Competition Policy and Nigerian Commercial Governance

 In Thinking Aloud

Abstract: This paper assesses the importance of competition regulations. It outlines the nature of competition policy; especially regarding the ‘sleights’ of the invisible hand in allowing for monopolistic tendencies by firms. A brief review of the objectives of the Nigerian Federal Competition and Consumer Protection Bill follows, with recommendations on why the Bill, currently waiting for assent by the President, needs a rethink, in terms of practicality, applicability and the institutional capacity of Nigeria to execute its mandates.

  1. Introduction

Markets are ubiquitous. They exist all over the world and have so for several hundred years as points of exchange for value. They represent a platform where the invisible hand can draw and design while humans ‘look on’. Markets involve goods (and services) and those goods come from an antecedent process-production or manufacture by a firm. The firm is an important unit of economic analysis, in the sense that it supplies goods to individuals and the individuals in turn supply it with labour.[1] It is an indispensable part of the economy but one that cannot be allowed to function without the appropriate amount and form of oversight from the state. The theory of state intervention is premised on the notion that there is need to regulate the market by a third party for efficiency and oversight, since, if the market is left unchecked, it will injure or harm consumers. While the considerations regarding the purpose of state intervention in economic activity are well known historically, the reasons for intervention in capitalist arrangements needs some articulation.[2] Dietrich Rueschemeyer and Peter Evans submit that: “There are a number of theoretical arguments as to why state intervention should be necessary for economic transformation in a capitalist context … Insofar as economic transformation involves the institutionalization of market exchange or its extension to land and labor, even the narrowest neoclassical model has space for the state … the market requires a strong set of normative underpinnings in order to function at all. Without effectively institutionalized guarantees of these normative underpinnings, “transaction costs” will be exorbitant and the market will not allocate resources efficiently”.[3] If the market’s invisible hand is not guided by the government’s “visible” hand; externalities will certainly ensue. Coming home, the Nigerian state has its own mandate to provide requisite state support to its economic system. Derived from philosophical foundations, brief foray with military governance and resultant constitutional government, the Nigerian state has the responsibility to optimally manage its economic system. Adejumobi explains this while acknowledging that the responsibility to manage exists as a result of Nigeria’s neo-liberal economic stance. He says that: “The economic system of a state consists of institutions and processes by which a society produces and distributes scarce material resources, and the control of economic resources provides a continuous and important base of power in society (Dye, 1983: 82). The state is central to the economic organization of society. Being the allocative agency, the state makes core economic decisions—the structure of the economy, the constitutive and regulative rules of economic production, the property regime, and the distribution of income and resources”[4] (original emphasis retained). The states is equipped with formidable powers and properties and to some extent-especially in authoritarian regimes-can repress free markets, as Communist governments have unfortunately shown. The trick then, is to keep up an optimal amount of intervention and regulation over the market to ensure it functions effectively and efficiently. The effective and efficient functioning does not have a specific look but has specific characteristics: free entry and exit of firms; goods must be identical; and there are not information asymmetries, inter alia. The foregoing are what would see to the realization of a perfectly competitive and efficient market.

The promotion of efficiency is of paramount importance to any responsible government that intends to optimize the myriad of selfish interests carrying out their business. Nigeria has shown some level of acknowledgement of the need for a law that governs competition in the business and commercial environment but as with many things in the country, the bill seems to be floundering. On the import and purpose of the bill, Nigeria Current News reports that: “The Federal Competition and Consumer Protection Bill 2017 was passed by the National Assembly in December 2017 and has since been sent to the President for accent [sic]. Among other provisions, it establishes the Federal Competition and Consumer Protection Commission and the Competition and Consumer Protection Tribunal. Among others, the Bill seeks to eliminate monopolies at all levels of the Nigerian market, prohibits abuse of dominant market position and penalize restrictive trade and business practices. It provides for the removal or elimination of hazardous goods and services from the market and their replacement with safer and more appropriate alternatives. It also intends to reduce the risks and injuries which may occur from consumption of certain consumer items and services”.[5] Tough words indeed but one wonders whether the Nigerian state has the institutional, bureaucratic and technical capacity to appraise acts of market dominance and power, which can lead to or characterize monopoly. Since the return to civilian rule in 1999, there has been a gradual shift from government ownership of industries (telecommunications and energy) to enhanced private sector intervention. What the reasons for privatization were-and the interest in competition policy-are significant, especially since they are related to the general mismanagement of public enterprises[6] and horrifying aftermath of the IMF’s SAP of the late 1980’s. From a theoretical perspective and with resultant considerations requiring attention, Cook, et al, state that the interest in developing countries regarding competition policy was because: “… the shift towards the privatization of utilities in developing countries in the 1990s raised new concerns about the economic regulation of private utilities into markets that were not fully competitive. Would regulators provide surrogate competition for monopoly utilities and how would competition be developed in these industries?”.[7] The reason for a competition policy is essentially for regulation and supervision. How that is achieved and the level of the intervention required would depend on the level of economic activity and the nature of the market itself.

