Transcript Document 7127233

Strengthening Constituencies for Effective
Competition Regimes in Select West African
Countries
(CUTS 7Up4 Project)
INTERIM PROJECT REVIEW MEETING
29-30 July, 2009 at Senegambia Beach Hotel, Banjul, The
Gambia
Country Research Report (CRR) - DRAFT
COMPETITION REGIME SCENARIO IN NIGERIA
Presented by:
UGBAJAH, Leonard – Consultant to CEON
Professor, AROMOLARAN, Adebayo B. – Consultant to CEON
ADEDEJI, Babatunde Abiodun CStat – C-G, CEON
For
Consumers Empowerment Organisation of Nigeria – CEON
(Formerly, Consumer Affairs Movement of Nigeria – CAMON)
1
Outline of the Presentation
 Section 1: Characteristics of the MacroEconomy
 Section 2: Government Policy that Impinges
on Competition.
 Section 3: Progress made by Nigeria
towards Operationalising Competition
Regimes.
 Section 4: Political-Economy constraints in
implementing competition regimes in
Nigeria – Country with no competition laws.
 Section 5: Interface between sector
regulation and competition in select sectors.
 Section 6: Investigation of Existing
Competition Abuses and distortions at all
levels.
 Section 7: Identification of cross-sectional
(business, consumer and government)
perceptions regarding competition concerns
in Nigeria.
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 Section 8: Assessment of the implication of
I.
Characteristics of the
MacroEconomy
 Geographical Location: Most populous
black Nation is situated in West Africa.
Nigeria sits on the land mass of 923,768
square kilometers situated between
longitudes 3 degrees and 14 degrees East
and latitudes 4 degrees and 14 degrees
North.
It is bordered to the north by the Republics
of Niger and Chad. It shares borders to the
west with the Republic of Benin, while the
Republic of Cameroun shares the eastern
borders right down to the shores of the
Atlantic Ocean which forms the southern
limits of Nigerian Territory. The about
800km of coastline confers on the country
the potentials of a maritime power. Land is
in abundance in Nigeria for agricultural,
industrial and commercial activities.
 Government: Three-tier structure - A
Federal Government, 36 State
Governments, 774 Local Government
Administrations
 Population: 144.7million (year 2006
3
Geographical Location,
Population and Other
I.
Geographical Characteristics
Cont.
–
 Main Indigenous Languages: Hausa, Igbo,
Yoruba
 The 144.7million population is made up of
about 374 pure ethnic nationalities.
 Main Religions: Christianity, Islam,
Traditional
 There are two important rivers – the River
Niger, flowing from the north- west and its
major tributary, the River Benue, flowing
from the north-east to form a confluence at
Lokoja, capital of present day Kogi State.
The River Niger continues its flow towards
the Atlantic Ocean, breaking into a network
of tributaries consisting of streams, creeks,
and lagoons, forming a great delta called the
Niger Delta trough which it drains into the 4
Atlantic Ocean.
Geographical Location,
Population and Other
1.
Geographical Characteristics
Cont.
–
 The climate condition is marked by two
alternate seasons of wet season marked by
intermittent rainfall and dry season marked
by hotness and sometimes dry north south
trade wind (popularly know as harmattan).
The wet season lasts from April to October;
while the dry season lasts from November
through March.
 Each ethnic group has its own identifiable
way of life, mode of dress, values, food and
food habits, cultural predispositions for
members to do or not to do certain things,
and its shared mechanisms or patterns of
socialising its members.
 Nigerians from different ethnic groups
appreciate the diversity of cultural dances,
dress forms, food, handicrafts, drumming,
songs, farm implements and practices, and 5
other traits. For example, many Nigerians
Brief analysis of post-independent
social, political and economic history
 Nigeria gained her independence from Great Britain
on the 1st of October, 1960. This marked the end of
an era of nationalist struggles fought on the
intellectual and political fronts; it also marked the
beginning of a new era of hope, of lofty aspirations of
nationhood.
 The country already had a three-region structure
before independence- the Northern Region, the
Western Region and the Eastern Region. These
Regions were autonomous to a large extent including
in the management of resources and development
planning.
 The emphasis was on fiscal federalism marked by
resource autonomy among the constituent regions
that pay taxes to the federal government.
 Like in most other countries with fragile inter-ethnic
harmony, the economy was dominated by agricultural
production with the famous groundnut pyramids in
the North, the palm oil plantations in the East, Cocoa
in the West and rubber in the Mid-west. These and
many more products, as well as the rich solid mineral6
deposits found in different parts of the country
formed the major foreign exchange earner and driver
Profile
Population:
GDP (Current US$):
Per Capita Income:
(Current US$)
Surface Area:
Life Expectancy:
Literacy (%):
PROFILE
144.7 million ****
103.3 billion****
640.0 (Atlas method)****
1,128 (at PPP.)***
923.8 thousand sq. km
46.5 years***
69.1 (of ages 15 and above)***
HDI Rank:
158***
Sources:
- World Development Indicators Database, World Bank, 2006
- Human Development Report Statistics, UNDP, 2005
(***) For the year 2005
(****) For the year 2006
GDP Contribution by Sector
Services
26%
Agriculture
44%
Mining &
Quaring &
Crude Oil
26%
Agriculture
Manufacturing
Mining & Quaring & Crude Oil
Services
Manufacturi
ng
4%
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2. Government Policy that
Impinges on Competition
 2.1. Development Policy
 These are the National Economic Empowerment and
Development Strategy –NEEDS, NEEDSII and the
Seven-Point Agenda of the President Yar`Adua.
 The broad goals of NEEDS, NEEDSII and the
Seven-Point Agenda are poverty reduction, wealth
creation and employment generation through the
development of an enabling environment for growth.
 The seven point agenda accommodates Power and
Energy, Food Security and Agriculture, Wealth
Creation and Employment, Mass Transportation,
Land Reform, Security and Functional Education.
 The overall long-term vision of the President 7-Point
agenda and NEEDS includes social and economic
transformation of Nigeria on a sustainable and
competitive basis.
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Development Policy - Continues
2.1.2 Structural Adjustment Programme (SAP)
 The Structural Adjustment Programme (SAP) was
introduced in Nigeria in July 1, 1986. This was
against a background characterised by structural
imbalances, fiscal, foreign exchange, and balance of
payment crises as well as external debt problems that
defiled all forms of reform measures put in place
before 1986 (NCEMA, 2004).
 The policy thrust of SAP, as stated in the basic
document was on economic reconstruction, social
justice and self-reliance through the alteration and realignment of aggregate domestic expenditure and
production patterns for the purpose of restoring the
economy back to the path of steady and balanced
growth
The major objectives in line with the SAP policy thrust
included:
 (i) restructuring and diversifying the production base
of the economy to complement crude oil sector;
 (ii) achievement of fiscal and balance of payment
viability;
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 (iii) laying the basis for a sustainable growth;
 (iv) lessening the dominance of unproductive
investments in the public sector; and
2.2. Agriculture Development Policy



