Festivities and the Price Hiking Phenomenon

The festive periods are here again and, expectedly, prices of products and services are already sky rocketing. But in foreign climes, the reverse is the case. In this piece Ndubuisi Eluwa, who spoke to market players, questions the rationale behind this.

Alhaji Haruna was furious with his wife, Yewande, who had gone to the market to shop for the just concluded Eid-el-Kabir Festival but returned several hours later with a less than impressive purchase. Of course, the obvious reason was that the prices of things had gone up beyond the amount Yewande received for the shopping and as such she had to manage with what she had.  

Yewande’s dilemma is just one in a million of the Nigerian populace who has come to accept this phenomenal increase in prices as a part of festivity periods. Recent visits at the markets reveal that prices of things are already going up by the day and the traders do not hesitate to let you know that it is ‘season’. However, surveys also show that Nigerian consumers have come to see what constitutes abnormality in foreign climes as normal. “After all what can one do?” some reason. So they brace up for it or even look forward to it.  

Kenneth, a trader at Irepodu Market in Ikotun said, “Nigerians joyfully spend money during festive periods. Perhaps this is why they do not realize that they are being ripped off”. Going further, Kenneth said that much as Nigerians like to spend money at these periods, they also like to make money, “So those who provide services hike their charges in order to make more money. In this quest to make seasonal money it does not matter if they unduly ‘milk’ their fellow citizen dry”.  

At Iyana-Ipaja, Abiodun Adeleke, a textile dealer appears to corroborate Kenneth’s position when she identified transportation fare at these periods as another reason for the increase in prices of things. She argued that transporters always increase transport fares around this period even though the prices of textile material do not really go up during the end of year festivities. According to her, factories engage in clearance sales towards the end of the year and “this”, she said, “force prices down.” However she admitted that some traders hike prices when they have limited stock and do not have any hope of getting fresh supply soon.  

Ephraim Otakpo, a businessman also corroborated the above positions when he berated transporters. According to him, the issue of manufacturers and traders are even understandable. “The greed of danfo and taxi drivers to me is the most annoying. You see a danfo driver come out to a bus stop and perhaps notices that there are many people waiting for buses, the next thing is that he inflates the fare for no just reason. For them, even the rain is an opportunity to hike fares.” he said. Ephraim is further irked by the fact that commuters who can barely afford a decent meal in a day, rush at the buses as if their very existence depended on it. “Try challenging the driver for hiking the fare without justifiable reasons and your fellow passengers will make you regret the day you were born,” he submitted. From Ephraim’s position, it is evident that Nigerians indeed do not just tolerate this absurdity but take delight in condoling it.  

Mrs. Tina Onyejiekwe is a food stuff dealer at Iyana-Ipaja. She blamed the hike in prices on a number of things. Firstly, she said that companies usually close every end of the year. According to her this closure reduces the volume of certain goods in circulation; a situation she said results in excess demand for limited quantity. Talk about simple economic theory.  

Secondly, she blamed the custom officers at the borders for the rise in the cost of things such as frozen foods, vegetable oil, seasoning etc, that come in through the borders. She claimed that the custom officers usually charge importers more during end of year period because they (custom) also have to raise money for themselves during the festivities. The importers in turn add all that as part of their costs.  

This position was re-echoed by both Abiodun and Kenneth. Kenneth said, “Borders are usually tight at this period thereby making it difficult for people to bring in goods.” 

But Andrew Abu, MD, Seldrew Investment Ltd, who has headed many production units of several manufacturing firms, differed on the issue of companies’ end of year closure. According to him, before production companies go on end of year vacation they ensure that their distribution centers are well stocked as the consumers are not interested in having short supply while they are celebrating.

He however identified the reasons for the hike in prices during festive periods in Nigeria to include lack of variety and bandwagon effect on the part of the consumers. Explaining the bandwagon effect, he said that Nigerian consumers have the habit of “follow, follow”. “People buy things most times because their friends or someone close to them have those things. For instance someone buys a particular brand of car simply because his friend or someone close to him has that brand,” he said.  

He noted that this tendency is further encouraged by the fact that Nigerian markets lack variety of products. “We have quite a limited number of brands compared to what is obtained in foreign climes where there are several brands of a particular product that consumers can choose from. The implication is that when there is no variety, the consumer does not have much choice and the trader knows it and is ready to take advantage of the situation to hike the price.”  

But where do consumers stand in all of this?  

Roseline Ndukwe believes that greed and the culture of self exploitation are reasons for the hike in prices during festive periods. She explained that “Nigerians are too greedy for gains and so they take undue advantage of situations to exploit their fellow citizens”. But Mrs. Adenike Oseni feels otherwise. According to her, the prices of things have always been going up in Nigeria so it is not necessarily related to festive periods. She also explained that when prices go up, they do not come down.  

There are speculations however that with the winding up of the Sallah celebrations prices will soon regularize providing a good opportunity to shop for the looming Christmas and New Year season.  

Whatever be the case, market watchers believe that Nigerians deserve better offerings during festive periods. Many also believe that replicating places like Shoprite, which are said to give discounts especially during festive periods to induce sales, will go a long way in curbing this ugly phenomenon.