Wednesday, January 27, 2010

AS EAC COMMON MARKET LOOMS UP LARGE... Activists in Tanzania cry out for consumer protection

The Business Times of Friday, 15 January 2010 10:53
A FULL Customs Union became a reality within the East African Community on January 1 this year ... And – as the Community hurtles into a Common Market regime that is tentatively slated to become operational come next July – activists in Tanzania have come to the fore in the fight for consumer protection in ways more than one.

In the looming advent of a Common Market, deliberate efforts need to be taken sooner than later to ensure effective protection of the interests of consumers as a whole.

Steps must also be taken to promote and enforce fair competition at the marketplace wherever and whenever possible, with the interrelated objectives of driving prices down, as well as improving the quality goods and services.

This should be in a win-win situation in which all stakeholders benefit: businesses and consumers in particular, and the economy at large.

The envisaged EAC Common Market – whose Establishment Protocol was signed by the Heads of State of the five EAC member countries in Arusha on November 20, 2009 – will come into effect across the entire Community on July 1, 2010... But only – and if only – the National Legislatures of the five States: Kenya, Uganda, Rwanda, Burundi and Tanzania ratify the Protocol in the interim.

In the event, certain quarters in Tanzania consider it prudent for the relevant authorities and economic moguls – including the Government and players in the private sector – to urgently put in place the requisite mechanisms for ensuring that Tanzania benefits maximally from the dual arrangements of a Customs Union and a Common Market.

Speaking to Business Times in an exclusive interview held in Dar es Salaam this week, the executive director of the Tanzania Consumer Advocacy Society (TCAS), Bernard Kihiyo, said Tanzania requires to identify, prepare and adopt a serious approach that would ensure smooth, 'mortise-and-tenon' entry of the country into what is a relatively new economic and financial regime.

"We are having a laissez-faire approach on very important issues and, as such, need to remove all barriers to creative thinking sooner than later,” Kihiyo said, further counseling against negativisms like “ 'the Customs Union, Common Market won't work;' 'we don’t have capital;' 'why change;' 'we can't get there;' 'we are better off as it is'; 'may be in 20-30 years to come...' As Mwalimu Nyerere always said: 'it can be done play; just your part,'" Kihiyo elaborated.

In his view, the executive director says, “Tanzania will certainly benefit a lot from the envisaged Common Market. For starters, the country has a considerable store of comparative advantages that include a phenomenal endowment of natural resources which the other member countries don't have.

“These include precious minerals, swathes of forestry and fisheries, livestock, water resources, large tracts of arable land; a reasonably good climate, human capital, and socio-political stability/security.

“Then, its geographical location that puts Tanzania in an entrepot trading advantage vis-a-vis the six landlocked 'neighbouring' countries of Uganda, Rwanda, Burundi, Eastern DRC, Malawi and Zambia,” Kihiyo says.

But, all that notwithstanding, he says, “there still is a real need for the Government in Dar to invest heavily in the country's infrastructure and logistics. Among these are the need to revamp and otherwise put in place transport and transportation (including port and warehousing facilities), state-of-the-art telecommunications, as well as stable and adequate utility supplies (power, water, etc).

“If we want to excel under the proposed Customs Union and Common Market conditions, we must also revamp the country's legal and other regulatory/procedural frameworks; hospitality industry facilities; insurance and financial services; a highly educated/skilled workforce, and many other supporting facilities,” he enumerated.

“ There is indeed a need to invest heavily in the quality of labour that can produce goods and services for the expanded, more competitive regional market. We need to train lots of service providers on the concept of consumerism so as to enable them
render excellent customer services as a matter of course.

“We have to establish good policies that allow businesses and consumers alike to enjoy in full the benefits of a Common Market.

"Our business entities must undergo transformation in the way they regard, handle and treat customers. The conception of who a consumer is in the business context has to be changed from one of what is now regarded as a 'human cash dispenser' into an essential element for the healthy existence of businesses. Such a transformation has far-reaching effect on the provision of goods and services to customers, so that the servicing of the requirements of customers will be at the heart of market philosophy in all sectors of the economy.

'Politically-motivated slogans won't get us far in the socio- economic developmental stakes... We must leave no loopholes for unscrupulous players to take unfair advantage of the Common Market at the expense of 126m East Africans.'

“Not only would knowledge and practice of this concept aid in
improving the provision of quality services that would, in turn, lead to increased success in business at the coming regional Common market; it would also spell greater success in the local market as well," Kihiyo stated.

