Nigeria Content Online

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.