Viewpoint

April 21, 2024

Pricing: Why is MultiChoice public enemy #1?

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By Matthew Abanikanda

When, in February, Nigerian Breweries (NB) Plc announced an upward review of prices of 45 products, a beer-loving friend of mine said: “The last hope of the common man is under threat.” He was, of course, not talking about the judiciary, but beer.

His remark, laced with typical Nigerian levity to dilute impact of bad news, was one of real wit. The threat to the common man’s last hope has since increased, with NB also adjusting prices in March and April to make it a hat-trick in three months. The company attributed the price reviews to “rising input costs and the need to mitigate the impact”.

In March, streaming giants, Netflix, announced a review of its pricing in Nigeria with effect from 1 April. The video streaming raised the price of its Standard Plan to N4000 from N3,600, with the Premium Plan rising to N5,000 from N4,400 and the Mobile Plan moving to N1,600 from N1,200.

Earlier, International Breweries, bottlers of Hero and Trophy lager brands, increased prices across its product portfolio, citing “escalating costs impacting our business” as the cause. Another brewing giant, Guinness Nigeria Plc, announced a new price structure, which kicked in a few days ago, citing leaping costs of production and of that of doing business.

The economic realities are not hidden from anybody. Inflation, according to the National Bureau of Statistics (NBS) rose to 33.20 per cent in March from 31.70 per cent in February. Food prices, which have been leaping since the removal of subsidy on petroleum last year, with food inflation now standing at 40 per cent. The price of a 50kg bag of rice zoomed from N62,000 to N90,000 within weeks.

 The impact of subsidy removal on transportation costs has been huge and is a huge factor in food prices changing almost weekly, with prices of some items changing on a per-purchase-basis. In December, 12.5 kg cylinder of cooking gas, which cost N9,000-N10,000, now costs N15,800.

Healthcare is similarly impacted, with prices of medications shooting through the roof. According to SBM Intelligence, an organization that specializes in providing clarity on political, economic, and social issues in Nigeria and West Africa, the prices of anti-hypertensive have increased by as much as 160 per cent. Ampiclox, the popular antibiotic, recorded a staggering price increase of 1,390 per cent, while the anti-malarial, Lonart DS, recorded a price increase by 110 per cent. 

Last year, cab service providers, Uber and Bolt, made significant adjustment in prices in response to fuel subsidy removal. Also, last year, pay television companies, StarTimes and MultiChoice Nigeria, twice made price adjustments last year, following the 40 per cent devaluation of the naira and fuel subsidy removal

At every point, costs are climbing. School fees at all levels, including those of federal government-owned universities, have gone up. The University of Ibadan recently raised fees for freshers to N230,000 and N412,000, depending on the course of study, from N64,000 and N69,000 paid last year. The fee hike, already posted on the institution’s portal, equals 453 per cent and 750 per cent increase. Recently, too, electricity tariff for a certain class of consumers also went up from N66 to N255, a 300 per cent hike. Prior to the recent hike, they have been rising progressively to public anger, which is hardly expressed with clenched teeth and dissipates quickly despite the worse than dire supply by power companies.

My pocket, like that of every consumer, is hurting and I would have prices remain the same. I suspect that providers of goods and services would want the same as they will have more people with disposable income for their goods and services. Price freezes, however, are impossible because economic dynamics never stay the same. Consumers of all goods and services have adjusted to that fact. I take that back, as there is an exception.

Abanikanda lives in Lagos