On Wednesday, Justice Ambrose Lewis-Allagoa of the federal high court, Lagos, ordered federal government to fix the prices of milk, flour, salt, sugar, bicycles, motorcycles, motor vehicles, and their spare parts. This looks like a judicial attempt to address the biting inflation and the harsh economic climate caused in the main by naira devaluation. My mind instantly flashed back to 1984 when the military government of Major Gen Muhammadu Buhari announced price controls for essential commodities, also known as “essenco”. The military had overthrown the democratically elected government of President Shehu Shagari on the back of untold economic hardship and corruption.

The hardship started in 1982 but Shagari papered over the cracks obviously because a general election was approaching. Crude oil prices were falling — from an average of $34 in 1981 to $32 in 1982 and $29 in 1983. Our foreign reserves, which stood at a decent $10 billion in 1980, had crashed to just $1 billion in 1983 as oil revenue dwindled. Before the oil boom of 1973, our foreign debts totalled $420 million. With the deceit of “unlimited” oil wealth, our debts had ballooned to $14.7 billion by 1982. We earned $22.4 billion from oil exports in 1980 but just $9.6 billion in 1982. The dramatic fall ruined the economy. Still thinking we were rich, we failed to make key adjustments.

We had become hopelessly addicted to imports because of what we celebrated as a “strong currency” — even though it was clearly propelled by oil revenues which are eternally volatile and unreliable. We insisted on keeping the naira at par with the dollar. We still refer to this as the “good old days”. With companies unable to access forex for raw materials and spare parts, they started folding up or sacking workers. Civil servants were being owed salaries, some for three to four months because, simply put, government was broke. Oil wealth has a way of making you live above your means until the day breaks and you realise your tummy has expanded beyond your feeding capacity.

As Nigeria could not import enough basic stuffs like rice, sugar and milk because of forex shortage, Shagari decided to introduce “import licensing” by issuing permits to a closed group of “importers” and allocating the little dollars in the kitty to them. We set up a presidential task force to import rice to sell at “control prices”. Many of those who got forex — using their connections with Shagari’s government — were not even importers or manufacturers and did not really need the allocations. They were believed to have diverted the scarce currency to the streets, and that was apparently the origin of the street trading in dollars which we have now given the fancy name of “parallel market”.

Shagari’s government went into absolute turmoil. It tried to keep Nigeria afloat through an emergency “stabilisation plan” that cut spending, reduced imports and hiked duties. There was still no relief. As we say in Nigeria, “water don pass garri”. Prices of goods and services went through the roof. Unemployment was unforgiving as retrenchment became the order of the day. The opposition parties came hard on the ruling party, the National Party of Nigeria (NPN). This was the condition of Nigeria when then-Brigadier Sani Abacha announced the overthrow of Shagari’s government on December 31, 1983. We all celebrated the coup, expecting a better economy and lower prices. 

Buhari did the “right thing” for “the masses”: he ordered price controls for essential commodities. Soldiers took over the streets, invaded warehouses, shops and markets and started dictating the prices at which goods should be sold. I recall vividly how soldiers came to our village’s central market and started forcing traders to sell goods below the prices at which they themselves bought from wholesalers. “How much is Omo?” a soldier, with a horsewhip in his hand and a rifle on his back, asked an old market woman.  “Fifty kobo,” she replied. “It should be 30 kobo,” he decreed, brought out three 10 kobo coins and paid. He went on and on and on. The poor woman was distraught.

When the soldier had bought three to four items, the woman pleaded with him to move to the next stall. We were kids and bystanders and were somehow enjoying it. We believed prices were too high and thought traders and hoarders were the problem. We knew nothing about costs of production and transportation and other pricing mechanics. All we wanted was cheaper sugar, milk and Omo. How it was achieved was none of our business. My grandmother, a trader, miraculously escaped the raid by the soldiers. She later told me that what the soldiers were doing was wrong. “I cannot sell my goods for less than the cost at which I bought them. It is as I buy that I sell,” she explained to me.

