A Quarterly EnewsLetter Vol.9, Issue No. 2, 2014

Editorial Comments

CUTS International is implementing a Project on Competition Reforms targeting agriculture and transport sectors in four countries including Zambia. The other countries are Ghana, India and the Philippines. CUTS International Africa Regional Director Rejit Sengupta said that the Project titled ‘Competition Reforms in Key Markets for Enhancing Social and Economic Welfare in Developing Countries (CREW)’ will benefit both consumers and producers.

Sengupta, Coordinator of the CREW Project, said that the process of competition enforcement is fairly weak across many developing countries, and needs to be strengthened to ensure that competition reforms lead to measurable welfare gains.

Speaking at the second National Reference Group (NRG) Meeting held in Lusaka he said, “Through this Project, CUTS aims to develop an approach, which would help in assessing the benefits of competition reforms on consumers and producers in the two sectors”.

Sengupta said that maize and bus transport sectors particularly, could have impacts on consumers and producers, hence, the Project is trying to identify benefits that are accruing to consumers and producers in the two sectors that can be attributed to competition reforms.

The NRG comprised key national institutions and stakeholders with specific role of taking the Project findings forward for policy and practice changes. The purpose of the NRG meeting was to allow the sector experts to share the findings from the Project to enable the NRG members to review them and guide the researchers on issues that need to be explored further.

In the same event, Competition and Consumer Protection Commission (CCPC) Director for Mergers and Monopolies Luyamba Mpamba highlighted that Agriculture and Transport being targeted, under the Project are also among the most viable and open to entry, which has seen CCPC intervening in them following some allegations of anti-competition practices. “We are happy that such a Project is being implemented in Zambia as this would help in identifying reforms that can remove impediments that are stifling competition, leading to adverse impact in the market” , he said.

Earlier, the Ministry of Commerce, Trade and Industry Permanent Secretary, Siazongo Siakalenge, said that demonstrating benefits of competition to stakeholders using a credible body of evidence has remained a challenge for developing country’s policy-makers. Siakalenge said that the Government is ready to work with CUTS in liaising with the Ministries of Agriculture and Transport for exploring the incorporation of emerging recommendations from the Project in relevant policies and processes.

The meeting was characterised by informative discussions from the institutions being represented. These included Zambia Consumers Association, the Food and Agriculture Organisation, the Commuters Rights Association of Zambia and the Zambia Bureau of Standards.
(Zambia Daily Mail, 06.07.14)


Electricity Tariff Hike Not to be Used to Increase Prices
Zambia Electricity Supply Corporation Limited (ZESCO) said that the recently announced hike in electricity tariffs should not be used as a scapegoat to increase prices of goods and services for the consumers.

ZESCO’s Managing Director, Cyprian Chitundu, said that the 25 percent tariff hike, which was recently announced by the Energy Regulations Board (ERB) was minimal and that it would be exploitative if other goods and service providers use it as a scapegoat to increase prices.

“There is no way prices of bread, transport by mini bus owners or rentals should go up. These tariffs are not out of this world”, Chitundu said. “We are mindful that these changes don’t hit the people’s pockets. Despite these changes, people who want to use charcoal, kerosene will be paying more. The tariffs are still lower than what people pay for their mobile phones”,he added.

However, the ERB has allowed ZESCO to increase electricity tariffs for domestic consumers by 24.63 percent effective from July.

(Source: Lusaka Times: 12.06.14 )

Bumper Harvest to Reduce Mealie Meal Prices
The Civil Society for Poverty Reduction has commended the Zambian farmers for producing a record Maize bumper harvest for the 2013-14 farming season. CSPR Head of Information and Advocacy Diana Ngula said that the farmers need praise for their hard work, which has resulted in surplus Maize production.

Ngula, however, said that surplus Maize should result in reduced mealie meal as the current mealie meal prices are way beyond the reach of most of the citizens.

“Admittedly, Nshima is our staple food and we feel happy as a nation when we attain food security and food sovereignty and we say kudos to our hard working farmers but the bone of contention should be whether this will translate into lower mealie meal prices” , she said.