But why are monopolies “bad” in the first place? What makes them so pernicious that the state has to intervene and have them dismantled in many cases?[8] In simple terms, there is an optimal use of inputs that a firm can engage and this is where the price of a good is as close to the Marginal Cost as possible. Yet it is not always simple to confirm what constitutes a close enough price to the Marginal Cost, especially where there are problems of information regarding the decisions of the firms, the costs of inputs and the detailed characteristics of the market. Prices are meant to serve as adequate signals to participants in the market, so, where the prices are not determined by an optimal process within the firm itself, it will lead to distortions as a problem of asymmetric information. As a rule, the forces of supply and demand should determine prices, or better put a situation of perfect competition ought to exist where the forces work unhindered. But how would a perfectly competitive situation be described? “Competition, by definition, exists when no single economic agent, whether buyer or seller, can control the price in the market. This will occur when each agent’s activities in the market make up only a small part of total market activity; because many other agents are carrying out the same roles. New agents can enter the market at will if they feel there are profits to be made. Price is thus determined by the market as a whole. In theory, each agent must simply accept that price. Ideally, the market would also be large enough to absorb whatever quantity of goods is traded by any single agent at the ruling price. Since, in perfect competition, it is up to the agent to decide the quantity traded, sellers and buyers are all quantity-fixers and price-takers. Each agent chooses to trade that quantity which will maximise his or her profits and which he or she has the resources to handle”[9] (original emphasis retained). From the foregoing passage, we can draw out some characteristics of perfectly competitive markets: i.) There is free entry and exit of firms; ii.) There are numerous firms selling the same products; iii.) There are no informational, infrastructural and transactional constraints and costs to buying and selling. In reality, as is obvious, such situations do not exist and it is the aim of the regulatory environment to create an environment where this gets as close to the ideal as possible.

The outcome of a perfectly competitive market is the realisation of a general equilibrium and not a partial one (that contemplates only a single good), i.e., where: “Efficient allocation of resources consists of technically efficient use of inputs to produce outputs and Pareto efficient allocation of consumption across households”.[10] This leads us to another important point on the function of the market equilibrium to the effect that it: “… is a market clearing allocation guided by prices and firm and household optimization subject to market prices”.[11] Perfect competition is a profound concept in economics, such that the first fundamental theorem of welfare economics takes its cue from the notion. Blaug reminds us of this theorem to be that: “… subject to certain exceptions—such as externalities, public goods, economies of scale, and imperfect information—every competitive equilibrium is Pareto optimal”.[12] But as mentioned before, no market in reality is perfect but the likely occasioned by the neglect of anti-competitive practices is what the state intends to reduce to the lowest levels.

