Edificio con Refuerzo 1

There are numerous laws on consumer protection in Nigeria. The Research Report on the State of Consumer Protection in Nigeria, 2014, included an impressive list of thirty-seven (37) laws relating to consumer protection. These laws are listed in Appendix 3. Most of the laws were enacted following the liberalisation of the various sectors of the economy. In addition, in 2004, the Federal Government launched SERVICOM, a service contract with the citizens. This initiative, which is aimed at improving the quality of services delivery by all government ministries and agencies to consumers, also includes complaints redress mechanisms.

130 The Consumer Protection Council (CPC), established by the Federal Government decree 66 of 1992, is the apex statutory consumer body in Nigeria. In the exercise of its function to

“encourage the formation of voluntary consumer groups or associations for consumer wellbeing” (CPC Act, Section 2h), the CPC has registered twenty-eight consumer organisations which are listed in Appendix 5. In contrast, there is no provision in the Nigerian Communications Act (NCA, 2003), for the recognition or support for voluntary consumer bodies.

In spite of the numerous laws and consumer bodies, consumerism remains at a low level in Nigeria (Ijewere & Obeki, 2011). This is traceable to the country’s little history of civil societies and voluntary consumer advocacy groups. During the period 1967- 1999, there was very little Civil Society activities due to the 3 years of civil war and the almost 30 years of military rule.

Available literature indicates that consumer advocacy began in the early 1970s, with the introduction of consumer rights and complaints section in some local Newspapers and magazines and a few radio programmes on consumer related issues (Ogechukwu, 2013: 51).

These initiatives spurred the formation of a few consumer bodies in the 1970s including the Consumer Protection Organisation of Nigeria (CPON) in 1970 whose aims included consumer education and advocacy. CPON represents consumers in the Standard Organisation of Nigeria (SON) and the Advertising Practitioners council of Nigeria (APCON) and publishes The Consumer, a quarterly magazine devoted to consumer issues. Other consumer bodies include National Consumers of Nigeria (NCON) formed in 1971; Consumer Organisation of Nigeria (CON), 1992; Consumer Rights association of Nigeria (CRAN), 1993; Public Interest Law Organisation (PILO), 1996; Consumer Awareness organisation (CAO), 1999. CAO engages in the review of consumer protection laws, research on consumer issues and creation of consumer awareness (Monye, 2003).

Voluntary consumer bodies in Nigeria are not actively engaged in consumer advocacy and their impact is yet to be felt by consumers. Their activities “have remained rudimentary … they are yet to make any appreciable impact on the country.” (Monye, 2003:10). The regulators do not take them into reckoning, neither are they consulted nor informed of regulatory decisions. This is because they are perceived not to have any significant level of expertise in any specific sector.

131 Apart from not being effectively engaged in consumer advocacy in any specific sector, their area of operations is localised and “they have not embarked on or received adequate publicity”

(Ijewere & Obeki, 2011:190). This is confirmed by the data on consumer awareness of consumer associations, which showed that 86% of consumers are unaware of the existence of consumer associations (Nkamnebe, Idoko & Kalu, 2009). Most of the consumer groups are further disadvantaged because they do not benefit from public funding and consequently are characterised by poor staffing (in numbers and expertise), inadequate resources and uncoordinated activities. The little attention accorded civil societies traces the pattern of path dependency to the military era when civil society’s activities were suppressed.

3.6 Conclusion

Nigeria is Africa’s largest republic and economy with a population of 160million and a GDP of USD 568.5 billion in 2015. Nigeria’s socio-political environment has been adversely impacted by civil war, 30 years of military dictatorship and sixteen years of democratic rule characterised by non-transparent transactions. Nigeria has been described as neo-patrimonial state imbued with clienteism, and culture of impunity (Transparency International, 2014;

Martini, 2014). This situation coupled by grand scale looting of public funds has been the bane of development in Nigeria since the return to democratic rule in1999. The economy is undermined by endemic corruption which has led to weak institutions (North, 2005), severe underdevelopment, unemployment and poverty. For example, Nigeria is the sixth largest exporter of oil but depends on imported refined petroleum products, and generates only 4000MW of electricity (10% of South Africa’s output). Corruption is manifested in all aspects of the economy including the regulatory agencies and the regulated companies.

