Regulating prices may harm economy, NECA tells FCCPC

Adewale Oyerinde, the director-general (DG) of the Nigerian Employers’ Consultative Association (NECA), has warned the Federal Competition and Consumer Protection Commission (FCCPC) against regulating prices.

According to a statement issued by NECA on Monday, Oyerinde spoke during an appearance on TVC Business Nigeria.

He said regulating prices may inadvertently harm the economy if broader issues affecting market dynamics are ignored.

On August 29, the FCCPC gave businesses a one-month ultimatum to reduce prices.

Tunji Bello, executive vice-chairman and chief executive officer (CEO) of FCCPC, said businesses involved in price fixing and gouging, would be penalised, as both practices harm consumers and are considered unfair business practices.

Bello said the commission has identified patterns of price fixing in the retail segment.

However, while Oyerinde acknowledged that the FCCPC’s intent to protect consumers is commendable, he said the approach fails to consider the complex factors contributing to rising prices, including foreign exchange volatility, escalating energy costs and supply chain disruptions.

“Price manipulation does occur, but the market should be allowed to regulate itself within the boundaries of fair competition,” Oyerinde said.

The DG emphasised the importance of relying on empirical data and a thorough understanding of cost structures in determining fair pricing, rather than what he termed “conjectures” by regulatory bodies.

OYERINDE CALLS FOR DIALOGUE

Oyerinde said there is a need for a more comprehensive dialogue between regulators and the private sector to address the root causes of rising prices.

He stressed that the government should focus on creating a conducive environment for businesses to thrive, which includes addressing supply chain bottlenecks and providing support in critical areas such as energy costs.

The NECA boss also advocated for reforms to reduce contradictions within the regulatory system, urging the government to create a level playing field for businesses instead of offering handouts.

Oyerinde cited instances where conflicting requirements from different regulatory agencies create additional challenges for businesses already struggling with high operational costs.

He called for government intervention that ensures regulatory actions do not inadvertently lead to negative socio-economic outcomes, such as job losses and increased insecurity.

The DG also requested an approach that balances the need for consumer protection with the realities of operating a business in Nigeria’s challenging economic environment.

Also, Oyerinde expressed NECA’s commitment to continued engagement with the government to drive sustainable development and create a stable market environment that benefits all stakeholders.

However, FCCPC has clarified that its recent price reduction directive to businesses aims to curb exploitative practices in the marketplace, rather than controlling prices.

FCCPC said the commission’s mandate is to safeguard consumers from unfair and deceptive practices and to ensure robust competition across all sectors.