Price Controls Are Bad!

By Madi Jobarteh

The Gambia Government must desist from imposing prices for goods and services in the private sector. The practice of price controls have been certified as lacking economic sense because it ends up creating bigger problems in the economy.

Madi Jobarteh

These include causing businesses to close because they cannot break even with the new prices. This causes shortages of goods because fewer businesses are active. Furthermore it causes hoarding. Price controls also lead to the production of poor quality commodities as businesses reduce size, weight or quantity of the commodity just to satisfy the new price.

Therefore price controls serve no purpose other than create shortages, push poor goods into the market and in the final analysis bring back higher prices. This is why price controls are counterproductive.

What The Gambia Government must do is to create the enabling environment that will generate many more economic players such as more bakeries. This enabling environment is about reducing taxes both on inputs such as flour but also on profits, lowering interest rates, ensuring uninterrupted water and electricity supply with limited tariffs and building the necessary communications and transportation infrastructure. This is where The Gambia Government has failed since Independence.

Furthermore Government needs to consider either building or reviving state enterprises such as NTC that also engages in the supply of basic commodities. Government must also enter in productive industries where we have national factories that produce flour among other items.

Hence the idea of price controls is a lazy, inefficient and inept policy by our technocrats who refuse to do the hard thinking and effective management to produce a viable economy for us. It is nothing other than a populist agenda intended to undeservedly legitimize the Government.

Let us therefore demand our government to abandon bad practices and policies of the sixties to the eighties and beyond when authoritarian and corrupt regimes around the world use price controls to cover up their incompetence and corruption.

This is not the first time price controls have been imposed in The Gambia yet it has never served us in anyway. We continue to experience high cost of living, poverty and a dull economy.

Let us demand the Government to give us an economy where competition and efficiency and quality will determine demand and supply hence set the price!

Let us not allow inefficient and incompetent technocrats and bad policy makers to use price controls to victimize innocent economic actors and then pit the general public against those economic actors. One can see right now how everyone is jeering at these bakers and ignoring the Government which is in fact the very one causing high cost of living in this country.

For The Gambia Our Homeland.

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