(Source: Lusaka Times, 14.05.14 )

CSPR Urges Government to Intervene in Fuel Price Hike
The Civil Society for Poverty Reduction (CSPR) in Eastern Province appeals to the Government to intervene in the recently increased fuel pump prices. CSPR Provincial Coordinator, Maxson Nkhoma stated that the decision to increase the pump prices will impact negatively on the ordinary Zambians who are already living, under the poverty datum line of one dollar per day.

“As CSPR we feel and know that government should have found other practical ways of ensuring that the money saved from subsidies could have been channeled to benefit many citizens than increasing the fuel pump price”, he said.

He further complained that the prices of essential commodities are already high, adding that recent hike of fuel prices will worsen the situation, hence, the need for government to intervene.

Nkhoma also urged the Competition and Consumer Protection Commission to also monitor the situation on the market to ensure that the common consumer is not exploited.

(Source: Lusaka Times: 23.04.14 )

Benefits of Business Reform Process
CUTS plans to start a Project in the transport sector to analyse the benefits of business reform process on the public.

CUTS’ Assistant Programmes Officer, Faith Mwamba, said that the evaluation of the Project will be implemented focussing on the public passenger transport sector realising that some of the reforms undertaken on the Business Licensing Reform Programme (BLRP) may have direct and indirect impact on the sector.

“The aim of the Project, therefore, is to assess the tangible benefits of an effective reform process on the public passenger transport sector from the point of view of the welfare gains or losses for both service providers (producers) and consumers” ,she added.

She also said that the purpose of the reform process is to eliminate the key constraints to the country’s regional and global competitiveness. Mwamba added that the creation of the initiative will also assist the Government to quantify and document critical information about the business sector.

Mealie-meal Price Likely to Further Increase
The Millers Association of Zambia (MAZ) said that the mealie-meal prices are likely to increase between November and December due to the K5 increase on the maize floor price.

Minister of Agriculture and Livestock, Wilbur Simuusa, announced that the increased floor price of maize for the 2014-2015 maize marketing season by K5, to K70 for a 50-kilogramme (KG) bag of maize from K65. However, MAZ President, Allan Sakala, said that the increase in the maize floor price will also affect the price of maize food products, especially when the cost of doing business in the country is high.

“Mealie-meal prices are likely to increase between November and December in 2014, following the K5 increase on the maize floor price for the 2014/2015 maize marketing season by Government. He said the increase will also be based on the high cost of storage facilities, which include maize fumigation”. Sakala, however, urged the Zambians to be wary of traders who buy mealie-meal from millers at a cheap rate for resell at K65 a 25 kg bag and such dealers are exploiting the consumers.

(Source: The Post: 30.06.14 )

Improved Mobile Satellite Services Underway for Airtel Customers
Thuraya Telecommunications, a leading Mobile Satellite Services (MMS) operator has entered into an agreement with Bharti Airtel International to provide its customers with mobile satellite products and services across 17 countries in Africa. The partnership will provide Airtel Africa customers voice and broadband connectivity via Thuraya’s satellite network across the continent’s most remote areas.

Starting from May onwards, Airtel Africa will sell Thuraya’s products airtime packages at their Enterprise accounts team. In a statement issued in Lusaka, Thuraya Chief Executive Officer Samer Halawi, said that Thuraya”s partnership with Airtel Africa is a very positive development in bridging the digital divide in Africa. Halawi said that the company’s robust satellite network would enable Airtel Africa to provide its consumer and enterpeise users with reliable, high quality voice broadband services.

(Source: Times of Zambia, 01.04.14 )

PAZ Foresees Hike in Poultry Prices
THE Poultry Association of Zambia (PAZ) said that the farmers may be compelled to raise the price of poultry products owing to the revised maize floor price from K65 to K70.

PAZ Executive Manager, Dominic Chanda, said that the revised floor price, in addition to other factors, such as the recently hiked electricity tariffs, volatile Kwacha and export of maize bran, an essential ingredient in stock feed, would affect the profitability and competitiveness of the sector. The costs of production will increase and some of the farmers will be out-competed. But ultimately, farmers will have to increase the price of poultry products.

He said that the projected increase in the prices was likely to lower consumption of poultry products that would also affect jobs in the sector.

(Source: The Post Newspaper, 25.04.14 )

About the Newsletter
Consumer Watch newsletter is 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 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.