Despite the highhandedness of the military enforcers, prices did not come down. In fact, things got worse as traders began to hoard the goods to avoid being forced to sell at a loss. They only sold whenever the soldiers were not around (and, in any case, how many shops and markets across the federation could they police closely?) I would later take economics in my fifth form in secondary school. We were taught that when supply is below demand, prices would rise. We were also taught that you cannot control prices if you do not have excess supply. If you are in charge of supply and you can meet demand, you can decide to lower your prices. They don’t teach this in military schools.

Now that Lewis-Allagoa has ordered federal government to fix the prices of sugar, flour, vehicles, etc, we are celebrating again. It is a pro-poor judgment, isn’t it? But we’ve been here before, haven’t we? The logic behind price control, as canvassed by its proponents, is that inflation is caused by traders and hoarders who are profiteering at the expense of the masses. There should be an element of truth to this, but that is probably 0.00001 percent of the reason for inflation. Don’t take my word for it: order a used motorcycle or spare part directly from the US and do the math. It is common sense prices will rise as component costs rise. If transportation cost goes up, the price of tomatoes will rise.

How do we enforce this judgement? We import sugar. At what point are we going to fix the price? Should we go to Brazil and order their exporters to sell to us at a particular price? Or is it when the importer has brought in the commodity — after buying dollars at N1,200 or higher — that we will order her to sell at a fixed price? Or is it at the point that the importer sells to the distributor? Or when the distributor sells to the wholesaler? Or when the wholesaler sells to Iya Mufu at Oke Arin market? I guess police will be ordered to use horsewhips to force her to sell at N50 what she bought at N100. Even locally produced goods are at the mercy of rising production and transportation costs.

Apparently, there is an outdated law called Price Control Act that was enacted by the military in 1978 during the oil boom era when petrodollars launched us into a subsidy binge, including paying for meals and laundry for university students. Those were the “good old days” of subsidising consumption instead of production. According to Mr Femi Falana, the senior lawyer and human rights activist who instituted the price control suit, a Price Control Board is saddled with the responsibility of fixing the prices of goods, preventing hoarding of goods, and protecting customers from exorbitant prices. The goods listed in the law include bicycles, matches, salt and sugar.

What better time to “fix” the prices of these all-important items than now when cost of living has gone haywire and Nigerians are in severe pains? Sure, you can keep prices below cost through subsidies. No problem. But when the bubble bursts, you will be more than sorry. Venezuela did it for a long time with petrodollars and Venezuelans thought they were on top of the world. Under President Hugo Chávez, they barely paid the market price for anything. Petrodollars subsidised all. When oil revenues crashed and funding the mammoth subsidies became impossible, the inflation did not have Part Two. Since 2015, over 7.5 million Venezuelans have gone on a “japa” spree.

The solution to our current economic woes is not artificial price controls. It will only worsen the scarcity, empower black markets and raise prices. The solution is not border closure either, as suggested by Alhaji Abubakar Kyari, the minister of agriculture and food security. He obviously learnt nothing from our previous border closure in 2020. He should please ask the National Bureau of Statistics (NBS) for data on food inflation for that year. Those who benefit the most from these knee-jerk policies are the security officers at the borders. We always avoid the hard work when it comes to policy thinking. The real challenge is: how can we reduce associated costs and boost supply?

Every economic reform must factor in safety nets for the poor. There are rational measures that can be taken in the short-run to reduce the pains. As Waziri Adio, one of Nigeria’s leading public policy analysts, proposed in his column last week, President Bola Tinubu can take urgent steps to address the food inflation by reducing tariffs on key items for a limited period of time. Releasing grain reserves can also help stabilise prices by boosting supply. This is a more sensible and realistic route to “price control” instead of using horsewhips and guns. If Iya Mufu buys a bag of flour at N40,000, how on earth can government force her to sell to consumers at N35,000? I mean, who does that?

Tinubu’s directive that grain reserves be released to boost supply and, hopefully, tame food inflation is a welcome step. Let’s hope the grains would not be diverted to hoarders. This is Nigeria. While the price control judgment has to be appealed and the law eventually amended, the truth is that Nigerians are suffering and they need to breathe. I have witnessed episodes of economic hardship since I was a kid but I have never seen anything of this dimension. I know Tinubu is clinically implementing tough reforms — which, I must agree, is inevitable if we are to have an economy — but I hope it does not end up as a case of “the surgery was successful but we lost the patient”.

