Nigerian Government Gives Traders A Month to Reduce Consumer Goods Prices

The Federal Competition and Consumer Protection Commission (FCCPC) has issued a one-month moratorium for traders and market stakeholders engaging in exploitative pricing, with a firm warning to reduce prices of goods before enforcement actions commence.

This announcement was made by the newly appointed Executive Vice Chairman of the FCCPC, Mr. Tunji Bello, during a stakeholder engagement focused on exploitative pricing held on Thursday in Abuja.

Addressing the growing trend of unreasonable pricing of consumer goods and services, Bello said that the Commission is determined to curb unethical practices that threaten the stability of Nigeria’s economy. He cited a glaring example of price exploitation, pointing out that a fruit blender branded as “Ninja,” priced at $89 (approximately N140,000) in a popular Texas supermarket, was being sold for a staggering N944,999 in a supermarket located on Victoria Island, Lagos.

Bello questioned the rationale behind such a significant price hike, stressing that these practices are not only unjustifiable but also detrimental to the nation’s economic health.

In his address, the Vice Chairman highlighted the legal implications for those found guilty of exploitative pricing. Under Section 155 of the law, violators—whether individuals or corporate entities—face severe penalties, including hefty fines and potential imprisonment if convicted.

“This is intended to deter all parties involved in such illicit activities,” he stated, but he also noted that the current approach is not punitive.

Instead, the FCCPC is appealing to traders and market stakeholders to embrace a spirit of patriotism and cooperation, offering them a one-month grace period before the Commission initiates strict enforcement measures.

The FCCPC’s stance is a response to the persistent complaints from consumers about the exorbitant prices of goods and services across Nigeria. Bello explained that the Commission’s investigation into these practices revealed a worrying trend of price fixing and collusion among market associations, leading to unjustified price surges. This, he said, undermines consumer trust and contributes to economic instability.

During the engagement, the Chairman of the National Association of Nigerian Traders (FCT Chapter), Ifeanyi Okonkwo, pointed out that one of the significant factors contributing to the high prices of goods is the excessive charges on imported goods at Nigerian ports. He called on the FCCPC to establish a task force, including representatives from the traders’ association, to effectively monitor and enforce fair pricing across the market.

Okonkwo’s concerns were echoed by other market stakeholders who cited a range of issues contributing to the continuous rise in prices. These included the high cost of transportation, insecurity, multiple taxation, and the overall economic climate, which has been challenging for both businesses and consumers.

In response to these concerns, Bello acknowledged that the government is aware of the difficulties facing market stakeholders and is committed to addressing them.

“We have heard and you have genuine issues, and the government has the responsibility to address these problems,” Bello assured.

However, he also urged traders to reflect on their practices, noting that there are instances where traders have collaborated to exploit consumers.

“There are also gang-ups to exploit consumers by traders,” he remarked, emphasizing the need for self-regulation within the industry.

Fighting Inflation Through Price Control?

While the FCCPC’s engagement with stakeholders is part of its efforts to checkmate market practices and ensure that consumers are not unduly exploited, this move is seen as another attempt at price control. Previous attempts to regulate prices have met with limited success, often triggering backlash and running into resistance from market players who argue that such measures are at odds with the principles of a free market.

The high cost of goods and services in Nigeria has been attributed to high inflation, exacerbated by economic reforms of President Bola Tinubu’s administration – mainly, the removal of fuel subsidy and the floating of the foreign exchange market.

The government has deployed various interventions to tackle inflation, which has remained stubbornly high at 33.40% as of July. The government recently announced the removal of import tariffs and duty fees on select food products, in an effort to make essential goods more affordable for consumers. However, this policy shift has yet to translate into a noticeable reduction in the inflation rate.

The removal of import tariffs was intended to lower the prices of key food items, but its impact has been limited by other factors such as transportation costs, insecurity, and the depreciation of the naira. Against the backdrop of the unmaterialized anticipated relief for consumers, many believe the government is now exploring additional measures like the FCCPC’s price control initiative.

However, market stakeholders who attended the Abuja engagement session expressed mixed reactions to the FCCPC’s directive. Some acknowledged the need to protect consumers from exploitative pricing, but others pointed to the underlying economic challenges that drive up costs, including high transportation expenses, multiple taxation, and insecurity.