Nigeria’s agricultural policy is the synthesis of the
framework and action plans of Government designed to
achieve overall agricultural growth and development.
The policy aims at the attainment of self sustaining growth
in all the sub-sectors of agriculture and the structural
transformation necessary for the overall socio-economic
development of the country as well as the improvement in
the quality of life of Nigerians.
The history of agricultural policies and programmes in
Nigeria dates back to 1935 with the policy on formation of
cooperative societies. After this a number of policies and
programs aimed at achieving the goals of the agricultural
sector have been put into place by several governments.
These list of policies and programs are summarized as
follows:
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Cooperatives (1935 to Date)
Commodity Boards (1947 to 1986)
Agricultural Research Institutes (1964 to Date)
National Accelerated Food Production Project (1970s)
Nigerian Agricultural Cooperative Bank (1973 to Date)
Agricultural Development Projects (1975 to Date)
Operation Feed the Nation (1976 to 1979)
River Basin Development Authorities (1977 to Date)
Directorate of Foods, Roads and Rural Infrastructure (1986 to 10
1993)
National Agricultural Land Development Authority (1991 to 1999)
2.2. Agriculture Development
Policy Cont.
 2.2.2. The broad policy objectives
The broad objectives of agricultural policy in Nigeria over the
past 2
decades have been the:
 attainment of self-sufficiency in basic food commodities
with particular reference to those which consume
considerable shares of Nigeria’s foreign exchange and for
which the country has comparative advantage in local
production;
 increase in production of agricultural raw materials to meet
the growth of an expanding industrial sector;
 increase in production and processing of exportable
commodities with a view to increasing their foreign
exchange earning capacity and further diversifying the
country’s export base and sources of foreign exchange
earnings;
 modernization of agricultural production, processing,
storage and distribution through the infusion of improved
technologies and management so that agriculture can be
more responsive to the demands of other sectors of the
Nigerian economy;
 creation of more agricultural and rural employment
opportunities to increase the income of farmers and rural
dwellers and to productively absorb an increasing labour
force in the nation;
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 establishment of appropriate institutions and creation of
administrative organs to facilitate the integrated
development and realization of the country’s agricultural
Major Agricultural Imports, Exports
and Contribution to Economic Activity



