Consumers at mercy of government, monopolies

In the wake of outrageous increase in prices of essential goods and foodstuff, enforcement teams of the Federal Competition and Consumer Protection Commission (FCCPC), have been upbeat in their mandate to protect consumers.

They raided supermarkets and detained products they ascertained were not properly tagged as well as identified those that have expired, but their dates were craftily and criminally altered to deceive consumers.

Those efforts and appearances are useful to create awareness and alert unsuspecting customers. But there are weightier forces to confront to force down prices.

In their recent Abuja outing, the Commission said it discovered species of rice, Stallion and Caprice, products that had exited the production line years ago were still available, re-tagged to swindle buyers. FCCPC said it confiscated 34 bags that contained weevils but were repackaged with shelf life of 2026. That’s quite revealing, but apart from seizures, FCCPC should go steps further to prosecute these criminal infractions so that others in that trade will learn lessons.

However, these random, downstream raids cannot be far-reaching if we do not have in mind upstream cartels and policies of government that trigger high production costs. On April 17, the Commission expressed concern that, “despite recent appreciation of the naira against the dollar, consumers continue to face escalating costs without a corresponding decrease in prices.

The situation is unacceptable, and the FCCPC is committed to protecting consumers from exploitation.” The Commission then charged Nigerians to report businesses that hike prices arbitrarily.

The retail price of a one-foot yam tuber at some Lagos neighbourhood is N4,000. This is not something that can fill the plates of a moderate-sized family at breakfast, but the itinerant vendor whose ‘supermarket’ is a wheelbarrow insisted that’s the retail price.

How does one report a trader of no fixed address, whose product is not even in the category of items affected by movement of the dollar? And what will form the content of such report; that a vendor who takes the risk to source yam from faraway markets in Abuja and Niger State, should not sell at prices appropriate to cover his costs?

It’s difficult to figure out what magic the FCCPC will conjure to force down prices when they do not manage the economic variables. It is even fraudulent of a government that claims to operate a free-market economy to complain of high retail prices, when it is unwilling and unable to bring down production and other costs.

For instance, if you are an importer and you bring vehicles through Nigerian ports, these are the charges you must settle: shipping line charges; shipping line import fee; Nigerian port freight additional recovery fee; port and terminal charges; free parking rent period; total parking rent; terminal handling charge; VAT at 7.5 per cent; stamp duty and terminal documentation.

If you’re moving a container within Lagos, prepare to pay between N450,000 and N600,000. To move containers from the Eastern ports to other parts of the country, prepare to pay between N350,000 to N1,800,000, depending on the location. It is the same cost when you have goods to export.

If your consignment enters demurrage, you pay N30,000 every extra day. Delays are orchestrated to prolong your stay. Trucks are reported to spend two to three weeks at Lillypond, to access Apapa Port, due to poor APMT operations. Not to mention the multiple checkpoints where truckers are fleeced.

Doing maritime business in Nigeria is reported to be costliest within the ECOWAS sub-region, not because of efficiency and ease of doing business, just the outcome of a dishonest craving for levies and touting. The consumer suffers the brunt.

The same FCCPC later confessed that multiple taxes are among reasons consumer prices are refusing to come down despite government propaganda. The Commission said it conducted a comprehensive investigation and found that government and its agencies were the real culprits.

The Director of Surveillance and Investigations of the commission, Mrs Boladale Adeyinka made the revelation in a chat with journalists. She said: “We’ve conducted extensive interviews with marketing executives and sellers across various sectors. Despite government efforts to stabilise the currency, prices remain high. Our findings point to a complex web of factors, including multiple layers of taxation and importation costs, driving prices up. The cost of transportation is a significant burden on the sellers, and this cost is inevitably passed on to the consumer. For instance, a product that once cost N15,000 now sells for N50,000.

“This drastic increase is largely due to higher transportation expenses, the rising cost of pesticides, and insecurity concerns in certain areas. Our first step is to compile a report on the multiple taxes affecting the market and advise government on potential solutions. We aim to unlock the market by reducing these taxes, thereby easing the financial burden on both sellers and consumers.” A very noble intention.

