By Pius Ebong
The Akwa Ibom State Government’s reported plan to regulate the prices of food items in the state may be driven by a genuine concern about the hardship facing ordinary citizens. That concern is understandable. Food prices are high, household incomes are under pressure, and government has a responsibility to protect consumers.
But good intentions do not automatically produce good economics.
The fundamental question is this: Can government sustainably control the price of food without first controlling the cost and availability of the food itself? The answer is doubtful.
Much of the food consumed in Akwa Ibom’s urban centres comes through supply chains involving farmers, aggregators, transporters, wholesalers and retailers who invest their own capital and carry considerable risks. A trader who travels outside the state to purchase food does not pay only the farm-gate price. There are transportation costs, loading and unloading charges, market levies, financing costs, spoilage, security and other expenses before the commodity reaches Uyo, Eket, Ikot Ekpene or another market.
Government cannot make those costs disappear by announcing a lower selling price. If the actual cost of bringing a commodity to market is higher than the government-mandated selling price, the trader has only a few choices: sell at a loss, withdraw the commodity, divert it to another market or sell outside the official system. The predictable consequence is reduced supply and, eventually, higher prices.
That is the fundamental weakness of price control: it attempts to control the symptom while leaving the causes untouched.
Nigeria has experimented with price-control policies before. The experience provides little evidence that administrative price fixing can permanently solve problems created by inadequate production, expensive logistics, inflation, shortages and weak distribution systems. Price control in Nigeria has never provided a durable substitute for increased supply and reduced production costs.
There is another danger that deserves attention: the attempt to restrict or muzzle market unions.
Market unions exist primarily to represent and protect the interests of their members. They should certainly be accountable, and government should act where any union or individual trader engages in extortion, intimidation, collusion, hoarding or other unlawful practices. But regulating unlawful conduct is fundamentally different from suppressing legitimate collective representation.
Market associations often provide coordination, dispute resolution, communication, security and other services within the trading environment. Weakening them without providing effective alternatives could disrupt the distribution network and make traders less willing to operate.
The result could be the opposite of what government intends: less supply, more scarcity and higher prices. The better approach is to attack the cost of food rather than decree its selling price.
Government should expand agricultural mechanisation, improve farm-to-market roads, facilitate affordable agricultural credit, strengthen extension services, establish aggregation centres and invest in storage and cold-chain infrastructure. It should encourage food processing and develop strategic reserves that can purchase commodities when supplies are abundant and release them when shortages emerge.
Traders should be treated as partners in food security, not enemies of the consumer. Government should provide organised markets, reduce unnecessary levies, improve logistics and eliminate illegal charges that ultimately become part of the price consumers pay.
Consumer protection remains essential, but it should target proven unlawful practices rather than treating every high price as evidence of exploitation.
The objective should not be a government-approved price. It should be an efficient food system capable of producing affordable prices through increased supply, lower costs and healthy competition.
Akwa Ibom cannot decree abundance. We must produce it, preserve it, process it, transport it and distribute it. Until we do that, attempting to control prices by fiat—and weakening the market organisations that help move food—risks creating the very scarcity and hardship government is trying to prevent.