Agricultural output consists mainly of: food crops, such
as cassava, yams, sorghum, millet, maize, groundnuts,
palm fruit; cash crops, such as palm oil, rubber, cocoa,
cotton, gum arabic, and shea butter; poultry, goats, lamb,
pigs, and cows; fishery products; and forestry products.
the major agricultural imports being wheat, rice, sugar,
milk, meat, and fish.
The main agricultural exports commodities are cocoa
beans, coffee, copra, cotton, palm-oil and soya bean.
Agricultural contribution to economic activity
The agriculture sector plays a significant role in the Nigerian
economy;
 In spite of the dominance of oil, the sector is the mainstay
for the majority of Nigerians, employing some 70% of the
country's labour force.
 Most workers in the sector live below the poverty line:
 agriculture accounts for some 67% of national poverty,
thus the sector is crucial in national poverty reduction
efforts.
 Agriculture remains important for the diversification of the
economy, in particular its export structure
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 Some estimates put the sector's contribution to GDP at
41%.
2.3. Industrial Policy
The Federal Ministry of Industry's policy objective
is to
transform the Nigerian economy from "its rural
and
agrarian form to a modern and competitively
industrialized one". This is to be pursued by, inter
alia,
encouraging the private sector to play a pivotal role;
providing services for the training and development of
indigenous skills and manpower; and financial
support.
Nigeria's current industrial policy thrust is
anchored on a
guided deregulation of the economy and Government's
disengagement from activities which are private-sector
oriented, leaving Government to play the role of
facilitator,
concentrating on the provision of incentives policy and
infrastructure that are necessary to enhance the private
sector's role as the engine of growth.
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2.3. Industrial Policy Cont.
The industrial policy is intended to:
 Generate productive employment and raise
productivity;
 Increase export of locally manufactured goods;
 Create a wider geographical dispersal of industries;
 Improve the technological skills and capability
available in the country;
 Increase the local content of industrial output by
looking inward for the supply of basic and
intermediate inputs;
 Attract direct foreign investments (FDIs);
 Increase private sector participation.
 The Federal govt has recently adopted the ‘cluster’
concept as the nation’s industrial development
strategy.
 There is an ongoing effort to harmonise and merge
the nation’s industrial and trade policies following
the merging of the two Ministries.
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2.4 Trade Policy
 2.4.1 Nigeria’s Current Trade
Policy
 From the structural Adjustment Era in 1986,
there was a significant shift in Nigeria Trade
Policy direction towards greater trade
liberalization.
 The adoption of the Structural Adjustment
Programmes (SAP) in 1986 by the Nigeria
Government was as a result of shift in
Government Trade policies.
 The main engine of development strategies
to Nigerian government is trade. This is
because of the implicit belief that trade can
create jobs, expand markets, raise incomes,
facilitate competition and disseminate
knowledge.
 The enhancement of competitiveness of
domestic industries, with a view to , inter
alia, stimulating local value-added and
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promoting a diversified export base , is the
main thrust of trade policy.
2.4 Trade Policy Cont.
 In order to ensure that the resultant domestic costs of
adjustment do not outweigh the benefit, the
government pursues the liberalization of its trade
regime in a very measured manner.
 Reorientation of attitudes and practices towards
modern ways of doing business are reforms which
accompany this policy direction.
 The tariff regimes, which are the instrument of the
trade policy, are designed in a manner which allows a
certain level of protection of domestic industry and
enterprise.
 While this is the main trade policy framework to
guide economic growth, the trade expansion,
Employment generation and poverty alleviation
dimensions are now subsumed in the NEEDS,
NEEDSII and Seven-Point Agenda of the President.
2.4.2. Trade-Specific Measures Scheduled for
Implementation
The measures include the following:
 the reduction of the uncertainty and unpredictability
of the tariff regime;
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 reduction of tariff rates, as part of Nigeria's
commitments under the WTO and loan agreements
with the IMF;
2.4 Trade Policy Cont
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implementation of the ECOWAS protocol on free
movement of goods and people;
the operationalization of existing export processing
zones (EPZs) and the establishment of new ones;
the granting of export-processing status to factories that
contribute to non-oil exports;
the establishment of an export production village
scheme; the negotiation of preferential trade
agreements to diversify trade;
the provision of incentives to encourage non-oil exports;
the implementation of port reforms to ensure timely
clearance of goods and eliminate malpractices;
the replacement of the pre-shipment inspection scheme
with inspection at destination; and the streamlining of
the exchange rate regime.
Other envisaged trade-related measures include
transforming the Consumer Protection Council into the
Nigerian Trade and Competition Commission to handle
issues relating to, inter alia, anti-trust and competition
policy, contingency trade measures, and consumer
protection;
establishing an intellectual property commission and a
bankruptcy commission; strengthening the capacity of
trade-related institutions, including the Ministry of
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Commerce;
2.5 Privatisation Strategy
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2.5.1 Privatisation Process
The origin of privatisation in Nigeria can be traced to
the Privatisation and Commercialisation Decree of
1988, which came as part of the Structural Adjustment
Programme (SAP). The Privatization and
Commercialisation Decree of 1988 set up the Technical
Committee on Privatization and Commercialisation
(TCPC) to privatize 111 public enterprises and
commercialize 34 others.
By 1993, according to the submissions of the TCPC, 88
out of the 111 enterprises listed in the decree had been
privatised. Based on the recommendation of the TCPC,
the Federal Military Government promulgated the
Bureau for Public Enterprises Act of 1993 which
repealed the 1998 Act and set up the Bureau for Public
Enterprises (BPE) to implement the privatization
programme in Nigeria.
This was followed by the Public Enterprise
(Privatization and Commercialization) Act, 1999 which
created the National Council on Privatization,.
The Federal Government is making use of the selected18
investment advisors to implement its privatization
programme under the supervision of BPE.
2.6 Investment Policy

Nigerian Government seeks to establish the private
sector as the engine of economic growth, with the
Government providing the enabling environment for
private investors, both domestic and foreign, to operate
in line with its developmental strategy. To achieve this
development strategy, several measures have been put
in place.

