Prices to drop: FG gives traders 1-month deadline

The Federal Competition and Consumer Protection Commission (FCCPC) has issued a one-month moratorium for traders and other market stakeholders engaged in exploitative pricing practices to reduce the prices of goods.

The announcement was made by the newly appointed Executive Vice Chairman of the FCCPC, Mr. Tunji Bello, during a one-day stakeholders’ engagement on exploitative pricing held on August 29, 2024, in Abuja.

Bello stated that after the moratorium period, the commission would begin strict enforcement.

“This meeting is to address the growing trend of unreasonable pricing of consumer goods and services and the unwholesome practice of market associations,” he said.

He highlighted the commission’s discovery of a fruit blender known as Ninja, which was being sold for $89 (approximately N140,000) at a popular supermarket in Texas, but was priced at N944,999 at a supermarket on Victoria Island, Lagos.

Bello questioned the rationale behind the significant price disparity, stating that such arbitrary hikes were unacceptable.

He warned that these unwholesome practices, including price fixing, were threatening the stability of the economy.

“Under Section 155, violators, whether individuals or corporate entities, face severe penalties including substantial fines and imprisonment if found guilty by the court,” Bello explained.

However, he clarified that the commission’s current approach was not intended to be punitive.

“I, therefore, call on all stakeholders to embrace the spirit of patriotism and cooperation,” he urged.

Bello emphasized the importance of the moratorium, saying:

“We are giving a moratorium of one month (September) before the commission will start firm enforcement.”

“We have heard, and you have genuine issues.

“The government has the responsibility to address the problems, but generally, let us talk to ourselves too”.

He also pointed out that there were “gang-ups to exploit consumers by traders.

Contributing factors to high prices

During the engagement, market stakeholders attributed the rising cost of goods and services to several factors, including high transportation costs, insecurity, and multiple taxation.

Ifeanyi Okonkwo, Chairman of the National Association of Nigerian Traders (FCT Chapter), highlighted that charges on imported goods at the ports also contributed to the price hikes.

He called on the FCCPC to establish a task force and involve the association in its enforcement activities.

Mr. Emmanuel Odugwu from Kugbo Spare Parts market noted that the cost of transporting a trailer load of tires from Lagos to Abuja had surged from N450,000 to over N1 million.

Ms. Kemi Ashiri, Liaison Manager of Flour Mills, argued that regulatory fines needed to be harmonized for businesses to survive.

Ikenna Ubaka, speaking for supermarket owners, alleged that banks were charging interest rates exceeding 30%.

He also noted that rent increases and supply chain price hikes further escalated costs.

He also claimed that electricity distribution companies were imposing exorbitant charges on supermarkets.

Mr. Solomon Ukeme from the Master Bakers Association noted that prices of key ingredients like flour, sugar, and butter had surged.

This rise had significantly driven up the cost of confectioneries.

“A bag of flour that was previously sold for N34,000 is now being sold for N74,000,” he said.

Ukeme also identified multiple taxation as a major factor contributing to the high cost of bread.

Overview of FCCPC’s role

FCCPC is a critical agency in Nigeria responsible for safeguarding consumer rights and ensuring fair market competition.

Established by the Federal Competition and Consumer Protection Act (FCCPA) of 2019, the FCCPC consolidates the functions of the former Consumer Protection Council (CPC).

It also integrates the Nigerian Communications Commission’s Consumer Affairs Bureau.

This consolidation strengthens consumer protection efforts in the country.

The FCCPC investigates and enforces consumer protection laws, promotes consumer rights and education, and fosters fair market competition.

The commission is empowered to address various anti-competitive practices, such as price-fixing, market allocation, and monopolistic behaviors.

Additionally, the FCCPC regulates advertising practices to prevent misleading or deceptive advertisements that could harm consumers.

By carrying out these functions, the FCCPC aims to create a market environment conducive to economic growth while protecting consumers from exploitation​.

History of price regulation in Nigeria

Price regulation in Nigeria has a complex history, marked by several interventions aimed at curbing exploitative pricing practices.

The government historically regulates prices during economic instability or to protect consumers from price gouging.

Under the FCCPA, the FCCPC has powers to regulate prices to address anti-competitive practices threatening market stability.

Under the FCCPA, the President can regulate prices of goods and services to enhance competition and control the market.

This provision lets the government intervene directly, preventing market abuse by businesses and ensuring consumers aren’t charged excessively high prices.

In the past, similar regulatory bodies, such as the now-defunct Price Control Board, were established to control the prices of essential goods.

However, these efforts often faced challenges such as enforcement difficulties and resistance from market stakeholders.

The FCCPC’s broader mandate and enhanced enforcement powers offer a stronger approach to regulating prices and ensuring fair competition.

The FCCPC’s ongoing efforts, like the moratorium on exploitative pricing, underscore its commitment to market stability and consumer protection.

The FCCPC’s strategy integrates enforcement, education, and stakeholder engagement, essential for sustainable price regulation success in Nigeria.

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