AND FOUR OTHER THINGS…

GO FOR GOLD!

Displaying more of grit and less of panache, the Super Eagles are one match away from winning Nigeria’s fourth Africa Cup of Nations title. I believe I am speaking on behalf of millions of Nigerians when I say we are aiming for the trophy against Côte d’Ivoire today, having painfully lost four finals before. The way Nigerians of all “tribes and tongues” have been celebrating our outings once again confirms my bias — that we really love this country. We do not hate one another. It is just that our leaders have politically mismanaged our emotions. We are united by sport, Afrobeats and Nollywood but divided by politicians. Imagine how great Nigeria would be with quality leadership. Unstoppable.

AFRODEMOCRACY AGAIN

Senegal, one of the most politically stable African countries with no history of military intervention, is on the verge of a debilitating crisis with the strange conduct of President Macky Sall, who is due to step down as president this year after serving two terms. It is very clear that he wants to handpick his successor and is afraid of a strong opposition candidate being elected. In the typical behaviour of African leaders who have no respect for the liberal principles of democracy, he had been clamping down on opposition leaders and has now postponed the election, the first time ever, to “resolve” the crisis he orchestrated. And to think this man came to power as an opposition leader! Nauseating.

RIP, KT

I lost a dear friend on Wednesday. Kayode Tijani, the sports journalist and archivist, died at 55 after a prolonged illness, dating back to the Africa Cup of Nations in Egypt in 2019. He went there whole and returned in bad shape, never to recover. KT, as we called him, was one of the most knowledgeable sports journalists in Nigeria and had an incredible trove of videos on the country’s sporting history dating back to the 1960s. He worked at a number of reputable media organisations home and abroad. He was one of the major supporters of TheCable, the online newspaper I founded 10 years ago. I pray that his family, friends and fans will be comforted at these difficult times. Devastating.

NO COMMENT

Something to celebrate: The Nigerian National Petroleum Company (NNPC) Limited says it has commenced oil production from the Akpo West field in Port Harcourt, Rivers state. This will add 14,000 barrels per day to our production. It may look small — compared to 250,000bpd from Agbami — but given the various mortgages on our future oil production, this is better than nothing. The NNPC said the new production “is in line with President Bola Tinubu’s directive”. Have you noticed that many statements from government agencies these days start with “in line with President Tinubu’s vision” or “renewed hope agenda”? Is it a standing order or the signature tune? Wonderful.

“There is little that can withstand a man who can conquer himself. Every time I appoint someone to a vacant position, I make a hundred unhappy and one ungrateful. I am the state” – France’s King Louis XIV.

France’s Bourbons king, Louis XIV (Born: 5 September, 1638; Died: 1 September, 1715), also known as Louis the Great or the Sun King, ascended to the throne in 1643 and reigned until his death in 1715. His reign of 72 years and 110 days is said to be the longest of any French sovereign (he began to reign at the age of five). The statement “L’etat, c’est moi” literally meaning, ”the State, it is me” credited to this king demonstrated that he and the other Bourbons kings ruled with absolute power and iron hand and saw the French nation as their personal property with everything and everyone at their beck and call.

Which was why, despite that the objective conditions for the French revolution of 1789 had long been noticed, and Louis the Great was warned, he spurned the warnings. It will hold during my time, he was quoted as saying, let my successors take care of themselves! He was both right and wrong! Louis XV (Born: 15 February 1710; Died: 10 May, 1774; reigned from 1 September, 1715 until his death) took care of himself but not so his own successor, Louis XVI!

Although called “Louis the beloved” Louis XV died an unpopular king; discontentment and the signs of a revolution were thick in the air throughout his reign. Regardless, this king and his wife, Marie, had 10 children in 10 years (1727 – 1737). He was reputed to have consummated his marriage to his wife seven times on their wedding night! Who was there doing the counting, if I may ask!

