Why Nigeria is Ripe for a Competition Law

To improve Nigeria’s Ease of Doing Business and hence economic competitiveness, a number of policy reforms have been initiated and are now being implemented in sectors of the economy such as; banking, insurance, capital market, trade & investment, foreign exchange, services, telecommunications, manufacturing, building & construction, power, and oil & gas.  

As the government increasingly divests its interests in public assets and deregulates the entry and exit of private sector players in critical sectors of the economy, it becomes more imperative for a legal framework to be put in place; regulating activities of large corporations and big investor groups capable of using their vantage positions to crowd out small and medium size entrepreneurs; thereby establishing monopolies to the disadvantage of consumers and the utmost detriment of the overall economy.

Nigeria has seen the privatization and unbundling of large monopolistic corporations like the defunct Nigerian Telecommunications Limited (NITEL), National Electric Power Authority (NEPA), Nigeria Airways Limited, National Bank etc. There are ongoing implementations of deregulation policies in the downstream petroleum sector, foreign exchange market, foreign participation in business (FDI & FPI), while the government is also encouraging the public-private-partnership (“PPP”) model of attracting private sector capital into investing in the economy.

Legal Framework – Competition Regulation Still A Sector-Based Issue

Whilst the government has been pro-actively serious about building the various legal regimes necessary for attracting private sector participation in the Nigerian economy, it has however been slow in establishing a special body under a distinct legal regime for regulating fair competition, among all the players that come into the various segments of the market.

Unlike in other advanced and some developing jurisdictions where a Competition Commission exists for administering a distinct Anti-Trust Law for competition issues arising in any segment of the economy, what operates in Nigeria currently is a sector-based approach to competition whereby the laws regulating certain industries contain provisions regulating competition as far as it relates to the specific industries. Specifically, the Investments and Securities Act 2007; the Nigerian Communications Act 2003; the Electric Power Sector Reform Act 2005 among other laws, contain provisions dealing with competition as it relates to matters within the purview of such laws.

There are also legislation which facilitate entry, exit and operations of foreign investors as well as protect private foreign investments (as well as domestic investors) in Nigeria. These include: Public Enterprises (Privatization and Commercialization) Act; Nigerian Investment Promotion Commission Act; Foreign Exchange (Monitoring and Miscellaneous Provisions) Act; and, the Infrastructure Concession Regulatory Commission Act.