Traders Responsible For Food Inflation?

FROM available records, Nigeria is experiencing one of the worst cost of living crisis in a genera­tion with inflation at 40.87 percent in June 2024 ,the highest in 28 years. The increase in food prices has been largely attributed to the depreciation of the naira, conflicts in food producing regions and the souring transportation expenses.

The Central Bank governor, has also confirmed that new inflationary trends are emerging, extend­ing beyond the traditional monetary factors. This is worrisome.

There are many kinds of inflation, but for the purpose of this discourse, we are focusing on food inflation. This is because food inflation accounts for the buck of Nigeria’s inflation basket which rose up the previous month with high food prices and weaker naira.

According to economists, the rise in the prices of key food commodities is mostly caused by insecurity, high cost of transportation of products, climate change and the instability of the foreign exchange rate of the Naira.

In fact, a common narrative among households these days is the issue of the prohibitive cost of food and other survival strategies. This is borne out of the fact that expensive food has a direct cost to lower income owners many of whom are unable to increase their wages to offset the rising cost of living.

As it would appear, the Nigerian economy has defied all known economic theories to solve the problem con­fronting the nation. And in what looked like passing the buck, an agency of the Federal Government –The Federal Competition Consumer Price Fixing Com­mission (FCCPC) says that disppropornate pricing of imported goods mostly among retailers is responsible for inflation in consumer goods in the country.

In a statement by the FCCPCs executive chairman and Chief Executive Officer, Tunji Bello ,the commission stated that it plans to engage with market leaders to check exploitative pricing across the country. Accord­ing to the statement, the commission stated that by collaboration with market leaders, it is confident that a product pricing to avoid excessive profiteers at the expense of consumers would be arrived at.

The agency said that it recognized that prices charged are in most cases disproportionate for import­ed products and excessive for locally produced ones.

A concerned Nigerian who spoke on this issue said that Nigerians are not patriotic enough on this issue saying “how can one explain the high cost of yams, and cassava in our markets now. He agreed that prices can go up because some of government policies, but not to a very large extent that a tuber of yam goes for as high as 8,000 and a basin of garri, only God knows how much. He noted that this is unfair practice and that it is prevalent in the retail segment of the distribution chain where some market associations are engaged in price fixing at the expense of consumers, adding that by so doing, the traders have become agents of inflation. He condemned this act which he described, as reprehensible, unethical, exploitative and illegal.

Another respondent, Mrs. Theresa Achonu said that the market unions and associations are very powerful and most times act beyond the government of the day. She said that the market associations decides what happens in the markets and that it is either you com­ply or go. She said that almost everything sold in the market, including crayfish, tomatoes, vegetables, garri has strong unions and you must belong to the union before you are allowed to sell in the market.

Mrs. Achonu said that the associations decides what happens and fix prices of commodities in the markets and that you must comply or go, and that it is not easy to fight them because most of them belong to political parties and other bodies that one does not know. She asked, “do you know how and when prices of com­modities are fixed uniformly overnight?

The woman suggested a situation where government agency can penetrate various unions and associations to discuss on the way forward, saying that the associa­tions are far stronger than any agency of government and nobody knows where they derive their powers from.

She said, not withstanding the fact that government can have it’s way if it is determined to break the jinx of indiscriminate price fixing and exploitation of con­sumers

She stated that most of the associations are regis­tered and somehow covered by the law and asked, who registered them? Is it not the same government, why can’t they stop them if they are operating outside the framework of the law that established them?

A youth coper in Asaba, Musa Mohammed who said that inflation is a sustained increase in prices of goods and services which negatively impact on purchasing power and lead to tough financial decisions for con­sumers, he opined that Nigerians unprecedented infla­tion is a case of multiple factors and if not addressed fast is capable of spelling doom for the nation.

A retired banker who does not want his name in print said that in modern times the preferred method of controlling inflation is through monetary policies to be imposed by the nation’s Central Bank. The next, he said, as an alternative is a cap on prices which do not have a great record of success. In either case, stressed that soft language are hard to pull off.

He also suggested some interventions by the govern­ment to help bring down prices of goods and services such as price control as an economic policy to be im­posed by the government by setting up minimum and maximum prices of goods and services. The intent for price control is to make necessary goods and services more affordable for consumers.

Such interventions can break monopolies, regulate prices and improve consumer choices, he emphasized.

From all indications, food inflation is bad and should not be allowed in a country. We are however, optimis­tic that the government can fight and win the battle against enemies of food in our society.