Need for the Enforcement of Measures Against Anti-Competition Among Nigerian Businesses – By Dr. Philip IkomiArticles, Columnists, NNP Columnists, Philip Ikomi Wednesday, June 27th, 2012
By Dr. Philip Ikomi | NNP | June 27, 2012 - It is a no brainer. If people who sell goods to the public are allowed to compete freely with one another, the people who buy stand to gain. If the sellers team up and set prices such that no seller is allowed to sell at a different set of prices, then the buying public would always be at the mercy of the sellers. In several countries around the world, the government, knowing that sellers, if left to their own devices would take undue advantage of their positions to sell at skyrocketing prices, has made laws that prohibit sellers from participating in behaviors that will neutralize competition among sellers. In the United States, these laws are subsumed under the rubric of Anti Trust laws. Anti trust laws are laws that deal with anti competitive behaviors and unfair business practices. These laws are to encourage competition in the marketplace while discouraging practices that violate standards of ethical and moral behavior. In European countries, these laws are known as anti-competition laws and are embodied in the Treaty of Rome. The laws are intended to maintain fair competition among businesses. Such laws are against price fixing, where for instance sellers of cement would set the price at say two thousand Naira a bag and sanction all who sell at a different price lower than the fixed price. They are also against geographic market allocation such that in a particular geographic area, only that merchant can operate and so can set the price for the commodity at whatever suits him or her. The laws also prevent mergers of companies that hitherto provided similar services or products to the public while operating separately if such mergers are meant to reduce competition such that the emergent companies would then be monopolies. The law is not against monopoly per se.
In Nigeria, one does not know what laws are in place but it would probably be similar to the European law since the Nigerian body of laws came primarily from the Greco-Roman laws established in these shores at the time of the colonial enslavement of Nigerians by the British. Without knowing if there are any laws against anti-competition or unfair business practices, one can guess that no law is being enforced to prevent anti-competitive practices, unfair or unethical behavior among Nigerian businesses. It is against this back drop that we have to examine the recent protests by the Balogun Market branch of Dealers of Bags and Leatherwear Association of Nigeria against their self-declared “unfair business practices of their Chinese counterparts whom they accused of selling at “very cheap prices” reported in the Punch-on-line of June 19, 2012 by Onozure Dania. Dania reported that “the national Chairman of the association, Mr Azubike Nwachukwu , said Nigerian dealers have been operating at a loss since the Chinese business men started retail selling of the leather products at a very cheap price.” It is really demoralizing for a group of merchants to take to the streets to openly fight for an illegal position. Nigerians are supposed to side with these fellow Nigerians who are crying foul because they are being displaced in the marketplace by fellow merchants selling superior goods at affordable prices but whose only crime is that they are non-Nigerians. If there are any laws against anti-competitive practices in Nigeria, these Nigerian dealers should be rounded up and remanded in police custody until they are released on bail after a court date has been set for them.
They are asking that foreigners who are in Nigeria legally should be prevented from doing business because they are offering cheaper alternative goods to Nigerians. If anything, a government that allows free enterprise in the capitalist system and allows market forces to work welcomes competition among the providers of goods and services. It is to lower prices and by inviting competition that government welcomes diverse players whether in the air or on the ground in the markets. This quest for a truly diverse market place led the government to allow private airlines in the Nigerian sky and multiple phone companies in the country. It appears that the government has not done enough educating the Nigerian on the street about the reason for government action. The ministry of information has its work cut out for it but it seems not to be bothered. They are more interested in traveling abroad collecting estacode or allowances for foreign travel and courting foreign investors than preparing the public to understand what the government is doing to improve the condition of the masses. If the masses were aware that the Balogun Market protesters were actually against their interests the protesters would not have seen the light of day. In fact, they would not have embarked on any such protests since they would have known that it was against the law or at the very least, against common sense.
In the last paragraph, I mentioned that the government opened the sky over Nigeria to private airlines. In the aviation sector, we have a body similar to the Balogun Market branch of the Bags and Leatherwear Association of Nigeria in the Aircraft or Airline Operators Association of Nigeria. You would think that this body is a legitimate trade organization until you realize that it is actually a price fixing body for the private airlines. They fix ticket prices such that individual airlines dare not deviate from the prices that have been jointly agreed to the detriment of the Nigerian public. The government of Nigeria agonizes over ticket prices and allows more airlines to be registered for increased competition among the airlines, but what does the government get? It gets less competition as each newly formed airline joins the so-called Operators and raises ticket prices to the level dictated by the Operators. We find similar associations in virtually all areas of human endeavor requiring competitive pricing in Nigeria. The practice of price fixing is done with Cement, building blocks, food, including yams, rice, gari, transport fares, etc. In fact, with regard to transport fares, I was traveling to Abuja on one of the so-called luxury buses last July.
I was told that the price for the journey had been fixed but as they were taking less than the “association” fixed price, they would only write the fixed price on my ticket while they took the lower price from me! This way if confronted by those who check, they would find that the bus transport company was complying with the association price for the journey. This is very distressing. So, an operator who has reasons to want to charge less for the trip cannot because he would have to pay a price for not towing the line of the association that has designated a price that all operators must charge their passengers. The end result is that Nigerians are taken by their own people. Nigerians have nowhere to turn to reduce the burden of daily living. They endure hardships occasioned by the very people with whom they live and people who cannot meet the challenges of the day, simply fall through the cracks. Because there is no enforcement of anti-competition measures, people live at the mercy of the sellers in the society. That is why during the holiday periods, you name it, Christmas, New Year, Eid El Fitre, Eid El Maulud, Easter, or what have you, prices often hit the roof with the price of every commodity having been fixed by the various associations. The prices of rice, tomato, fish, egusi, maggi, etc are all fixed. This scenario must cease if Nigeria must move forward as a country where the needs of everyone is taken into account, rather than the way it is at the moment where only the rich and the suppliers or sellers are doing well and holding all others to ransom. It is high time the nation’s law enforcement held the feet of all sellers to the fire for them to be truly competitive. If anti-competition laws are not in the Nigerian law books, the legislators must keep busy to institute them because that is the only way the legislators can be seen to be doing some good for the people they represent.
Capt. Philip A. Ikomi, Ph.D.
Former Airline Captain, Former Truck Driver, Retired Professor
Philip A. Ikomi is an Industrial/Organizational Psychologist
Feedback: Email: philikomi@Yahoo.com
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