Africa is with much business potential. Antitrust Law also referred to as Competition Law is a set of rules, guidelines, principles and judicial decisions recognized by governments relating either to agreements between firms that restrict competition or to the concentration or abuse of market power by private firms/companies.
The importance of the Competition Law to the development of any nation cannot be overemphasized. It is in recognition of its importance to economic growth that many of the civilized nations have established a well structured Antitrust/Competition Law to suit their economic situations.
Some of the important reasons of having a Competition Law are enumerated as follows:
- Encouraging competition between firms as that is the lifeblood of strong and effective markets
- Competition helps the consumers get a good deal
- It encourages firms to innovate by reducing costs and providing incentives for efficient organization of production
- Competition creates efficiencies in market place including productive –and allocative efficiency
- It enables a markets to operate more effectively
- It makes individual to be creative, sensitive and at alert to recent happenings
No doubt therefore from the foregoing that the African economy is overripe for a competition law, particularly in this era of deregulation, privatizations and commercialisation of various sectors of the economy as well as on going public institution sanitization and mergers & acquisitions in the government sectors. This is because the above processes could end up creating new dangers in the absence of Antitrust/Competition Law. This is because when we liberalise and deregulate vital sectors, ushering in place of government monopolies, private players who are not constrained by social interests and whose overriding drive is profit, nothing prevents the new undertakings from engaging in cartel and abusive activities such as price fixing, market division and excessive pricing.
To ensure that the on going deregulations, privatizations, commercialisation as well as mergers and acquisitions do not endanger the economy in future; Nigeria and African nations are recently making efforts to bring into existence an Competition Law.
Thus, the proposed Bill which is being pushed before the law makers in some African country is aimed at achieving all benefits derivable from a competition regime. It is also expected to cover areas such as:
- Control of cartels and restrictive agreements: This will ensure that business undertakings do not enter into agreements which would restrict competition. Such agreement could be in form of price fixing, or reducing volume of goods to be released into the market, thereby creating artificial scarcity, market or consumer sharing agreement, collusive tendering or bid rigging, etc.
- Control of Dominant Position: This aspect seeks to ensure that firms/companies which have gained a position of significant power do not by their process damage the competition process.
- Merger Control: This aspect of competition law is concerned with control of mergers and other forms of business combination, to ensure that the resultant effect does not jeopardize competition in the relevant market.
- Monopolies: This aspect prohibits any attempt to organize a monopoly in any trade or services.
All African await the competition regime with so much expectation particularly the expectation of enjoying the dividends of an Competition Law. Its eventual promulgation would therefore be a welcomed development.
While we await the enactment of the Competition Law in all nations in Africa, it is necessary to equip ourselves with knowledge required to operate effectively in the competition regime.
To this end, one would say that though the Bill may be undergoing some challenges before the law makers for one reason or the other, the fact that its promulgation is the desire of many African cannot be overemphasized.
It is expected that the law makers takes active steps to ensure that an Antitrust/Competition Law becomes a reality in their country even where it requires drafting a new Bill or amending the proposed one to suit the peculiarity of this country.
It is also expected that the Law will come into existence/operation soon enough to curb some of the existing challenges in the African Market.
Finally, the future of the economy is anchored on how effective the African Laws are structured particularly in handling 21st century challenges and one of these Laws is a Competition law. It is in this regard that one can say that Competition is the bedrock to development in Africa.