Tuesday, January 15, 2008

Independent Consumers Associations are Required to Supplement Government Efforts on Consumerism.

From TCAS Annual Review Discussions;

M/s; Lucy Ludovick Tarimo and other members in TCAS’s board of directors tried to define Independent Consumer Association as an organization not committed to a political party or relying on government, affiliated with small, medium or large producers, manufactures, distributors, service providers and is standing as an independent consumers association with the deliberate intention of not allowing that particular organization to be controlled by other powerful interests hence cause biasness on organization’s future decisions.

A shared commitment and efforts to fulfil the right of consumers should be the responsibility of the government with other members of the society like individual consumers, producers, distributors, service providers, professionals, civil societies, NGOs, consumers’ associations and others. All should work together to supplement government efforts on protection and promotion of consumers rights. Mr Adam Karia contributed in the discussion.

This is not a new phenomenon; there are a lot of government programs on child and maternal healthy, HIV/AIDs of which government is doing through its’ ministries, hospitals, commissions, agencies like;- TACAIDS but yet still there are NGOs such as AMREF, UMATI, Marie Stopes, SHIDEPHA, Pathfinder, Engender-Healthy, Family Healthy International (FHI) just to mention some few whom are working day and night to supplement government efforts on reducing the effect of HIV/AIDs, and unsafe motherhood that affect majority of Tanzanians. Mr Adam Karia emphasized.

Mr Bernard Kihiyo said; the government is having the Minister for Community Development, Gender and Children; Minister for Justice and Constitutional Affairs-courts of law, Minister of State in the President's Office - Good Governance and Commission for Good Governance and Human Rights yet still there are organisations and NGOs which are working to supplemented government efforts on the same; NGOs such as; - Tanzania Media-Women Association (TAMWA), Legal and Human Rights Centre (LHRC), National Organisation for Legal Assistance (NOLA), Tanzania Gender Network Program (TGNP), TUWAJALI Women Rights Legal Assistance (WRLA), Kuleana and many others.

There is Ministry of Water which is there to coordinate the supply of clean water to all Tanzanians; however government effort is supplemented by independent organization such as Oxfam, Care International, Action-Aid, Water-Aid, Plan International, etc by establishing or financing various water projects in different parts of Tanzania.

Moreover the government is having Minister for Planning, Economy and Empowerment; Minister for Industry, Trade and Marketing; Minister for Energy and Minerals; Minister for Health and Social Welfare; Minister for Agriculture, Food Security and Co-operatives; Minister for Infrastructure Development; Minister for Information, Culture, and Sports; - all of these ministries are dealing with Tanzania consumers in one way or the other but there is no independent non governmental consumers’ associations to do the same.

For instance through Ministry of Industry, Trade and Marketing this coordinates manufacturing, trade and marketing of goods and services in and outside the country; in helping the ministry to perform its duties there are several agencies established such as ‘’Tanzania Bureau of Standards’’ (TBS) for controlling goods standards; ‘’Tanzania Weight and Measurement Agency’’; and ‘’Fair Competition Commission’’; Energy and Water Utility Regulatory Authority (EWURA) which on its peculiar case it is under two different ministries (Ministry of Water; Ministry of Energy and Minerals).

Under the Ministry of Health and Social Welfare there is ‘’Tanzania Food and Drugs Regulatory Authority’’ (TFDA); Ministry of Infrastructure Development there are; - ‘’Surface and Marine Transport Regulatory Authority’’ (SUMATRA) and ‘’Tanzania Civil Aviation Authority’’ (TCAA); Minister for Information, Culture, and Sports there is ‘’Tanzania Communication Regulatory Authority’’ (TCRA). Kihiyo elaborated.

Under each of the Sectoral Regulatory Authority (SRAs) there is Consumer Consultative Council whereas under Fair Competition Commission there is ‘’National Consumer Advocacy Council’’. Each of these SRAs - council consists of not less than five members and not more than ten members appointed by responsible minister. The council in consultation with the minister makes its own rules for regulating its procedures and other matters relating to its functions on promoting and protecting consumers’ rights. Mr Proches M. Latonga explained.

