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How prices of goods are controlled by Nigerian governments – Femi Falana
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.
