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27/01/2021 The Nigerian Federal Competition and Competition Protection Act 2019: Lessons from South Africa | Afronomicslaw
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The Nigerian Federal Competition and
Competition Protection Act 2019:
Lessons from South Africa
Category: Analysis
Subcategory: Stand-Alone Posts
By:
Enyinnaya C. Uwadi
September 25, 2019
The Nigerian Federal Competition and Consumer Protection Act (FCCPA), which is modelled
after the South African Competition Act, established two institutions for the purposes of
enforcing its provisions. These are the Federal Competition and Consumer Protection
Commission (FCCPC) and the Competition and Consumer Protection Tribunal (CCPT). It
saddled them with the responsibility of promoting competition in the Nigerian market by
eliminating monopolies, prohibiting abuse of a dominant position and penalizing other
restrictive trade and business practices.[1]
The FCCPA repealed the Consumer Protection Council Act,[2] and established the FCCPC[3] in
the place of the Consumer Protection Council (CPC). It also repealed Sections 118 to 127 of
the Investments and Securities Act (ISA) 2007 which hitherto empowered the Securities and
Exchange Commission (SEC) to regulate and approve mergers, and assigned this role to the
FCCPC.[4] The FCCPA is applicable to all commercial activities within, or having effect in
Nigeria.[5] Its provisions are also binding on all government departments and state owned
corporations, and indeed all commercial activities aimed at making profit and targeted at
satisfying demand from the public.[6] It equally applies extraterritorially to any prohibited
conduct by a Nigerian citizen or a person ordinarily resident in Nigeria; a corporate body
registered in Nigeria or carrying out business within Nigeria; any person supplying or
acquiring goods or services into or within Nigeria; any person in relation to the acquisition of
shares or assets outside Nigeria which results in the change of control of the business, part of
the business or any asset of the business in Nigeria.[7]
The FCCPC is composed of a Board made up of a Chairman, the Chief Executive of FCCPC
(Vice-Chairman of the Boards), two Executive Commissioners and four non-executive
Commissioners.[8] These Board members are to be appointed by the President subject to
confirmation by Senate.[9] Likewise, the CCPT is composed of a Chairman who shall be a
lawyer with 10 years post-qualification, and experienced in competition law, consumer
protection or commercial and industrial law; six other members with 10 years professional
experience in either of competition and consumer protection law, commerce and industry,
public affairs, economics, finance, or business administration.[10] The tenure of office of the
members of the CCPT is 5 years from the date of confirmation or upon the attainment of 70
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27/01/2021 The Nigerian Federal Competition and Competition Protection Act 2019: Lessons from South Africa | Afronomicslaw
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years, whichever comes first.[11] The procedure for appointment of the members of CCPT is
the same with the FCCPC. The CCPT adjudicates over conduct prohibited by the FCCPA,
entertain appeals from and reviews any decision of the FCCPC,[12] hear appeals on the
decisions of sector-specific regulators on competition and consumer protection matters, after
the FCCPC had first considered the appeal.[13] The decision of the Tribunal is to be registered
at the Federal High Court for enforcement purposes only,[14] while appeals on the Tribunal’s
decision goes to the Nigerian Court of Appeal.[15]
In the context of existing legal framework, the provisions of the FCCPA override that of any
other law in all matters relating to competition and consumer protection. This implies that the
FCCPC has precedence over and above any other sector-specific regulator in matters or
conducts which affect competition and consumer protection.[16] To ensure a cordial
relationship and guard against power tussle between sector-specific regulators and the
FCCPC, the FCCPC is mandated to negotiate agreements with sector specific regulators having
competition and consumer protection competence to co-ordinate and harmonize the exercise
of jurisdiction over competition and consumer protection matters within the relevant industry
or sector.[17]
The above presents a fair representation of the institutional structures and their
responsibilities under the FCCPA. As I noted earlier, the Nigerian competition law is modelled
after that of South Africa with some variations here and there, as some of the provisions
therein are replicas of that which is obtainable in the South African regime. My thinking is that
South Africa was adopted as a reference because its competition regime stands out as a
model of competition law implementation for developing countries.[18] It equally appeals to
them[19] due to the fact that the general philosophy which guides the South African
Competition regime is the idea of using the law as a vehicle for the attainment of national
economic and social objectives. Eleanor Fox and Mor Bakhoum in their book Making Markets
Work for Africa (OUP, 2019) call this ‘harnessing markets to make them work for the people’.
