 of 5 June (Decree 79/2015).

In 2018, specific competition rules applicable to the air transport services were adopted by the Mozambican government, with the enactment of Decree 35/2018 of 30 May. While reinforcing the prohibition of anticompetitive practices established in the Competition Act, this Decree sets examples of specific practices that may be considered anticompetitive agreements or abuses of dominant position in this sector. The Decree also provides that the CRA may, at the request of an air service provider, approve measures destined to correct certain adverse effects that affect air transport companies derived from the application of competition rules. The CRA will be responsible for the enforcement of these rules.

To date, the Mozambican competition regime has not been fully enforced: the competition watchdog was legally created by Decree 37/2014 but it is not yet completely operational. Although the president of the board of the CRA was appointed by the Mozambican government in April 2020, the other members of the board are yet to be nominated. Once these appointments are concluded, there will be nothing preventing the CRA from starting to enforce competition law in the country.

If the CRA, once operational, follows the steps of other African competition enforcers, it might start prosecuting undertakings in respect of matters that occurred before its own creation.

The application of the Mozambican competition regime currently raises several questions deriving, in particular, from the inexistence of an active CRA more than five years after it was created in legal terms. Accordingly, the most advisable approach for undertakings operating in the country and wanting to ensure compliance is to carry out thorough self-assessment exercises of their commercial practices and to judiciously analyse future steps that have a potential impact on competition.

Competition Regulatory Authority

Decree 37/2014 (as amended by Decree 96/2014), creating the CRA and approving its Bylaws, entrusts the CRA with supervision, regulatory and sanctioning powers. Its institutional design closely follows the structure of most European competition authorities.

The powers of the CRA, which correspond to the typical powers of most competition authorities, include: carrying out unannounced inspections (dawn raids), seizing documents in the premises of undertakings under investigation, interviewing the legal representatives of the undertakings or associations of undertakings involved in alleged breaches of competition law, or any other person, requesting documents and other relevant items of information and sealing off their premises when necessary.

The CRA’s decision-making body is its board. At the end of April 2020, Mr Júlio João Pio was appointed by the Mozambican government as president of the CRA board (Resolution 24/2020). The president and the four other members of the board are appointed by the Mozambican government for five-year terms (renewable only once). It is expected, nevertheless, that day-to-day activities will be carried out by the CRA’s investigative branch, the Directorate General, which includes a number of departments, such as the Antitrust Directorate, the Mergers and Market Monitoring Directorate, the Litigation Directorate and the Economic Studies Directorate.

The CRA is financed through the annual state budget and the contributions of sectoral regulatory authorities. Decree 96/2014, amending the CRA’s Bylaws, clarified the financing mechanisms of the Authority, by, notably, determining that it receives 5 per cent of the fees charged by a number of sector-specific regulators, thus increasing the independence of the competition enforcer. For the sake of transparency, the CRA shall publish an annual report of its activities and submit it both to the government and parliament, and shall make public its enforcement priorities every year.

The practical application of the Competition Act will greatly depend on the organisation and activity of the CRA as well as on the enforcement priorities that it will define. It is uncertain how the CRA will make use of its powers, but it is fair to assume that, considering the language and the close ties between the two authorities, it will tend to follow the Portuguese Competition Authority’s decisional practice.

Pursuant to the Competition Act, sectoral regulations (such as those for oil products and telecommunications) may contain rules on the promotion of competition, entrusted to the respective sectoral regulators. Therefore, currently, and until the CRA becomes active, undertakings active in regulated industries must be aware that competition rules may already be enforced by the respective sectoral regulator. The question that remains in this regard is how the CRA will coordinate its powers with those of sectoral regulators.

Prohibition of anticompetitive practices

The Competition Act prohibits agreements between undertakings, decisions of associations of enterprises and practices, both horizontal (such as market sharing and price-fixing) and vertical (including discriminatory pricing and resale price maintenance), provided their objective or effect is the prevention, distortion or restriction – in an appreciable manner – of competition in all or in part of the Mozambican market.

Abuses of a dominant position are also prohibited by the Competition Act, notably price discrimination, refusal to grant access to an essential facility, breaking a commercial relationship in an unjustified manner or predatory pricing.

Pursuant to the Competition Act, an undertaking is deemed to hold a dominant position when it operates in the market without facing significant competition or when it holds a prominent position in the market. The Competition Regulation establishes a (rebuttable) presumption that undertakings holding a market share equal to or above 50 per cent are deemed to hold a dominant position. The Competition Regulation also considers that the existence of significant barriers to market entry may indicate that one or more undertakings holding a market share of less than 50 per cent may still be deemed to hold a dominant position. In these cases, it is for the undertaking or undertakings holding a dominant position to prove otherwise. Therefore, undertakings with shares close to this threshold should carefully evaluate the effects of their commercial behaviour in Mozambique.

