A Quarterly EnewsLetter Vol.6, Issue No. 2, 2010

Editorial Comments

Consumers have continued facing challenges such as poor service delivery as well as huge increments in services. For most, this has lead consumers to fail to access the expensive (yet basic needs) goods. It is time for the government to start listening to the consumers’ plight. Many are the times when commodity price increase is not matched by an increase in consumers’ disposable income. Despite assurances of better service delivery, consumers of electricity, for example, have continued to suffer from tariff hikes by Zesco without convincing justification from the electricity company. One can elude these tariff hikes as being based on an academic assumption that once Zesco attains cost reflective tariff or price then investment in the energy sector would be feasible or profitable thereby making electricity cheaper for consumers. It is, however, time that consumer’s interests are now put at the heart of these firms


Fuel Price Rise Saddens Motorists
The price of fuel has gone up with a number of motorists expressing their displeasure at the increase. The over 13 percent increase has resulted from the government’s stance of stopping to subsidise the commodity. The Zambian Minister of Finance Ng’andu P. Magande indicated that government has spent a lot of money subsidising fuel at the expense of other projects. The pump price of petrol is now US$ 1.554 from US$1.366 while diesel is selling at US$1.42 from US$1.318 in Lusaka. Most motorists complained that their disposable incomes were not increased every time such an adjustment was made hence making the commodity unaffordable (expensive). “Fuel is what drives an economy and hence these increases affect consumers spending power as the increase has spill over effects on goods and services”, bemoaned one motorist.

(Source: Zambia Daily Mail, 18.05.10)

ZESCO Proposed Tariffs Opposed
Consumers have opposed the proposed 36 percent Zesco tariff increase. Most of the consumers felt that the proposed tariffs favoured the mines which consume 50 percent of power, and disadvantaged the ordinary consumers. Consumers complained that Zesco in 2009 justified their increment on the basis of kwacha depreciation, global recession and increased power import charges. Zesco did not adjust tariffs downwards when economic performance improved. Other consumers implored on Zesco to source funds from banks and elsewhere for its recapitalisation as opposed to increasing the electricity tariff by 36 percent as this would have negative impacts on consumers and ultimately the economy.

(Source: The Post, 27.06.10)

Low Tariffs on International Calls
The reduced international gateway fees and annual mobile service operating fees should result in low charges on international calls and local mobile service delivery. Some mobile operators such as Zain Zambia and MTN Zambia have since reduced fees on international calls by 70 and 40 percent respectively. Consumers are thus expected to benefit from the reduction which should translate into lower charges on mobile service delivery. Zambia Information and Communication Technology Authority (ZICTA) also implored on the service providers to reduce call rates stating that the reduction in operating fees was not in vain hence the need for this to have a positive bearing on consumers.

(Source: Times of Zambia, 30.06.10)

Mealie Meal Price Reduced
Consumers have welcomed the price reduction in Zambia’s staple food. The price reduction of between US$0.6 and US$0.8 according to some milling companies was a way of passing on benefits to the consumers after the reduction in maize (mealie meal grain) price. Mealie meal prices are fetching US$7.1869 for a 25 kg bag (from US$8.009) of roller meal while a same kg bag of breakfast is selling at US$11.2936 from US$12.1150. Despite the reduction, some consumers felt that the prices needed further reduction in order for consumers to reap for benefits.

(Source: Zambia Daily Mail, 29.06.10)

Solar Products to Rural Areas
Most of the rural areas in Zambia remain without access to electricity. A Dutch company, Rural Energy Foundation (REF) is supporting 8,000 rural households through its network of retailers facilitating access to renewable energy. The company, which specialises in solar (PV), has embarked on hydro-power systems and low-cost water filters. The solar energy would stimulate economic development for the households in rural areas which are not on the national grid. With solar energy, the households can considerably improve their living standards as they will cut down on costs such as kerosene, batteries and candles. Further, the setting up of solar barbershops, charging units, entertainment cafes and shop lighting will raise the image of the rural areas.

(Source: Zambia Daily Mail, 17.05.10)

Snapshots on Consumer Issues

Consumers’ Safe with Authorities’ Intervention
About US$40,000 worth of counterfeits were recently confiscated in Lusaka with three foreign nationals being arrested by a combined team of Zambia Police officers and Cycorp Zambia limited. Counterfeit products seized included 86 Digital Versatile Discs DVD players, 27 television sets, 25 fridges, 23 microwaves and 23 home theatres under the brand name of Samsung.

(Source: The Post, 04.06.10)

Negative Impact of Fuel Hike on Agriculture
The government has increased fuel by 13 percent and a number of farmers have expressed concern with the development hence criticising it as ill timed. Farmers in the major farming areas − which include Mazabuka and Mukushi districts have stated that the move will negatively affect agricultural operations such as commodity and input haulage, wheat planting and other farm and off farm operations.

(Source: The Post, 04.06.10)

Consumers Sued for Illicitly Consuming Beer
There was an outcry among concerned residents of Zambia’s Mungwi district over the high consumption of an illicit brew commonly known as Kachasu among. This outcry from the residents necessitated police action hence impounding over 2,000 litters of the illicit beer and arresting people that were found drinking it. Mungwi police officers confirmed the confiscation of the large quantities of the illicit brew and said they were still mounting more patrols to sweep off the village completely.

(Source: The Post, 22.06.10)

About the Newsletter
Consumer Watch newsletter is a joint initiative of the CUTS ARC and ZACA, published with the objective of enhancing consumer welfare through sensitisation, information dissemination and capacity building of consumers, business entities and government. While addressing consumer concerns, the newsletter focuses on bringing out issues such as violation of consumer rights and measures to be taken by the relevant authorities to protect stakeholders.

CUTS ARC and ZACA will strive to support and lobby the Government and the stakeholders to ensure resumption of the process to eventually enact a functional Consumer Protection Law in the country and also establish a functional institutional mechanism to implement the law. This is in line with the changes taking place in other countries in the region in the wake of globalisation and liberalisation. Apart from carrying consumer-related information, the publication will also give an analysis on current consumer concerns in the country.