Question

How big firms rip off African consumers

Answer 1

African markets have been long monopolized by big firms since the time of the British monopoly of the palm oil trade in the Niger. Even till recently, competition law was not enacted in South Africa to protect the rights of smaller producers. The monopolies charge prices that are more than 20% higher than that in the world markets. The British capitalists for long restricted black Africans to trade in the country. The state collides with these large monopolies and provides protection and patronage to them. The smaller firms are unable to compete with them. This reduces economic efficiency and restricted growth. The African markets are also very small and do not allow entry of more firms. Consumers are also loyal to purchasing from the dominant firm since it is more popular. These political and economic factors make the monopoly firms exert their power and exploit the consumers with exorbitant prices.