Furthermore, its impact is felt regionally within Africa through emulation and diffusion by
learning, as well as internationally via its synergy with other developing countries on the
platform of BRICS.[20]
However, notwithstanding the sophistry of the regime in South Africa when compared to
Nigeria, the former’s regime has not had an easy sail in its implementation of the competition
law due to some enforcement and sometimes procedural related challenges. The general
lesson here for new competition regimes in developing countries like Nigeria is that the
adoption of competition law is not an end itself, but a means to an end. To put in other words,
it is the first step in the unending journey of competition regulation. Some of the provisions in
the FCCPA which could be a clog in the wheels of enforcement and the lessons from South
Africa which could be adopted to address these challenges will be discussed as follows:
Threat to the independence of the regulator via political control and regulatory capture.
For example, the provisions of Part XI of the FCCPA on price regulation is made subject to
an order of the President, a political actor. It is argued that the power to make such an
order ought to be vested in the FCCPC and not a political actor who may prioritise
political calculations over economic decisions. Most times, governments tend to
backtrack from necessary economic decisions with long term benefits, especially if
unpalatable in the short term, for fear of an unfavourable reaction in the polity which
could jeopardise their political interests and popular support.
The lesson Nigeria needs to learn from South Africa is to insulate its competition regime
from undue political interference in the enforcement of its competition regime. This
potential for political interference may be a challenge to the enforcement of the
provisions of Section 2 (2) (a) (b) of the FCCPA where state-owned institutions engage in
anti-competitive conduct like abuse of dominance. Global best practices in competition
regulation is that the competition authority is established as an independent, non-
ministerial department, subject only to the law of the land, like the South African
Competition Commission and the UK’s Competition and Markets Authority, in order to
insulate it from external influence of political actors, as well as powerful multinational
firms, as the latter may threaten the independence of the FCCPC via regulatory capture as
is often the case of new competition authorities in developing countries.
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27/01/2021 The Nigerian Federal Competition and Competition Protection Act 2019: Lessons from South Africa | Afronomicslaw
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There is also the overzealous approach in the wording of some sections, for example the
extraterritorial provision which applies to a Nigerian carrying on business in any part of
the world in Section 2(3)(a). Inasmuch as the extraterritorial provisions under Section 2(3)
are commendable, one is left to wonder how this provision of subsection 3a whose basis
of application is the mere fact that the conduct in question was committed by a Nigerian
citizen, will be successfully implemented.[21] A further concern is the criminalisation of
cartels which although is quite commendable may prove to be an overzealous approach
where the expertise and resources to successfully investigate and prosecute cartels are
not in place.
The lesson here is that the FCCPA needs to be amended to expunge this impracticable
overzealous provision to the extent that it relates to a conduct by a Nigerian in another
country, where the effect of the conduct has no bearing on Nigeria. On the criminalisation
of cartels, Nigeria can borrow a leaf from South Africa and introduce a leniency program
for cartels, due to the difficulty in detecting, investigating and prosecuting cartels. This will
encourage firms engaging in cartels to take advantage of the friendly gesture in return for
a reduced penalty. Indeed, competition authorities from developed countries with their
expertise and funding still have some difficulties in detecting cartels. This led to the
adoption of the leniency programs in the fight against cartels. South Africa recorded
tremendous success in cartel prosecution following the adoption of the leniency program
in 2004,[22] but experienced a downward trend upon the criminalization of cartel in 2016.
This should be a lesson for the FCCPC.
The FCCPC should adopt a one step at a time approach in implementing the FCCPA. It
should not succumb to the pressure of engaging in a wild goose chase by going after big
firms without investigation and gathering sufficient evidence, in order to gain public
acceptance and credibility. A single successful enforcement will send a strong signal to the
public, which is far better than hurriedly going after multiple firms at the same time and
failing to record a single success.