Fate, sometimes, is cruel even as Maximilien Robespierre (‘the Incorruptible’), who presided over France’s Reign of Terror (1793 – 1794), has said that “Pity is treason”! Louis XVI, who was minded to accept some of the reforms proposed by the leaders of the French revolution, was the one who got consumed by the revolution. He was guillotined on 21 January, 1793 “in the 39th year of his age, at 22 minutes after 10 o’clock in the forenoon”

When situations have got so bad, any leader who appears on the scene must make up his mind which side of the divide he wants to pitch his tent – whether on the side of the people or against them. And if on the side of the people, he must act fast, and decisively, too. No sitting on the fence! No half measures! Drum this into Nigeria's President Bola Ahmed Tinubu's ears!

Another example that teaches this truth very clearly is Mikhail Gorbachev, the last effective leader of the Union of Soviet Socialist Republic. Gorbachev bid his time as he climbed up the ladder. Once in the saddle, he announced his twin-policy of “glasnost” and “perestroika” He wanted to make the Soviet society a little bit more open. He sought to give the people some liberty. But as he opened the door a little, a rush that he could not control swept him off his feet!

Revolutionary France will happen upon Nigeria if care is not taken! The objective conditions for a revolution are everywhere prevalent in Nigeria. Only the subjective conditions remain to be seen. And in the last few weeks we have seen food protests in Nigeria, which were similar to what happened in France when the peasants thronged the streets in their numbers chanting: “We are hungry, give us bread!”

On December 30 last year, Lagosians pelted Tinubu with cries of “Ebi n pa wa” We are hungry, they chanted as the president’s long motorcade waltz its way through the crowd in downtown Lagos. An arrogant Queen Marie-Antoinette had mocked the French peasants, saying: “Let them eat cake”! The starving people that could not afford cheap bread were the ones the queen teased with expensive cake!

Compare Marie-Antoinette’s obliviousness to the abject conditions and daily life of deprivation and penury of the French masses to the Nigerian Senate President, Godswill Akpabio’s insensitive and irresponsible “Let them breathe” response to the cry of Nigerians to their presumed representatives to take notice of the suffering in the land and act accordingly!

Ongoing food protests – were they spontaneous or sponsored? Even if they were sponsored, the prevailing conditions made that possible. No one can deny that the situation of things in the country has become unbearable, even for the middle class Nigerians, not to talk of the poor and the multidimensionally or desperately poor. If, on the other hand, the protests are spontaneous, then, it means Nigerians, ever so docile, are now stirring. And that is a warning signal for the government to act fast.

The mistake many are making is to think the problem is that of the president alone; it is not! State governors, local government chairpersons and the National Assembly members are all in the net together. There is no way an injury to the president will not affect these other fellows across the board. Even past presidents and governors; past National Assembly members, party leaders past and present should note how JJ Rawlings called some fellows out of retirement in Ghana to answer for their crime against the Fatherland. If Vox Populi is Vox Dei, then, let our leaders listen to the cries of the people and harken to the voice of God!

I see Tinubu in Gorbachev’s shoes. If he dithers, like the Soviet leader did, God help him! If he fiddles like king Nero did while Rome burned - like Gov. Babajide Sanwo-Olu of Lagos was reported partying in one fairytale island while fire was on his roof - you can be sure he will come to certain grief. Nigeria’s situation is dire; it is long past the one that half measures can take care off. “Either this or that” is what is needed now.

On whose side is Asiwaju Bola Ahmed Tinubu: On the people’s or their oppressors’? The same audacity that Tinubu displayed on the way to the presidency is needed now. He must call the same bulldozers into action. He has to step on toes now like he did then. Said Robespierre: “Audacity, more audacity and always audacity and France will be saved” Yes, audacity, more audacity and unending audacity saved France. The same audacity is needed right now if Nigeria would be saved. Is Tinubu up to the task? Can this man rise above his well-known limitations and conquer his own foibles?

Let no one deceive you: This is no mean task. Says the great Greek philosopher, Aristotle: “I count him braver who overcomes his desires than him who conquers his enemies, for the hardest victory is over self” Tinubu conquered his many enemies on the way to receiving the APC presidential flag; he thereafter went ahead to defeat 17 opponents at the Saturday, February, 25, 2023 presidential election. Now, he is up against the fiercest enemy he will ever confront – his own self. Will he stumble at this hurdle? May he not! But should he, then…!

