Capacity Building on Competition Policy in Select Countries of
Eastern and Southern Africa
7Up3 Project

 

 

Consumer Empowerment Lacking

He observed that the reason should be attributed to the lack of comprehensive consumer protection laws and policies in the countries. The Minister explained that regulations to protect consumers are often scattered across various legal documents in different government departments, making access to these documents very difficult, and their understanding by the consumers impossible.

He was speaking in a dialogue: "Promoting Consumer Protection Policies in Africa" organised between representatives of the government and consumer organisations, by the Botswana Government and Consumer International Regional Office for Africa (CI-ROAF).

Moroka said consumers are adversely affected by restrictive business practices such as collusive tendering, exclusive distribution practices and market sharing cartels, which reduces consumer choices, increase and minimise benefits. He was concerned that decisions that affect local markets and consumers were being made at multilateral level with no input from local and national stakeholders such as consumers.

He assured participants that Botswana was in the process of formulating a competition policy, which is expected to culminate in a competition law shortly.

Government officers often complain about the legitimacy and expertise of civil society organisations on policy issues, while civil society organisations fret about being ostracised from the policymaking process – resulting in continuous tussle between these two sections. It is therefore essential to bring them on a common platform through dialogues like this, and make them move towards mutual cooperation.

(Daily News, 08.02.05)

Beef Exports Monopoly to Continue

Botswana Meat Commission (BMC) would continue to monopolise the beef export industry, unless the government amends the law to allow Botswana farmers to sell their livestock and meat products outside the country.

The Botswana Meat Commission Act of 1966 solely reserves the exportation of live animals or their edible products by the BMC. BMC is the only export entity in Botswana and regulated by the Veterinary Department in the Ministry of Agriculture. One of the purposes of enacting the law was to restrict livestock movement and control diseases.

Department of Animal Health and Production, Deputy Director Phillemon Motsu observed that a permit on control of export of cattle and the licensing of export slaughterhouses, therefore, could only be issued by the BMC. Excepting, on occasions under exceptional circumstances, the Minister could give a waiver if he believed it was in public interest to issue such a permit without the concurrence of the BMC.

Some farmers have raised concern on the BMC monopoly of the beef export market and appealed to the government to liberalise the sale of live animals and their products outside the country for better prices.

Botswana continues to import live animals and meat products from neighbours like South Africa and Namibia, and other areas declared disease-free by the European Union (EU).

(Daily News, 10.03.05)

Ethiopia fears business prospects in Djibouti

Contrary to its tradition of policies on trade, encouraging foreign investors to take up business activities in its territory, the Government of Djibouti has introduced a Finance Law recently, which requires foreign insurance companies to deposit in cash or secure a physical asset worth millions of dollars to continue operating.

This new requirement has indicated Djibouti's growing attitude in discriminating foreign businesses from those owned by its nationals.

Insurance companies wholly owned by foreigners have been asked to deposit $4 million, as compared to $1 million for those fully or partially owned by Djiboutians. Insurance companies have thus been forced to increase their prices, sometimes up to three times the amount they had been charging earlier.

This law has subsequently also led to mergers by foreign (western) insurance companies with Djiboutian businesses. Whereas, others like the Ethiopian Insurance Corporation (EIC) has been deemed inactive following failure to deposit the required amount.

This new restrictive trend developing in Djibouti is worrying the business community of the neighbouring Ethiopia, which has traditionally, had close business ties with Djibouti. 

Analysts apprehend a similar move in the near future, when the government is expected to entrust stevedoring operation (a lucrative business of unloading vessels) under the exclusive domain of Djiboutian companies by a new law. In the meantime, however, there remains only one company, COMAD, that offers stevedoring services, determining its prices at will, on account of its dominant position.

A genuine cause of concern for COMAD's largest competitor, the Ethiopian Maritime Transit Services Enterprise (MTSE), is that the company could soon find itself out of business once this new law is passed.

COMAD's officials, however, have submitted that they have no intention of increasing prices in a move to take advantage the situation.

These new developments have come as unexpected surprise for Ethiopian firms, who are worried about their business prospects with this abrupt change in stance of their neighbours.

(The Ethiopian Business Overseas Group. London, 07.04.05)

Move to attract foreign firms lauded

The 9th Addis Chamber International Trade Fair organized by the Addis Ababa Chamber of Commerce (AACC) saw the presence of several high government officials. The trade fair, with the theme 'enhancing competitiveness' provided an opportunity to various foreign and domestic business houses to showcase their products. Firms representing 31 countries from around Africa, Europe, Asia, North America and Middle East participated in the exhibition.

Assistant Secretary General of AACC, Ato Hailemeskel Abebe emphasised that ‘These trade fairs would prove to be very useful in providing opportunities for local and foreign companies to promote their products and services to both Ethiopian and foreign business communities and attract the attention of local consumers’.

Occasions like these are expected to be useful for Ethiopia to attract foreign companies, and help clear clouds of concern regarding constraints in the country’s policy environment that has adversely impacted trade in the country.