The Nigerian Investment Promotion Commission Act
No. 16 of 1995 is the law governing investment in
Nigeria. The Act
established the NIPC as the successor to the Industrial
Development Co-ordination Committee (IDCC).
Investors, both domestic and foreign, under the NIPC
Act, can participate in all sectors of the economy with
the exception of the production of arms and
ammunition, narcotic drugs, and psychotropic
substances.
Through a subsidiary that must be incorporated in
Nigeria, foreign companies are permitted to operate in
Nigeria. The Corporate Affairs Commission, under the
Companies and Allied Matters Act of 1990 (as
amended), regulates and supervises the formation,
incorporation, and registration of companies in Nigeria.
Nigeria’s investment regime offers a plethora of
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incentives, including tax holidays, reduced taxes, capital
allowances, capitalization of expenditure, accelerated
depreciation, import duty rebates, investment tax

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2.7 Public Sector Reforms
The public sector reform agenda focuses on the
following:
 Restoration of professionalism in the Civil Service;
 Rationalization, restructuring, and strengthening of
institutions;
 Privatization and liberalization in the sector;
 Tackling corruption and improve transparency in
government accounts;
 Reduction in waste and improve efficiency of
government expenditures; and
 Enhance economic coordination.
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2.8 Labour Policy
To enhance job opportunities in the country, the
Nigerian
Federal Executive Council (FEC) has approved a new
National Employment Policy.
 The new policy aims to create more jobs and give full
pay to the current workforce.
 The policy, worked out by the Ministry of Labour
and Productivity, also encourages individuals and
groups to create their own jobs, provide opportunity
for continued training and create social work
environment that is gender sensitive.
 The new policy also seeks to endorse strategies for
job promotion. They include promotion of micro
small-scale sector jobs, inducement of more
employment in the agricultural sector, promotion of
labour-intensive businesses, linking education and
training to labour market requirements and
strengthening labour market information.
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2.9 Consumer Protection
Policy – State of its Implementation,
Consumer Awareness and Existence of
Consumer Organisations.
The Nigeria Government under the then leadership of
President
(General) Ibrahim Badamosi Babangida, in complying
with the
UN General Assembly Guidelines on Consumer Protection
(Res.
39/248 of 1985) which it ratified as a member, enacted the
Consumer Protection Council Act No. 66 of 1992 on 23rd
day of
November 1992, to Protect Nigerian consumers from this
social
malaise.
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The Council was not established until 1999, seven
years after the Act was enacted.
The law provides for the Establishment of
Consumer Protection Council at Federal level and
State Consumer Protection Committee in each State
of the Nigeria Federation.
In Nigeria today, there is no single codified
document where the rights of consumers are
contained as against the producer/manufacturer or
suppliers of goods and services. What one is likely 22
to see are several legal enactments establishing
certain institutions charged with the responsibilities
2.9 Consumer Protection
Policy – State of its Implementation,
Consumer Awareness and Existence of
Consumer Organisations. Cont.
Prominent among these consumer legislations are:
 The Consumer Protection Council Act No.66 of 1992
 The Weights and Measures Acts 1974
 The National Agency for Foods & Drugs
Administration and Control (NAFDAC) Act No. 15 of
1993
 The Food and Drugs Act 1974
 The Counterfeit and Fake Drugs and Unwholesome
Processed Foods (miscellaneous Provision) Act 1999
 Nigerian Civil Aviation Authority (NCAA) Act No.49 of
1999
 Department of Petroleum Resources (DPR)
 Standard Organisation of Nigeria (SON) Act
 Federal Environmental Protection Agency (FEPA) Act
 Nigerian Electricity Regulatory Council (NERC) Act
 Trade Malpractices Act 1992
Despite this statutory protection framework, the level of
practical protection has remained rather low. This is
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because the
laws are yet to take care of some vital aspects of consumer
Section 3: Progress made by
Nigeria towards
Operationalising Competition
Regimes.
As a prerequisite to the Nigerian Competition Regimes,
Government have started with sector-specific regulatory
laws with the aim of encouraging competition in some
specific sectors of the Economy.
Some of the sectors with regulatory laws are:
Communication, Power, Oil & Gas, Financial Services,
Transport, Health, Tourism, and Education.
Bills Prepared by Different Bodies But Never Passed in the
Parliament into Acts.
 In the year 2000, the Federal Government through the
Bureau of Public Enterprises (BPE), set-up a Competition
and Anti-trust Seform Steering Committee to look into the
needs for competition / anti-trust policy and reforms for
Nigeria. The Committee came-up with the draft policy and
the draft bill called “Federal Competition Bill” which has
remained a Bill.
 In the immediate past tenure of the National Assembly, two
different bills on Competition/Anti-Trust were reportedly
passed by the National Assembly. The bills are:
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Section 3: Progress made by
Nigeria towards
Operationalising Competition
Regimes. Cont.