Another concern relates to some of the provisions of the FCCPA which appears to clash
with the statutory powers of other agencies like Standards Organisation of Nigeria; the
National Agency for Food and Drug Administration and Control and Nigerian Customs
Service. These agencies also have consumer protection powers under their respective
enabling Acts may see FCCPC as a threat and consider it to be encroaching into their
statutory provinces, where they have developed considerable expertise. This poses a
question on whether these agencies will respond favourably to any approaches made by
the FCCPC to them pursuant to the provisions of Section 105(4) Act.
There is also confusion on whether or not the FCCPC is actually a supreme competition
regulator under the FCCPA. This confusion arises when comparing Section 104 which
makes the FCCPA supreme to any other law on competition and consumer protection,
with Sections 47(2) and 105(4), (5) and (6) (a) (b) which recognizes sector-specific
regulators established under the relevant sectoral law. Notwithstanding the fact that
Sections 47(2) and 105(6) (c) acknowledge the leadership position of the FCCPC when
dealing with sector-specific regulators, recognizing these sector-specific regulators
established by other laws and mandating the FCCPC to negotiate agreements with
them[23] is clearly in tension with Section 104 which starts with the supremacy phrase,
‘Notwithstanding the provision of any other law but subject to the Constitution of the
Federal Republic of Nigeria…..” The problem here is whether these sectoral regulators will
perform their duties pursuant to their establishing Act, the FCCPA or the negotiated
agreement.[24]
The above dilemma shows that an amendment of the FCCPA is imminent in order to avoid a
situation of having the FCCPC inundated by jurisdictional tussle to the detriment of
competition regulation. Following the example of the South African regime, institutional roles
27/01/2021 The Nigerian Federal Competition and Competition Protection Act 2019: Lessons from South Africa | Afronomicslaw
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need to be clearly defined and streamlined in the FCCPA. It is my view that sector-specific
regulators ought not to interfere with competition matters and should focus on their areas of
core competence pursuant to the supremacy clause. This would help to avoid jurisdictional
clashes and more importantly, the under-regulation of competition in those sectors, following
from the experience Nigeria had with the SEC when it was empowered with some competition
law powers under the ISA. According to Dimgba,[25] the SEC focused more on its traditional
role as a securities regulator to the detriment of competition law and regulation, as a result of
its lack of expertise in the field.
Another potential challenge is the associated and potential problem with the judicial process
under the FCCPA. Competition law cases are business related, and in business, time
management and efficient allocation of resources are very important. I want to assume that
the CCPT will be efficient and decide cases at a faster pace than the regular Nigerian courts.
However, the FCCPA ought to have considered the delays in the Nigerian judiciary which can
make a case linger for over 10 years, and imposed timeframes for the hearing of appeals and
delivering of judgement on competition cases at the Appeal Court, in the same manner
provided in the 2018 amendment to the Nigerian Constitution for pre-electoral cases which
are time bound.[26] Equally, it is worth noting that the FCCPA is silent on whether the decision
of the Appeal Court on competition and consumer protection is final or can be further
appealed to the Supreme Court. This creates another challenge of interpretation as some
cases in Nigeria terminate at the Court of Appeal while others at the Supreme Court.
Going further, notwithstanding my earlier position that sector-regulators should hand-off
competition matters, another concern with the FCCPA is the intermediate appeal procedure
where the decision of sector regulators are to be first reviewed on appeal by the FCCPC before
being appealed further to the CCPT. This procedure does not resonate well with me because
of the time constraints and financial implication it has on the overall appeal process. Also, it is
my view that the FCCPC ought not to be overburdened with so many responsibilities at this
early stage to the extent that it loses focus of its core mandate of competition regulation.[27] I
believe that the CCPT will be a proper forum for appeals from the decisions of a sector
regulators, for efficient management of time and allocation of scarce resources.
Following the competition regime in South Africa, strong and competent pro-competition
institutions should be established in order to safeguard the competition process to ensure the
attainment of the objectives of the FCCPA. There is therefore the need to establish a
specialised court to be called Competition and Consumer Appeal Court (CCAC) in the place of
the Court of Appeal as the appellate and final court in competition and consumer protection
matters. The importance of having a specialized court in competition matters is that the
expertise of judges in both legal and economic concepts enables them to hear and
understand expert evidence and argument, and make decisions that are legally and
economically sound, having regard to the impact upon the system as a whole. Any further
appeal on the decision of the CCPT should be to the Supreme Court only on point of law, and
subject to the leave of the Supreme Court. Timeframes on the duration of appeal should
equally be imposed in order to ensure speedy dispensation of justice.
