President Muhammadu Buhari has taken a cue from Beto’s apt saying, as he signed the Federal Competition and Consumer Protection bill into law, last week. This is coming fifteen years after the Bureau for Public Enterprise (BPE) proposed an anti-trust law to checkmate monopoly in the Nigerian economy.
The anti-monopoly law seeks to promote economic efficiency, maintain competitive market and protect the Nigerian economy, protect the interest and welfare of consumers by providing consumers with wide variety of quality products at competitive prices as well as prohibit restrictive or unfair business practices in the Nigerian economy.
Similarly, promotion of business competition, control of existing monopolies and other restrictive trade and business practices would be achieved by provisions of the bill. However, despite the enactment of this bill into law which is a good development, there are other methods through which monopoly among businesses in the country could be reduced. They include;
Liberalization of Markets:
Deregulating markets enables new firms to enter into the industry and compete with the existing monopoly. However, it should be noted that some industries are natural monopolies and therefore these industries do not allow the penetration of new firms.
This involves joining two firms together to prevent an increase in monopoly power. It is helpful in preventing monopolies but not dealing with existing monopolies.
Monopolistic businesses usually fix highest possible price on goods which it can obtain from the customers, in order to make more profit. The state can control the monopoly by fixing the profits and the prices and ensure that the industry does not earn undue profit. But it is also not very effective and cannot be put into actual practice. It is very difficult to determine the cost of production in monopolistic business because it would not provide any information related to its business.
Formation of consumer associations:
The government could help by creating more consumer associations. This is an effective method of checking and controlling monopoly. It should give them some reasonable powers and patronage. It should be vested with the responsibility of bringing to the notice of the Government on the one hand and the society on the other, high handedness of the monopoly. But this proposal too is complex and complicated.
Monopoly does not come to the notice of the people. It is therefore, important that proper sensitization should be done to inform the public on the defects of monopolistic business.
Creating Fair Competitions:
Monopoly in business happens when an organization is not in competition with any other organization. Strong competition removes monopoly. This is the most effective method of ensuring that monopoly is properly checked.