“A Bill for an Act to Provide for the Protection of
Trade and Commerce against Restraint and Monopoly;
and for Connected Purposes, 2001” - sponsored by an
honourable member of the House of the
Representatives. And
 National Antitrust (prohibitions, enforcement, etc.) bill,
2004 “An Act to regulate and prohibit unfair
competition and unreasonable combinations in restraint
of commerce, Industry and Trade, including
monopolies, Trusts and Interlocking Directorates, etc ,
and to make provision for other matters relating
thereto”. Sponsored by Hon. Halims Agoda & Others.
Efforts to reconcile/harmonized the two versions of the bills
have not been successful up till date.
 Elsewhere within the government circles, there was a
parallel move to introduce what is referred to as the
Federal Trade and Competition Commission (FTCC).
This Bill went to the National Assembly in 2006 but was
thrown out by the Senate in the first reading for reasons
bordering mainly on lack of understanding of the
subject of competition law.
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Section 3: Progress made by
Nigeria towards
Operationalising Competition
Regimes. Cont.

3.3. Current Efforts by the Government to Have a
Competition Law for Nigeria.

On Wednesday, April 22, 2009, the President Alhaji
Umar Musa Yar’adua presented before the Federal
Executive Council (FEC) for deliberation and approval,
a Bill titled “Competition and Consumer Protection
Bill”. The bill seeks to promote the welfare and interests
of consumers and provide them with competitive prices
and choices. The bill also seeks to regulate monopolies,
merger & acquisitions and all forms of business
combinations and prohibit restrictive business practices
which prevent, restrict or distort competition or
constitute the abuse of a dominant player in the market.

Deliberation on the Bill was deferred till another date to
enable Council Members sort-out the grey areas in the
bill and for proper harmonization with the existing
sector-specific regulatory laws.
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Section 3: Progress made by
Nigeria towards
Operationalising Competition
Regimes. Cont.
 3.5. Some of the new Challenges/Constraints that
is likely to prevent the Passage of Competition
Law in Nigeria.
3.5.1. Political Will of the National Assembly
 From all indications, it is very clear that the Federal
Executives are sincere about having a competition
law for Nigeria. This is substantiated by the efforts of
the President Alhaji Umar Musa Yar’adua when he
presented a Bill on Competition and Consumer
Protection to the Federal Executive Council in April
2009 for approval ad eventual sending to the National
Assembly for enactment into Law.
 But it is a doubt if the National Assembly can match
the commitment of the Federal Executive Council in
giving the Bill an accelerated passage.
 Details on the new challenges/constraints that is
likely to prevent passage of competition law in
Nigeria are treated in section four of this report.
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Section 3: Progress made by
Nigeria towards
Operationalising Competition
Regimes. Cont.

3.6. Other Laws/Policies of Government in place to Address
Anticompetitive Issues in the Nigeria Markets
Some of these laws/Bills are:
 Nigerian Electricity Regulatory Council (NERC). Act
 Nigerian Communication Commission (NCC) Act
 National Transport Sector Reform Policy (NTSP)
 Central Bank of Nigeria Act
 Securities Exchange Commission (SEC), Act
 National Insurance Commission (NAICOM) Act
 Standard Organisation of Nigeria (SON) Act
 National Electric Regulatory Commission (NERC),
 National Broadcasting Commission Act
 Trade Malpractices Act 1992
 The National Agency for Foods & Drugs Administration and
Control (NAFDAC) Act No. 15 of 1993
 Nigerian Civil Aviation Authority (NCAA) Act No.49 of 1999
 The Weights and Measures Acts 1974
 The Consumer Protection Council Act No.66 of 1992
 The Railway Reform Bill
 The Ports and Harbour Reform Bill
 The National Transport Commission Bill
 The Road Sector Reform Bill
 The Postal Bill
 The Inland Waterways Authority Bill.
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SECTION 4. Political-economy
constraints in implementing
competition regimes in Nigeria
- Countries with no
competition laws

