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Capacity Building on Competition Policy in Select Countries of Eastern and Southern Africa

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Strengthening Constituencies for Effective Competition Regimes in Select West African Countries (CUTS 7Up4 Project) INTERIM PROJECT REVIEW MEETING – PowerPoint PPT presentation

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Title: Capacity Building on Competition Policy in Select Countries of Eastern and Southern Africa


1
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)
2
Outline of the Presentation
  • Section 1 Characteristics of the Macro-Economy
  • 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.
  • Section 8 Assessment of the implication of
    natural monopolies on competition.
  • Section 9 In-dept assessment of competition in
    Agriculture Sector.

3
Characteristics of the Macro- Economy
  • 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 census)
  • Official Language English

4
I. Geographical Location, Population and Other
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 Atlantic Ocean.
  • Nigeria has two main topical vegetation zones-
    the rain forest zone and the savannah zone. These
    two reflects the amount and spatial distribution
    of rainfall in the country.

5
1. Geographical Location, Population and Other
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 other traits. For
    example, many Nigerians eat eba, pounded yam,
    'amala'and even usi (starch) and akpu that do not
    traditionally belong to their cultures. They
    enjoy the Efik 'Edikang-lkong', the Hausa and
    Fulani tuwo, the Urhobo ukodo and the lgbo pepper
    soup.

6
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 mineral
    deposits found in different parts of the country
    formed the major foreign exchange earner and
    driver of the GDP of the country .

7
Profile
8
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 YarAdua.
  • 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.

9
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 re-alignment 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
  • (iii) laying the basis for a sustainable growth
  • (iv) lessening the dominance of unproductive
    investments in the public sector and
  • (v) improve the sectors efficiency level and
    intensify the growth potentials of the private
  • sector.

10
2.2. Agriculture Development Policy
  • Nigerias 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
  • 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 1993)
  • National Agricultural Land Development Authority
    (1991 to 1999)
  • Presidential Initiatives on Cocoa, Cassava, Rice,
    Livestock, Fisheries and Vegetables (1999 to
    2007)
  • The National Food Security Programme (2008-date)

11
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 Nigerias
    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 countrys 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
  • establishment of appropriate institutions and
    creation of administrative organs to facilitate
    the integrated development and realization of the
    countrys agricultural potentials.
  • protection and improvement of agricultural land
    resources and preservation of the environment for
    sustainable agricultural production

12
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
  • Some estimates put the sector's contribution to
    GDP at 41.

13
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.

14
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 nations industrial
    development strategy.
  • There is an ongoing effort to harmonise and merge
    the nations industrial and trade policies
    following the merging of the two Ministries.

15
2.4 Trade Policy
  • 2.4.1 Nigerias 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 promoting a
    diversified export base , is the main thrust of
    trade policy.
  • Creation of conducive environment to increase
    capital inflows, and the transfer and adoption of
    appropriate technologies are also being sought
    for by trade policy.

16
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
  • reduction of tariff rates, as part of Nigeria's
    commitments under the WTO and loan agreements
    with the IMF
  • the harmonization of Nigeria's tariff schedule
    with the ECOWAS common external tariff (CET)

17
2.4 Trade Policy Cont
  • 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 Commerce

18
2.5 Privatisation Strategy
  • 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
    selected investment advisors to implement its
    privatization programme under the supervision of
    BPE.

19
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.
  • Nigerias investment regime offers a plethora of
    incentives, including tax holidays, reduced
    taxes, capital allowances, capitalization of
    expenditure, accelerated depreciation, import
    duty rebates, investment tax credits,
    repatriation of profits, and transferability of
    funds are the measures put in place by the
    Nigerian Government to in a bid to boost
    investment.

20
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.

21
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.

22
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.
  • 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 to see are several legal enactments
    establishing certain institutions charged with
    the responsibilities of determining or regulating
    specific areas of consumable goods and services.

23
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 because the
  • laws are yet to take care of some vital aspects
    of consumer
  • Protection.

24
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

25
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.

26
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 Yaradua 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.

27
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 Yaradua 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.

28
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

29
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, FMCI,
  • 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
  • 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

30
SECTION 5. Interface between sector regulation
and competition in select sectors
  • 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.

