Victor EzejaThe Centre for the Promotion of Private Enterprise (CPPE) has called on the Federal Competition and Consumer Protection Commission (FCCPC) to refrain from price control, stating that the core mandate of the agency is to protect consumer’s rights.
CPPE in a statement by its Chief Executive Officer, Dr Muda Yusuf, said FCCPC should focus on creating a robust competition framework across sectors of the economy and protection of consumer rights and interests not price control.
Join our WhatsApp ChannelHe stated this while reacting to the one month notice given by FCCPC to traders in various markets across the country to slash prices of goods.
The newly appointed Executive Vice Chairman of the FCCPC, Tunji Bello, who announced the directive during a stakeholders’ meeting in Abuja on Thursday, expressed concern over the excessive pricing of both imported and locally produced goods which he claimed was due to price manipulation and anti-consumer practices by market associations.
Dr Yusuf said the Commission seems to be fighting the symptoms of the current inflationary pressure in the economy, instead of dealing with the root cause.
He added that the core mandate of FCCPC is not even to fight inflation, as that is solely the responsibility of monetary authorities that have the capability to deal with the challenge of high prices.
He also pointed out that consumer protection is about controlling price at the retail end of the supply chain.
“The core mandate of the commission is the creation of a robust competition framework across sectors and protection of consumer rights and interests,” Dr Yusuf stated.
“Consumer protection is not about directly seeking to control price at the retail end of the supply chain.”
Yusuf stated that the best way to protect consumers from exploitation is to “diligently promote competition across sectors,” citing an example of the telecom sector liberalisation which led to emergence of different operators.
“The emphasis should not be on pricing but on deepening the culture and practice of competition and a level playing field for all investors. Intense competition makes profiteering difficult and diminishes the chances of exploitation of consumers. When consumers have choices, it is difficult to exploit them,” explained.
The CPPE CEO emphasised that the only condition for consumer exploitation with high prices is when there is monopoly but the retail segment of the economy do not have that power as many of them are operating across the country coupled with the fact that they also deal with perishable commodities which they need to quickly dispose to avoid losses.
“The truth is that the retail segment of the economy is the least vulnerable to price gouging or consumer exploitation on a sustainable basis, contrary to the thinking of the commission,”
“The reality is that the risk of profiteering increases with monopoly powers.”
He urged FCCPC to focus attention on “creating a good competition framework to deepen competition across sectors.”
He further stressed that the Federal Competition and Consumer Protection Commission needs a proper understanding of the dynamics of pricing and the key drivers of inflation which include “the naira exchange rate depreciation, high energy cost, high cost of logistics, seasonality of food production, high cost of funds, extortions on the highways, high post-harvest losses, high cargo clearing cost, impact of the insecurity on food production, climate change and global factors disrupting supply chains.”
He also pointed out that there is an emerging trend in which Nigerian products are being exported to neighbouring countries because of the profitability, which consequently adds to pressure on commodity prices in the country.
“Our view is that the proposal by the FCCPC to traverse markets across the country with objective of ensuring price regulation is unlikely to yield concrete outcomes. This is not a sustainable strategy. What we need to fix are the fundamentals driving production, operating and distribution costs which resulted in spiraling inflation in the first place.”
He also called on the FCCPC to stop “further intimidation of the operators in the retail sector”, noting that they create millions of jobs in the economy.
He stated that the retailers are also affected by the current inflationary pressures as many have shut down their businesses due to harsh economic condition.
He urged FCCPC to work in collaboration with other government agencies to address the fundamental causes of inflation in the economy.
“The focus should be on causative factors driving prices, not the symptoms. This is a more sustainable approach than resorting to intimidation of traders, supermarket owners and market men and women.
“It is also important to draw attention of the commission to areas where there are frequent consumers rights violations like the aviation, health, energy markets, electricity market, financial services, telecoms and cable Tv sectors. These are areas that demand the attention of the commission even more than the markets,” he added.
Victor Ezeja is a passionate journalist with six years of experience writing on economy, politics and energy. He holds a Masters degree in Mass Communication.
