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By Casmir Igbokwe
In the later part of 2023, many men suffering from benign prostatic hyperplasia (BPH) were alarmed and disturbed. The price of their favourite drug, Duodart, increased by over 300 per cent. The British pharmaceutical giant, GlaxoSmithKline (GSK), had announced it would leave Nigeria in August 2023 after 51 years due to the harsh economic environment and declining revenues. This affected the price of Duodart and some other drugs like augmentin. It was such that many Nigerians could not afford the cost of these drugs anymore. They still cannot afford them today.
In April 2024, the Federal Government worsened the plight of Nigerians by hiking electricity tariff for some categories of customers. It classified electricity consumers into Bands A, B, C, and D. As a Band A consumer, my electricity bill skyrocketed by over 200 per cent. From N68 kilowatts per hour, the tariff went up to N225 kWh. It was later reduced to N206.80/kWh. This astronomical tariff increase impacted heavily on the income of many citizens. High cost of other goods and services also made a mess of people’s take-home pay. Many of us simply complained and moved on with life.
Like individuals, companies also face economic challenges. Many of them found and still find it difficult to break even due to rising operational costs, including currency volatility and regulatory hurdles. Nigerian Breweries, MTN, Nestle Nigeria, among others, all posted losses in the past few years. For the 2024 financial year, Nestle Nigeria posted a net loss of N164.6 billion, a 107 per cent decline from the N79.5 billion loss recorded in 2023. MTN Nigeria announced a N550.33 billion loss before tax in 2024. This was attributed to N925.36 billion net foreign exchange losses. Recently, the industry regulator approved an upward review of tariffs for the telecommunications industry.
Regrettably, some of the companies that could not stand the downturn in the economy have either shut down operations or relocated to other countries. Over 10 of them exited Nigeria in 2023 alone. They include, among others, GSK, Sanofi-Aventis Nigeria Ltd, Unilever Nigeria Plc, Procter & Gamble Nigeria, and Bolt Food.
Certain government policies contribute to this problem. On his inauguration day as President on May 29, 2023, for instance, Bola Tinubu suddenly announced the removal of fuel subsidy. “Subsidy is gone,” was the way he casually said it. From about N185 a litre, the price of petrol immediately jumped to over N600 a litre. It later moved up to over N1,000 in many parts of the country. Today, the price hovers between N940 and over N1,000 a litre. Unlike when former President Goodluck Jonathan was in power, there was no immediate protest march against the increase. Nigerians took it in their strides and moved on with life.
Exchange rate is also a problematic factor in our economic misfortunes. Early 2023, it was below N500 per dollar. Since President Tinubu assumed office, it has been climbing up such that today, it is over N1,500 per dollar. At some point, it was over N1,700 per dollar.
The fuel price increase and exchange rate volatility impacted heavily on the prices of goods and services. A bag of 50 kilogramme of rice used to be below N10,000 as of 2015. The price has been moving up since Tinubu took over power last year. Today, it is about N100,000 or more. It is the same story for other commodities. Organized labour agitated for an increase in the minimum wage. After much persuasion and muscle-flexing, they got N70,000 as minimum wage. Even at that, many state governments are yet to pay the increase. Nigerians have been dying in silence as if we were all under a spell.
The irony of it all is that whenever some companies respond to the dictates of the harsh Nigerian economy, some regulatory agencies wake up from sleep to assert their authority. Air Peace airline is a typical example. In December 2024, the airline got trapped in the dragnet of the Federal Competition and Consumer Protection Commission (FCCPC). The agency wrote the management of Air Peace, saying it was conducting inquiries which were focused on addressing poor service delivery, exploitative practices, and potential consumer rights violations. Air Peace management was angry when the FCCPC went public with its enquiries or investigations without conferring with the Nigerian Civil Aviation Authority (NCAA) which is statutorily mandated to monitor and supervise airlines. The NCAA knows the intricacies of running an airline. It knows that the airline industry is capital intensive and weathers through different storms to break even. It knows when an airline is deviating and applies sanctions when that happens. Air Peace later reported the matter to the Presidency.
