04/14/2017
ARTICLE: PRICING DECISION IN THE FREE ENTERPRISE SYSTEM
By: Rev. Ralph Saykpa Wiah (MARKETER)
Tel: +233-241-261-399/[email protected]
INTRODUCTION
Pricing decision by business men in developing countries in the free enterprise system is the root cause to hardship because it is not monitor when it comes to our stable food, utilities, rent/mortgage, ward fees just to mention few, being left solely in the hand of business men some of whom don’t know that pricing decision are determine from cost effective method of production up to the finish stage rather misapply the principles of international trade to the detriment of consumers making government developmental achievement not felt.
I disagree with the concept of African countries and business men mode of pricing decision in the free enterprise system, mostly West Africa chosen the path of the West wherein our income per capital is very low; Jobs are scarce; cost of living being so high; and consumers are not protected.
The big question is should pricing decision in Africa be left in hands of our business men or should central government constituting a legal body made of professional to say specialist to regulate at some level prices since civil servant who should be the main buyers are under paid and working benefits are not adequate as compare to the west we want to mimic?
In our end of the world governance in itself must be accountable, just, transparent, participatory, responsive, and couple with rightful application of the rule of law likewise the PLEST factors must be strong and effective to attract investment. With limited industries and private sector being the engine of growth, if empower employment opportunities will be adequate so that more people gets involve in decision making while entrepreneur or businesses who really don’t know what it takes to arrive at a price of a commodities, yet, concerned is on superfluous profit at the detriment of the consumers in the name of market forces determine price, will be managed and development will be felt by the people.
PRICING DECISION
I wish that each business men are trained, empowered and is made aware that pricing decision is determined from the raw stages of production to the finished stages, the lower the cost of raw material purchased will enable prices to also be lowed, it also, means every working capital put in the business must be retrievable therefore, stages leading production must be cost effective, so that the price of each commodities be affordable by the consumers.
On the other hand, prices at our end of the world is determine by assumption, even if we know it was bought for example, a shoes, five ($5.00) dollars, since our profit margin is high and quadruple always at the expanse of the buyer. In actual fact, returns of five dollars profit should be two ($ 2.50 cent) or at most three ($ 3.00); making a total of seven to eight ($ 7.50/8.00), that include the principle amount and the profit anything above that is trade surplus. Who cares to monitor from central government since we preferred market forces determine prices. It is important, to be aware that when one obtained trade surplus is against international trade.
I am not opposing to the idea of a free market or capitalism. But I want every developing country to redirect their economic policy on pricing control on consumable and being careful in monitoring every pricing decision from the end of the trader or the business men even the blue chip companies, so that cost of good will not is so higher.
The West we are trying to mimic have achieve to some level if not all the six stages of economic development whist we are unable to graduate even from the first stages successfully, if we did, stable consumable like, food, shelter and other commodities will initially be much for the people, satisfactory, affordable while the excess be exported. Instead, we export when our people don’t have adequate, given business men the chance to determine price and exporting for foreign exchange making our people to buy at higher price.
How can we go in for a free enterprise system wherein market forces determine the price of commodities? In these countries, laborer who works eight hours over a twenty eight days period or perhaps thirty days can afford that cost of rent, food shelter and at most all utilities but for Africa, the wage bill, even salary is so low for laborer or junior staffs that we can’t do the reversed.
FREE ENTERPRISE SYSTEM
Yes! It is globally accepted that countries ought to choose which enterprise system they preferred. Some countries exist that do not practice the free market or capitalist rather choose Socialist States form of government wherein they managed their Nation’s social and economic affairs, directing what kind of work people have to do and even limit the opportunities people have to do businesses and own businesses to some extend it works for them but I believe one must determine what is good for themselves and which direction to choose when it comes to choice as a Democratic Nation.
Free enterprise system is an economic system is where a government places very few restrictions on the types of business activities or ownership in which citizens participate. This type of system is referred to as a free market, or capitalism.
Democratization, gives us the ability to mimic what the West and other developed and developing countries do most especially, America, England, and Singapore just to mention few who practice it to the fullest. We instead, as West African countries we must initially, built the enabling environment, wherein public and private institutions are able to be paid adequately wages, and salaries to meet the so called pricing decision that is left in the hands of business men to decide, entrepreneur or companies whose motive is to make astronomically profit at the expense of the laymen.
THE DANGER OF BUSINESS MEN LEFT ALONE TO DETERMINE PRICE
I will like to use Ghana and Liberia as a case study to illustrate my point on this issue of business men being left alone to determine price on behalf of the citizenry. Ghana has developed interns of infrastructure development, roads, electricity, institutions and so on but the cost of living is so high, if we were to do comparative analysis.
I do believe, if the cost of these things are checked regulated to some extend to avoid astronomical profit, and if it means that we must engage, traders, business men on what is pumped in the business or its establishment for which it is sold at said price, that cost as I speak will be affordable with maximum profit still be derived by business men.
The massive development by each government will be embrace by the citizenry but rather over look by the people that government is not making any effort or nothing is done or felt in the mind of the people because they don’t have the purchasing power; and stable diet is costly the reasons being that what one consumes a day is not adequate, affordable and not at the right place to be easily bought.
Liberia on the other hands, before then and even now though from war certain commodities are controlled and monitor like for example, the stable “food rice” and others. Though, the country is not that developed as compare to other countries but business men and citizen are mindful in their pricing decision because they know if high will attract attention.
I believe, if functional leaders and government who governance should be accountable, just, transparent, participatory, responsiveness and the rule of law is fully apply when refuse to create an atmosphere where workers of all classes earning is able to meet their immediate demands at the end of the month will feel and not condemn governmental agenda.
In conclusion, I want to take this time to urge strategic planners and economic planning teams of Nations to put in placed a system of monitoring businesses on how good are purchased, manufacture, the actual cost involve and the profit margin attached to those goods. Government should also, monitor public institutions on their pricing decision most especially the utilities if done consumers will cheered up and not seek and see the many development like in Ghana as an effort to compete in the commonwealth of Nations and rather desert from going for greener pastures like those in Ivory Coast, Angola and Zambia who remain in home land and see it attractive as an opportunity to invest and live.
