FCCPC’s heavy-handedness and the threat to Nigeria’s business and economic future

In a move that has raised eyebrows across Nigeria’s business landscape, the Federal Competition and Consumer Protection Commission (FCCPC) recently announced its intention to impose penalties on Coca-Cola Nigeria and Nigerian Bottling Company for alleged misleading trade descriptions and unfair marketing practices. This latest action is part of a worrying pattern of heavy-handedness that has seen the commission impose hefty fines on various multinationals. In 2023, the commission imposed a rather hefty fine of $110 million on British American Tobacco (BAT) for violation of tobacco laws. Only recently was it the turn of Meta’s messaging platform, WhatsApp, for which it fined $220 million for allegedly violating the Federal Competition and Consumer Protection Act (FCCPA) and the Nigerian Data Protection Regulation (NDPR). Now, the commissions appear to be going after yet another multinational, Coca-Cola, and Nigerian bottling company.

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Could these actions be as a result of the pressure on government agencies to self-fund through revenue generation, or has the commission completely lost sight of its original mandate and become yet another government mechanism that unduly burdens legitimate corporate businesses in the country? To put these arguments in perspective, it is important to note that the FCCPC was established to protect consumers and ensure fair competition, but its recent actions suggest a shift away from these core competencies. Instead of fostering a business-friendly environment, the commission appears to be erecting barriers that discourage investment and economic growth. The case of British American Tobacco, which faced significant penalties, the recent action against WhatsApp, and now Coca-Cola highlight a rather disturbing trend and make one question the FCCPC’s methods and motives.

Many Nigerins will agree that the country’s economy is at a critical juncture. This administration, like several before it, has made substantial efforts to attract foreign and local investments that are critical to revitalise growth. However, there is no denying that the actions of some of these government agencies make the task difficult and paint the country as a difficult place to grow investments. It is obvious to see that FCCPC’s actions seem counterproductive to President Tinubu’s desire to attract foreign direct investments. By imposing excessive fines and creating an atmosphere of uncertainty, the commission is inadvertently driving businesses away. Consider this: According to the National Bureau of Statistics, Nigeria’s foreign direct investment (FDI) inflows have plummeted from $2.28 billion in 2019 to $698 million in 2021. How much of this decline can be attributed to regulatory overreach and the perceived anti-business stance of agencies like the FCCPC?

This situation is not just about numbers; it has real-world consequences. Several multinationals have already left Nigeria, citing an unfriendly business environment. These companies, including the likes of Procter & Gamble, have either scaled back their operations or exited entirely. In 2023, GlaxoSmithKline Consumer Nigeria Plc, the country’s second-biggest drug producer, announced its decision to halt operations. In November 2023, it was Sanofi, the French pharmaceutical multinational that exited Nigeria. Then there were other notable brands like Unilever Nigeria PLC, ShopRite Nigeria, Equinox Nigeria, and Bolt Food. Some reports suggest that the exit of these multinationals from Nigeria’s economy has cost the country as much as N94tn in loss of output in five years.

As one can imagine, the departure of these companies has led to massive job losses and a significant reduction in economic activity. If agencies like the FCCPC continue on their current trajectory, we could see even more businesses forced out of the country, leading to an economic catastrophe.

One cannot ignore the importance of regulatory bodies in ensuring fair play and protecting consumers. However, the approach must be balanced and transparent. Moreover, the FCCPC’s actions beg several critical questions: Where do these funds from such hefty fines go? Are they reinvested in the economy, used to bolster consumer protection, or simply absorbed into the bureaucratic machinery?

Read also: FCCPC unfazed by WhatsApp exit threat over $220m fine

In light of these concerns, it is imperative for the President to intervene and ensure that the FCCPC’s actions do not derail the country’s economic objectives. The administration’s call for investment must be matched with a regulatory environment that supports, rather than hinders, business growth. It is high time for a comprehensive review of the commission’s activities and a recalibration of its approach to ensure it serves its purpose without becoming an obstacle to economic progress.

Akeem Akinniyi writes from Lagos. Akeem is a communication specialist and public commentator.