The Executive Vice Chairman/Chief Executive Officer, of the Federal Competition and Consumer Protection Commission, FCCPC, Adamu Abdullah in this EXCLUSIVE interview with DAILY POST correspondent, Ochogwu Sunday, speaks on the continuous rise in prices of goods in the market.
He also bares his soul on the recent tariff price hike by the MultiChoice Nigeria Limited, the owners of Dstv and Gotv and some other pressing issues. Excerpts:
Due to some federal government policies, prices of goods and services have skyrocketed since last year. Consumers now find it difficult to afford even a meal. What is the Commission doing about this?
We have a deregulated economy, which means there is competition in the market among everybody, including all the suppliers and even manufacturers. So if you are operating a cement company, and there are four of you, and you produce your cement in a place where they pay band-C rate of electricity, which is lower than Band A rate, then you have power at a lesser cost, so the price of your product may not be as high as that of those paying higher.
FCCPC does not determine the prices of products because we don’t actually know the cost of the production and whatever went in. However, we are doing everything possible to ensure that there is a level playing field for both manufacturers and consumers.
When the rate of dollars started crashing down, the prices of products were still up. And that is not understandable at all. But we found out so many things that opened our eyes. For instance, when we went to Masaka market, one of the things that was going on was that every food item had an association. You will see things like association of yam sellers, association of rice sellers, and association of palm oil sellers.
What they do is beyond sitting down and discussing their interests. They determine new entries in the market. If you are a new person and come to the market from anywhere with your own produce from your farm, they have touts that will block you. They will give you two options: either to register with them or sell to them at a cheaper rate so that they can sell it out at a higher rate. So they usually fix the prices of products.
But is it allowed for individuals or groups to sit down and fix the prices of goods and services?
The practice is against the law. You don’t form an association and fix prices; that is illegal. Unfortunately, this has become a norm in this country.
If you go to a barbershop, for instance, you will discover something like the Barbers Association of Nigeria, and these persons fix prices for barbing, and it is against the law. This is because people should have different reasons for different prices. For instance, if you are operating a barbing salon in Maitama or Asokoro, which are in Band A, you will pay more for electricity, but if your salon is in Karu, it should not be the same price because you don’t pay the same Band.
And apart from electricity, the rent for the shops is different. How much you pay in Asokoro cannot be the same as how much you pay in Karu. So, the Nigerian Barbers Association cannot sit down and fix the prices for all barbers. Barbers are to fix their own prices so that the consumers can make their choices at the price which they feel they can pay.
Any solution to that?
We are now working towards disbanding these associations. For instance, we called the Masaka market management recently, and they came here along with the chairman of the local government, and we had a very educational interaction.
We discovered that they did not even know that they are not supposed to sit down and fix prices. When we began to question them, they were even proud to say, “Yes, we do.” So we educated them that it is against the law and gave them the section of the law that prohibits such action. It was really an eye-opener for them.
Most Nigerians are not aware of these laws, what are you doing to educate people?
We are planning to use our offices in all the local government areas in the country, although we need more staff. However, if we have even a youth corps member with his laptop, you can get a lot from him. You can get prices of goods from him. Complaints can also be launched straight from his laptop to our complaint portal here.
So, you will have prices of goods and services in the 774 local government areas. There is already a platform for that, and it is domiciled in the Bank of Industry. Now, if a basket of tomatoes is sold for N2000 in Kano and N5000 in Abuja, you can blame transportation. So, many factors determine the prices of goods in the market.
Talking about transportation, is there any hope that the Compressed Natural Gas, CNG-Powered vehicles promised by the government will help reduce the prices of goods and services?
The CNG that the government is now developing for our commercial vehicles will bring down costs by at least 60%, which is a plan for the future. Beyond the cost of transportation, most of the vehicles used in transporting these items are in bad shape. Look, if you transport a trailer load of tomatoes to either Port Harcourt of Lagos, and somewhere along the road, the vehicle breaks down, what will happen to the tomatoes? Of course you will lose the produce and in your next batch, who is going to pay for the loss, definitely the consumers.
So the more reliable means of transportation we have, the lower the prices of goods and services. Of course we all know what happens at checkpoints in Nigeria. All these add to the cost of products in the market. The issues of checkpoints have gone to the office of the NSA already. When this CNG comes into effect, prices will drop by 60% and we are very sure of that.
Customers are complaining about supermarkets or stores displaying lower prices on shelves and charging higher prices at the checkout; what are you doing to curb this?
