Members of the Organised Private Sector (OPS) yesterday raised concern that the Federal Competition and Consumers Protection Commission (FCCPC) was becoming price control agency rather than furthering its core mandate of consumer protection.
This followed the FCCPC's recent one-month notice to retailers to crash prices of goods or face sanctions.
The members of the OPS that expressed this concern were the Nigeria Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Nigeria Employers' Consultative Association (NECA) and the Centre for the Promotion of Private Enterprise (CPPE).
They pointed out that the blame and solution for the escalating prices of goods and services in the Nigerian markets were at the doorstep of the federal government.
In a public statement captioned: "FCCPC Should Avoid a Price Control Mindset," an Economist and Chief Executive Officer of CPPE, Dr. Muda Yusuf, pointed out that the disproportionate focus of the FCCPC on the retail segment of the economy and pricing issues underscored the assertion that the commission was transforming itself into a price control agency.
"There is an emerging risk of market suppression and private enterprise repression by the FCCPC if the current trajectory continues," he stated.
He said that this would mark: "An elevation of regulatory risk in the Nigerian economy, which is detrimental to investors' confidence," adding that the CPPE is concerned about the approach, methodology, targeting and the recent threats by the FCCPC to market leaders, traders and supermarket owners.
"The commission seems to be fighting the symptoms rather than dealing with the causes of the current inflationary pressure in the economy.
"Even then, the core mandate of the commission is not to fight inflation. The fiscal and monetary authorities are statutorily responsible for macroeconomic policy issues and are better placed to deal with the challenge of high prices.
"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 that resulted in spiralling inflation in the first place. The dynamics of pricing and prices in an economy are much more complex and fundamental and do not seem aligned with the comprehension of the FCCPC on the issue."
It, therefore, appealed to the FCCPC to refrain from acts that might be construed by the public as further intimidation of the operators in the retail sector of the economy most of whom are micro and small businesses, with many in the informal sector.
Yusuf also drew the 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 said.
In its reaction to the FCCPC's directive that retailers should crash the price of goods in the market within one month, NECA urged the government to address key economic fundamentals in order to induce low commodity prices and service charges.
The Director General and Chief Executive Officer of NECA, Mr. Adewale-Smatt Oyerinde, attributed the continuous escalation in commodity prices and service charges in the economy to abrasive macroeconomic fundamentals such as rising exchange rate, i
nterest rate and high inflation rate.
Oyerinde averred that it would be practically impossible to have a stable price regime in the face of "constantly fluctuating exchange rate, galloping lending rate, high energy costs, multiplicity of taxes, levies, fees and an unfriendly regulatory environment."
He, therefore, cautioned that the use of enforcement to moderate prices in the economy would be tantamount to enforcing price control, which might lead to hoarding of commodities and further distortion of the economy.
"Any price control measure would also contradict the market economy that the government is projecting and send wrong signals to prospective foreign and domestic investors," he stated.
He also feared that the FCCPC might never be able to determine what the right commodity prices and service charges should be given the complex costs situation that businesses are facing.
Speaking in the same vein, the National President of NACCIMA, Mr. Dele Oye, said that the problem of exploitative pricing was a symptom of deeper, systemic challenges in the Nigerian economy that are caused by government policies and infrastructure deficits, which are not issues that could be solely attributed to the private sector's malicious intent.
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Oye said: "The primary responsibility for addressing the issue of exploitative pricing lies with the government and its policies.
"The government's opaque and inconsistent policies, its prioritisation of revenue generation over trade facilitation, and its failure to adequately address the systemic challenges impacting the ease of doing business in Nigeria are the key drivers to price fluctuations.
"The root cause of this problem is not the private sector, but rather a government that has not been faithful enough in its duty to create an enabling environment for businesses to thrive.
"The problem of exploitative pricing is not one that the private sector can solve alone; it requires a concerted effort by the government to address the systemic challenges and create an environment that fosters fair competition, innovation, and consumer protection.
"The way forward is not the pointing of fingers at each other, but rather what is needed is a comprehensive, collaborative approach that tackles the root causes and empowers businesses to thrive while safeguarding the interests of consumers."
