The Federal Competition and Consumer Protection Commission (FCCPC) has given a one-month moratorium to traders and market stakeholders engaged in exploitative pricing to reduce the costs of goods and services.
This was announced by Tunji Bello, the newly appointed executive vice chairman of the FCCPC, during a stakeholders’ engagement on exploitative pricing held on Thursday in Abuja.
Bello highlighted the growing concern over the unreasonable pricing of consumer goods and services, as well as the detrimental practices of certain market associations.
He cited an example where a fruit blender, commonly known as Ninja, was being sold for $89 (about N140,000) at a popular supermarket in Texas, USA, while the same product was being sold for an exorbitant N944,999 at a supermarket in Victoria Island, Lagos.
The FCCPC’s investigation into this matter raised concerns about the arbitrary price hike, which Bello described as a threat to the economy’s stability.
He also pointed out that under Section 155, violators, whether individuals or corporate entities, face severe penalties, including substantial fines and imprisonment if found guilty by the court.
However, he emphasised that the current approach is not punitive but rather a call for stakeholders to embrace patriotism and cooperation.
“Under Section 155, violators whether individuals or corporate entities face severe penalties including substantial fines and imprisonment if found guilty by the court.
”This is intended to deter all parties involved in such illicit activities.
”However, our approach today is not punitive. I, therefore, call on all stakeholders to embrace the spirit of patriotism and cooperation.
”It is in this spirit that we are giving a moratorium of one month (September) before the Commission will start firm enforcement,” Bello announced.
The meeting also provided a platform for market stakeholders to voice their concerns. They attributed the rising prices of goods and services to various factors, including high transportation costs, insecurity, multiple taxation, and high charges on imported goods at the ports.
Ifeanyi Okonkwo, chairman of the National Association of Nigerian Traders, FCT Chapter, suggested the formation of a task force to involve the association in enforcement efforts.
Emmanuel Odugwu from Kugbo Spare Parts market, said the initial cost of transportation of a trailer load of tyres from Lagos to Abuja was N450,000 but now, it costs over one million naira to transport the same.
Stakeholders from different sectors, including spare parts, flour mills, supermarkets, and bakeries, cited reasons such as exorbitant transport costs, high bank interest rates, rent increments, and multiple taxation as contributors to the price hikes.
The National Bureau of Statistics (NBS) had earlier reported that Nigeria’s headline inflation rate decelerated to 33.40% in July from 34.19% in June, sparking a glimmer of hope for many Nigerians. Food inflation also dropped to 39.53% in July from 40.8% in the previous month.
This drop, albeit minor, is attributed to a reduction in the prices of certain staple foods such as garri, akpu (fufu), and fresh fish, among others.
Several reports and surveys confirm these trends, highlighting that prices of items like tomatoes, pepper, and Irish potatoes have indeed dropped in recent months.
For instance, a basket of tomatoes has reportedly fallen from N120,000 to N50,000 between June and August 2024, offering some relief to consumers. The cost of garri, a staple in many Nigerian households, has also seen a reduction.
Many people, especially those in urban areas and low-income households, report that the prices of essential food items like rice, beans, and bread have remained stubbornly high or even increased in recent weeks.
“The figures don’t reflect what I’m seeing in the market,” said Adenike, a mother of three in Lagos. “The price of beans, bread, and rice has gone up again. It’s becoming increasingly difficult to put food on the table.”
Similar sentiments were echoed by market traders and consumers across the country. While some items may have experienced a slight price reduction, the overall cost of a food basket remains exorbitant for many families.
“Price of Garri, yam, tomatoes dropped a little, but rice, beans, bread, spaghetti, and groundnut oil is still very expensive,” said a trader in the Ikotun area of Lagos who does not want to be mentioned.
Economists and analysts have offered various explanations for the fluctuating inflation rates. Some attribute the recent decline to seasonal factors like increased agricultural production. Others point to government policies and exchange rate stability as contributing factors.
However, most experts agree that addressing the root causes of inflation, such as insecurity, infrastructure challenges, and monetary policy, is crucial for achieving sustainable price stability.
“It is a reality that prices of tomatoes, pepper and some other vegetables have dropped. And there is fluctuation in prices of other commodities like beans and rice,” Abiodun Olorundero, managing partner at Prasino Farms, said.
The agricultural expert cautioned that the recent decline in inflation rates might be short-lived. Despite the positive figures, he pointed out that the prices of essential commodities such as bread and rice remain elevated.
Olorudero attributed the current food price challenges to unfavorable weather conditions, particularly the rainfall deficit experienced in the northern part of the country. This, he said, has adversely affected agricultural production.
He expressed skepticism about the effectiveness of the government’s new policy of zero import duty and VAT exemption on basic food items.
According to him, the policy’s stringent conditions, which limit imports to paddy rather than processed rice, could hinder its impact on rice prices. The transportation of paddy to processing plants in the north and the potential for rice exports due to a weaker naira could further mitigate the policy’s benefits.
Olorudero emphasised that the ongoing challenges of high energy costs, foreign exchange volatility, and increased labour expenses due to the minimum wage hike would likely contribute to persistent inflationary pressures.
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