A new law to encourage competition and protect consumers has been given Presidential Assent in Nigeria in a move intended to penalize restrictive trade and business practices.

The Federal Competition and Consumer Protection Act – known as FCCPA - was given Presidential Assent on February 5 this year.

Its main intention will be to promote competition (at all levels) by eliminating monopolies, prohibiting the abuse of a dominant market position and penalizing any restrictive trade and business practices.

Broadly, the Act applies to all undertakings and commercial activities in, or having effect within, Nigeria.

It is binding on:

-         bodies corporate or agencies of government that engage in commercial activities;

-          bodies corporate which the federal, state or local government has a controlling interest in and which engages in economic activities;

-         all commercial activities aimed at making profit and geared towards the satisfaction of demand from the public;

-         it also applies to undertakings by the federal, state and local governments in Nigeria and any of their agencies.

The FCCPA repeals the Consumer Protection Council Act and Sections 118-128 of the Investment and Securities Act.

It also establishes the Federal Competition and Consumer Protection Commission and Federal Competition and Consumer Protection Tribunal. The Commission is charged with the enforcement of the Act.

Some of its core functions will include:

-         the protection of the rights of all consumers in Nigeria;

-         the investigation of anti-competition practices and agreements;

-         the regulation of mergers in Nigeria.

The Tribunal is empowered to adjudicate and exercise jurisdiction to hear appeals from any decision of the Commission and appeals from any decision of any specific regulatory authority with respect to competition and consumer protection matters.

Under the Act, the President of Nigeria is now empowered to regulate the prices of goods and services on the recommendation of the Commission while merger control and approval is now within the purview of the Commission.

Civil or criminal sanctions are also available to companies and directors of companies that violate the provisions of the Act.

The FCCPA is long overdue and the first comprehensive framework that addresses competition and consumer protection in the Nigerian economy.

It is robust legislation that cuts across the private sector and government enterprises that engage in commercial activities and is expected to discourage anti-competitive practices and promote economic efficiency while setting the tone for a solid consumer protection and anti-competition framework for Nigeria.

The implementation approach for the FCCPA, however, remains a mystery.

While the law is already in force, the Commission and Tribunal established under the FCCPA are yet to be set up.

However it is a step in the right direction and would hopefully create a more level playing field in the Nigerian economy.