How Prices Of Goods Are Controlled By Nigerian Governments

By Femi Falana SAN

Not a few defenders of neoliberalism have criticised the judgment of the Federal High Court in the case of Femi Falana SAN v Attorney-General of the Federation for directing the Federal Government to fix the prices of essential commodities in the country. The criticism of the judgment is anchored on the claim that Nigeria is a capitalist country. It is surprising that such critics are not aware that the leading capitalist countries in the world regularly subsidise energy and gas and regulate the prices of certain goods and services.

According to Hugh Rockoff, governments in the United States “have fixed the price of gasoline, the rent on apartments in New York City, and the wage of unskilled labour, to name a few. At times, governments go beyond fixing specific prices and try to control the general level of prices, as was done in the United States during both world wars and the Korean War, and by the Nixon administration from 1971 to 1973.”

Sometime in October last year, in response to the growing demand for rent control in the United Kingdom, the Mayor of London, Sadiq Khan recently said that: “Londoners re-elected me on a manifesto pledge to push for the powers to control rents and I will not stop advocating for this lifeline on their behalf. I am delivering on my promise to build a better, fairer, and more prosperous London by building more affordable homes in the capital and providing vital support to Londoners through the cost-of-living crisis. It’s about time the government did the same.”

Notwithstanding that Nigeria operates a so-called free market economy, several laws have imposed a duty on the Federal Government and State Governments to regulate the prices of fuel, tickets for train and domestic air travels, schools fees paid in government colleges and tuition in tertiary institutions, water rates, electricity tariffs, telecom call rates, tolling fees paid by road users, land use charge, fees for land documentation, rents paid by tenants and wages paid to workers. The Federal Government has just set up a Wages Review Panel to recommend the minimum wage payable by the public and private sectors in the country.

It is common knowledge that the federal government fixes duties on goods imported into the country. In particular, the Nigeria Customs Service is legally obligated to collect such duties. However, the Government has decreed that import duties shalll not be paid in respect of certain goods and products, including all basic foods items, medical and pharmaceutical products, books and educational materials, baby products, fertilizer, locally produced agricultural and veterinary medicine, farming machinery and farming transportation equipment, plant and machinery imported for use in the export processing zone.

Some private companies that are required to pay import duties running to several trillions of Naira are also granted duty waivers by the federal government. In the last 5 years of the Buhari administration, they gave duty waivers of N17 trillion to a few “captains of industry.”. Similarly, the Tinubu administration has extended such facilities to not less than 34 companies. It is submitted that the federal government is duty bound to prevent the beneficiaries of such humongous duty waivers from fixing the prices of the goods without regulation.

The Central Bank of Nigeria is legally mandated to fix the exchange rate of the Naira visavis other currencies. But contrary to the letter and spirit of the Central Bank Act, the Central Bank of Nigeria (CBN) has continued to devalue the Naira through dollarisation. The CBN has also floated the currency to allow market forces to fix the exchange of the Naira. But, the various circulars recently issued by the CBN, in the past couple of weeks, have confirmed that the federal government can no longer afford to allow market forces alone to fix the exchange rate of the Naira without regulation.

It is interesting to note that the services provided by a number of professional bodies are fixed and controlled by law. For instance, any lawyer who fails to pay the annual practising fees shall be denied audience in courts. The Stamp and Seal (purchased from the Nigerian Bar Association) shall be affixed to all documents, including court processes prepared by lawyers. In addition, the 2023 Legal Practitioners Remuneration Order has fixed the professional fees charged by legal practitioners. Any lawyer who fails to comply with the Remuneration Order shall be sanctioned by the Legal Practitioners Disciplinary Committee.

Therefore, the Order of the Federal High Court which has directed the Federal Government to control the prices of essential commodities in Nigeria is in accordance with section 16 (1)(b) of the Constitution which has imposed a legal obligation on the Government to control “the national economy in such manner as to secure the maximum welfare, freedom and happiness of every citizen on the basis of social justice and equality of status and opportunity.”

Last week, Vice President Kashim Shettima announced the plan of the Bola Tinubu administration to set up a Commodity Board which will be given the mandate to assess and regulate food prices, as well as maintain a strategic food reserve for stabilising prices of crucial grains and other food items. That’s the way to go if the poor in the society are to “breathe” as the implementation of the reforms embarked upon by the Tinubu administration gather pace.

The plan is in accordance with the Fifth Alteration to the Constitution of the Federal Republic of Nigeria, 1999 which stipulates that the Government shall direct its policy towards ensuring the right to food and food security for the people. It is also a revival of the Commodity Boards that were abolished as part of the conditionalities of the World Bank-inspired Structural Adjustment Programme (SAP) that was imposed on Nigeria in 1986 by the General Ibrahim Babangida regime.

This is a welcome development as the official announcement comes after the federal high court in Lagos ordered the federal government to fix the prices of essential goods within seven days. It is however pertinent to note that notwithstanding that the Attorney-General of the Federation has filed an appeal against the judgment, the federal government and some state Governments have been compelled to halt the moves by landlords and traders to fix the prices of goods in defiance of relevant laws.

Hence, on February 16, 2024, the Federal Competition and Consumer Protection Commission (FCCPC) temporarily sealed off a popular shopping mall, Sahad Stores in Abuja for persistently displaying lower prices on shelves and charging higher prices. The Commission exercised its powers under Section 18(f) of the FCCPC Act. Even though the shopping mall has since been reopened based on the undertaking of the owner to stop further involvement in “misleading” or “deceptive” pricing practices, the FCCPC has demonstrated its resolve to protect consumers from wanton manipulation of prices by traders.

In the same vein, the Lagos State Government has warned that it would start penalizing house owners found guilty of renting out their apartments at exorbitant fees. This disclosure was contained in a statement issued by the Commissioner for Housing, Mr. Moruf Akinderu-Fatai, who stated that the government would wield a big stick on allottees who engaged in sharp practices. Mr. Akinderu-Fatai said that residents of various state housing schemes have filed complaints about the high rent being charged by homeowners, adding that the state government would not hesitate to withdraw allocation from culpable home owners.

A few days ago, a bag of cement was sold for as much as N13, 000 in many parts of the country. But based on public outcry, the federal government and major cement manufacturers have jointly resolved to peg the price of 50kg bag of cement at between ₦7,000 and ₦8,000 depending on the location nationwide. The Minister of Works, Sen. David Umahi made this known to newsmen after a protracted meeting with major cement manufacturers in the country on February 19, 2024. The meeting was convened at the instance of President Bola Tinubu.

In view of the rising cost of living in Nigeria as a result of the religious implementation of neoliberal policies dictated by the International Monetary Fund and the World Bank, the Nigerian people should mount pressure on the Federal Government and State Governments to invest in massive production of food and other goods. Meanwhile, the skyrocketing duties and tariffs imposed on essential commodities that are imported into the country should be substantially reduced so as to make them cheap and affordable in line with the terms of the judgment of the Federal High Court.