Conclusion In conclusion, while this write-up is not advocating for a slavish adoption of the
South African competition regime, it is making a case for Nigeria to not only adopt the
relevant provisions of the South African Competition Act, but also for it to pick a few lessons
in the implementation and enforcement of its regime from the experiences of an older regime
from a developing African country. This will ensure that Nigeria avoids and overcomes some
of the likely challenges in the implementation of the new competition regime, in order to
ensure the attainment of the objectives of the FCCPA, and also the promotion of a pro-
competitive national markets for the good and betterment of its citizens, which is in line with
the idea of Fox and Bakhoum in ‘Making Markets Work for Africa’. [1] Explanatory
Memorandum, FCCPA. [2] Cap C25 LFN 2004; See Section 165, FCCPA. [3] Section 3, FCCPA. [4]
Section 93 of the FCCPA [5] Section 2. [6] ibid. [7] Section 3. [8] Section 4. [9] Section 5. [10]
Section 40. [11] Section 41. [12] Section 47 (1)(a). [13] Section 47 (2). [14] Section 54. [15]
Section 55 (1). [16] Section 104. [17] Section 105 (4) (5) (6). [18] Azza Raslan, ‘Mixed Policy
Objectives in Merger Control: What Can Developing Countries Learn from South Africa?’
(2016) 4 World Competition 39, Kluwer Law International, 625. [20] Jim O’Neill, ‘Dreaming with
27/01/2021 The Nigerian Federal Competition and Competition Protection Act 2019: Lessons from South Africa | Afronomicslaw
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Federal Competition and Consumer Protection Act FCCPA
Federal Competition and Consumer Protection Commission FCCPC
Competition and Consumer Protection Tribunal CCPT South African Competition Act
Trade and Business Practices Securities and Exchange Commission SEC
Consumer Protection Council CPC Competition Law Consumer Protection Law
Commerce and Industry Public Affairs Economics Finance Business Administration
Federal High Court Court of Appeal South African Competition Commission
UK’s Competition and Markets Authority Standards Organisation of Nigeria
National Agency for Food and Drug Administration and Control Nigerian Customs Service
Supremacy Clause Nigerian Constitution Supreme Court Court of Appeal
Competition and Consumer Appeal Court CCAC Competition Law Nigeria
BRICs: The Path to 2050’ (2005) Global Economics Paper no. 99
http://www.macropolis.org/oriente/BRICS.pd>faccessed 23 April, 2019; Natalya Mosunova,
‘Competition Law Enforcement in the BRICS and in Developing Countries: Legal and Economic
Aspects’ (2017) 4 BRICS L.J. 156. [21] See Enyinnaya Uwadi., ‘Prospects and Challenges of
Implementing Competition Law in Developing Countries: A Review of the Nigerian Federal
Competition and Consumer Protection Act 2019’ (LLM Dissertation, University of Reading
September 2019). [22] ‘Cartels in South Africa’, Interview withPieter Steyn (Getting the Deal
Through July 2018) <https://gettingthedealthrough.com/intelligence/172/article/6247/cartels-
south-africa> accessed 25 July 2019. [23] Section 105 [24] See Uwadi n 21. [25] Nnamdi
Dimgba, ‘The Changing Landscape: Federal Competition And Competition Protection Act’
(Keynote Address Delivered at the Jackson, Etti & Edu in Partnership with Norton Rose
Fulbright Conference On Competition Law, 18 June 2019) 4. [26] Constitution of the Federal
Republic of Nigeria 1999 (Fourth Alteration No 21) Act 2018. [27] William E. Kovacic &
Marianela Lopez-Galdos, ‘The Lifecycles of Competition Systems: Observations on the
Evolutionary Paths’(2016) 1 CPI Antitrust Chronicle 1, <
https://www.competitionpolicyinternational.com/wp-content/uploads/2016/04/Kovacic-
Lopez.pdf> accessed 23 September 2019.
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BRICs: The Path to 2050
BRICs: The Path to 2050' (2005) Global Economics Paper no. 99