Nigerians need to be blunt about some realities on ground in the country. It is no longer news that things are very hard for the citizens and other people resident in the country, or that the cost of living has gone beyond what millions of people can easily afford. That companies are closing operation in Nigeria and relocating to neighbouring countries is also what we read about almost daily in media reports. Indeed, for individuals and households, the greatest challenge at the moment is high cost of living, and to almost every business, it is persistent increase in the cost of operation. Can we really expect this situation to persist without any consequence?The most crucial concern of individuals and companies under this situation, even if it gets worse, is survival. Usually, whatever step is taken any business to survive becomes the consequence of the situation on ground. We cannot run away from it, and it is on this note that some decisions of some businesses, with regard to hike in the prices of their products and services amid rising operation cost, should be seen in the context of compelling need to stay afloat.
A fact is that most businesses are run to make profit. When the situation in a country is such that jerks up the cost of doing business, it will always affect the consumers of products and services as is now the case with some businesses, including MultiChoice, the parent company for the pay-TV outfits, DStv and GOtv that increased its tariffs due to what it described as continued increase in the cost of doing business in Nigeria. We have seen similar reaction to the strangulating economic situation in the country by government agencies that approved 50 per cent increase in data cost for telecom operators to survive in their business and raised tariffs to prevent electricity companies from going under.
These reactions to the increasing operation costs by these establishments may be causing uproar now, but the truth is that until the root causes of the high cost of living and doing business in the country are sincerely addressed, the situation may continue to get worse and Nigerians will always be the ones to bear the brunt.
In defence of its action, MultiChoice is pointing to the depreciation of the national currency with the value of naira dropping significantly, and high inflation, shooting up operation expenses.It is the same challenges most companies, including those owned by government, are facing.
Today, the inflation rate in Nigeria is one of the highest in Africa with food prices, transportation cost, energy cost and money spent on security increasing significantly despite the rebasing of the Consumer Price Index (CPI) by the National Bureau of Statistics (NBS). As part of the implications, many small and medium-sized enterprises have been folding up, worsening the unemployment situation in the country. Many that ought to have started operation and making contributions to national economic growth have not been able to see the light of day.
What should be our reaction to the situation as a country or as a government is not stopping MultiChoice and other companies having similar challenges from taking steps to stay afloat but to identify the challenges and tackle them effectively. We cannot pretend that the reasons given by those increasing their charges are not genuine or that they are not serious enough to warrant the decisions they have taken.
I read about a member of the House of Representatives from Edo State, Esosa Iyawe of the All Progressives Congress (APC) who made a frantic effort to get the House to direct MultiChoice to suspend the planned tariff hike. He explained that the increase in tariff in May last year sparked public outrage to the extent that many Nigerians who were already dealing with high cost of living were forced to ditch their decoders, even as he lamented what he claimed to be lack of competition in the pay-TV sector. We can ask; what is responsible for the high cost of living, and whose fault it is that there is no competition in the pay-TV sector? Is it MultiChoice?Even some live streaming channels, including YouTube that should not cost much to watch have been literally blocked against many struggling Nigerians through the 50 per cent increase in data tariffs granted by the government so that telecom operators can cope with the rising operation cost, and the need to sustain the industry.
Iyawe’s concern for the additional financial burden that the increase in DStv and GOtv tariffs will place on Nigerians may be genuine, but the story should not be that of lamentation but of what the government should do to mitigate the effects of the frequent fall in the value of the naira and the high inflation on businesses so that Nigerians can enjoy stability in prices of goods and services. Unfortunately, the discussion by the lawmakers, which ended with a directive that the tariff hike be suspended, failed to proffer solution to the high cost of operation that forced MultiChoice to take the survival approach. Have we forgotten that MultiChoice is a private company which normally should have the right to determine how much should be paid for its services based majorly on the operation expenses? The Federal Competition and Consumer Protection Commission (FCCPC)is having issues with the increase in the tariffs, asking for time to investigate it, but how many of the other increases we have seen have been investigated and where are the reports? Are we trying to feign ignorance of the fact that the cost of doing business in Nigeria has gone up and every company is increasing their charges? The Nigerian Economic Summit Group (NESG) has just made a worrisome revelation that the harsh economic environment in the country has led to closure of 30 per cent of Nigeria’s micro and small mediun enterprises. The Chief Economist and Director of Research at NESG, Dr Segun Omisakin, at the launch of the 2025 Private Sector Outlook, said the business closures and multinational divestments led to N94trillion economic loss for the country. Is this what we expect to continue to happen; is this how a country grows or what do you expect to happen when an investment is not breaking even?
We were in this country when the Federal Government said fuel marketers were free to sell their products at market rate.Apart from the Nigerian Communications Commission (NCC) approving the 50 per cent increase in the cost of data in the telecom sector, electricity tariffs have been increased severally in the power sector, fuel prices increase frequently, bakers have increased the prices of bread at different times, the cost of renewing vehicle particulars have gone up, school fees have been increased and the costs of medical treatment have been hiked. Even in Lagos, how much commercial bus operators pay Agberos to pick passengers at bus stops has gone higher up, sometimes leading to fighting between the ‘conductors’ and the Agberos.
The government may not be able to justify prevention of MultiChoce from raising its tariffs in the face of the rising operation cost. It is not a government-owned firm. Watching entertainment programmes on a pay-TV channel is not a right. It is a service that should be paid forwith the provider determining how much should be paid based on how much was spent on production.
We can only appeal to all service providers and manufacturers to be considerate of the financial burden that the economic situation in the country has already placed on the citizens.That the cost of doing business in Nigeria is putting serious pressure on the owners is a reality that stares us in the face.
The companies increasing the tariffs for their services are not our problem in Nigeria but the government that has not been able to do something serious to tackle the high inflation and reduce the cost of operating business in the country.
The companies, particularly the multinational, that are relocating from Nigeria also point to high cost of doing business in the country, among other reasons. What should worry us is the shameful fact that over 60 years after independence, and with the enormous resources with which God has endowed this country, we still cannot provide stable electricity supply and other important infrastructure as well as safe atmosphere for companies to operate with minimal cost. This is the jinx that we need to break. It will be difficult to make businesses to continue to operate at a loss. The best way to exhibit concern and protect Nigerians is for the government to tackle the challenges that are causing instability in the prices of goods and services.