The Competition Act also foresees the prohibition of abuses of economic dependence of a trading partner, that is to say the exploitation by an undertaking of one of its trading partners (either a supplier or a customer) when that trading partner has no ‘equivalent alternative’ to the undertaking’s services to obtain or to distribute a certain good.

Prohibited agreements and practices may be considered justified if they (1) lead to economic efficiencies (eg, promote the competitiveness of small and medium national enterprises, contribute to the consolidation of the national economy or lead to a better allocation of resources) or are relevant for public interest reasons (notably, to promote national products and services or exports), (2) are not liable to eliminate competition, and (3) do not impose restrictions on competition that are not strictly indispensable for the attainment of the objective.

The CRA may grant temporary exemptions to prohibited (and justified) horizontal and vertical agreements and abuses of dominant position, but not to abuses of economic dependence. The Mozambican government probably drew inspiration from the regime of the European Union until 2004. To obtain an exemption, undertakings must submit a request for prior assessment by the CRA, demonstrating that they fulfil the above-mentioned requirements. If it is satisfied with the demonstration of these conditions, the CRA will grant an exemption for a limited amount of time, determining the conditions and validity period of the granted exemption.

To benefit from an exemption, undertakings and associations of undertakings shall pay a fee of 200,000 meticais for the initial exemption request and an annual fee of 150,000 meticais, as established in Decree No. 79/2015. This is another surprising feature of the Mozambican competition regime, as the jurisdictions charging a fee for the grant of exemptions use, as a rule, a one-off fee model.

Finally, the Competition Act provides that the CRA shall approve specific rules on automatic exemptions, defining categories of prohibited practices automatically justified (equivalent to the block exemption regulations at the European level).

Merger control review

The merger control regime in place in Mozambique, set out in the Competition Act and in the Competition Regulation, does not depart significantly from the regime of the European Union.

Concentrations between undertakings (ie, mergers, acquisitions of control and the creation of fully functioning joint ventures) must be previously notified to the CRA if they meet one of the following notification thresholds (established in the Competition Regulation and similar to those on merger control in Portugal):

  • as a consequence of the concentration, there is the acquisition, creation or reinforcement of a market share equal to or higher than 50 per cent in the domestic market of a specific product or service, or in a substantial part of it;
  • as a consequence of the concentration, there is the acquisition, creation or reinforcement of a market share equal to or higher than 30 per cent but lower than 50 per cent in the domestic market of a specific product or service, or in a substantial part of it, and the individual turnover in Mozambique of at least two of the undertakings taking part in the concentration in the previous financial year exceeds 100 million meticais, after deduction of taxes directly related to turnover; or
  • the aggregate turnover in Mozambique of the undertakings taking part in the concentration in the previous financial year exceeds 900 million meticais, after deduction of taxes directly related to turnover.

Considering the low turnover thresholds in Mozambique (in particular the third threshold of 900 million meticais (roughly equivalent to €11.4 million at the time of writing)), undertakings with small or occasional business activities in the country may be required to file transactions with the CRA before being able to implement them.

A concentration that does not meet any of the above-mentioned thresholds for mandatory filing may still have to be notified if the CRA considers it might significantly restrict competition. This is definitely one of the most surprising aspects of the Mozambican merger control regime, as it does not emanate from either the Portuguese or European merger control rules.


The procedure set out in Mozambican merger control rules is quite similar to the Portuguese merger control regime.

Concentrations meeting one or more of the jurisdictional thresholds must be notified to the CRA within seven days of the conclusion of the agreement (or of the acquisition project) and may not be implemented before a non-opposition decision (express or tacit) of the Authority.

CRA’s investigation is divided into a Phase I (which may last for up to 30 days) and, if deemed necessary, a Phase II (which may last for up to 60 days). These time limits are suspended if there are requests for information (which stop the clock until the parties provide to the CRA the requested information), submission of observations by interested third parties, or submission of remedies by the parties (which stops the clock for 30 working days). The Mozambican merger control procedure allows for an additional 30-day phase when the board of the CRA is due to adopt a formal decision on a transaction (another singularity of the Mozambican merger control regime).

The notifying parties may initiate informal and confidential pre-notification contacts with the CRA if they wish to have the latter’s assistance with the completion of the notification form or to clarify the existence of the prior notification obligation or other questions relevant to the notification.

Pursuant to the Competition Regulation, the CRA will assess concentrations that do not meet the notification thresholds under a simplified and faster procedure (concluded with a Phase I decision, in principle). The CRA may require the filing of notifications that do not fulfil the jurisdictional thresholds within six months of the public announcement, if it deems that the transaction may significantly hinder competition. The CRA shall adopt a formal decision within 60 days but until then the parties must refrain from implementing the transaction.

