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A role for everybody, By ‘Tope Fasua

By admin Feb 7, 2024
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I could see that snigger. Oh, you think that inflation is to be wrestled down only by government and those who work within it? But inflation affects all of us Nigerians no matter our estate. And by all means, the more people earn, the lesser the effect as a relatively higher income affords you choices, while a low income constricts them for you. Inflation (increases in the prices of goods and services) basically creates millions of more poor people.  So, if you are not swimming in money, please pay attention.

I admit that any sitting government should worry the most about inflation. This problem is one of the chief headaches of any government indeed. But even here also there are misconceptions. Whereas inflation numbers are broken down state by state, then as urban and rural etc, only the federal government in Nigeria ever speaks about inflation. Hardly would you hear of state governments discussing the problem and what they could do to reduce the incidence of inflation within their jurisdictions.

Perhaps this is also because of another misconception – that central banks alone can and should manage inflation. As I had noted in earlier writeups, the annexation of the inflation management problem did not come until Milton Friedman pronounced inflation to be ‘always and everywhere a monetary phenomenon’. Now, Friedman was a powerful economist but not even Adam Smith’s pronouncements could not be countered, interrogated, or disproved. But it depends on what Friedman meant by his pronouncement that inflation is always monetary. Maybe he meant that inflation is always measured in monetary terms, or that inflation would not have been an issue if the world was not measuring value in monetary terms. Whereas this may be true, but my concern is that behind the monetary manifestation of inflation are many other factors – which are even more relevant to countries like Nigeria as we will see shortly.


One big mistake we make in our analysis as economists is that we usually consider our economy in Nigeria to be at par with the best economies around the world. Or that in the minimum, same variables apply and behave the same way everywhere.  This is how our cut-and-paste theories put us into trouble. For example, when we extol the virtues of the ‘market’ in allocating value, we ignore the fact that the countries where the market works have had to go through centuries of storming and norming. Some have had to fight wars to ‘find sense’ and arrive where they are today. In those countries people cannot mess about and manipulate prices to make an unmerited profit. In our country, this is the norm. Also, when similar elements complain that there is too much regulation in Nigeria, they suggest that players be allowed to do anything they wish. We should have concentrated instead on the fact that our regulators do not regulate properly. They confuse exploitation for regulation. Every industry in the countries that we admire are tightly regulated. You cannot move an inch except you follow the rules, and violators are often caught out, and meted with heavy penalties.

How Many Stakeholders Have We Dragged In So Far? 

So, apart from the central bank which must be allowed to do its work as much as monetary policy instruments will allow, we can see that already state governments, local governments should also be worried about inflation and should find roles in its control from time to time.

Towards A Solid Inflation Management Infrastructure

The idea is to be able to wrestle inflation down quickly when it occurs. For an economy like Nigeria – still at the toddler stage it must be admitted – we need the kind of infrastructure that have already been built and taken for granted by the matured economies. We will have to think for ourselves because elements from those countries have not made this known to us. We must figure out how. From my research, I found out that there are stiff regulations that prevent exploitation, arbitrary price increases, and unmerited profiteering even in these countries. Sometimes, these controls stem from industry regulators. At other times, players are organised into cooperatives, guilds and associations which ensure reasonability, rules and regulations but also create platforms for engagement with government and the people. These are largely lacking in Nigeria.

When I researched the practices around farmgate purchases from rural farmers in the UK, USA, Australia, and South Africa, I realised that most of these countries don’t even allow farmer to sell haphazardly to any straggler but must sell to associations and cooperatives that they belong.  In Nigeria, we have unfortunately not mapped that terrain properly and all sorts of characters have run amok distorting prices, exploiting farmers and consumers alike, profiteering, sabotaging government and even depriving the people of much-needed food where necessary. I am in contact with market participants and others who give a graphic example of what is going on.

What this means is that we have released our people into the clutches of these wicked fellows. And this must change.

Shrinkflation, Skimpflation, Profit-led Inflation, Sachetisation 

It is not good enough for the National Bureau of Statistics to simply supply us with new inflation numbers monthly and for us all to go to sleep afterwards, waiting for the next month. With the infrastructure I have in mind, the idea is to put in place a level of awareness, a response system, and regulation in place to tackle inflation before it runs away. The best time to put such system in place is a time like this – with inflation at 28.92 per cent (a 24-years high number), and the huge struggle to tame that runaway plunderer of value. What Nigeria needs is not just to react to inflation numbers, playing the role of price-takers, and panicking. We need to put in place right now and for the future, systems and policies that will help us manage inflation today and in the future, ensuring that we don’t have wild swings. We need to start thinking about how we could emulate the large economies in the world where 20 per cent inflation could not be imagined into the future except some cataclysm happened.

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And in those countries that we should emulate, recovery is fast. The United States, United Kingdom, and European Union have all seen their inflation rates descending from what were 50-years highs of almost 11 per cent apiece, to 3.4 per cent, 4 per cent and 3.35 per cent respectively. These countries/regions are telling the financial markets now that they are not in a hurry to start cutting rates lest inflation may take off. But they have systems to check those who want to increase prices arbitrarily, cheat consumers, and try to sabotage governments by stealing from people. We don’t have those safeguards and those are what we must now find.

Recently, Carrefour, the second-largest supermarket in France, decided to expose Pepsico for shrinking the volume of their Lipton Ice Tea, while maintaining same price. Shrinkflation is what that is called and Nigerians are very used to it. We call it ‘cheating’ here. But a system needs to be put in place to criminalise it. Anything that makes the lives of our people more difficult for someone’s greedy gains should be criminalised. Carrefour in France went further to say it will no longer be stocking products from Pepsico, and this was a major issue for that company. Imagine that a private sector-led supermarket will do this for its customers. We are not more capitalist than France, are we? The same scenario happened in Germany with Netto – a supermarket – outing some of the products which sought to exploit consumers.

Apart from Shrinkflation, there is Skimpflation, a scenario where companies reduce the quality of their products but sell at the same price or even higher. Every Nigerian will swear that there are many products that have been dumbed down and reduced in size and quality. Many companies around the world have been found to have increased their prices way beyond whatever increases in cost of production, cost of sales, cost of replacement, or even general inflation. In Nigeria, the idea by which almost every fast-moving consumer goods (FMCG) is now sachetised is an indicator of the hard times the people have been passing through. It is also an avenue for companies to maintain profitability – or increase same – by cutting down on volumes and quality packaging materials. All these issues must come into reckoning as we all come together to protect our people against future erosion of value.

Who Are the Stakeholders?

Who are the stakeholders in the management of inflation today and into the long-term? Who and who have to come together to help establish sanity in the administration of prices in Nigeria just as has been achieved abroad? Who and who should be looking at their jobs differently? I’ll say everyone. But more specifically:

  1. The Federal Government
  2. The state and local government leaderships – because that is where a lot of the cheating takes place.
  3. The agencies of the federal and state government in charge of standards, measurements, quality and so on e.g. Standards Organisation of Nigeria, Federal Consumer Protection Commission, agencies under Ministries of agriculture, trade and industry.
  4. Journalists and bloggers.
  5. Every Nigerian must maintain vigilance and escalate incidences of price and volume manipulation, because at the end of the day, we are all in this together.

‘Tope Fasua, an economist, author, blogger, and entrepreneur, can be reached through

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