Now, Multichoice gave a notification about an increase in its subscription fees. In a notice sent to customers, the company increased the DSTv premium bouquet to N44,500 from N37,000. Subscribers on the compact+ are billed to pay N30,000 as against N25,000. The new rates were billed to take effect from March 1, 2025. But before the rates could take effect, the same FCCPC, last week, summoned Multichoice Nigeria to explain the company’s move to increase subscription rates for DSTv and GoTV. In a statement last week, the FCCPC’s Director of Corporate Affairs, Ondaje Ijagwu, said the Commission, in exercise of its mandate under Sections 32 and 33 of the FCCPA, directed the Chief Executive Officer of Multichoice Nigeria to attend an investigative hearing at the Commission’s headquarters on February 27. It was later rescheduled for March 6, 2025 following a request for extension by MultiChoice.
“This action follows MultiChoice’s formal notification of the price adjustment, which raises concerns about recurrent unilateral price hikes, potential market dominance abuse, and perceived anti-competitive practices in the pay-TV industry,” the FCCPC statement indicated. It promised to impose regulatory penalties, sanctions, or other corrective measures on MultiChoice if it failed to provide satisfactory explanations, or found to have violated fair market principles. It directed MultiChoice Nigeria to maintain its current subscription prices until the ongoing investigation was concluded. The Commission said it was engaging with the sector regulator and other relevant agencies to ensure a fair and competitive digital subscription landscape in Nigeria.
The question is, does the FCCPC have the right to regulate consumer prices? A former Executive Vice-Chairman of the Commission, Babatunde Irukera, answered this question succinctly. In a statement in April 2022, Irukera said that the Commission had no such power to regulate consumer prices because it was not a price regulator and that Nigeria was operating a free market economy. Although the FCCPC Act has provisions that prohibit exploitative contract terms, including prices, Irukera noted that it did not give the Commission authority to say prices were too high.
According to the former FCCPC boss, during the COVID-19 pandemic, a popular supermarket sold a hand sanitizer that was N490 in the morning for N1,400 by noon and N3,400 by 5pm the same day. “We looked at their inventory, it was showing that they had 45 pieces left, but we couldn’t find it on the shelf or store. They hoarded that for the next day when the prices would keep going up. It wasn’t difficult to come to a determination that that was exploitative, manifestly unjust and unreasonable, because there was no rational explanation for that progressive increase,” he explained. What this means is that the FCCPC’s regulatory approach “must be methodical, and must be transparent and clear,” Irukera said. According to him, that something costs N100,000 doesn’t make it unreasonable or unjust; and that what is unjust and manifestly so is based on objective standards. It is neither arbitrary nor subjective.
There are some other misplaced complaints against MultiChoice. For instance, some Nigerians have agitated for what they called pay-as-you-go billing model in the pay television industry. This means you only pay when you turn on your TV and watch, and don’t pay when you turn it off and don’t watch. Incidentally, this billing model only works in the telecommunications industry. But in pay TV, subscribers pay for access to broadcast content that has already been created and paid for.
It is pertinent to note that in a competitive market, you don’t need to regulate prices. If a particular company increases the price of its product, I have a choice to move to its competitor. If I feel that MTN or Airtel is not giving me what I want, I switch over to Glo or vice-versa. It’s only when a price becomes too low (predatory pricing) with a view to running a competitor out of business and becoming a monopoly that a regulator moves in.
Besides, transport companies, breweries, pharmaceutical companies, educational institutions, electricity distribution companies among others have raised their prices or tariffs. FCCPC has not stopped them. As a consumer, I am pained each time prices are raised because it affects my little income. But should I now hail the FCCPC for selective application of its hammer? Soon, the National Assembly members will emerge with their ‘oversight function’ over the pay TV operators. They will create the impression that they are fighting for the ordinary Nigerians when in actual fact, they are most likely looking for what will enter their pockets. They contribute to the poor economic outlook in the country by wasting billions of naira in an opulent lifestyle and, invariably, pauperizing the same people they pretend to represent.
It is time regulatory agencies in Nigeria stopped engaging in shadow-boxing. Corporate firms should be investigated if there are genuine reasons to do that. But hounding these companies that are there to make profit or trying to extort money from them under the guise of enforcing some rules is nothing but intimidation. At all times, let us agitate for accountable and pragmatic leadership that will create a clear and robust economic pathway for all citizens.
•Also published in the Daily Sun of Monday, March 3, 2025