All councils under Sectoral Regulatory Authorities (SRAs) are governed by Director-Generals, non-executive members who are appointed by the responsible Minister or president in case of chairperson after consultation with relevant Ministers. These SRAs are required to submit their reports to the relevant Ministers within specified time and the responsible minister; who will share council’s budget and annual report with National Assembly for funds and approval.

In each council there must be a copy of the Public Register of activities done by the council that has to be accessible for inspection by the general public (consumers). But the responsible minister has the powers from time to time to advice, authorize and determine the categories of decisions and information which would be placed on the Public Register. Mr Latonga cemented.

In some instances we have experienced a negative side of what it sometimes means to be independent council, commission or agency under the parasol of the government. These councils in one way or the other are influenced by the political wind of ministers and government in powers. All TCAS’s attended board members agreed on this.

In view of the situation above; we need independent; non governmental consumers associations which can supplement the works of government ministries, commission and agencies mentioned above. Independent consumers’ associations are required to supplement government efforts on promoting and protection of consumers’ rights as it is to other marginalized groups like children and women rights on reproductive health, HIV/AIDS, general human rights and good governance and the like. Mr Latonga insisted.

The government of Tanzania with the support of various donors World Bank’s, DFID, SIDA, DANIDA, GTZ, CIDA, the Netherlands;- are carrying out various programs such as Business Environment Strengthening for Tanzania (BEST) programme; Private Sector Competitiveness Project; the Private Sector MSME Competitiveness Project; The Financial Sector Deepening Trust (FSDT); Tanzania Private Sector Foundation (TPSF) etc with the aim of improving the business environment; investment climate in Tanzania and strengthening private sector as an engine of country’s economic growth. Mr Hodrum B. Suleiman said.

He went further to say; I do recognize that private sector is an engine of Tanzania’s economic growth and that if poverty reduction goals are to be achieved significant strides must be made in the development of the sector. However, by focusing strictly on measures to overcome supply-side constraints that inhibit growth and competitiveness of the private sector, without supporting the efforts of government sectoral regulatory authorise, consumers' councils and other independent non governmental association these efforts are going to lack sight. Mr Hodrum B. Suleiman lamented.

According to Ellerman (Britton Woods Update, Jan/Feb 2002) argues that, improving the investment climate for one group may make it worse for some other groups. It has been revealed in April.2007 TCAS’s consumers Survey that more than 80% of consumers in Tanzania are suffering from lack of understanding of consumer rights. They remain vulnerable; they have no ability to claim their rights and don’t have a formidable platform that could make their voices’ heard. http://www.tcas.or.tz

Poor people economic empowerment under the Ministry of Planning, Economy and Empowerment through MKUKUTA - NSGRP is going to be unachievable dream, if consumers’ voices are not heard and consumers are not empowered to get the actual value for money they spend on the goods and services. M/s; Happy Steven Mhina-TCAS’s member of the board of directors said.

If not for Non governmental, independent consumers associations to supplement government efforts on protecting and promotion of consumers’ rights (consumerism), the most difficulty questions to ask our selves are
-How abusive business practices by enterprises at the national and international levels which adversely affect consumers will be curbed
-How private sector institutions will be made accountable and more responsive to consumer’s needs and interests
-How the private sector will emerge, grow and remain competitive in the absence of an informed and healthy consumers
-And, strengthening private sector, reforming business environment and investment climate for whom? If not for the betterment of all forty million Tanzania consumers. She insisted.

The presence on high increase on violation of consumers’ rights is a new challenge to Tanzania government, with its social-economic, political and judicial system. If the situation is not well taken care it is going to jeopardise the essence of citizen economic rights and empowerment in our country…It is now or never let us work together for the common good of Tanzania consumers, M/S Lucy Ludovick Tarimo said.

