NECA cautions against price control in retail segment

The Nigeria Employers’ Consultative Association (NECA) has cautioned against the use of enforcement by the Federal Competition and Consumer Protection Commission (FCCPC) on traders and other market stakeholders to moderate prices in the economy. The body said this would be tantamount to price control, which may lead to hoarding of commodities and further distortion of the economy.

The Director-General/Chief Executive of NECA, Adewale-Smatt Oyerinde, said the continuous escalation in commodity prices and service charges in the economy was a product of abrasive macroeconomic fundamentals, stating that any price control measure would contradict the market economy that the government was projecting and also send a wrong signal to prospective foreign and domestic investors.

Noting that it would be practically impossible to have a stable price regime, Oyerinde said that the magnitude of the three key economic prices, vis-a-vis exchange rate, inflation rate and interest rate, coupled with contradictions in the regulatory environment, with a constantly fluctuating exchange rate and galloping lending rate, high energy costs, multiplicity of taxes, levies and fees and an unfriendly regulatory environment all conspired to influence current price rates.

According to Oyerinde, the rising commodity prices and service charges could be better moderated by addressing the macroeconomic fundamentals, such as inflation, exchange rates and fiscal policies, which feed into the high cost of doing business in the economy.

The NECA boss urged the Federal Government to embrace measures that would encourage foreign exchange conservation, adopt a more beneficial rate exchange regime, embark on inward-looking monetary management to moderate the cost of borrowing, invest significantly in infrastructure development, encourage domestic refining to lower cost of transportation, logistics and pursue general improvement in the business operating environment.

The FCCPC had last week granted one month to traders and other market stakeholders to moderate the prices of their goods and services or face enforcement by the Commission.

According to the Commission, the measures are to curb the observed trend of unreasonable pricing of consumer goods and services by traders and market associations.