How prices of goods are controlled by Nigerian governments

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.