31
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.

32
SECTION 7 Identification of cross-sectional
(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
  • Perception on enforcement
  • Perception on role of media
  • Other issues

33
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 Question 11 - Level of awareness of the existence of Competition Laws and Agencies Question 11 - Level of awareness of the existence of Competition Laws and Agencies Question 11 - Level of awareness of the existence of Competition Laws and Agencies
Responses Code Freq
Yes 1 23 26
No 2 28 31
Dont Know 3 39 43
Total 90 100
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 DONT KNOW.
34
Question 12 - Level of awareness of the existence of Competition Laws and Agencies Question 12 - Level of awareness of the existence of Competition Laws and Agencies Question 12 - Level of awareness of the existence of Competition Laws and Agencies Question 12 - Level of awareness of the existence of Competition Laws and Agencies
Responses on Known Competition Regulations or Laws Code Frequency
Central Bank of Nigeria Act 4 15
Nigeria Communication Commission (NCC) Act 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
Total 26 100
Question 16 - Level of awareness of the existence of Consumer Laws and Agencies Question 16 - Level of awareness of the existence of Consumer Laws and Agencies Question 16 - Level of awareness of the existence of Consumer Laws and Agencies Question 16 - Level of awareness of the existence of Consumer Laws and Agencies
Responses Code Freq
Yes 1 70 78
No 2 4 4
Dont Know 3 16 18
Total 90 100
35
Question 17 - Level of awareness of the existence of Consumer Protection Laws and Agencies Question 17 - Level of awareness of the existence of Consumer Protection Laws and Agencies Question 17 - Level of awareness of the existence of Consumer Protection Laws and Agencies Question 17 - Level of awareness of the existence of Consumer Protection Laws and Agencies
Responses on Known Consumer Protection Regulations or Laws Code 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
Total 95 100
Question 24 - Level of Awareness of Competition issues in Nigeria Question 24 - Level of Awareness of Competition issues in Nigeria Question 24 - Level of Awareness of Competition issues in Nigeria Question 24 - Level of Awareness of Competition issues in Nigeria
Responses Code Freq
Yes 1 18 20
No 2 72 80
Total 90 100
36
2. PREVALENCE OF ANTI-COMPETITIVE PRACTICES
Question 7 - Perception on the extent to which anticompetitive practices are encountered in the country by Group Question 7 - Perception on the extent to which anticompetitive practices are encountered in the country by Group Question 7 - Perception on the extent to which anticompetitive practices are encountered in the country by Group Question 7 - Perception on the extent to which anticompetitive practices are encountered in the country by Group Question 7 - Perception on the extent to which anticompetitive practices are encountered in the country by Group Question 7 - Perception on the extent to which anticompetitive practices are encountered in the country by Group
Responses Responses Responses Responses Responses
Group Total Very Frequently Quite Frequently Infrequently Not at all
1 2 3 4
Business 31 17 (39) 10 (29) 4 (36) 0 (0)
Government/Regulatory Agencies 30 15 (34) 11 (32) 4 (36) 0 (0)
Consumers/Civil Society 29 12 (27) 13 (39) 3 (28) 1 (100)
Total 90 44 (49) 34 (38) 11 (12) 1 (1)