(The Monitor, 18.02.05)

Need to improve business environment in the country

At a recently held workshop on the implementation of industrial zones in Addis Ababa, private investors lodged their complaints about the lack of infrastructure and information, which has restricted business growth in the country.

The Land Lease Program in particular came in for a lot of drubbing. Investors felt that it imposed high prices for plots of land, without adequate infrastructure such as road, sewage, electricity, water and telephones.

Further, restrictive business environment and poor infrastructure made it hard for private investors to expand their production and services and even to start constructions of premises at times.

Privatisation begun in the last decade in the country, but had progressed at a fairly slow pace. It had become pretty evident that privatisation was only carried out in response to fiscal crises, to combat payment problems and in response to external pressure especially from the Bretton Woods Institutions. It has not been part of a systematic strategy to restructure the role of the state and to promote the private sector as a long-term developmental exigency for the economy. Official figures of Investment, however, showed indications of improvement.

A unanimous suggestion was that investment bureaus and offices should coordinate the responsible government authorities to ensure the provision of necessary infrastructure, and secure a level-playing field in the country’s economy. It emerged from the discussions that there should be consistent development of social and physical infrastructure, well planned protective measures for infant industries, tax incentives to attract foreign capital, and proper response from the government to the reticence of private investors.

Involving representative associations in the policy-making process was seen as the first step toward reducing business uncertainty and confirming the stability of regulatory and institutional reforms.

It was also recommended that the government should support broad-based dialogue that encourages associations to participate in the process of regulatory and institutional reform. The private sector must learn to operate on a level playing field, where the ability to compete and produce efficiently is the key to long-term success.

(The Ethiopian Reporter, 15.01.05)

Malawi scores poorly in business climate

Malawi has scored poorly in the World Economic Forum’s Global Competitiveness Report, which rated 102 countries in the world in terms of business and macroeconomic climate.

In their response to the 2004/05 Executive Opinion Survey questionnaires, local business executives mentioned access to financing, inadequate infrastructure including roads and telecommunications, inflation, tax rates and inefficient bureaucracy as the five most problematic factors for doing business in the country.

The report, covering the period 2004 to 2005, shows that Malawi has slipped from position 76 to 87 on the Growth Competitiveness Index (GCI) and dropped from 72 in the 2003-2004 survey to 84 in the latest one on the Business Competitiveness Index (BCI). On the Macroeconomic Environment Index (MEI), the country has dropped from 98 to 100 in the latest survey.

The report is based on a survey of 7,300 business leaders worldwide who responded to questionnaires on the Executive Opinion Survey which captures perceptions and observations of business leaders in a given country.

The unsatisfactory performance of Malawi in attracting investment has also been accepted by the Malawi Investment Promotion Agency (MIPA). Findings of the survey have come about four months after the Malawi Confederation of Chambers of Commerce and Industry (MCCCI), a representative body for the private sector, outlined what it called ‘10 priority issues for improving the investment climate in Malawi.’ In the ‘10 priority issues’, the business community, among other things, said it expects government to respect its own deadlines for tax refunds and making investment incentives clear, transparent and non-discretionary.

Observers have argued that Malawi offers very competitive investment incentives, but needs to correct its disincentives to attract investors. Business executives have mentioned unreliable utilities—water and electricity supply, high transport costs and inconsistent policies on expatriates as some of the investment disincentives.

Major incentives sought by investors, according to analysts, include ability to repatriate profits, dividends and capital; stable macroeconomic environment; efficient policies that allow employment of labour of an employer’s choice; efficient and reliable telecommunications, electricity and water supply. Investors have also expressed the need for simultaneous development of competitive and efficient services in the country by accounting firms, transport and legal services, as a pre-requisite to business development.

(The Nation, 14.04.05)

Malawi digs in its heels over its tobacco industry

Malawi, which is seeking to protect its important tobacco industry, will not ratify an international pact that aims to limit supply and demand of the leaf on health grounds.

Over 50 countries have ratified the Framework Convention for Tobacco Control (FCTC), which is effective from February 27 2005. Malawi is under pressure from the World Health Organisation (WHO) to follow suit. The convention, the first global health treaty negotiated under WHO auspices, aims to limit supply and demand of tobacco worldwide. The WHO says tobacco is the world's leading cause of preventable death, with 4.9 million tobacco-related deaths a year.

Agriculture Minister Gwanda Chakuamba has made it clear that, ‘Tobacco is running the country's economy, and Malawi will not ratify the convention’. Chakuamba was speaking for the estimated 2 million (a sixth of the country’s population) people who depend on tobacco and related industries for their livelihood. He said that by curbing production elsewhere, the convention could offer a chance to revive Malawi's tobacco industry currently affected by low prices and unpredictability.

Tobacco is Malawi's biggest foreign exchange earner. It accounts for over 70 percent of the country's exports and 15 percent of its gross domestic product.