As at 1999, the 50-year-old Nigerian government monopoly of telecommunications was able to provide the entire Nigerian population of over 100 million people only 450,000 landlines and 25,000 analogue mobile phone lines, resulting in a teledensity of about 0.47 lines per 100 inhabitants, which was among the lowest in the world. In contrast, the full liberalisation of the Nigerian telecoms sector in 1999 and the roll out of GSM service in 2001 have progressively led to an exponential growth of the sector. At the end of December 2015, fourteen years after the liberalisation, active subscriptions stood at over 151 million lines with a teledensity of over

132 99.39 (NCCStat, 2015:3); an average of about ten million lines per year. Mobile GSM accounts for 98.3% of total telecommunications and contributed 8.6% (USD 44.3billion) of the national GDP in 2014 (Arowolo & Folarin, 2014). However, in Nigeria, the benefits of liberalisation are not evenly distributed: a substantial part of the country, approximately 20%, is not covered, therefore do not have access to even basic telephone services [ICT Policy, 2012]. This notwithstanding, Nigeria is still the leading telecommunications market in Africa and one of the fastest growing in the world.

The Nigerian telecommunications regulatory framework is highly susceptible to political interference, conflict of interest and regulatory capture. The appointment of the governing Board of the Commission by the President of Nigeria creates room for political interference and clienteism. Furthermore, in the early years of liberalisation, the dearth of expertise and the resultant poaching of personnel from the Commission to the regulated companies gave room to agency problems and spurred further conflict of interest and cronyism.

This study has argued that the Commission is not entirely independent and consequently it is not fully consumer focused. It looks the other way as ordinary consumer interest rules are violated with impunity. This situation, which is still prevailing, creates a compromising effect on the enforcement institution, which is exploited by the services providers to the detriment of consumer interest (Ubochioma, 2013).

The review of empirical literature reveals that liberalisation of the mobile telecommunications has resulted in significant benefits to the consumer. Global mobile penetration stands at 97%

as at 2013, indicating that access to basic telephone has been achieved largely. Consumers are also enjoying lower prices as prices have dropped by about 50% in the past two decades following liberalisation. Nigeria shares in this success story. Mobile telecommunications have had a positive impact on the life of ordinary Nigerian consumers in the areas of social relations, work, employment, banking, education and security. It is now considered, as a utility and an extension of the consumers feel incomplete with it. The story is the same in many African countries and all over the world.

133 In spite of the laudable benefits of mobile telecoms, academic literature further reveals that the ordinary consumer is paying too high a price for these benefits as they contend with various challenges harm in the market (OFCOM, 2009; Xavier, 2008). In the neo-patrimonial environment prevailing in Nigeria, ordinary consumers are also grappling with the ineptness of the politicised regulator, high tariff, poor quality services and inadequate geographical coverage. The mobile telephone network “is unreliable and congested, expensive and customer unfriendly” (NTP, 2000:12).

The asymmetric relationship that prevails in the telecoms industry is exploited by the mobile services providers through unfair trade practices including mis-selling, deceitful promotion, advertisement and complex pricing strategies that compromise the interest of consumers and competition. As a result, ordinary consumers’ decision-making in the market is a difficult task that calls their rationality into question, as it does not often lead to their best interest (North, 1993; Menard and Shirley, 2005). This is further compounded by the low literacy level prevalent in a developing country like Nigeria. Consequently, consumers are unable to derive the full benefit of the liberalised telecoms market; they are also exposed to financial and emotional harm including confusion and frustration.

Addressing the challenges consumers encounter in the liberalised telecoms market place through regulatory initiative or intervention is crucial for the protection of consumer interest.

The next chapter explores the role of consumer representation in influencing the regulatory decision process in the pursuit of consumer interests.

134 CHAPTER 4 Representing the Ordinary Consumer: Trends in institutional

arrangements and processes 4.1 Introduction

The structure of the liberalised telecommunication market is characterised by competition in markets regulated by agencies independent from government. This structure makes it expedient for the regulator and services providers to engage with the ordinary consumers frequently. The nature of these engagements is usually defined by the Communications Act and regulation.

However, due to consumer heterogeneity, different institutional arrangements have been deployed in various countries to achieve effective engagement of the ordinary consumer.

The aim of this chapter is to explore the current trend in ordinary consumer representation and complaints management. These issues, in the Nigerian context, are the focus of the empirical Chapters 6 and 7 of this study. The chapter starts by discussing the inevitable need for regulation in liberalised competitive markets. It asserts that the ultimate goal of regulation is the attainment of policy objectives, which include the promotion of consumer interest. It reviews and affirms the crucial role of consumer representation bodies in facilitating consumers’ influential participation in the regulatory process, which also tend towards the achievement of policy objectives. In assessing the current trend in institutional arrangements for consumer representation and the dimensions of consumer representation, the chapter argues that the effectiveness of the various options depends on the prevailing socio-political environment and advocates a mixed approach for developing countries. Finally, the chapter looked at consumer complaints management processes, which are, at the same time, a potential cause of consumer complaints and an important dimension of consumer representation.

The considerations in this chapter will form part of the benchmark to be used in the empirical chapters 6 and 7of this study in evaluating the representation of the ordinary consumer and the management of ordinary consumer complaints respectively.