Next, Nigeria, April 15, 2010
A lack of competition law is leaving Nigerian consumers vulnerable to unhealthy competition, the Consumer Empowerment Organisation of Nigeria (CEON) has said.
Babatunde Adedeji, Coordinator General of CEON, said yesterday in Abuja at a National Training Workshop on Competition Policy and Law that without a policy to checkmate the activities of business owners who impose high prices for goods and services, the predator-prey relationship between consumers and suppliers will continue.
“It is natural for firms to compete,” said Mr. Adedeji, “but in some situation, the rivalry is undermined, so there is need to protect consumers. There have been series of initiatives and efforts towards putting in place an effective competition regime in Nigeria. Some of these initiatives and efforts are the various bills on competition and anti-trust at National Assembly and the Draft Federal Competition Bill/National Competition and Consumer Protection Bill of the Federal Executive Council.”
Benefits of the law
Mr. Adedeji said that when the competition law is in place it will promote efficient allocation and utilisation of resources, which are usually scarce in developing countries. This also means more output, lower prices and consumer welfare. Though competition will most likely lead to some job losses in some sectors in the short run, but this can be taken care of by having an appropriate social safety net in place.
“A good competition policy and law lowers entry barriers in the market and makes the environment conducive to promoting entrepreneurship and growth of small and medium scale enterprises.”
He called for an end to the arbitrary abuse of the Nigerian market by some operators which has continued to exist because of absence of political will by government to enact competition policy and laws.
According to the CEON coordinator general, efforts by government to adopt such legislation in the past have culminated in the development of six different draft competition bills that are yet to be translated into relevant competition laws.
The bills, if passed, will provide the necessary conditions for market competition, stimulate creative business activities, protect consumers and promote the balanced development of the economy, said Mr. Adedeji.
Failed bills
One bill which has never been accorded serious consideration by the parliament is the 2002 federal competition bill for an act to set up a federal competition commission.
“The bill was also to prohibit restrictive contract and business practices that substantially lessen competition and regulate the abuse of dominant position of market power and anticompetitive business combines.”
Another bill which was sponsored by the federal government through the Bureau of Public Enterprise (BPE) was presented as an executive bill to the Nigerian Senate in 2002. However, there have been no further actions on the bill since its presentation stage.
In 2008, a bill sponsored by Joel Ikenya, a senator at the time, was presented for an act to provide for the establishment of the Nigerian trade and competition commission.
The bill passed through its first reading in April 23, 2008, a second reading on November 6, 2008, and was then referred to joint committees on establishment and public service matters, judiciary, human rights and legal matters and commerce.
According to Mr. Adedeji, the bill was able to move so far because Mr. Ikenya was the Senate Committee Chairman on Commerce at the time. However, the bill has since stalled at the joint committee stage.
Another bill was the National Antitrust Bill drafted in 2000 as an act to regulate and prohibit unfair competition and unreasonable combinations in restraint of commerce, industry and trade.
Mr. Adedeji said the bill would have prohibited monopolies, regulated mergers and acquisitions, and policed all forms of business practices which constitute the abuse of a dominant player in the market. It would also have promoted the welfare and interest of consumers and provide them with competitive prices and choices.