An Economy in Transition
 Govt dominated to private sector driven-liberalisation, privatisation,
deregulation
•
Wither competition?
 Admired but not wooed
 a question of political will?
 Lack of coordination/multiple but sporadic efforts –BPE, FMJ, FMC&I,
•
Business actors and vested interests
 Informal businesses
 Major sectors- telecom, banking and financial services, aviation,
cement, sugar, etc
 Labour movement
 General public/consumers
 ‘Press-ing’ the matter- the role of the mass media.
•
The Prospects- making competition policy/law work in
Nigeria
 The policy considerations and development dimension
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The level of income distribution and incidence of poverty in the economy
The prevalence of concentration in core sectors
The increasing pressure of multilateral, bilateral and regional trade
agreement on domestic economies is another consideration
The need to achieve economics of scale and optimum performance in
some sectors of the economy
Linkage with other policies- NEITI, PPA (Due process), etc
Creating market opportunities for the SMEs both locally and externally
The policy could be a tool to deepen democratic values
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SECTION 5. Interface between
sector regulation and
competition in select sectors
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Absence of a a competition law/authority.
Strange bed fellows? Competition law can and, in fact, does co-exist
with sector regulation provided the framework is clearly defined.
Excerpts Federal Competition and Consumer Protection Bill
 Consultation
 Co-option
 Supreme competition regulatory power vested in the
Competition Commission.
Existence of sector specific regulators having competition
enforcement powers in their sectors.
 The Securities Regulation- Investment and Securities Act,
2007.Ss 121 and 128. SEC can even order the breaking up
of an existing firm on grounds of competition.
 The Nigerian Communication Commission-NCC. Elaborate
provisions and Rules on competition. It covers such issues
like: Licensing, Interconnection, Assignment of Frequency
and other Scarce Resources, Prevention Anti-Competitive
Practices and Ownership. Exclusive jurisdiction? S 90,
NCC Act.
 The Nigerian Energy Regulatory Commission- NERC.
Reform aimed at promoting competition. Elaborate
provisions on competition. No definition of relationship with
the proposed Competition Commission.
30
SECTION 6. Investigation of
existing competition abuses
and distortions at all levels
 Bid rigging in government contracts,
especially in the oil and gas sector.
 The cartels- cement, sugar, fertilizer,
downstream oil and gas.
 Interconnectivity disputes in the telecom
sector.
 Allegations of price fixing in the
telecoms sectors
 Manufacturers’ Association of Nigeria
and Gaslink dispute
 Interest rate ‘regulation’ in banks
 The effect of importation/dumping on
competition.
 Trade associations.
31
SECTION 7: Identification of crosssectional (business, consumers and
government) perceptions regarding
competition concerns in Nigeria.
 This section of the CRR is to get an idea of
perceptions regarding the state of the competition
regime in the Nigeria and to identify areas requiring
immediate attention.
 Assessment of perception of three groups of
stakeholders (Business, Government / regulatory
authority and civil society/consumers) on competition
policy and law issues in Nigeria is currently being
carried-out.
 A total number of 90 completed questionnaires have
been fully analysed and report of the analysis is
hereby presented in this preliminary analysis report.
ANALYSIS REPORT
 There are 30 questions in the questionnaire and
analysed under the following categories:
 Awareness issues
 Perception on prevalence of anticompetitive practices
 Perception on level of competition
32
 Perception on enforcement
 Perception on role of media
Category of Respondents
Code
Frequency
Business
BUS
31
Civil Society / Consumer
CON
29
Government / Regulatory Agencies
GOV
30
Total
90
1. AWARENESS ISSUES
Question 11 - Level of awareness of the existence of
Competition Laws and Agencies
Responses
Code
Freq
%
Yes
1
23
26
No
2
28
31
Don’t Know
3
39
43
90
100
Total
Twenty-six percent (26%) of the respondents answer YES that
there are rules, regulations or laws to check anti-competitive
practices in Nigeria. 31% answer NO while 43% DON’T
KNOW.
33
Question 12 - Level of awareness of the existence of
Competition Laws and Agencies
Responses on Known Competition
Regulations or Laws
Cod
e
Frequency
Central Bank of Nigeria Act
%
4
15
15
58
National Electricity Regulatory
Commission (NERC) Act
2
8
Nigeria Stock Exchange (NSE) Act
1
4
Petroleum Products Pricing Regulatory