37
Question 8 - Most Frequent Anti-Competitive Practices in Nigeria Question 8 - Most Frequent Anti-Competitive Practices in Nigeria Question 8 - Most Frequent Anti-Competitive Practices in Nigeria 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 MA 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
Total 270 100
38
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 Question 5 - How Respondents perceived the level of competition to be in the Nigeria Markets Question 5 - How Respondents perceived the level of competition to be in the Nigeria Markets Question 5 - How Respondents perceived the level of competition to be in the Nigeria Markets 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
Total 90 100
Question 6 - How Respondents perceived that the level of competition in Nigeria has an impact on the daily lives of consumers Question 6 - How Respondents perceived that the level of competition in Nigeria has an impact on the daily lives of consumers Question 6 - How Respondents perceived that the level of competition in Nigeria has an impact on the daily lives of consumers Question 6 - How Respondents perceived that the level of competition in Nigeria has an impact on the daily lives of consumers 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
Total 90 100
39
3.2. COMPETITION ASSESSMENT IN SELECT SECTORS
Question 10a - Assessment of Competition in TELECOM Sector in Nigeria Question 10a - Assessment of Competition in TELECOM Sector in Nigeria Question 10a - Assessment of Competition in TELECOM Sector in Nigeria 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 Question 10b - Assessment of Competition in POWER Sector in Nigeria Question 10b - Assessment of Competition in POWER Sector in Nigeria 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
Total 90 100
40
Question 10c - Assessment of Competition in RETAIL (Consumer Goods) Sector in Nigeria Question 10c - Assessment of Competition in RETAIL (Consumer Goods) Sector in Nigeria Question 10c - Assessment of Competition in RETAIL (Consumer Goods) Sector in Nigeria 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
Total 90 100
Question 10d - Assessment of Competition in COMMUTER TRANSPORT (Bus, Taxi) (Consumer Goods) Sector in Nigeria Question 10d - Assessment of Competition in COMMUTER TRANSPORT (Bus, Taxi) (Consumer Goods) Sector in Nigeria Question 10d - Assessment of Competition in COMMUTER TRANSPORT (Bus, Taxi) (Consumer Goods) Sector in Nigeria 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
Total 90 100
41
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 Question 14 - Respondents opinion on the level of competition enforcement in Nigeria - Is there any action taken if competition rules are violated Question 14 - Respondents opinion on the level of competition enforcement in Nigeria - Is there any action taken if competition rules are violated Question 14 - Respondents opinion on the level of competition enforcement in Nigeria - Is there any action taken if competition rules are violated 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
Dont Know 4 37 41
Total 90 100
Question 15 - Respondents opinion on the level of competition enforcement in Nigeria - Why NO' action is taken if competition rules are violated Question 15 - Respondents opinion on the level of competition enforcement in Nigeria - Why NO' action is taken if competition rules are violated Question 15 - Respondents opinion on the level of competition enforcement in Nigeria - Why NO' action is taken if competition rules are violated Question 15 - Respondents opinion on the level of competition enforcement in Nigeria - Why NO' action is taken if competition rules are violated
Response Code Frequency
Law is not enforced 1 6 29
Agency not strong enough 2 2 10
Corruption 3 5 23
Strong Lobbies 4 8 38
Total 21 100
42
Question 9 - Perception on existence of sectors under natural monopolies. Question 9 - Perception on existence of sectors under natural monopolies. Question 9 - Perception on existence of sectors under natural monopolies. Question 9 - Perception on existence of sectors under natural monopolies.

Sector Code Frequency
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
Utilities 18 10
Total 188 100
43
5. ROLES OF MEDIA
Question 28 - How often are competition issues or violations reported in the media? Question 28 - How often are competition issues or violations reported in the media? Question 28 - How often are competition issues or violations reported in the 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
Total 90 100
Question 30 - Perception on whether Journalist understand competition issues well Question 30 - Perception on whether Journalist understand competition issues well Question 30 - Perception on whether Journalist understand competition issues well Question 30 - Perception on whether Journalist understand competition issues well
Response Code Frequency
Yes 1 30 33
To a certain extent 2 53 59
No, not at all 3 7 8
Total 90 100
44
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 track- quo vadis?
  • Concessioning as an option
  • No competition foreseen in the nearest future
    except competition with other modes of transport.

45
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. Generally the structure of
    the farming population is such that there are
    more males than females in most states of
    Nigeria.
  • The land/farmer ratio across Nigeria is very low
    and ranges between 0.5 and 2.5 hectares for most
    states in the nation. Thus most famers operate on
    small holdings and are thus less competitive in
    terms of unit cost of production of agricultural
    products. Average size of land per farmer would
    need to improve if Nigerian agriculture is to be
    more competitive.

46
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
    self-sufficiency and the improvement of the level
    of technical and economic efficiency in food
    production, but laid less emphasis on improvement
    in the sectors 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 Nigerias 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, inconsistency and instability in
    macro-economic policies did not engender
    confidence in the economy and tended to
    discourage medium and long term investments in
    agriculture.

47
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 sectors 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 inputs. The value chains
    are also characterized with moderate level of
    anti-competitive practices such as price
    discrimination, price fixing and retail price
    maintenance.

48
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