Why Nigeria needs competition law

 If there is any time Nigeria needs a competition law, it is now. Competition or antitrust law basically seeks to promote fair or just business environment by regulating anti-competitive conducts by companies.

Just last month in Johannesburg, the Competition Tribunal forced Boksburg-based edible fats and oil refinery operator Sime Darby Hudson Knight (SDH&K) to pay a fine of R35 million and invest R135m in a new packaging and warehousing facility as part of the remedy for colluding with consumer goods maker Unilever.

Microsoft and several other firms have been punished in the US for antitrust activities.  A strong antitrust law prevents collusion, monopoly and other acts that put consumers or competitors in disadvantaged positions.

Africa’s biggest economy does not have a competitive law, thereby allowing collusions, deliberate and unnecessary monopolies to go scot-free.

In some places in Nigeria, only one firm is allowed to sell, which is one issue a competitive law is meant to address.

Currently, the Competition and Consumer Bill is in the National Assembly, having passed the second reading, but legislators need not dither on it if they are desirous of raising investor confidence and deepening healthy competition in the country.

The Nigeria Employers’ Consultative Association (NECA) and other key business membership organisations in Nigeria, in collaboration with Enhancing Nigerian Advocacy for a Better Business Environment (ENABLE), are championing the cause of passing this bill as soon as possible.

Goddy Ikeh, leader of the delegation that visited BusinessDay’s corporate head office in Apapa, Lagos, said the bill sets out to prohibit agreements or contracts targeted at restricting or eliminating competition in a given market.

Ike said it will forbid abuse of dominant position or market power, regulate mergers and acquisitions which is aimed at undoing competitors, while also prohibiting price fixing by a dominant firm or a number of firms in concert.

He further stated that it will prohibit collusive tendering or bid rigging, cartels or use of other antics to keep new entrants away from the market.

“The bill also proposes to subsume the existing Consumer Protection Council into the proposed Competition and Consumer Protection Commission, with enhanced capacity to implement the competition law and a more refined and comprehensive consumer protection law enacted as part of the bill,” he said, adding that a number of small, medium and large enterprises are in support of this bill.

He added that with the ongoing reforms in the economy and the privatisation and liberalisation programmes that have been pursued over the past few years, it is important that these programmes are supported with the appropriate regulatory measures and laws to ensure that they deliver real benefits to the citizens.

Another member of the delegation, Greatsheyi Akintunde, chairman of Nigerian Association of Small Scale Industries (NASSI), Ondo State chapter, said the bill will not only promote job creation and attract foreign and local investors but will also boost GDP.