(PPPRA) Agency Act
3
12
National Broadcasting Commission Act
1
4
Nigeria Communication Commission
(NCC) Act
Total
26
Question 16 - Level of awareness of the existence of Consumer
Laws and Agencies
Responses
Code
Freq
%
Yes
1
70
78
No
2
4
4
Don’t Know
3
16
18
90
100
Total
10
0
34
Question 17 - Level of awareness of the existence of Consumer
Protection Laws and Agencies
Responses on Known Consumer
Protection Regulations or Laws
Cod
e
Frequency
%
Consumer Protection Council (CPC) Act
22
23
Standard Organisation of Nigeria (SON)
Act
13
14
National Agency for Foods and Drugs
Administration & Control (NAFDAC)
Act
47
49
National Broadcasting Commission Act
2
2
Nigeria Communication Commission
(NCC) Act
8
8
National Electricity Regulatory
Commission Act (NERC)
3
3
95
10
0
Total
Question 24 - Level of Awareness of Competition issues in
Nigeria
Responses
Code
Freq
%
Yes
1
18
20
No
2
72
80
90
100
Total
35
2. PREVALENCE OF ANTI-COMPETITIVE PRACTICES
Question 7 - Perception on the extent to which anticompetitive
practices are encountered in the country by Group
Responses
Group
Total
Very
Quite
Frequent Frequen
ly
tly
1
Business
Government/Regulator
y Agencies
Consumers/Civil
Society
Total
2
31
17
(39%)
10
(29%)
30
15
(34%)
Infrequ
ently
Not at
all
3
4
4 (36%)
0
(0%)
11
(32%)
4 (36%)
0
(0%)
29
12
(27%)
13
(39%)
1
(100%
3 (28%)
)
90
44
(49%)
34
(38%)
11
(12%)
1
(1%)
36
Question 8 - Most Frequent Anti-Competitive Practices in
Nigeria
Anti-Competitive Acts
Code Frequency
%
Price Fixing
`01
74
27
Price Discrimination
`08
52
19
Tied Selling
`04
37
14
Entry Barrier
`09
29
11
Bid Rigging
`03
25
9
Predatory Pricing
`10
16
6
Anti-competitive M&A
`11
15
6
Exclusive Dealing
`05
10
4
Market Sharing
`02
6
2
Resale Price Maintenance
`07
4
1
Concerted Refusal to Deal
`06
2
1
270
10
0
Total
37
3. PERCEPTION ON LEVEL OF COMPETITION
3.1. ASSESSMENT ON LEVEL OF COMPETITION
Question 5 - How Respondents
perceived the level of
competition to be in the Nigeria Markets
Responses
Code
Freq
%
High
1
54
60
Moderate
2
29
32
Low
3
7
8
Nil
4
0
0
90
100
Total
Question 6 - How Respondents perceived that the level of
competition in Nigeria has an impact on the daily lives of
consumers
Responses
Code
Freq
%
High
1
48
54
Moderate
2
39
43
Not at all
3
3
3
90
100
Total
38
3.2. COMPETITION ASSESSMENT IN SELECT SECTORS
Question 10a - Assessment of Competition in TELECOM Sector in
Nigeria
Level of Competition
Code
Frequency
%
High
52
58
Moderate
35
39
Low
3
3
Nil
0
0
Total
90 100
Question 10b - Assessment of Competition in POWER Sector in
Nigeria
Level of Competition
Code
Frequency
%
High
1
0
0
Moderate
2
3
3
Low
3
19
21
Nil
4
68
76
90
100
Total
39
Question 10c - Assessment of Competition in RETAIL (Consumer
Goods) Sector in Nigeria
Level of Competition
Code
Frequency
%
High
1
46
51
Moderate
2
38
42
Low
3
6
7
Nil
4
0
0
90
100
Total
Question 10d - Assessment of Competition in COMMUTER
TRANSPORT (Bus, Taxi) (Consumer Goods) Sector in Nigeria
Level of Competition
Code
Frequency
%
High
1
62
69
Moderate
2
24
27
Low
3
4
4
Nil
4
0
0
90
100
Total
40
4. PERCEPTION ON ENFORCEMENT
Question 14 - Respondents’ opinion on the level of competition
enforcement in Nigeria - Is there any action taken if competition
rules are violated
Response
Code
Freq
%
Yes, Always
1
6
7
Yes, Sometimes
2
26
29
No
3
21
23
Don’t Know
4
37
41
10
Total
90
0
Question 15 - Respondents’ opinion on the level of competition
enforcement in Nigeria - Why `NO' action is taken if competition
rules are violated
Response
Cod
e
Frequency
%
Law is not enforced
1
6
29
Agency not strong enough
2
2
10
Corruption
3
5
23
Strong Lobbies
4
8
38
21
10
0
Total
41
Question 9 - Perception on existence of sectors under
natural monopolies.
Sector
Code
Frequenc
y
%
Cement
3
2
Flour
2
1
Health
1
1
Oil & Gas
56
30
Postal (NIPOST)
10
5
Power & Energy
(Electricity)
86
46
Solid Minerals (Steel)
8
4
Sugar
3
2
Telecommunication
1
1
18
10
188
100
Utilities
Total
42
5. ROLES OF MEDIA
Question 28 - How often are competition issues or violations
reported in the media?
Response
Code
Frequency
%
Very Often
1
22
24
Sometimes
2
49
55
Rarely
3
18
20
Not at all
4
1
1
90
100
Total
Question 30 - Perception on whether Journalist understand
competition issues well
Response
Cod
e
Frequency
%
Yes
1
30
33
To a certain extent
2
53
59
No, not at all
3
7
8
90
10
0
Total
43
Section 8. Assessment of the
implication of natural
monopolies on competition
“The new conventional wisdom is that network utilities should be
unbundled, with the potentially competitive network services under
separate ownership from the natural monopoly network, so that the
network owner has no incentive to favour its own service provider”
(David Newbery: The Relationship between Regulation and
Competition Policy for Network Industries,2006)