  1. A Brief Analysis of the Nigerian Competition and Consumer Protection Bill

The Bill’s long title is ‘An Act To Repeal The Consumer Protection Act, Cap C25, LFN, 2004; Establish the Federal Competition and Consumer Protection Commission and the Competition and Consumer Protection Tribunal For the Development and Promotion of Fair, Efficient and Competitive Markets in the Nigerian Economy, Facilitate Access by All Citizens To Safe Products, Secure the Protection of Rights For All Consumers In Nigeria and For Other Related Matters’. The Bill’s lengthy title may have something to do with the fact that prior to now there was no law or legal framework for competition or antitrust, in Nigeria. Perhaps the legislators are keen on making up for lost time and policy. In terms of structure, the bill is divided into 16 parts, divided between matters specific to Consumer Protection and Competition law. Relevant for our purposes, the sections on Competition worth mentioning are: Part II which arms the Competition and Consumer Protection Commission with the powers of enforcement for warrants and requests for information from parties or persons that may have contravened stipulations of the law. Part VIII relates to ‘Restrictive Agreements’ that would restrain competition, agreements that are authorized (under certain circumstances) and those that are not, the prohibition of minimum resale price maintenance and the withholding of products by a supplier, inter alia. Part IX relates to ‘Abuse of a Dominant Position’, the criteria for determining the relevant market, and the prohibition of abuse of a dominant position. Part X relates to Monopoly, the determination of a Monopoly situation by the Commission, the powers to call for information, investigate and report on a Monopoly, inter alia. Part XI relates to Price Regulation, the determination of same, the requirement of regulated goods or services to be sold in accordance with authorized prices. Part XII relates to Mergers, how they are defined and the power of the Commission to approve same, to investigate small and large mergers, the power to revoke merger approval, etc. Part XIII grants the Commission supremacy over other government agencies that may have related dealings with a subject entity or matter of competition law, the power to determine by fiat the industries that are subject to competition law and the jurisdiction of the Commission, among other things. For, as Banwo and Ighodalo have identified: The Federal Competition and Consumer Protection Commission (“the Commission”) established in the Bill has superior powers to all other regulatory bodies created under any laws, such as the Securities and Exchange Commission (“SEC”), Nigerian Communications Commission (“NCC”) etc. but subject to the provisions of the Constitution of the Federal Republic of Nigeria; in all matters relating to competition and consumer protection”.[13] Lastly, Part XIV relates to the specific offences against competition that include: Price-fixing, Conspiracy, Bid-rigging, Obstruction of investigation or inquiry, Offence against records, giving of false information and failure to attend or give evidence. This is not to say that the protection of consumers is not tied in some way to Competition Law or policy ipso facto but they are excluded since they go beyond the scope of this paper.[14]

 

The objectives of the Bill, as provided for in s. 1, are to: a) promote and maintain competitive markets in the Nigerian economy; b) promote economic efficiency; c) protect and promote the interests and welfare of consumers by providing consumers with competitive prices and product choices; d) prohibit restrictive business practices which prevent, restricts or distorts competition or constitute an abuse of a dominant position of market power[15] in Nigeria; and contribute to the sustainable development of the Nigerian economy. It has been argued by some lawyers that Nigeria is ripe for a competition law and this expectation is not unreasonable.[16] However, the level of economic activity, sophistication of the market and capacity of the bureaucracy must be considered, alongside this expectation. This is because while it is easy to replicate the statutes of developed nations, the replication will not take into account their peculiar social, economic and political institutions. This is not to say that Nigeria is not ready for a comprehensive Competition Law (and not to imply that anti-competitive practices do not already occur) but that caution be exercised along with initiatives to broaden and regulate the market. The point being made is that: “… [M]arkets play a very important role … but markets are not enough if we are to link development to competition. Enterprise and innovation, the stimuli to self-transformation, depend on more than market institutions and the organization and regulation of these wider institutional frames is an essential element in competition policy”.[17] The road to a market economy-the goal of any competition policy-should be paved with more than good intentions, it should be paved with the proper approach and understanding of the institutional foundations of a market economy and what would ensure that the economy and the state are harmonized in the best kind of relationship.

 

There is danger in not properly appraising the economic and commercial structure of the markets as they exist, as there are foundational aspects of an economy that lend themselves towards the creation of a more perfect market, such as a science and technology base. This has to do with the interplay of science and technology as a driver of innovation and improved production processes, which include R&D. The Nigerian Ministry of Science and Technology has presented a roadmap for the creation of National Innovation Systems in the past but little has been done about integrating them with the commercial environment. This is much less the fault of the Ministry of Science and Technology and much more a national failure to see to the creation of a market economy from the kindling left by previous military governments. The point being made for proper assessment is not an unimportant one, for it is easy to get the policy stance wrong and where the starting foot is incorrectly placed it can create negative future feedbacks. Metcalf and Ramalogan take the position that: “De Leon (2000) makes clear there is little prospect of translating competition law and practice from advanced Western economies to the developing world. Local institutions matter and competition policy may clash irreconcilably with the established business culture and be undermined as a consequence. Moreover, a dynamic view of competition and its relation to innovation results in a very different take on the competition problem”.[18] The fact remains that the drivers of a productive economy, one where firms are able to acquire the right science, technology and resources to improve their production processes is very lacking. The length of time it takes to acquire a patent over an industrial process in Nigeria is one of the longest in the world.

