• Sunday, May 19, 2024
businessday logo

BusinessDay

Wanted: Ministry of Multichoice and government palliatives for Nigeria

Wanted: Ministry of Multichoice and government palliatives for Nigeria

It appears that the federal government is about to upend the Nigerian free market following the ex-parte injunction of a Competition and Consumer Protection Tribunal (CCPT) barring pay TV services provider MultiChoice from increasing the prices of its bouquet of services.

While the ex-parte ruling on the matter initiated by a certain Festus Onifade might not be judgment, the ruling highlights the sickening hypocrisy bedevilling the Nigerian socio-economic environment, which compels the question of what constitutes priorities for those in charge of driving this economy out of the doldrums.

Immediately after I read the news of the ruling in a Vanguard newspaper publication, I scanned through the internet in search of the laws and powers of the Federal Competition and Consumer Protection Commission (FCCPC), and I was able to grab some information on what is termed restrictive agreements.

Restrictive Agreements under the FCCPA, my finding showed, “are agreements that prevent, restrict, or distort competition in any market. This can be done through price fixing, market allocation, limitation of production and distribution of goods and services, collusive tendering, and tied selling. Agreements that involve any of the above activities are, by virtue of the FCCPA, generally unlawful and have no legal effect.”

My question then is, how on earth can a company that, for reasons entirely predicated on the cost of its business operations, be deemed to have run afoul of the law for increasing the prices of its products and services?

Apart from the economic realities of inflation that necessitated the price increase, Multichoice is playing in an industry where fair competition exists and where consumers also have the option of either gravitating to service providers that offer more competitive prices or even totally avoiding subscribing to pay television.

Pay television cannot be considered an essential service that has to be regulated by the government in the public interest, and where the service provider is neither obstructing competition nor preventing the consuming public from migrating to competition, what business of the government and its tribunals is it how much they charge for services?

We are in a country where the government has practically increased the prices of nearly every service it provides for the people, yet it manages to extend its hands of control into the private sector in a manner that suggests certain businesses are being made to replace public utilities that have to be either subsidised or at best served by the people as factor costs.

It is curious that while the government, through this tribunal, is overreaching itself to impose a price control regime on what is entirely a private sector entity, the Nigerian Minister for Power and the Federal House of Representatives are at loggerheads over the recent 235 percent increase in electricity tariffs in the country.

Nigerians, on April 3, 2024, were jolted by the news of an increase in the electricity tariff from N67 per kilowatt hour to N225 per kilowatt hour. Even as the companies that are in charge of providing electricity, a very essential public utility, have been unable to either provide this service or effectively metered their services to ensure that consumers pay appropriately for what they consume.

While the House of Representatives was insistent on shelving the implementation of the new tariff, Minister of Power Adebayo Adelabu said any failure to implement the new tariff regime would throw the country into darkness.

The question here is, what sort of darkness will MultiChoice’s tariff increase impose on Nigerians, given the variety of options available for Nigerians? Shouldn’t those who cannot afford the new tariff either opt out of competition or rely on terrestrial television services that are available free of charge?

As far as electricity is concerned, the only options available for the helpless citizens of Nigeria are to spend millions of naira on solar power installation or rely on petrol and diesel-powered generating sets. Here is where hypocrisy walks around naked. Upon assumption of office, the government increased the pump price of premium motor spirit (PMS) by more than 500 percent, from N185 a litre to between N585 and N650 in some parts of the country.

These are not all. Under the watch of the Nigerian government, the value of the naira has continued to plummet unabated, triggering intractable inflation. Businesses such as Nigerian Breweries, Nestle, Guinness, and a host of other consumer-centric businesses in the country reported dizzying losses as a result of the adverse impact of foreign exchange headwinds on their businesses.

Multichoice relies on forex for most of its inputs. Multichoice relies on diesel power to maintain its offices and service equipment nationwide. MultiChoice pays premium grid electricity when available and pays the premium to the multitude of production houses that produce all the programmes Nigerians enjoy on its Africa Magic channels.

If the Federal Government feels justified to remove subsidies on electricity and fuel (perhaps those on Mecca Pilgrimages), should Multichoice not be economically entitled to increase tariffs for its services given the impact of the naira exchange and the consequent increases in the prices of inputs on its business?

We live in a country where fees paid for admission to federal universities have increased by more than 200 percent, an indication that the government of Nigeria may have determined funding for education. Why should a business be prevented from effecting a marginal price increase?

It seems that there is a conspiracy to impose selective victimisation on Multichoice, and the ruling of this government tribunal appears to validate this suspicion. Since the increase in its prices was mooted, Nigerians have been mustered into a bullying crowd, triggering conversations about the boycott of MultiChoice.

But it has now become obvious that the effort is powered by competing pay-TV operators and fuelled by ignorance. Has the government attempted to regulate the skyrocketing cost of air transportation, which has risen by more than 150 percent since May 2023? Coca-Cola and Pepsi now sell for N350, up from N100 less than a year ago. A bottle of water is N200, up from N100 a year ago. I recently visited a restaurant in Ikeja after about eight months and was shocked when a bill of N6,800 was placed before me. I never paid anything more than N3,000 in this place in those good old days.

I do not want to remind Nigerians and the Nigerian government of the prices of rice, garri, and other essential staples.

If the government cannot provide succour to the people with those essential products, why hold the focus on MultiChoice, a private business with less than 25 million subscribers, or just 12.5 percent of the population of the country?

Those who make a show of fighting MultiChoice easily forget the battles they have fought to remain in business, even in the face of crippling government hostility. Not long ago, in the determination to give Nigerians an opportunity to drive the pay-TV market, the Super Sports bouquet was taken from MultiChoice and allocated to a Nigerian company, HiTv.

To remain in business, MultiChoice created the Africa Magic bouquet and continually invested in it, paying for and producing purely African content. While these channels were growing from one to as many as seven, With Africa Magic, content providers in the country began to proliferate because Multichoice was paying them. More importantly, we saw a company that was investing in promoting indigenous languages through Africa Magic Igbo, Africa Magic Hausa, and Africa Magic Yoruba.

I do not know any person who follows the Nigerian movie industry who would claim ignorance of the reality that Nigerian movies’ continued dominance of the African market has the footprints of Multichoice all over the path. Can anyone possibly work out the income and influence opportunities this has created for Nigerians and Nigeria as a force in the community of nations?

We need to get our priorities right as a nation. MultiChoice is not the government ministry department or agency that some people are turning to. I can even state without fear of equivocation that should MultiChoice become a ministry in the sort of Nigerian government we operate today, pay-TV and some of the exclusive content MultiChoice brings would be out of the reach of the poor and average-income earners in the country.

Multichoice is a business that operates in the difficult environment created by the government of Nigeria. Let the government allow its free market economy to sort things out. Let the government fix the exchange rate of the naira; let them fix the refineries in Nigeria and make fuel available at affordable rates; let them rouse the productive sector of the economy and cause the naira to compete fairly against other international currencies.

If they achieve these, market forces and competition will become MultiChoice’s nemesis or its vindication.

Until then, please stop stifling businesses that have agreed to operate in Nigeria. Many others are taking flight, y’know?

 

Ikem Okuhu is a journalist, a Public Relations professional, brand strategist and teacher. With a career that traversed Print Media, Oil & Gas, Banking and entrepreneurship, Ikem is the author of wave-making book; PITCH: Debunking Marketing’s Strongest Myths, a dispassionate exposition of the dos and don’ts of successful engagement in the marketplace, especially the Nigerian marketplace. He is the founder/publisher of BRANDish, Nigeria’s first nationally circulating Brands and Marketing magazine.