You know ehn living in my country Nigeria, I have realized that prices are like the weather because they are unpredictable, unstable and even unbelievable. Today a bag of rice can cost 45,000 thousand naira and the very next day it can increase to like 60,000 thousand naira and you are left to wonder why rice that do not have wings, skyrocket like that? 🤦
That is why as soon as I saw the topic on price regulation, my mind become alert and I was recalling all the experiences I have experienced in consumer exploitation by sellers and suppliers improper increase of the prices of goods at any slight chances. In my country, prices are worth regulations to prevent it from flying to heaven like a national prize.
Now let’s break it down. Price cap is merely an indicator that there is a limit of how much or how little a person can sell a commodity. If the government says we cannot sell a loaf bread above 1000 naira, even though you baked it using imported flour, holy water or angel butter, you cannot sell it at 1500 naira.
However, when the limit is not set, a day will come when a baker will wake up in the morning and see the sun shining too bright and decide that today his oven is hot, therefore his bread would be 2,000 thousand naira.
Price caps or ceilings are supposed to protect consumers. Whenever there is no restrictions, there are business people who would blow out the prices like balloons, they would sell sachet water at 500 naira and still want you to believe that it is due to dollar rate, this can be so annoying. Nigerians are not new to those kinds of situations, even pure water sellers will tell you that it is because dollar is expensive, right there you will be wondering how the U.S currency have anything to do with the borehole water in your backyard.
However to be fair, a business in Nigeria is not a venture to be run with ease. There is NEPA that will hoard light at the worst time, the cost of petrol, rent, transport, tax, and even agbero who feel they have a right to your profits. When all these costs are summed up, the owners of businesses have no option than to hike their prices in order to survive. Then when you say to them not to increase the prices, they will respond as though you are making fun of their fate.
Then will we say it all right to let business owners correct the prices whenever they choose?
Well you see, if you have ever purchase tomatoes in Mile 12 market you will know that freedom is dangerous. One of the women will say 2,000 naira each basket and the other lady who will be next to her will complain 4,500 for the same tomato in the same basket. You will begin to wonder if one of them is selling designer tomatoes. When prices are left to be determined freely by all, there will be confusion and chaos, this is why I feel there should be some form of price control, particularly on the basic necessities such as food, fuel and medicine. You can not allow someone to sell Panadol ₦10,000 simply because he is trying to make profit. Then, it will be only billionaires who will be able to cure headaches while water and bread too will be luxuries.
However, excessive regulation can be counter productive as well. In case the government attempts to push the prices below the natural level, sellers can cease production or even cease selling. Like the case of fuel, when there is regulations on fuel traders to sell at 500 naira per litre yet the actual price would be 850 naira, you would be surprised that you can no longer get fuel anywhere because that is how scarcity starts. We are familiar with this exercise in which the government sets prices low and the black market will suddenly emerge with special price. So, there is need for a delicate balance since we do not want people to suffer due to high prices and we also do not want business owners to run away by making them to sell at a loss.
In my view, the most suitable solution is that the government should bring about an environment where business can flourish without having to incur too much. With the fairness of electricity, transportation, and import duties, the business owners would not have to increase prices to make ends meet.
Please, I would like to tell you about one amusing situation. One day, I went out to purchase eggs in a local market. I asked the lady what one crate would cost me, she smiled and said, “3,500 thousand naira”, I was shocked that I said “Madam, last week it was ₦2,800!” and she replied "Oh my sister, this one is special egg o, the hens eat imported feed". I stared at her with the thought of whether the hens too went to London for a holiday but I still purchased them, since I was hungry and I was eager to go back home and make food.
That is what happens in Nigeria, everybody has a motive to their prices either real or imaginary. Ask a pepper seller, she will tell you that the road to the farm is bad, ask a tailor he will say thread is now costly, ask a keke driver he will say fuel. Then in no time everybody is not pointing at something or somebody as to why you are poor.
However, the reality is that there ought to be a system which consumers and sellers are safeguarded. The owners of the businesses are supposed to earn enough profit to ensure that their businesses do not go under, yet at the same time the consumers must be able to afford basic things without making it a prayer point.
Thank you so much for staying this far, hope you had a good read with me, see you again next time 😁.