Substantive test

The substantive test of Mozambican merger control aims at determining whether a transaction is likely to lead to the creation or reinforcement of a dominant position that may give rise to significant impediments to effective competition in the national market, or in a substantial part of it.

As set by Decree 79/2015, the merger filing fee corresponds to 5 per cent of the annual turnover of the participating undertakings. The obligation to notify rests on the party acquiring exclusive control. The fee, in this case, is, in principle, calculated on the basis of its individual turnover. The obligation to notify mergers, acquisitions of joint control and creation of joint ventures belongs to all the parties involved. In these situations, the filing fee appears to be payable by all parties and, therefore, calculated on the basis of all companies’ turnovers.


Breaches of Mozambique competition law may be subject to severe sanctions. The CRA may impose fines of up to 5 per cent of annual turnover on undertakings that are found to have entered into a restrictive agreement or other restrictive practices, such as abuses of dominant position or of economic dependence.

In this respect, the Competition Regulation empowers the CRA to set out a leniency programme, to be approved by the CRA, for reducing fines imposed on both undertakings and individuals that have participated in a competition infringement but identify others involved in the infringement and provide information and documents that allows the CRA to prove the anticompetitive practice. Total immunity from fines is off the table, even for the first undertaking coming forward to the CRA and blowing the whistle, which may be granted a fine reduction of between 50 and 70 per cent, the second a fine reduction of between 30 and 50 per cent, and the third a fine reduction of between 10 and 30 per cent.

Violation of the prior notification obligation may be sanctioned with a fine of up 5 per cent of the annual turnover of the parties involved in a concentration, which, surprisingly, may be lower than the actual filing fee. Parties failing to notify a concentration within seven business days of the conclusion of the agreement may be liable to a fine of up to 1 per cent of their annual turnover.

Mozambican competition rules also provide for fines of up to 1 per cent of an undertaking’s annual turnover for refusal to cooperate with or provide information to the CRA, or the provision of false, inaccurate or incomplete information.

The criteria that must be complied with for the determination of the amount of a fine are detailed in the Competition Act and include, among other things, the gravity and the reiterated or occasional nature of the infringement and the degree of participation of the infringer. Pursuant to the Competition Regulation, once set up and fully operational, the CRA shall publish more specific guidelines on the determination of fines.

If the seriousness of the infringement or the public interest so justifies, the CRA may also apply ancillary sanctions, such as the publication of the sanction applied in the national gazette and in one of the newspapers with the highest circulation in the relevant geographical area (national, regional or local), the very severe prohibition from participating in public tenders for up to five years and the imposition by the CRA of the spin-off of an undertaking, the transfer of shareholder control, the sale of assets, a winding-down of activities or the adoption of any other act or measure that it deems necessary to eliminate harmful effects on competition.

Pursuant to the Competition Act, the CRA may also impose, if objectively necessary, periodic penalty payments of up to 5 per cent of average daily turnover on undertakings that failed to comply with a decision of the CRA imposing sanctions or the adoption of specific measures, or failed to provide statements, or provided false statements in a merger control proceeding.

Agreements and practices that breach Mozambican competition rules are null and void.

The Competition Act provides that the decisions of the CRA imposing fines are enforceable titles. Accordingly, in the event that an undertaking fails to pay the fine within the set deadline, the CRA may require enforcement of the decision before the Tax Enforcement Court.

Judicial review

Pursuant to its Bylaws, CRA decisions are subject to judicial review, either to the Judicial Court of the city of Maputo (for against decisions imposing fines or other sanctions) or to the Administrative Court (for appeals lodged against decisions concerning merger control or exemptions).

An appeal against a decision of the CRA suspends, as a rule, the effects of the decision, except for decisions imposing fines. Therefore, to avoid paying the fine before the decision becomes final, the addressee of the decision must request that the court suspends the effect of the decision, demonstrating that the implementation of the decision would cause him or her serious damage and providing, in any case, a guarantee in lieu.

Legal privilege

Mozambican competition regime is silent on the protection of legal privilege. It is, in particular, unclear whether, if documentation or correspondence exchanged between an undertaking and its lawyer are found at the undertaking’s premises during an unannounced inspection (dawn raid), the CRA may use them as proof of anticompetitive behaviour. Reference should, therefore, be made to other pieces of Mozambican legislation in, among others, the Constitution, criminal procedure law or the Bylaws of the Mozambican Lawyers Bar Association (approved by Law 28/2009 of 29 September). In this regard, it is advisable that undertakings seeking to evaluate compliance of their practices with competition rules engage a lawyer with experience in Mozambican law to determine the conditions of any client–attorney communications.

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