 

  1. Conclusion and Recommendations

“There is evidence that developing country markets do exhibit the same kind of ecology of entry and exit as developed economies, though the process is far more complex than simply good firms entering and knocking out bad ones. In fact the process is not well understood (Tybout, 1998). The main objective of policy should thus be to promote competition as a means of assisting in the creation of markets responsive to consumer signals, and ensuring the efficient allocation of resources in the economy and efficient production with incentives for innovation. This is expected to lead to the best possible choice of quality, the lowest prices and adequate supplies to consumers, leading to increased consumer welfare”.[19]

 

The need for a Competition Policy is an urgent one but what is more urgent is the requirement on the part of the government to enhance competition. Perfect markets do not exist anywhere but the closer the government is able to ensure that the environment is created, the better it will augur for the business environment. One way that the environment can be improved can draw from the ‘Ease of Doing Business’ Indicators. This comes from the idea that the characteristics of a perfectly competitive market relate to the indicators themselves. For example, one of the indicators concerns the cost of setting up a business, which is essentially the ability of a firm to enter the market. Sengupta and Dube, writing on competition policy for developing nations establish that: “… [T]here are two components of a comprehensive competition policy. The first component refers to a set of government measures that enhance competition or competitive outcomes in the markets, such as relaxed industrial policies, liberalized trade policy, conducive entry and exit conditions, reduced controls in the economy and greater reliance on market forces. The other component of competition policy is a competition law and its effective implementation to prevent anti-competitive behaviour by businesses” (emphasis mine).[20]

 

Again, the stimulation of scientific innovation in firms through a National Innovation policy is crucial to creating the environment for competition. This is because, firms can escape the process of producing a particular quality of products at a particular rate, where they are able to innovate through Research and Development to improve their production processes; better than their competitors. But what kind of environment exists for innovation in Nigeria? Not much, as one of the greatest obstacles to doing business is the availability and quality of infrastructure, namely electricity.[21] Metcalfe and Ramlogan, in this regard, discussing the nature of innovation as it relates to competition, state that: “Innovation is a correlate of increasing returns and the latter undermines any resort to the precepts of perfect competition as a guide for policy … We too shall argue that the best competition policy is a pro-innovation policy and that this takes the debate over competition policy into a far broader domain, one consistent with a process view of competition and the instituted context of competition. The general objective is to support development and so raise average standards of living and reduce the inequality of its distribution. Innovation and the growth of practical knowledge is the necessary condition for this transformation to occur”.[22]

 

Innovation is important but as preceding paragraphs have shown, it is not the only key. The government must appraise the necessary conditions for a competition policy to have the kind of effect it ought to have. Again, Sengupta and Dube, having investigated-from a policy angle-the various lessons learned by countries around the world in their adoption and administration of a competition policy, advised that: “[A]lthough steps have been taken towards promotion of competition through the adoption of market reforms, there is need for a more holistic approach (based on a long-term approach, policy cohesion, evolution of effective institutions, engagement of multiple stakeholders, among others) to ensure that a proper competition framework is evolved to attract investment for development”.[23] In that regard, they itemized several areas that a government should consider, as what they had drawn out from the experiences of both developing and developed countries. The focus areas are: Reforming policies that deter free entry and exist of players (competition) in the market; Political will for promoting competition as a means to attract potential investors; Developing effective institutions; Stakeholder sensitization for supporting the reforms agenda; Competition reforms integrated in investment climate improvement programmes; Coordination among agencies having convergent responsibilities.[24]

 

The goal of competition policy is not a simple one. It involves understanding the complex processes around markets and states, as well. The principal objectives are probably not attainable in real life (since no perfect market exists) but the idea is that the journey is the goal itself and takes an economy closer and closer to perfection. This means that regulation and competition policy are the dual notions that the government must consider when addressing economic reform in general. Cernat and Holmes take the view that: “Competition law and policy are intended to regulate anti-competitive behaviour by firms, whereas deregulation is aimed at minimizing market-distorting government intervention. Regulation is meant to control the behaviour of firms in sectors where market failures are widespread and where we cannot rely on competition alone. Regulation can pursue different types of objectives. Economic regulation, social regulation, environmental, health and safety regulation are among the main categories of government intervention that may have a bearing on the market and may interfere with competition objectives”.[25] Policy recommendations must consider the level of economic development and the relevant model the government-both state and federal-wishes to adopt in terms of a structured approach. However, Singh and Dhumale (citing Laffont) take the view that a competition policy may not even be necessary if the developing country has not reached a stage requiring one. They state that: “Competition is an unambiguously good thing in the first-best world of economists. That world assumes large numbers of participants in all markets, no public goods, no externalities, no information asymmetries, no natural monopolies, complete markets, fully rational economic agents, a benevolent court system to enforce contracts, and a benevolent government providing lump sum transfers to achieve any desirable redistribution. Because developing countries are so far from this ideal world, it is not always the case that competition should be encouraged in these countries[26] (original emphasis retained).

