The Price Of Neglect: How Lack Of Price Control Affects Nigeria’s Economy -By Paul Alimu Maunta

Nigeria’s economy is facing a significant challenge: the lack of effective price control. This absence of regulation has far-reaching consequences, affecting individuals, businesses, and the economy as a whole.

Without price control, essential goods and services such as food, fuel, and transportation are left to fluctuate based on market conditions. The removal of fuel subsidies, for example, led to a significant increase in transportation costs, which in turn raised the prices of goods. Many Nigerians, especially low-income earners, struggle to afford basic necessities, leading to a decline in their quality of life.

Inflation occurs when the prices of goods and services rise continuously. In Nigeria, the lack of price control contributes to inflation because producers and sellers can increase prices whenever production costs rise. This uncontrolled inflation reduces the purchasing power of consumers, meaning that their money buys less over time.

The absence of price control disproportionately affects the poor. Wealthier Nigerians may cope with price hikes by spending more, but low-income families are forced to cut back on essential items. This increases the gap between the rich and the poor, deepening inequality.

Industries rely on stable prices to plan their operations effectively. For instance, when the cost of raw materials fluctuates unpredictably, it becomes difficult for manufacturers to set reasonable prices for their products. This uncertainty discourages investment in local industries, making it harder for the Nigerian economy to grow.

In the absence of price regulation, some businesses exploit the situation by charging excessively high prices. This is common in sectors like healthcare and education, where demand remains high regardless of price. Such practices not only harm consumers but also weaken trust in the private sector and government.

Nigeria relies heavily on imports for food, fuel, and other goods. When local prices rise uncontrollably, it increases demand for foreign goods, putting pressure on Nigeria’s foreign exchange reserves. This demand weakens the naira against major global currencies, further worsening inflation.

To address the issue of uncontrolled prices, the government and policymakers can take several steps:

1. Strengthen Price Regulation: Establish clear policies to control the prices of essential goods and services.

2. Encourage Local Production: Investing in agriculture, energy, and manufacturing can reduce reliance on imports and stabilize local markets.

3. Improve Infrastructure: Better roads, electricity, and water supply can lower production costs, making goods more affordable.

4. Monitor Inflation: The Central Bank of Nigeria should adopt measures to manage inflation and stabilize the currency.

Therefore, lack of price control in Nigeria significantly affects the economy by increasing inflation, widening inequality, and discouraging industrial growth. While market-driven economies have their advantages, the unique challenges in Nigeria require some level of government intervention to stabilize prices and protect consumers. By implementing strategic policies, Nigeria can reduce the negative impacts and create a more stable and inclusive economy.

Paul Alimu Maunta
Student, Department of Mass Communication, Borno State University, Maiduguri.