Tanzania Consumer Advocacy Society (TCAS) with partnership with Consumers International (CI) is vocal, independent non governmental campaigning voice for consumers in Tanzania. We would like to build a powerful national consumers movement to supplement government efforts on protection and empowerment of consumers everywhere in Tanzania. Jackyz Meena explained.

Saturday, January 5, 2008

Tanzania Consumers are suffering from Uncontrolled, Unreported Inflation and Cartels.

By Bernard Kihiyo

Consumer is an individual like me and you, who tend to buy goods or services for his/her personal uses to satisfy individual immediate needs, gains, leisure, interests or satisfaction. Consumer can consume tangible goods like food, building materials, home appliances and intangible goods like hospital, transport, insurance, banking, utility, telecommunication, education services this is just to mention some few.

According to my definition above, it appears that consumers are the largest economic group, affecting and affected by almost every public and private economic venture and decision.

Inflation can be defined as the continuing rise in the general level of prices of some set of goods and services in a given economy over a period of time.

There two main causes of inflation; one is the presence of excess demand beyond the output capacity of the economy to supply goods and services, which push up prices, i.e. financing of the public deficit entirely by printing more money, this increase in money supply will push aggregate demand up, causing prices to rise (demand –pull-inflation).

And the second cause of inflation is an increase in inputs costs- wages, raw materials, rise in taxation, the increase in the prices of utilities, other overhead costs, rise on costs of imports, rise in bank interest rates; all these tend to push up cost faced by the firms, thus forcing a consumer price to increase (cost-push inflation).

While; Cartel is a small group of producers or importers of goods or service who agree to regulate supply in an effort to control or manipulate prices. Adam Smith wrote in ‘’The Wealth of Nations’’ (1776) that when people of the same trade meet, `the conversation ends in conspiracy against the public, or in some contrivance to raise prices or price fixing.

Tanzania economy depends fully on imported goods because our industrialization process is on an very infant stage; we do import almost 75% of goods in our shops from canned/packed food stuff to building materials, from home appliances to cloths, from medical equipment to drugs, from computers to office stationary this is just to mention some few.

Due to this economic dependency from other countries’ economies; Tanzania tends to be a victim of local and overseas cartels in human and animal drugs, petrol, cars and automobile parts, building materials, home and industrial appliances and the like.

We know by names few prominent traders who feed and supply all above mention stuff for Tanzanians. With just a single meeting at Kariakoo or Jamatin prices of certain goods might rise to a significant percentage on imported goods.

It is the interest of all businessmen around the world if not controlled; to reap as huge profit as possible no matter what it takes to consumers. This kind of conspiracy led to unjustifiable and artificial increases in prices for hundreds of imported food stuff, medicine, building materials, home appliances to Tanzania.

It is cartel-type of purchasing behaviour of big merchants in Tanzania who use to form cartels which decided the purchase price of farmers’ food and cash crops. They normally decide who will buy what, where, at what price and so on.

It is cartel-type of purchasing behaviour of big merchants who use to adopt a delay tactic on purchasing on farmers’ cash crops such as cotton, coffee, tobacco, tea, and cashew nuts with the intention of frustrating farmers whom later can accept low prices for their crops

The government on some few incidents had intervened on abolishing licences of some traders whom appeared to sabotage or having intentions of exploiting farmers in one way or the other, however majority of them go without been identified.

It is against this background that Tanzania Consumer Advocacy Society (TCAS) would like to work as an independent watch dog on identifying and investigating these antitrust behaviours on purchasing farmers’ food and cash crops which ruin the purchasing power - marginal propensity to consume of this very important section of Tanzania consumers.

TCAS will do all what it takes to investigate and conduct some researches on all antitrust behaviours that in one way or the other affects consumers’ welfare.

