Expert, Market Leader Differ on Rising Food Prices

• Expert, Market Leader Differ on Rising Food Prices

An economic strategist at the Manufacturers Association of Nigeria, Mr. Ambrose Oruche, has blamed the activities of market unions for the rising prices of food in the country.

But the President, Ikeja Shop Owners’ Association, Mr. John Okonkwo, disagrees with this view, saying the association does not fix prices.

Oruche told our correspondent in an interview that the unions fixed prices for their members, making it difficult for free market situation to rule.

He said, “The activities of market men and women unions push prices up because there is no competition.

“When people are unionised, they create an oligopoly where everybody must sell as the union dictates. So, government should find a way of breaking into that cabal and allow competition because competition brings down prices, but when you gang up, it leads to increase in prices.

“If you are passing through Ikeja railway, you will see heaps of oranges and watermelon that are getting bad and smelling. They could not be sold because the unions have insisted that they should not sell below a certain amount. If you go against the union, they will seize your wares.”

Responding, Okonkwo, said, “We have never discussed price fixing during our meetings, not to talk of implementing it.”

He maintained that price increase in the market was as a result of the increase in the rate of the dollar.

He said, “Nigeria has made the dollar a national currency and so whatever affects the dollar is bound to affect prices in the local market. The reason why prices of things are high is that the dollar rate has remained on the high side.

“Since Nigeria is not producing, the local people sell their goods and then use the money to buy imported goods. When they are selling their goods, they have to sell at a rate that will enable them to also buy the items that were imported with the American dollars.”

Apart from the increase in dollar rate, he said the hike in prices of fuel had resulted in high cost of transporting goods from the farms to the market.

In May 2016, the Federal Government increased the pump price of fuel from N97 to N145. This resulted in corresponding increase in transportation cost and equally led to rise in prices of food stuff.

For instance, a 10kg bag of Semovita, which previously sold for N1,700 now sells for N3,000, showing an increase of about 70 per cent.

In the same vein, a 75cl bottle of red palm oil has increased by over 500 per cent from N150 to N1,000; a sachet of indomie noodles has risen from N35 to N100, which is over 200 per cent increase.

The price of a bag of rice has moved from N8,000 to N23, 000; a bag of cement, hitherto selling for N1,000 now sells for N2,300.

Okonkwo said that price increased more in January and February than it did in December.