The CPPE has urged the FCCPC to stop intimidating traders and businesses as Nigeria faces rising commodity inflation. Learn more about their statement.
The CPPE has requested that the Federal Competition and Consumer Protection Commission refrain from adopting a mindset focused on price control.
On Sunday, a statement released by Dr. Muda Yusuf revealed the disclosure from CPPE’s Director.
Several days following FCCPC’s ultimatum for traders and businesses to drastically lower their prices, CPPE has made comments on the matter.
CPPE expressed concern about the FCCPC’s excessive attention on the retail sector of the economy.
Consumer protection does not involve attempting to directly regulate retail prices, according to the economic think-tank group.
It seems that the FCCPC is unknowingly shifting its focus from being a commission dedicated to consumer protection to becoming an agency for controlling prices.
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This assertion is underscored by the commission’s disproportionate emphasis on pricing issues of the retail sector within the economy.
The commission’s primary objective is to establish a comprehensive competition system across all industries and safeguard consumer rights. It must be noted, however, that protecting consumers does not entail regulating retail prices directly. In light of this fact, the CPPE has expressed concerns regarding the FCCPC’s tactics towards prominent market players such as traders and supermarket proprietors in terms of approach, methodology and targeting strategies.
It appears that the commission is addressing only the symptoms of inflation in the economy instead of tackling its root causes. Moreover, it should be noted that battling inflation isn’t even within their primary duties. The fiscal and monetary authorities are responsible by law for macroeconomic policy matters and have a more favorable position to handle price surges effectively.
Both theoretical and empirical evidence confirm that promoting competition is the most effective way to safeguard consumers against exploitation. The telecoms sector serves as a prime example of this approach’s efficacy. Rather than focusing on pricing, priority ought to be given to fostering healthy competition and an equitable playing field for all investors. Competition eliminates gouging practices and reduces consumer vulnerability to exploitation; when options abound, it becomes challenging to take advantage of them.
The economic retail industry is abundant with several participants, boasting an estimated eight million retailers in the Nigerian trade sector. From numerous supermarkets to departmental stores and markets spread across the country, competition intensifies with a higher count of contenders in this space which renders profiteering more arduous.
Contrary to the commission’s belief, retail is actually the least susceptible segment of the economy to sustained price gouging or consumer exploitation. Retailers lack monopolistic powers that could influence prices in a way that perpetuates profiteering over time. Additionally, many retailers deal with perishable goods which makes it challenging for them manipulate supply given their inherent pressure for speedy product disposal.
Increasing monopoly powers amplify the likelihood of profiteering. Therefore, it is crucial for the commission to concentrate on establishing a sound competition framework that promotes competitiveness across all industries.
To effectively handle pricing dynamics and inflation, the commission must have a thorough understanding of key drivers such as: currency depreciation, costly energy & logistics, seasonal food production fluctuations, expensive funds/access to credit, extortion on highways or roads leading to high losses after harvests. Additionally impacting factors are global disruptions in supply chains due to insecurity concerns linked with climate change.”
The CPPE requested that the FCCPC stop intimidating retail sector operators, particularly micro and small businesses in the informal sector.