But it is not likely this government will heed the advice of the FCCPC and soften its addiction for taxes. However, it is a fair assessment that a Commission of the Federal Government has identified it as the major source and reason for higher prices. Doing that, the Commission has exposed the many lies government propagates when it blames ‘unpatriotic elements’ for the galloping inflation it has engineered.

The number one source of today’s economic misery is the fuel tax President Tinubu whimsically imposed on poor Nigerians on May 29, 2023. All over the world, sensitive governments cap prices of essential commodities and services that affect the majority of citizens in several ways: electricity and petroleum products are too essential and sensitive for any intelligent government to abandon to monopolies, in the name of market forces. But the advisers of this government, the International Monetary Fund (IMF) had cajoled the President to impose more taxes, starting with the fuel tax.

The Federal Government has refineries that are not working. For more than ten years, Nigeria has been importing refined products from countries that do not have the advantage of crude oil deposit. After a cartel of fuel importers (friends of government) swindled the government of huge sums for parading empty cargoes and fictitious bills, in pretense of fuel credit, the NNPCL became the sole importer on behalf of government. Yet, the figures still didn’t add up because what is claimed as daily local consumption was far from reality.

It was then alleged that the excess numbers were smuggled to other countries in ECOWAS and Central Africa. Since government pretends not to have solution to curb evil activities of smugglers, it decided to sell fuel to Nigerians in the amounts charged in ECOWAS countries. Old story.

The lie told by the IMF remains that fuel subsidy only benefits the rich; that the top 20 per cent households benefit twice from subsidy as the bottom 20 per cent. If the tool to isolate rich households is ownership of vehicles, let it be known that there were just 11.8 million registered vehicles in the country as at 2018, according to the National Bureau of Statistics (NBS).

Assuming that number is now 20 million vehicles by 2024, is IMF saying that close to 180 million other Nigerians don’t need a lot of petrol because they don’t own vehicles? What about the artisans who use petrol to power machines; the cold-room vendors, logistic companies that ferry goods from place to place? What about school children and workers who commute to places via public transportation daily?

Their solution is to provide mass transportation that are not cheap. At best, state governments will cut fares by 25-50 per cent for six months, part of IMF’s dictations that don’t make sense in far-flung and unserved rural communities, where petrol sells for N700 per litre. It is from rural areas food is transported to townships and cities at very high costs.

State governments are jubilating because petrol taxes are yielding very good returns. Even the most cosmopolitan of them have refused to do things differently. They are advertising bags of rice and beans as palliatives for their ‘poorest of the poor.’ It’s a thing of shame to even admit that citizens live in abject poverty and the best government could do is subject them to status of Internally Displaced Persons (IDPs) and victims of disastrous policies.

But these were once self-sustaining and self-respecting taxpayers, who didn’t need food palliatives to survive, except that this government, in less than one year has multiplied the number of poor people it inherited from the last administration.

Five electricity Distributing Companies (DisCos) are now to be sold because the faceless owners who took money from banks to purchase them in 2013 have defaulted. Private monopolies that were spoon-fed by government for ten years have crashed. The liability is on poor and unmetered consumers, who are now segmented into bands, similar to the obnoxious segregation policy Nigeria fought to dethrone during apartheid in South Africa.

The propaganda out there is that the naira is doing better and prices of essential production inputs, for example, diesel, has crashed. Yet, retail price is still N1,250 per litre along the coast and far more in the hinterland. Who is benefitting from the purported crash? And why is cement still so costly? Maybe FCCPC can help.

Football lovers who watch matches on pay TV channels were jolted last week, when MultiChoice, again announced a 25 per cent increase in subscription fee for DSTV and GOTV bouquets. But the company said the new fees are market-reflective, just like the new electricity tariffs. They said businesses are victims of high operational costs and the very harsh economic dynamics of the moment. They need to survive.

Businesses are struggling and consumers are hurting. It is hoped that the National Assembly will interrogate the market and policies of government intelligently. Citizens deserve fair policies, not palliatives!