 

In summary, while this paper does not suggest any specific policy recommendation in terms of competition policy, it does recommend a better appraisal of the level of economic activity and institutional capacity of the government to understand at a very intimate level, the nature of the economic structures. It should involve the National Bureau of Statistics, the Ministry of Finance, the Ministry of Budget and National Planning, Ministry of Trade and Industry and the organized Private sector and representatives of the informal sector. The Ministries and the NBS have to set targets as regards the nature of the policy to be adopted and investigate what kind of market and/or economic development stage the country has achieved. The Executive also has a foot in the door that can be involved, namely the Presidential Enabling Business Council (PEBC) that can serve as the ‘private sector facing’ arm of the government that can acquire information and data from the private sector on their perceptions of the market (the kinds of information asymmetries, barriers to entry, etc). The judiciary must also play a role in terms of providing the requisite training in economic analysis for judges that would handle appeal cases from the Competition Tribunal. Competition cases would likely involve complex expert testimony from Economists trained in Econometric analysis, especially regarding cases of market dominance and power. This does not even mention the kind of training the Competition and Consumer Protection Commission requires-a capacity building that would follow the findings of the Ministries, Executive bodies and the Judiciary. The need to do the foregoing is imperative, as this paper does not suggest that a competition policy is unnecessary but rather that its implementation should be preceded by adequate evidence based appraisal that is handled by the government, having taken into consideration the views of the private sector. A competition policy is necessary for Nigeria but constructive thought must be put into how it will be applied fairly and efficiently. This is because though the relationship between states and markets is inevitable; the success of this relationship and its smooth running depends in a large part on how much depth is involved in setting the guidelines of the relationship. Perfect markets do not exist but a near perfect policy is possible.

 

 

[1] Ronald Coase describes it in appropriate terms: “‘The normal economic system works itself. For its current operation it is under no central control, it needs no central survey. Over the whole range of human activity and human need, supply is adjusted to demand, and production to consumption, by a process that is automatic, elastic and responsive.’ An economist thinks of the economic system as being co-ordinated by the price mechanism and society becomes not an organization but an organism”.” See Coase, R. (1937). The Nature of the Firm, at p. 2. Economica, New Series, Vol. 4, No. 16, pp. 386-405. Available at: http://www.colorado.edu/ibs/es/alston/econ4504/readings/The%20Nature%20of%20the%20Firm%20by%20Coase.pdf. Date accessed-13/06/2016.

[2] The case for intervention in Nigeria and its legal origin and constitutionality are contained in the Constitution of the Federal Republic of Nigeria, 2011 (as amended) in s. 16, which provides that:The State shall, within the context of the ideals and objectives for which provisions are made in this Constitution a. harness the resources of the nation and promote national prosperity and an efficient, a dynamic and self- reliant economy; b. control the national economy in such manner as to secure the maximum welfare, freedom and happiness of every citizen on the basis of social justice and equality of status and opportunity”.

[3] See Rueschemeyer., D and Evans, P. The State and Economic Transformation: Toward an Analysis of the Conditions Underlying Effective Intervention, at p. 44. In Bringing the State Back In by Rueschemeyer, D., Peter Evans, P., and Skocpol, T. (eds.), (1985)., Cambridge University Press, New York and London.

[4] See Adejumobi, S. (2011). Introduction: State, Economy, and Society in a Neo- Liberal Regime, at p. 5. In State, Economy, and Society in Post-Military Nigeria, Adejumobi, S (ed.). Palgrave Macmillan, a division of St. Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010.

[5] See “Group Asks Buhari To Sign Federal Competition, Consumer Protection Bill”, January, 26th, 2018. Available at: https://nigeriancurrent.com/2018/01/17/group-asks-buhari-to-sign-federal-competition-consumer-protection-bill.

