The Centre for the Promotion of Private Enterprise (CPPE) has asked the Federal Competition and Consumer Protection Commission (FCCPC) to concentrate on its statutory task of ensuring consumers’ rights are not violated, and not turn itself into a price control agency.

 

 

The Centre gave the advice against the background of the recent directive, given by FCCPC, to  traders and other market stakeholders to crash the prices of  their goods within a one-month period, or face sanction.

 

 

But CPPE, in a statement signed by its Director/ CEO, Dr. Muda Yusuf, on Sunday, warned against what it described a ‘disproportionate focus of the Commission on the retail segment of the economy and pricing issues’.

 

 

It  noted that the core mandate of the Commission is  to create a robust competition framework across sectors, and protect consumer  rights and interests, and not directly seek to control price at the retail end of the supply chain.

 

 

The Centre argued that with the directive,  FCCPC is ‘unwittingly’ transforming into a price control agency, rather than carry out its core mandate of creating  a robust competition framework across sectors, adding that consumer protection is not about directly seeking to control price at the retail end of the supply chain.

 

 

It therefore queried the  Commission’s approach, methodology and recent threats to market leaders, traders and supermarket owners, describing it as tantamount to  fighting the symptoms rather than dealing with causes of the current inflationary pressure in the economy.

 

 

CPPE expressed the belief that instead of the Commission assuming this role, it is the fiscal and monetary authorities that should be statutorily responsible for macroeconomic policy issues, and are, therefore, better placed to deal with the challenge of high prices.

 

 

It also noted that the best way the Commission can protect consumers from exploitation is to diligently promote competition across sectors.

 

 

“Our experience with the telecoms sector amply validates this position. The emphasis should not be on pricing but on deepening the culture and practice of competition and a level- playing field for all investors. Intense competition makes profiteering difficult, and diminishes the chances of exploitation of consumers.  When consumers have choices, it is difficult to exploit them,” the Centre argued.

 

 

It added that, with the retail sector of the economy characterized by a multitude of players, the sector becomes the least vulnerable to profiteering, price gouging and consumer exploitation,  due to intense competition, contrary to the thinking of the Commission.

 

 

“There is an  estimated figure of  eight million retailers in the trade sector of the Nigerian economy.  And there are thousands of supermarkets, departmental stores and markets across the country.  The higher the number of players in a sector, the more competitive the operating environment becomes, and the more difficult it becomes for profiteering to take place.

 

 

“The truth is that the retail segment of the economy is the least vulnerable to price gouging or consumer exploitation on a sustainable basis, contrary to the thinking of the commission. They do not have the monopoly powers to influence prices or perpetuate profiteering sustainably.

 

 

“Besides, many of them are dealing in perishable items, which makes supply manipulation difficult because of the inherent pressure for speedy disposal of the products. The reality is that the risk of profiteering increases with monopoly powers,” it stated.

 

 

The Centre therefore advised FCCPC to focus its attention on creating a good competition framework to deepen competition across sectors, while also having  a proper comprehension of the dynamics of pricing and the key drivers of inflation.

 

 

CPPE identified some of the factors responsible for high pricing as  the naira exchange rate depreciation, high energy cost, high cost of logistics, seasonality of food production, high cost of funds, extortions on the highways, high post-harvest losses, high cargo clearing cost, impact of insecurity on food production, climate change and global factors disrupting supply chains.

 

 

The Centre also identified  the emerging dimension of the increasing export of Nigerian products to neighbouring countries in the West African sub-region, and beyond as a consequence of the weak domestic currency.

 

 

It therefore appealed to  FCCPC to refrain from 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.