Noting that the Common Market will bring together about 126.2 million consumers with a combined purchasing power of about US$60 billion, Kihiyo said this “will certainly stimulate economic growth for the entire region... However, a lot of changes must be made in the way business is currently done.

"This is a big market which no business worth its name can ignore. There will be free movement of persons, labour, goods, services, and capital. There will be rights of residence.

There will be fewer or no market restrictions against any registered/licensed business entity to conduct business in any of five member states. But the most critical question one has to ask is, how far prepared are consumers and businesses in the region to meet the challenges of the EAC Common Market – and, in the event reap to the maximum possible the benefits of the new regime," he said, adding emphatically that “the region must be looked at – and seen – as a Bigger Picture!”

For his part, the chairman for Consumer Society, Daimon Mwakyembe, told Business Times that "part of the reasons which led to the collapse of the former EAC in 1977 was ideological differences. This shouldn’t be the reason this time!”

Noting that the 'new' EAC was officially revived on July 7, 2000, Mwakyembe said “all the five EAC member states are practising free market economy whereby the prices of goods and services are determined in a free market pricing system governed by the laws of supply and demand.

“However, a Common Market alone may not guarantee outcomes that are efficient and in the public interest. In the real world, the benefits of a Common Market do not exist in pure form – due to human nature of greed,” he said.

Nonetheless, consumers are likely to benefit more in a Common Market that outside one, he argued.

"For one, there will be more business players competing for custom and consumers' money. Hopefully enough, there might be certain improvements in the quality of goods and services supplied at a reasonable and competitive market prices," he said.

Nonetheless, Mwakyembe – a former director-general of the Tanzania Bureau of Standards – said one main worry is likely to remain: how violations of consumer rights can be curbed within the Common Market...

“ As of now, consumer rights violation at the single country level are on the raise with the passage of time... The respective Governments seriously need to formulate and adopt legislation, mechanisms and programmes that are designed to effectively regulate, sensitize and popularize among the EAC citizenry
regarding their rights and responsibilities as we rush along
and into a Common Market in a matter of a few months,” the chairman counselled.

Mwakyembe admits that “remarkable efforts have been taken in Tanzania in recent years that led to the adoption of important statutes for consumer protection and regulation of a free market economy.”

This was accomplished with considerable cooperation and help in cash and in kind from the World Bank, the Tanzania Government and Parliament, as well as other stakeholders.

Mwakyembe named the important extant statutes on consumer affairs adopted in this decade as including the Energy & Water Utility Regulatory Authority Act (2001); the Surface & Marine Transport Regulatory Authority Act (2001); the Fair Competition Act (2003); the Tanzania Communications Regulatory Authority Act (2003), and the Tanzania Civil Aviation Authority Act (2003).

Others are the Tanzania Food & Drugs Authority Act (2003); the Bank of Tanzania Act (2006), “and many other written laws.”

Among the earlier ones are, of course, the Tanzania Bureau of Standards Act (1975, revised in 2009 – although not yet adopted!); and the Weights and Measures Act (1982).

Commenting upon the matter, a former director-general of the Small Industries Development Organization, Epaineto Toroka, said “there is also a need to have central bodies to regulate the Common Market if and when it comes into effect.

Noting that "the EAC countries already have so many bodies regulating labour, services, goods and rights of residence at the country level,” Toroka said “if we go into the Common Market, we will need to have central bodies to regulate it, too... Market weaknesses and loopholes within the EAC will need to be addressed and dealt with accordingly, as no one country can do it alone," Toroka stressed.

“The most appropriate way forward for the EAC member states is to go into a Common Market bloc. However, there must be intensive advocacy on what is the Common Market will all be about; what are the benefits in it for ordinary Tanzanians, Kenyans, Ugandans, Rwandans and Burundians – and what the disadvantages are!”

The PR, Media & Communications Manager for the Dar es Salaam-based Serengeti Breweries Ltd, Teddy Mapunda, told this write that, “if Tanzanians – and, indeed the other EAC members – really want to have a positive outcome in the coming years, beginning especially in 2010, then consumer protection within the Common Market must feature prominently in it...

“But this requires strong political will and commitment from those in power; they should undertake what we in the trade call 'consumer protection crusade' for the betterment of individual consumers, citizens and other stakeholders as a whole.

Noting that mere slogans – mostly politically-motivated – will not get us far in the socio-economic developmental stakes, Mapunda called for the powers-that-be “to make sure that there will not be loopholes which would enable unscrupulous players to take unfair advantage of the Common Market – and at the expense of 126 million East Africans.”

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