LAST WORD: Why have we not started growing food on a large scale all over the country – the Federal, state and local governments? Are housing estates our critical priority at this time? Are people protesting because they need accommodation or because they need food? In this respect, Tinubu’s administration has wasted eight months already! Why can’t the churches and mosques also clear hectares of land and pour their unemployed, hungry and angry members there?

FEEDBACK

God bless you for the write-up on the explosion at Ibadan that seems to focus on South-west governors and the way they have been playing politics with the welfare and development of the region! Your short reference to Miyetti is to tell our governors that they ought to come out of their hiding and boldly equip and mobilize our security operatives, the Amotekun, to become able to protect and rescue our people from predators who value cows more than human beings. If the South-west governors would rise up this time, perhaps, they should consider the call of the Aare Ona Kakanfo, Chief Gani Adams, seeking the inclusion of the Oodua People's congress members (in Amotekun). The OPC have tried for us and as they are not tired, they should be incorporated (into Amotekun). One of the major duties of any government is security and protection of life and property but alas, people are no longer safe anywhere, to the extent that our Obas are now targets of kidnappers and unknown gunmen! Such was unheard-of in Yorubaland and it amounts to desecration of the land, which can trigger unrest if the authorities don't act in time. According to you, our governors need to explain what they are doing with their security votes and we need to know why Lagos state has refused to join the South-west security operations. Is Lagos State no longer in the South-west? You challenged our people for having forsaken their prime positions in the profession and in industries. Truly, the Yoruba have failed in these areas and we need to wake up. However, I have a case with our governors: Since the fourth republic began, no governor in Ekiti or Ogun state has deemed it fit to establish a rice-processing factory in their respective state to provide employment and bring down the high price of foodstuffs. Oyo state alone has the potential to feed the region but what is happening? You warned against sweeping under the carpet the report of (YSDM) Yoruba Self-Determination Movement’s complaint about the Bodija explosion when the report is out. I like to say here that I will not give you any rest but shall continue to remind you to do what you know best how to do until the authorities concerned do the needful. Thank you very much for your courage and uprightness and for always being there for the people. You are one of the prophets of our time! - Bishop Alli Olu Richard.

Thanks, Bola, and God bless you! Akintoye is senile; he is crying when the milk is already spilled. What intelligence and security apparatus does the YSDM have in place? Akintoye is a politician. Why the Yoruba have not advanced beyond noise-making is because of people like him, like Gani Adams, the selfish and timid Yoruba governors and the hungry and myopic Yoruba traditional rulers in cahoots with illegal miners of our resources. If they are as honest, bold and have the love of their people in their heart as you always do in your submissions, let them show up, and powerfully too! I am bold to say that there is nothing remaining in One Nigeria! Also, there is nothing on the table for the Yoruba except a bold step is taken. Let Akintoye, going to 90 years, go and rest! By the way, what has the Afenifere achieved for the Yoruba in this dispensation? Was their leader, Pa Ayo Adebanjo, not rooting for a non-Yoruba in the last presidential election? How can people move forward with that kind of mindset? Nigeria has crossed the Rubicon! - Pastor Jube Olawole.

The judgement of the Federal High Court in Lagos last week ordering the government to fix prices of some goods and services in seven days has triggered speculations that the government might be considering a reintroduction of price control. Justice Ambrose Lewis-Allagoa specifically asked the federal government to determine the prices of milk, flour, salt, sugar, bicycles and their spare parts, motor vehicles and their spare parts and petroleum products such as petrol, diesel and kerosene. The order was contained in the judgement in a suit filed by Femi Falana against Price Control Board and the Attorney General of the Federation according to Section 4 of the Price Control Act of 2004. Falana had sued the Board and the AGF to fix prices of the items but the respondents did not file any defence. The court order has set off speculations that the government might undo its deregulation policy. But it should be noted that the court order was for the government to fix the prices of the mentioned items; it did not specify whether the fixed prices should be above or below market rates.

