Leading consumer advocate and economist, Appiah Kusi Adomako, is making a strong case in favour of the Minister of Communications’ intervention, demanding that MultiChoice reduce prices for Ghanaians amid the improved macroeconomic environment.
The West African Regional Director of CUTS International says the state intervention is not only fair but also necessary.
The staunch consumer protection advocate is making this case following claims that the move by the minister is a smack on free market principles.
Speaking on The Point of View on Channel One TV, Appiah Kusi Adomako, West Africa Regional Director of CUTS International, argued that while Ghana operates a liberalized, free market economy, the absence of competition in the pay-TV space has created a functional monopoly.
This situation, he says, demands government oversight to correct market anomalies and protect consumers.
“When you are a player in the market and you don’t have a competitor, you can decide to charge monopoly prices. And that is what we are facing,” he argued
He referenced early this year price hike by MultiChoice, which gave consumers only six days’ notice to comply. A move, he says, violates the principle of “fair notice” that would likely not have occurred in a competitive market.
Cedi Strengthened, But No Price Relief
The economist pointed out that with the Ghana cedi appreciating significantly against the U.S. dollar in recent months, DSTV subscription prices should have naturally adjusted downwards, given that previous hikes were justified by exchange rate pressures.
This situation, he adds, underscores what he believes is a classic case of market failure, hence the need for governmental intervention.
“The cedi has appreciated significantly against the dollar, and if you were to do that, MultiChoice is supposed to also adjust its prices downwards organically without any ministerial intervention. But the minister has come in,” he indicated.
Free Market Does Not Mean No Intervention
Appiah Kusi Appiah, who touts himself as a believer in liberal economic systems, was quick to emphasize that even in advanced free market economies, government intervention is used to correct market failures.
He cited instances where the US, which is believed to be the foremost proponent of the free market, experienced governmental intervention to rectify market failures.
“I believe in a free market. However, when a free market is not able to lead to an optimal outcome, that is why we have what’s called market failures. In the U.S., 2008, the market collapsed. It was a free market, and the Government came in and bailed out the private sector. And so if the free market is not working, then we need to look at how we can make the free market work,” he recounted.
He further cited the current U.S. President, Donald Trump’s push for lower prescription drug prices, as another example where governments can and do step in to protect consumers from monopolistic pricing.
Minister’s Call Justified
He maintains that the Minister’s request for MultiChoice to slash DSTV prices isn’t an attack on free enterprise. He says it’s a call for fairness, one grounded in economic reality and consumer protection.
For him, a government asking an operator to reduce prices is not strange. It happens across jurisdictions, and given the current dynamics, the Minister’s call is valid.
“Government intervention by asking MultiChoice to reduce prices is not out of place, because the market is such that nobody can enter the market and, in the short term to be able to compete in a way that can result in prices going down. And so there are those kinds of barriers to entry, which means that the government may have to urge the operator to reduce its prices,” he insisted.
He added that, “asking the operator to reduce prices is not something strange. We’ve had it in many jurisdictions. I agree with the minister. MultiChoice is earning what is called monopoly rent, or monopoly profit. And if there were to be a competitor in the market, I’m sure that MultiChoice would not be able to sustain its subscription prices at the level at which they are charging.”
The development is exposing regulatory gaps in consumer protection, the need for a competitive pay-TV landscape, and how far the state should go to ensure fair pricing in a liberal economy.
