I am following this egbon very closely. His energy levels are very high. He just got the Federal appointment after waiting for so long and the need to hit the ground running has become more than compelling.
Its not easy to see yourself despite your credentials and strict loyalty be relegated from the A team to the C team
After winning the Presidency, the very critical next level assignment of sharing the spoils of the war came to fore.
With Egbon not making the cream of appointments, this one at the consumer protection agency must now be used as a stepping stone to more visible portfolios hence this push at price control.
Seeing the actions including the latest reports where retailers have been given one month to effect price reductions just makes me laugh.
In an aggressive need to show ‘doings’, egbon’s team have given the marching orders that all pricing should be reverted back or reduced ‘just like that’.
Much as we would all love to have this happen, one cannot help but ignore this as it smirks of not only naivety of the economics of the matter, a clear ignorance of how macro economic forces work leading to pricing and also total lack of understanding of our fiscal and monetary policies of the givernment he serves and its inpact on pricing.
He gave an example of an item with a 500% mark up on the shelf price as example and a justification for his position.
No doubt, retailers have taken advantage of the ‘madness’ in the system to profiteer and as such government must look very critically at engaging them in ensuring order but a blanket order like a military government will not work in this instance.
Basic economics, Mr Bello will tell you that in a period of hyper inflation as in what we have today, replacement cost is a major factor in arriving at suitable pricing.
Another factor is interest rates. So with intereste rates crossing the 40% mark, coupled with the corrupt inefficiencies along the value chain of the import business that has been mentioned, you will begin to see that the 500% mark up, if at all, cannot come down justifiably by more than 10% even if you carry ‘koboko’ and pursue them.
A reasonable 400% mark up is what I will put if I were that retailer and wait for your koboko.
Cost of buisness for him has gone up by over 1,000%- check out cost of power YOY, cost of diesel YOY, cost of fuel YOY, Naira devaluation YOY then factor in increased corruption and the series of inefficient Government Parastatals that are part of the value chain all giving the importer the longest end to end transmission process from purchase order to shelf and lastly decreased purchasing power esp for a product which is non essential, leading to an over extended stay on the shelf, you will see that the so called 500% would have been totally eroded.
So my brother, this is not the time for the usual window dressing or see – I am working kind of thing, this is the time for men to roll up their sleeves and really do the work.
You should use your ‘power’, if you have to convene a session with all stakeholders from both the fiscal and monetry side to the Trade and Investment minsitry, to other economic players and seek a robust end to end engagement to fight inflation, corruption, red tape beaurocracy in a bid to streamline processes and ease the pressure in the economy.
This your style will lead to hoarding which will lead to scarcity and ramp prices up even further.
Please dont come and worsen our case, if you cant better our lot, leave us they way we are.
Your focus should be on the managers of the economy and not those who will buy fuel at a particular price on monday morning and by Tuesday evening they are seeing another price.
My brother, this is not the time for comedy..let’s get serious
Thanks