Nigerian Telecoms Sector- dismantling the natural elements of the
monopoly.
 Common network becoming less important for the major
operators
The Electricity Supply Industry- rescuing the reform from the powers
of darkness.
 Laudable reform initiative, slow progress.
 Unbundling the different segments of the ESI- generation,
transmission and distribution- achieved in principle
 Opportunities for private sector investment- IPPs, etc.
The Public Water Supply Industry- running ‘natural monopoly’
 Still a govt monopoly
 Access to public water supply still very low
 Efforts geared towards improving public water supply
The industrial gas supply market- policy in the pipeline
 The new Nigerian Gas Policy- emphasis on local utilisation
 Direct supply to end users still largely unexplored
 A pilot scheme (Gaslink Nig Ltd)- Manufactrers’ Association
of Nigeria (MAN) challenged bilateral price review by the
supply company- resolved by the National Assembly.
The Nigerian Railways Corporation- getting the coaches back to 44
track- quo vadis?
 Concessioning as an option
Section 9. Indepth Analysis of
Competition in Agriculture
Sector

This section examined the status of competition in the agricultural
sector in Nigeria. The study reveals a serious case of resource
misallocation that could only result in lowering the
competitiveness of the Nigerian agricultural sector. Most of the
states that have comparative advantage in particular are not among
the highest cultivators of such crops in Nigeria.

Major Characteristics:




Prevalence of small holder farmers mostly located in the rural areas, with
attendant lack of access to finance and infrastructure.
Concentration in market for inputs like fertilizer, in fact, outright
cartelisation.
Import competition in some sectors like rice, sugar with ongoing govt
policies on import substitution.
Cartelisation in product retail marketing- farmers get peanuts from middle
men at the farm gate

It was found that the states with the highest yield of particular
crops are not those that allocate the largest amount of land area to
the crop; implying that higher yields does not necessarily imply
larger land allocation. Thus, indicating that Nigeria is not yet fully
exploiting its comparative advantage in the production of most
crops. If national resources were to be spent more judiciously,
states with highest yields in particular crops should allocate more
resources to the production of such crops. This would improve
competitiveness in the agricultural sector.

The study also shows that women participation in farming is still
relatively low in the south western, north east and north western
parts of Nigeria. Women participation in farming is more in the
states in the south east, south south and north central regions.
45
Generally the structure of the farming population is such that there
are more males than females in most states of Nigeria.
Section 9. Indepth Analysis of
Competition in Agriculture
Sector Cont.




A major question examined in this paper is whether or not
agricultural and trade policies have favored increased
competition in the agricultural sector in Nigeria.
Investigations revealed that agricultural policies from the
1960s to the late 1990s focused on ensuring selfsufficiency and the improvement of the level of technical
and economic efficiency in food production, but laid less
emphasis on improvement in the sector’s competitiveness.
This lack of emphasis on competition in the sector may
have lead to limited impact of policy and lack of
sustainability which was found to be the major weakness of
agricultural sector policy in the four decades in reference.
The latest effort by the Nigerian government at formulating
an effective agricultural policy was in May 2008. The
policy was articulated in what is called the “National Food
Security Programme”.
One of the major objectives of policy is to achieve
substantial import substitution through improved
competitiveness along the agricultural value chain.
The study also reviewed Nigeria’s macroeconomic policies
as it affects agricultural sector competition. In the past,
disharmony between macro-economic policies and the
agricultural policy have resulted in a non-conducive
environment for agricultural policy to thrive. In addition, 46
inconsistency and instability in macro-economic policies
did not engender confidence in the economy and tended to
Section 9. Indepth Analysis of
Competition in Agriculture
Sector



Thus over the past 2 decades, inconsistency in shifting
between open and protectionist trade policies have
characterized Nigerian agricultural policy. Such changes
hinder the ability of stake holders to develop long-term
strategies. While protectionist trade policy has been viewed
as the only option for developing the agric sector, there has
been a lack of effective domestic agricultural policy
strategy to take advantage of the protection and enhance
the domestic agricultural sector’s efficiency.
This study also utilized data from both secondary and
primary sources to do an analysis of the state of
competition in the rice and cassava subsectors. Information
was gathered through the personal interviews with some
major agricultural input suppliers and the personal
administration of questionnaires to 70 farmers/agricultural
inputs suppliers.
The results of the investigation showed that the nature of
competition in the rice and cassava subsector do not differ
much. Generally the value chains are characterized by low
levels of competition. Major attributes of competition in
the two sectors are: the prevalence of many small sizes
producers, few input supply firms with limited reach to
farmers, low resource access and utilization, low
productivity, high prices and limited access to modern 47
inputs. The value chains are also characterized with
moderate level of anti-competitive practices such as price
THANK YOU
Consumers Empowerment Organisation of Nigeria
(CEON)
35, Abeokuta Road,
Ijebu-Ode,
Ogun State,
Nigeria.
Email: [email protected]
[email protected]
[email protected]
Tel Mob: +234-7030-330-199
+234-8077-576-604
+234-7027-183-810
Website: www.ceon-camon.org
48