As of April 2007 TCAS had conducted a consumers’ survey on their experience for the past twelve months; it had been learnt that there is a significant price rise of common food stuff like maize meal, rice sugar, and cooking oil for the past 12 months before April.2007.

On average Consumer Price Index (CPI) of retail price for one kilogram had risen as follows; - sugar from Tshs 800 to Tshs 1200, this is 50% price rise, maize flour from Tshs 320 to Tshs 500, this is 56.3% prise rise, rice (normal standard) from Tshs 600 to Tshs 950 this is 58.3% price rise, cooking oil from Tshs 900/litre to 1700/litre this is 88.8% price rise.

Due to this we experienced food inflation with annual rate of more than 50 percent as stated above. On the other words the amount of goods and services which can be purchased by a specific sum of money; given the prices of those goods and services increased by 50% is definitely going to lower consumers’ marginal propensity to consume within the stated period.

The survey results by TCAS indicate that 67 percent of households in Tanzania cannot afford to have three meals a day; however 73 percent could only manage to have two meals a day, whereas 27 percent of the households could only afford one meal per day, this leaves only about 33 percent households that could manage to have three meals or more in a day.

In year 2007 Tanzania government continued on watering seeds of consumers’ welfare destructions; for instance the government increased tax on petrol in 2007-8 - budget, also the government decided to stop giving subsidies to Tanzania National Electric Supply Company Limited (TANESCO) which resulted to 21 percent tariff price increment and up to 250 percent increment on installation fee.

Government’s subsidies is one way of strengthening poor consumers’ right to access to basic services, If Tanzania government decides to stop giving subsidies to TANESCO there is no other way TANESCO can do than to shift the burden to the consumers.

In the Guardian of 6th Sept.2007 there was a statement by the minister of Industries, Trade and Marketing Hon Basil Mramba that the Government is probing why pricing of locally made goods using locally available raw materials are more expensive than imported ones.

What Mramba wants to probe is purely the consequence of rise on fuel tax and what we see on shaken and worsening of Tanzania firms’ competitive position in domestic and overseas markets; against foreign rivals is one of inflation signals however other factors mentioned with definition above might apply.

The other unreported point that influences our local prices especially on our food can be viewed in the PhD thesis done by Dr Bakar Nnunduma for three good years on food management systems in Tanzania Market; he realised that; our poor food handling systems account for 40 percent of Tanzanians food poverty. Our prices on food are not realist because they are inflated to cover the losses that are acquired during the process and handling of our food from source to the markets and later to consumer’s plate.

For instance transporting simple perishable goods like tomato from Iringa to say Dar es Salaam market, given that a trader bought 100 cases of tomatoes from source; the process of taking the stuff from the source-farm to the market can take three to five days. Consequently to this delay about 40 cases equivalent to 40% of bought cases of tomatoes will reach the market while rotten due to poor handling and use of un-refrigerated vehicle like Fuso.

What a trader will do to cover the loss, is to increase price of the remaining 60 cases to cover the loss that had been acquired from the rotten 40 cases of tomatoes.

The end user-consumer is the one who is going to pay for this avoidable negligence that can be reduced by introducing proper policy on transport and transportation of perishable goods in accordance to codex standards for fruits, vegetables, eggs, fish, meat - food stuff in order to preserve the quality at the same time the quantity from being damaged.

I call upon the government and SUMATRA to call for investors on this line. SUMATRA should start thinking on giving licences to companies that can work to reduce the gap of relevant and appropriate means of transportation on food stuff.

As long as consumers comprise of all Tanzania population, its high time for politicians to put consumers’ rights promotion and protection on their agenda to save needs and interests of the entire nation. Tanzania Government should provide and maintain adequate infrastructure to develop, implement and monitor consumers’ protection policies.

Special care should be taken to ensure that measures for consumer protection are implemented for the benefit of all sectors of the population, particularly the rural population and people living in poverty.

The Author is
The Executive Director of
Tanzania Consumer Advocacy Society