[6] See Salako, H. (1999). An Overview of Privatisation in Nigeria and Options for its Efficient Implementation, at p. 17. CBN Economic & Financial Review, Vol. 37, No. 2. Available at: http://www.cbn.gov.ng/out/Publications/communique/efr/RD/1999/efrVol37-2-2.pdf. Date accessed-06/02/2018. Salako explains the normative reasons why Nigeria took to privatization and couched them within arguments for more efficient use of market structures. He says that: “Privatisation, which now occupies the center stage in global economic liberalisation is regarded as an avenue for raising productivity and enhancing overall economic growth. This is achieved through increased involvement of the private sector in productive economic activities through the sale of public enterprises to the private sector, with a view to improving economic efficiency. With privatisation, the role of government in direct productive activities diminishes as the private sector takes over such responsibilities. Under such a setting, government is expected to provide essential infrastructure and an enabling environment for private enterprise to thrive. Privatisation is predicated on the assumption of state inefficiency and “absolute” efficiency of the market”. Cf, : Arowolo, D.E. & Ologunowa, C.S. (2012). “Privatisation in Nigeria: A critical analysis of the virtues and vices”, International Journal of Development and Sustainability, Vol. 1 No. 3, pp. 785-796. Available at: https://isdsnet.com/ijds-v1n3-12.pdf. Date accessed-06/02/2018.

[7] See Cook, P., Fabella, R., and Lee, C. (2007). Competitive Advantage and Competition Policy in Developing Countries, at p. 2. Great Britain by MPG Books Ltd, Bodmin, Cornwall.

[8] There is an emphasis on ‘many cases’, since a natural monopoly is not one of them. Natural monopolies usually exist outside the scope of such interest because they are recognized as being able to efficiently provide a certain good or service and dismantling them may do more harm to the economy than good.

[9] See “The theory of markets: six basic considerations”, the Food and Agriculture Organisation, FAO Corporate Document Repository. Available at:  http://www.fao.org/wairdocs/ilri/x5547e/x5547e17.htm. Date accessed-05/02/2018.

[10] See Starr, R. (2011). General Equilibrium Theory: An Introduction, at p. 6. Cambridge University Press, London and New York.

[11] See Starr, R. General Equilibrium Theory: An Introduction, op. cit., at p. 7. Starr goes on the tie the argument made a bit earlier in this paper to the microeconomic foundations of equilibrium theory and how the selfishly directed behaviour of market participants can lead to pareto efficient outcomes. He explains that: “The First Fundamental Theorem says that selfish, individually focused behavior in a market setting results in globally efficient use of resources. That’s a surprise. The structure that allows this to happen is the market price system. Prices (of outputs and inputs) are visible to all in the market. They coordinate the individual activity. They apparently provide sufficient coordination that individually optimizing plans become globally efficient”.

[12] See Blaug, M. (2007).The Fundamental Theorems of Modern Welfare Economics, Historically Contemplated, at p. 185. History of Political Economy, No. 39:2. Available at: http://coin.wne.uw.edu.pl/mbrzezinski/teaching/HE4/BlaugWelfareTheorems2007.pdf. Date accessed-05/02/2018. Blaug provides a simple explanation on the meaning and scope of pareto optimality to be one entwined with a conception of attaining social welfare, construed to be the following: “Social welfare is maximized by an allocation of resources that meets with unanimous approval, meaning that it is then impossible to reassign inputs and outputs so as to make any individual strictly better off (in his or her own judgment) without making at least one other individual worse off. If we add to this the notion of perfect competition, an economic regime in which all firms are too small to influence the price at which they sell their product, being “price-takers and not pricemakers” in Tibor Scitovsky’s immortal phrase, we reach the first fundamental theorem. It is a generalization of the case of bilateral exchange, which, being voluntary, must be welfare-enhancing for both parties. If all individuals face the same prices for commodities, what is true for two individuals is also true for n individuals. That is why perfect competition is essential to the proof of the first fundamental theorem”.

[13] See Banwo and Ighodalo; Solicitors. (2016). Why Nigeria is Ripe for A Competition Law, at p. 3. Available at: http://www.banwo-ighodalo.com/assets/grey-matter/cc24f356e22d4ef31a5aeafb789b5a4c.pdf. Date accessed-16/05/2017.

