CPPE Warns FCCPC Against Turning into Price Control Agency
The Centre for the Promotion of Private Enterprise (CPPE) has said, the Federal Competition and Consumer Protection Commission (FCCPC) appears to be unwittingly transforming into a price control agency rather than a consumer protection commission.
The director/CEO of CPPE, Dr. Muda Yusuf stated that the disproportionate focus of the commission on the retail segment of the economy and pricing issues underscores this assertion.
“The core mandate of the commission is the creation of a robust competition framework across sectors and protection of consumer rights and interests.
“Consumer protection is not about directly seeking to control price at the retail end of the supply chain,” he said.
According to Yusuf, this is why 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 seem 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.
“It has been proven, theoretically and empirically, that the best way to protect consumers from exploitation is to diligently promote competition across sectors,” he pointed out.
He stressed that the emphasis should not be on pricing but on deepening the culture and practice of competition and a level playing field for all investors, noting that, “intense competition makes profiteering difficult and diminishes the chances of exploitation of consumers. When consumers have choices, it is difficult to exploit them.”
Yusuf added that, “the retail sector of the economy is characterized by a multitude of players. There are an estimated 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.”
He noted 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, saying, “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.”
Yusuf added that the commission needs a proper comprehension of the dynamics of pricing and the key drivers of inflation.
“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 which resulted in spiraling 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,” Yusuf stated.
The CPPE appealed to the 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.
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