Price control, first used by the military regime of Gen. Obasanjo in the 1970s, is a government order that stipulates a maximum or minimum price to be charged for specified goods and services, especially during periods of war or high inflation, as we have today. Minimum price is called price floors while the maximums are price ceilings. But with the continued expansion and liberalization of the economy over the years, price control has become largely otiose, although the government is still fixing price floor for wages and salaries (minimum wage). In 2004, the Obasanjo administration reenacted the Price Control Act and set up Price Control Board. The law remained largely unknown and unheard of until Justice Lewis-Allogoa’s pronouncement last Wednesday. If the federal government had been diligent enough to enter a defence and argue against price fixing, the judge might have given a different order. I await the government’s next move, but for now, I caution that reintroducing price control would be counterproductive and difficult to enforce and, in addition, create unintended consequences.

Price control could lead to shortages of goods and services as producers become less incentivized to produce them at lower prices, and this may result in the emergence of black markets where the goods are sold at higher prices than the regulated prices. A good example is the foreign exchange market where black market has become a major determinant of reference prices. Another challenge is that price regulation could also result in reduced investments and innovation in some sectors as producers may be less motivated to make huge investments if they cannot raise prices to recoup their investments. This is one of the reasons that foreign investors shied away from investing in refineries in Nigeria. Regulated prices of refined products were considered major disincentives. Proliferation of fake products as genuine producers cannot produce at regulated prices is another problem of price control, and as I said earlier, price control could be very difficult and costly to enforce. Government will have to deploy regulators or ‘’mystery shoppers’’ to go from shop to shop to catch violators. Trust Nigerians, another set of extortionists and bribe takers would emerge. Every unemployed youth and motor park ‘agberos’ would want to enlist in the Price Brigade! I urge the government to abandon any idea of a return to price regulation.

The leading cause of inflation in the country is food inflation, and to address this problem, it is important to note that Nigeria is not suffering from shortages of food and basic commodities. In fact, our markets are still full of food items in large quantities. Rather, the problem is that people do not have money to buy the food they want in the required amount and quality. This is known as food insecurity. Our problem is not food shortage, but food insecurity. I should note that this is not developing countries’ problem alone. There are many cases of food-insecure households even in the US and some European countries, and they have devised many programs to check it. We should. First, there’s a strong need for employers to increase salaries of low-income earners in their organizations. It’s heartening that the federal government has started minimum wage discussions with the NLC. Second, state governments should establish some kind of food stamp programs in which governments buy basic items in large quantities and resell at reduced prices to the vulnerable members of the public. It was common in the 1970s and ‘80s in the old Cross River State and I am not surprised that Akwa Ibom State government is already planning to bring back the scheme. But the government should guard against possible abuse by light-fingered officials. Third, every household should be encouraged to grow own food crops, especially annuals (those crops that are grown and harvested under one year), and raise poultry. Every civil servant should be mandated to own a farm and Fridays should be declared work-free to enable them go their farms. This is an emergency.

Food insecurity and large-scale hunger in a large population such as our poses serious national security challenges. The outbreak of protests in some northern states last week where, incidentally, poverty is very pervasive should be an early warning signs that things may go out of hand.

Wigwe University…

An online video emerged last week alleging that Wigwe University would be charging school fees in dollars, and that each student would pay over $12,000 in tuition and sundry charges. Although I knew that this was a misleading allegation that could damage the reputation of the new institution, I promptly contacted its founder, Dr. Herbert Wigwe. He responded: ‘’This is not true. It is only foreign students that will pay in dollars. Nigerians will pay in Naira. This is clearly stated in the University’s website. No amount of mischief will derail us from contributing to the development of our country’’. All over the world, foreign students pay far higher fees than citizens of those countries. Since Wigwe University is planning to attract students from other countries, they should pay in dollars and the university will earn foreign exchange. But this is not new or unprecedented. I recall that there were some foreign students at UNN in those days (1970sn and 1980s) when our public universities were among the best in the world. University of Calabar was also full of Camerounian. In fact, Cameroun had to establish a consulate in Calabar to take care of the influx of its students into UNICAL. That era has long gone with the reduced funding and prolonged labour strikes. Now that our private universities in general and WU in particular are hoping to bring back the lost glory, we can only support them.

The dollarization of the economy has become a major problem, contributing to the weakening of the Naira and rampant inflation. The EFCC has announced that it is on the trail of culprits. But we should be careful not to make sweeping allegations against genuine citizens. The Herbert Wigwe I know will never flout the law.