[14] The relationship between competition policy and consumer protection goes a long way to the effect that: “… aiming at very high quality standards for products to ensure consumers get good-quality products may run the risk that such standards will limit dynamic competition”. See Cernat, L., & Holmes, P. (2004). Competition, Competitiveness & Development-Lessons from Developing Countries, at. p. 13. United Nations, New York and Geneva. Available at: http://unctad.org/en/docs/ditcclp20041ch0_en.pdf. Date accessed-08/02/2018.

[15] Defining market power can be a tricky concept, even for economists. Paolo Buccirosi mentions that: “While competition is a fuzzy concept, economists have found a clever way to say what a perfectly competitive market is. Perfect competition occurs when the market clears at a price equal to the marginal cost of production. When this does not happen, firms are said to possess market power. Market power, however, is not an absolute concept. It may exist to different degrees depending on the extent to which prices are above costs and on the time period during which a firm is able to maintain such level of price. The notion of market power defines the first prong. Competition law applies to those conducts that are aimed at creating, increasing, defending, or exploiting a significant market power. Not all conducts that have these effects constitute an antitrust infringement, as many of these conducts are likely to foster both efficiency and consumer welfare. For instance, R&D investments, advertising and product differentiation, and other similar strategies are means used by firms to gain the ability to raise prices above costs, or in our terminology to obtain some market power. However, they are also likely to improve the welfare of consumers and of the overall society. As a consequence antitrust authorities rarely, if ever, challenge them”. See the Introduction, p. xiv. Handbook of Antitrust Economics, (2008), Paolo Buccirossi (ed.), the MIT Press, Cambridge, Massachusetts, London, England.

[16] See Banwo and Ighodalo; Solicitors. Why Nigeria is Ripe for A Competition Law, op. cit., at p. 3.

[17] See Metcalfe, J., & Ramlogan, R. (2007). Competition and the Regulation of Economic Development, at p. 10. In Competitive Advantage and Competition Policy in Developing Countries, by Cook, P., Fabella, R., & Lee, C (eds.). Printed and bound in Great Britain by MPG Books Ltd, Bodmin, Cornwall.

[18] See Metcalfe, J., & Ramlogan, R. Competition and the Regulation of Economic Development, op. cit., at p. 21.

[19] See Cernat, L., & Holmes, P. Competition, Competitiveness & Development-Lessons from Developing Countries, op. cit., at. p. 4.

[20] See Sengupta, R., & Dube, C., Competition Policy Enforcement Experiences From Developing Countries and Implications For Investment, at p. 5. Being a paper presented at the OECD Global Forum on International Investment VII, ‘Best Practices in Promoting Investment for Development’ 27-28 March, 2008, Paris, France. Available at: http://www.oecd.org/investment/globalforum/40303419.pdf. Date accessed-07/02/2018. The authors state further, that: “It is well-established that competition law can regulate markets best if it is part of a comprehensive competition policy rather than when it has been enacted in isolation. It is the enactment of a competition law without a complementary adoption of most of the other elements of competition policy that has resulted in some operational shortcomings in many developing countries”.

[21] In fact, the data shows that costs of doing business; percentage of firms identifying an inadequately educated workforce as a major constraint; number of tax payments, among other things, are generally less in the OECD countries than non-OECD countries. Specifically, data on Nigeria evidences wide differences in these indicators which are the structural and institutional challenges that may have defeated Nigeria’s Science and Technology policy before its implementation. This is in addition to specific problems of low civil service capacity, low federal budgetary allocation and policy reversals. Perhaps the adoption of the OECD’s NIS framework for Nigeria is premature; as countries adopting such frameworks have had decades of innovation that led to their economic growth. Nigeria has had a much different history and a different institutional development path and such a framework would likely not succeed in achieving desired growth unless it is followed with market enhancing policy per the issue raised above.

[22] Metcalfe, J., & Ramlogan, R. Competition and the Regulation of Economic Development, op. cit., at p. 21.

[23] See Sengupta, R., & Dube, C., Competition Policy Enforcement Experiences From Developing Countries and Implications For Investment, op. cit., at p. 14.

[24] Ibid, at p. 12.

[25] See Cernat, L., & Holmes, P. Competition, Competitiveness & Development-Lessons from Developing Countries, op. cit., at p. 8.

[26] See Singh, A., & Dhumale, R. (1999). Competition Policy, Development and Developing Countries, at p. 4. A working paper, the South Centre. Available at: http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.369.2121&rep=rep1&type=pdf. Date accessed-07/02/2018.

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