At a recent event in Uyo, the Akwa Ibom State capital, the Executive Vice Chairman and Chief Executive Officer of the Federal Competition and Consumer Protection Commission, FCCPC, Mr. Olatunji Bello revealed that the commission had discovered cartels responsible for the exorbitant prices of goods and services, especially in the foodstuff industry.
Cartel is an association of manufacturers or suppliers with the purpose of maintaining prices at a high level and restricting competition.
Their goal is to maximize profit without giving a damn to how the final consumer feels or the general economic conditions of the nation.
According to Mr. Bello, cartels operate like a mafia organization and they currently dominate the packaging and poultry industry.
His words: “They operate in a mafia-like fashion such that if you choose to leave one of them to check the price of the other, before you would reach the next factory, the first seller would have tipped off the second seller to quote the same price … They had succeeded in frustrating the efforts of the government to make prices affordable for the masses of the country.”
For example, “The small poultry owners used to sell a day-old chick for between N480 and N590 and they still made a profit. But not after the arrival of two big players in the market. I choose to withhold their names at this point.”
“The big players brought in big money and expanded the market and expectedly they were soon in a position to control 80 to 90 percent of the poultry market in the city.”
“They used their clout and financial muscle to hijack the local poultry farmers association and now dictated that a day-old chick be sold at N1,350 in a curious reversal of the law of the economy of scale which otherwise stipulates that the more you produce, the less the unit price.”
He further explained that in the last one year, the Federal Ministry of Agriculture and Food Security has supported poultry farmers with broilers, vitamins, feeds and cash through various interventions across the nation’s six geopolitical zones but despite these, prices of poultry products have continued to skyrocket.
For instance, starter mash which sold for N11,000 in October 2023 rose to N14,000 in January this year, N16,500 in March, N21,500 in July and N23,500 in October.
He also added that the high prices of drinks in recyclable packs were substantially caused by “unfair pricing dictated by a cartel in the packaging sector.
“The cartel in the packaging sector consists of five big players who are in the business of importing and providing local manufacturers with packaging materials he said.
In lieu of the foregoing, a 50cl of Fanta in a plastic container that used to sell for between N150 and N200 now go for between N450 and N500.
He further stated that in a bid to cushion the harsh effects of the ongoing economic reforms by the Federal Government, President Bola Tinubu has introduced a number relief measures such as the removal of tariff on food imports, VAT on pharmaceuticals and medical devices, tax waivers for businesses and public transportation as well as provide easy credit for the conversion of vehicles from petrol to Compressed Natural Gas, CNG.
Therefore, it is only fair that our businessmen and businesswomen and traders share such gains with consumers in form of reduced prices.”
The revelation came on the heels of the latest report by the National Bureau of Statistics which indicated that the headline inflation rate for the month of October was 33.88% relative to that of September which stood at 32.70%.
The report showed that the headline inflation rate increased by 1.18% points when compared to that of September this year.
On a year-on-year basis, the report added that the headline inflation rate was 6.55% points higher than the rate recorded in October 2023 which was 27.33%.
Also, the urban inflation rate in September 2024 was 2.67 percent, reflecting a 0.28 percentage point increase compared to 2.39 percent in August 2024; while the rural inflation rate stood at 2.39 per cent in September 2024, up by 0.33 percentage points from 2.06 per cent recorded in August 2024.
In a related development, the investigations by the Daily Trust Newspaper has shown that the prices of building materials have also hit the rooftop, resulting to over 100 per cent hike within one year.
Cement prices moved from over N4,000 to N8,800 per bag, representing a 100 per cent increase.
Blocks in the block industry that used to sell for N250 each last year, now sell for between N550 and N600 depending on the size.
Iron rods which ranges from 10mm to 16mm, that used to sell for N800,000 per ton in 2023, now sell for N1,600,000 per ton depending on the brand.
The cost of paints has also gone up as a big rubber, which hitherto cost between N23,000 and N25,000, is now between N46,000 and N50,000.
The situation in the building sector has made a lot of persons to express doubt about the possibility of meeting the targets of affordable housing for all as contained in the Social Development Goal number 11:1 which deals with safe and affordable housing.
According to a real estate developer, Musa Ibrahim, he said: “With the current rise in the prices of building materials, affordable housing for all will remain a mirage until the government takes a deliberate action to crash prices.”
“It is even becoming worrying now that not only housing is affected but also rents as landlords wake up to increase rent at will, citing high cost of building materials.
Nigerians have endured unnecessary inflation of prices of goods and services for the larger part of the year, but now need a relief as we gradually approach the Yuletide season.
While price control is not on the cards of the FCCPC, the cartels responsible for the outrageous prices of goods and services should know that certain sections of the act establishing the FCCPC also empowered it to publish offenders.
Therefore, now is the time to take advantage of the grace provided by FCCPC in the spirit of democracy”, instead of enforcing the laws which prescribed stiff penalties, ranging from heavy fine to jail terms
Comrade Edwin Uhara is A Public Affairs Commentator.
