CPPE: Nigeria should avoid a price control mindset

Nigeria is at a critical juncture as the Federal Competition and Consumer Protection Commission (FCCPC) is under scrutiny for potentially veering into a price control agency. Against the backdrop of turmoil in the retail sector and recent price adjustments for Premium Motor Spirit (PMS), Muda Yusuf, Director General of the Centre for the Promotion of the Private Enterprise (CPPE), shares his insights on the evolving landscape. In a recent interview on CNBC Africa, Yusuf emphasized the need for the FCCPC to steer clear of a price control mindset and refocus its efforts on addressing higher-level issues within the supply chain. He underscored that while retail pricing is a visible manifestation of broader market dynamics, the root causes often lie in monopoly powers and market influences at the supply chain's apex. With over 10 million retailers and a multitude of supermarkets, Yusuf argues that healthy competition at the retail level minimizes the risk of exploitation or profiteering. Instead, he advocates for a more targeted approach that addresses monopolistic practices across various sectors to safeguard consumer rights. Furthermore, Yusuf emphasizes the importance of collaboration between consumer protection agencies and fiscal and monetary authorities to ensure a holistic approach to price regulation. While acknowledging the complexity of the pricing dilemma, particularly in light of recent petrol price hikes driven by exchange rate dynamics, Yusuf highlights the necessity of balancing fiscal sustainability with consumer welfare. Notably, he addresses concerns surrounding the entry of Dangote petrol into the market, cautioning against misattributions of price increases to new market entrants. Despite challenges, Yusuf sees potential macroeconomic benefits in reducing pressure on reserves and exchange rates, provided there is a transparent and equitable pricing framework. As Nigeria navigates these pricing challenges, Yusuf's forward-looking perspective offers valuable insights into establishing a balanced regulatory environment that promotes market efficiency while safeguarding consumer interests.