Abstract

One major objective of a businessman is profit maximization. Therefore, every businessman can decide to consistently increase the prices of their products so as to be able to achieve the profit maximization objective. However, this would not be possible because of government intervention and regulation in the prices of goods and services in the market.

Due to the free-market economy operating in Cameroon, there is a need for government intervention in order to protect the consumer who finds himself in a very vulnerable situation. The government has intervened amongst other domains in the area of price homologation of basic commodities, alternatively referred to as products of mass consumption and in the area of promoting and ensuring fair market competition.

However, this research project is aimed at investigating government regulation of prices of basic commodities: a perspective on consumer protection. The study makes use of materials collected from books, websites, published and unpublished thesis, and journal articles. Results show that the Government comes in to regulate prices by setting maximum and minimum prices in the market.

Through the maximum and minimum prices, the government controls the prices of basic commodities in the market. This study concludes that manufacturers and other business persons should not take advantage of consumers’ ignorance to increase prices of basic commodities however, the study also recommends that the list of homologated goods and prices should be made available to the public through both public and private media.

This is because so far sensitization is only done by government officials who sometimes knowingly or unknowingly withhold certain facts about what is expected of the economic operators.

CHAPTER ONE

GENERAL INTRODUCTION

1.1 Background Of The Study

In practice, power often lies to the greater extend with the producer than with the consumer. Most firms operate under conditions of imperfect competition with manufacturers and producers being able to restrict output and raise prices of goods. The phenomenon can also be observed at the level of economic operators when they create artificial scarcity in order to increase prices.

Around 600 BC, trade was carried out by barter that is a system of exchange where goods and or services were directly exchanged for goods and or services. Goods were exchanged for food, tea, weapons, spices, and salt. In fact in the Middle Ages, Europeans traveled around the world to barter crafts and furs in exchange for silks and perfumes.

However, the barter system had some limitations. Firstly, there had to be a double coincidence of wants, secondly, there was the lack of a common measure of value, thirdly, there was indivisibility of certain goods, fourthly, the other person did not have any proof or certification that there was a legitimate transaction and there was consumer protection or warranties involved.

Following the above setbacks of the barter system, money was introduced in other that exchange of goods and services may take place more easily. It also encouraged specialization. Money is and on itself is nothing, but it derives its value by being a medium of exchange, a unit of measurement, and a storehouse of wealth.

It allows people to trade goods and services indirectly, understand the price of goods and give a way to save larger purchases in the future.it is above all valuable because everyone else will accept it as a form of payment.

Due to the value placed on money manufacturers and service providers determine prices following the forces of demand and supply in a bid to amass as much money as possible. This is especially so in a free-market economy where the economy is at the whim of businessmen, who usually care about profit over people, and there is no government interference and hence monopoly price setting. The exchange of goods and services between suppliers and consumers is voluntary, and all business arrangements are decentralized.

However, there is no free market in the real world as the government always intervenes by putting some type of constraints in the allocation of resources and the exchange of goods and services; for example, the setting of minimum wages by many governments around the world.

Take the case of a free market like the United States; it regulates itself by allowing the firms to set their prices. It allows businesses to seek new growth opportunities, providing them with an incentive to realize a higher profit.

As a result, the competition gets more intense as firms are competing in a perfect competition setting. In such a system, the price is finished goods and services are declining but there is a greater variety of high-quality products.

In fact, a free market uses all of its resources to generate a profit offering to the consumer efficient production of goods and services that’s meet their needs, offered at the lower possible prices and at the highest qualities.

Thus, the US has designed anti-trust laws (also known as competition laws in other English-speaking countries) to regulate the conduct of business and promote fair competition towards the protection of consumers.

1.2: Statement Of The Problem

Due to the free-market economy operating in Cameroon, there is a need for government intervention in order to protect the consumer who finds himself in a very vulnerable situation. The government has intervened amongst other domains in the area of price homologation of basic commodities, alternatively referred to as products of mass consumption, and in the area of promoting and ensuring fair market competition.

The lack of knowledge on government’s efforts through the ministry of trade and other affiliated organs like ANOR (Agency for Norms and Quality in Cameroon), SNH (Hydrocarbon price stabilisation Fund), National Cocoa and Coffee Board, and MIRAP (Consumer Product Supply Regulatory Authority) and others to ameliorate the living standard of citizens puts the latter at the mercy of unscrupulous economic operators and even state Agents who most often infringe on their rights.  This study therefore shall throw more lights and increase awareness of consumers on their rights via-à-bid economic operators and state Agent

1.3 Research Questions

1.3.1 Main Research Question

How are consumers protected through the regulation of basic commodities?

1.3.2 Specific research question

1. What constitutes the origin and Evaluation of consumer protection?
2. What are the mechanisms for price regulation in Cameroon?
3. How can consumer perspective on regulation be determined?
4. To examine the policy recommendations on consumer protection