The House of Representatives is looking into claims of foreign multinational companies engaging in exploitative and Predatory Pricing practices that harm Nigerian businesses. The House requested the Federal Competition and Consumer Protection Commission (FCCPC) to take prompt action in stopping the unjust business practices carried out by certain international companies in Nigeria. During the plenary session on July 2, 2024, Babajimi Benson (APC, Lagos) proposed a motion that led to the decision to launch the probe.
During the meeting, Mr. Benson emphasized the importance of international business ethics and standards, highlighting the necessity for companies to conduct operations in a transparent, ethical, and effective manner in order to maintain fair Trade practices both domestically and globally. It was noted that certain businesses have failed to adhere to these principles. The Air Peace Airline case at Gatwick Airport and the recent accusation made by Dangote Oil Refinery against global oil companies were both examples he used to illustrate his point.
Committees should probe suspected unethical practices of foreign airlines.
More so, Mr. Babajimi Benson mentioned that before Air Peace Airlines started offering flights from Lagos to London for less than ₦1 million, foreign airlines such as British Airways and Ethiopian Airlines were still selling their one-way tickets for as much as ₦4 million. However, the moment Air Peace Airlines began selling tickets at a lower price point, other international airlines quickly followed suit and dropped their ticket prices even lower than Air Peace Airlines.
Also, the House instructed several committees to look into the reported predatory pricing practices, including Aviation, Petroleum (both Upstream and Downstream), Commerce, and Foreign Affairs. Furthermore, the House has requested that committees look into the suspected unethical practices of foreign airlines and IOCs in the business sector. They are to submit their findings within four weeks in order to determine the appropriate legislative response. The House has also tasked the Committee on Legislative Compliance with the responsibility of ensuring adherence to rules and regulations.
There is a rise in number of businesses shutting down operations in Nig.
Deputy Speaker Benjamin Kalu successfully secured unanimous approval for the motion when he called for a vote from the assembly. Multinational companies are leaving Nigeria in droves, leading to the introduction of this new motion. Over the past few years, there has been a rise in the number of businesses shutting down operations in Nigeria. The Devaluation of the Naira and rising operational expenses have been given as reasons for the companies opting to leave.
By August of 2023, GlaxoSmithKline (GSK) Consumer Nigeria Plc, the second-largest pharmaceutical company in across Nigeria, decided to discontinue its operations in the country. As a result, the pharmaceutical company chose to put an end to its marketing and distribution agreement and selected third-party distributors to handle the sale of the drugs and Vaccines of the company. Also, Procter, a leading consumer goods company in the United States (US), recently announced their departure from the country.
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Additionally, the manufacturer of popular brands like Gillette, Always, Pampers, Oral-B and Ariel, P&G, will likely after of $1 billion and $1.5 billion from the restructuring of its activities in Argentina and Nigeria. These two markets have been challenging the corporation’s business. Unilever made a strategic decision in March 2023 to cease the Manufacturing of its homecare and skin-cleansing items in Nigeria due to their negative impact on profit margins. This move was necessary in order to ensure the profitability of Unilever’s operations in the country. Two separate committees in the House are investigating the departure of these companies from Nigeria.