We, as a commission, have been addressing that. One of the biggest supermarkets in Abuja was recently sealed because of misleading or deceptive practices. Once we can deal with the bigger supermarkets, the smaller ones will also fall in place. There are some supermarkets not only in Abuja but across the country where product prices are not displayed on the shelves. In such places, it is at the point of payment that even the buyers get to know the cost of the product they are buying.
This is against the Nigerian law. You are supposed to display the prices so that people can make informed choices of what to buy. It is also deceptive for you to display the price and indicate that it is N1000, and then by the time I come to pay, I will discover it is N1500. That is against the law. Most of the time, we discover these things by ourselves. We conduct investigations in supermarkets across the country from time to time. We discovered the Abuja supermarket, and when we asked them to come and defend themselves, they refused to come, so we went on our raid and proved to them that what they were doing was wrong.
We picked three pieces of the same brand of ‘kpli kpli’, and when we went to the counter, we discovered that one was N700, another one was N900, and another one was N100. Meanwhile, they are both the same products in the same supermarket and the same shelf. With that, we were able to prove to them that this is what they are doing. We had to bring them here, and we discussed the matter and told them that they had to comply with the law.
I was at the same supermarket at the weekend and discovered that they now have about six points where they display the prices of their products. I tried it with about two or three products and found out that the prices at the supermarket are the same as what they have at the point of payment. We can now confirm that they are about 95 percent compliant now.
It even went beyond that; we had a rigorous exercise in several markets where we asked the people what prices were at the farm and the local market. We were in places like Benue, Taraba and some others to ask what price is a tuber of yam in the farm and what price it is sold in the local market. We also discovered that some supermarkets have expired products and even products that they are not supposed to sell.
MultiChoice Nigeria Limited recently increased the prices of its services on DSTV and Gotv, but there has been an outcry from Nigerians, what effort is the commission making to resolve this?
As I said earlier, we are not a price regulatory agency. We don’t regulate prices. What we do is ensure that there is a level playing field so that companies can compete. Of course, there are many claims against DSTV, and these claims are being investigated. Whatever we find, we will do what we are supposed to do.
DSTV wrote a four-page letter explaining why their prices had to go up. They cited issues like the hike in electricity tariffs and the cost of diesel. They also complained about the forex. So, we sat down with them, looked at the complaints, and checked whether people were still getting the service they desired.
Customers have long demanded a pay-per-view. We followed up, and they agreed that people will be allowed to suspend their accounts at least four times a year. For instance, when you are traveling, you can suspend your DSTV account until you return and you are allowed to do that four times a year.
The problem was that they did not make it public. Meanwhile, that was the agreement we had with them. We told them that they should go to the public and tell them their entitlements. So they are wrong for not doing that. If we can get the pay-per-view and the suspension of account and the issue of paying for channels that you don’t even need, if DSTV can address these issues, then the increase in prices can be justified. This is the discussion that is currently ongoing between the commission and DSTV.
Any updates on the Chinese Supermarket that was recently shut down for allegedly refusing to sell to Nigerians?
What we have confirmed is that this issue of discrimination is not something that is happening there. The estate has a chamber of commerce, the estate has a management at the gate, they control who comes into the estate. If you don’t have any business there, they won’t allow you in. The supermarket in question is inside the chamber of commerce and all the residents of the estate, as well as their visitors are allowed to use the supermarket.
The said supermarket is at the gate of the estate. Security at the gate controls those coming. It is not about discrimination. They didn’t tell anybody not to come into their supermarket, but like I said, not everybody is allowed into the estate where the supermarket is.
But then, the issue of selling and displaying prices in Yuan is still there. We told them that this is Nigeria and we have our own currency. It is against the CBN act to come into Nigeria and be selling things in your own currency. We have been meeting with the Chinese embassy and even the management of the chamber of commerce has been here several times. We are working together to resolve the issue.
Building materials, especially cement, skyrocketed recently. Any hope for Nigerians?
Last week, all the cement companies in Nigeria were here. We sat with them for over 12 hours and what we were discussing was the issue of what went into production. We brought in experts as our advisers so that when these people are talking, we can speak the same language.
The thing is, if you don’t understand what they are going through, you will not be able to make informed decisions. What the government needs from us is informed decisions. One of the mandates of the committee is to advise the government on the nation’s economy and cement is a major issue.
Another investigation that is ongoing is about the iron rod market. We received several complaints and we have seen it with our own eyes through building collapse that some iron rods have issues. Instead of bending, it breaks. Even the thickness is something we have to look at. In this case, we have to work with the Standard Organization of Nigeria.
INTERVIEW: Many supermarkets engaging in deceptive practices – FCCPC Ag EVC, Abdullahi
