Haggling may be the national pastime of Nigeria. Everyone is expected to argue over a price, be it for a basket of eggs or a shipment of sand. Even industrialized retail items, e.g. a bottle of Coca-Cola, has a variable price. We take for granted that a can of Coke will always cost a certain amount, regardless where we go. This does not hold true for Nigeria.
The price can vary even with the same vendor, either from day to day or person to person. There is a woman near the estate that runs a small business selling edible sundries to construction workers at the site. We (the interns) will often visit the store for a tasty afternoon snack of digestive cookies, which are most accurately described as “wheatmeal coasters.” For one guy, they cost him 30 Naira. For everyone else, she only charges 20 Naira. Why? In this case, she took him to be a silly foreigner that would be willing to pay any price she named. Figured she could pull a quick one and make boost her margin by 50%.
But Nigeria is not a country of swindlers – as the email scams would lead us to believe. I asked DK, one of the staff, why haggling is so commonplace. Don’t people grow tired of arguing over a price? Can they not see the convenience of having a set price for goods? His answer offered an insight to the nuances of Nigerian culture.
A Nigerian seller will price items based upon the perceived purchasing power of the buyer. If I walked up to a vendor wearing a freshly pressed suit, that person would name me a higher price than for a local whom they know to be struggling through a rough economic patch. Some probably do it to squeeze as much money as possible from a buyer. For most, however, it’s about paying what you can afford. A well-off businessman can afford to pay 200 Naira extra (~$1.30) for a sandwich, so it’s only fair that he do so. That extra cash goes straight into the pocket of some small time entrepreneur trying to scrape together enough money for next week’s rent. Think of it as a culturally embedded form of socialism – one that redistributes wealth over time. (In reality, of course, this method does nothing to flatten the wealth disparity, but it’s a respectable intention.)
It’s similar to the “pay what you can afford” scheme, except in reverse: they decide what you should be able to afford. And far from it being an informed decision based on your actual present economic status, it’s a snap judgment. A keen observer can actually notice the half-second it takes a vendor to name a price, when they gauge how much they think they can charge you. It’s an instant calculus that they perform repeatedly throughout the day.
And thus, haggling is born. The vendor names a price, and immediately the buyer gets offended. They exclaim about the outrageousness of the price. Some will talk about they are financially strapped right now because crops didn’t perform well, car broke down, wife just had a child, whatever. The vendor will counter with a similar story of economic woe. This goes back and forth for a while. The buyer will often walk off in a display of not really needing the item of interest, returning in 20 minutes to give the vendor a second chance to adjust their price. When it’s all said and done, one can easily spend 45 minutes in back-and-forth over a gallon of diesel fuel, debating a difference of maybe $5.
As DK put it, “When I’ve nothing better to do – it’s a blast. But when I’m on a day of errands and have a lot of others tasks to complete, it’s annoying as hell. I just want them to let me pay the normal price.”
It reveals a fundamental assumption of most developed capitalist markets – that an item has a set price. We take for granted that an item should be priced based on manufacturing and delivery costs, plus some markup for profit. Social elements of a person’s financial stability are rarely factored into naming a price, and certainly not for selling a dozen eggs. And for good reason: haggling no doubt slows down economic activity by prompting all of these social arguments, introducing uncertainty into budgeted expenses, and adding complexity to business relations.
I must admit, however, there is a certain sense to it.