Last season farmers in sub-Saharan Africa grew 375,000ha of tobacco. Malawi led the pack with 130,000ha followed by Zimbabwe with 60,000ha and Mozambique at 50, 000ha.

(Business Report, 10.02.05)

Tobacco prices – a national worry

The Tobacco Control Commission (TCC) has suspended tobacco sales at all auction floors in the country indefinitely on account of the ‘low prices’ being offered for the cashcrop as complained by farmers.

This development has brought uncertainty in the financial market with analysts fearing the move to further send the kwacha down hill. An economist said with this year’s tobacco output estimated to be lower than last year; low prices could worsen the present forex scenario in the country.

In an interview, TCC general manager Godfrey Chapola said farmers were unhappy with the prices offered by buyers. Tobacco Association of Malawi president Albert Kamulaga agreed that shelving the tobacco ‘was the right thing to do as prices were too low’. Kamulaga added that no buyer was ready to offer more than US$1.20 per kg for any of the burley tobacco. These happenings have prompted peaceful protests by the growers.

Experts have warned that illegal cross border trade could become rampant if the situation is not resolved, and if low price continued for long, as farmers would turn to neighbouring countries for better returns.

(The Nation, Business, 05.05.05)

Mauritius strengthens its Textile Industry

Mauritius has launched a new organisation called “Enterprise Mauritius” to support its textile industry to face off stiff competition, after the removal of the export quotas under the Multi-Fibre Agreement.

The textile industry is one of the four pillars of the island’s economy after sugar, tourism and financial services. It employs presently 75 000 people, including 20 000 foreigners mostly from India and China.

’Enterprise Mauritius would promote the use of appropriate technologies and stimulate the right conditions for exports. It would also help develop professional manpower and create a network of operators in the free zone’, said the Industry Minister Sushil Khushiram. According to the Minister, all enterprises having difficulties should be restructured to enable them to face the future and new obstacles. ‘There is a big apprehension on the part of textile producers of several countries because of threats represented by China’, he added.

‘Several industries set up by industrialists from Hong Kong in Mauritius have closed shop during the past years and opened new ones in China because of the abolition of quotas. Even Indians are investing there’, the Minister lamented.

He expressed that the Textile Enterprise Support Team (TEST) set up last year to help industries move towards high value added products and modernise equipment, would assist textile manufacturers to face the challenge of remaining in contention.

(Mauritius News, 01.05)

Mauritius announces plans to become ‘Duty-Free Island’

Mauritius has announced ambitious plans to become the world's first duty-free island in its bid to turn the sun-drenched Indian Ocean nation into a tourist "shopping paradise."

Finance Minister Pravind Jugnauth has announced the abolition of an 80-per cent tax on some 1,850 different types of goods, including fabrics, clothing, electronics and jewellery, in an attempt to transform Mauritius into a shopping paradise for tourists.

‘It is to create a new and unprecedented dynamism ... for investment and to take big step toward the full-employment growth path’, he said, adding that the move would help improve the country's current economic situation.

This transformation of the island into a "shopping paradise," a long-standing dream of authorities in this Francophone island, is expected to be completed over a period of four years.  The government is also planning on incentives for local and international investors to set up massive retail centres. 

Tourists to Mauritius, drawn by its beaches, are already forsaking sun-tanning and watersports on the coast and heading inland to take advantage of organized spending sprees.

Earlier this year, government officials had informed that they were actively pursuing plans to transform Mauritius further into a shopping Mecca for inexpensive luxury items, particularly as its industry faced uncertainties with the abolition of global textile quotas.

(All Africa, 22.04.05)

Competition brews up in the beer market

Two new brands of the amber nectar will soon be hitting the shelves and the bars of Mauritius. Universal Breweries is all set to launch its products soon, expecting to shatter Phoenix Beverages’ monopoly on locally-made beers. The market is already bubbling with expectations.

Based in Nouvelle-France, the new brewery has already started test runs, however, the brands to be launched remain a closely-guarded secret.

Observers believe that Phoenix Beverages is set to lose its market position – a logical result when a monopoly is broken up – but will definitely give Universal Breweries a run for its money. As the launch of the new beers approaches, the billboards are filling up with adverts boasting Phoenix and Blue Marlin, Phoenix Beverages’ major labels. At this point in time, the ads have a nationalistic flavour. As it happens, Universal Breweries is foreign-owned…

The new brewery, which has guzzled Rs 260 million in investments, is owned by two Indian nationals. Ravi Jaipura owns a group, which is the main Pepsi distributor in India and Raman Sood, an important figure in India’s booming real-estate market. They have invested massively in the new brewery and certainly expect more than mere peanuts when the market opens up.

 Universal Breweries believes it can eat up a 25% share of the local beer market right from the first year. Beer consumption here in Mauritius totals 50 million litres, per annum.

Universal Breweries has banked on the expertise of a Czech brewmaster, Franck Mrazek, who would supervise the production process. Ingredients will be imported from Holland and Denmark, while the bottles will come from India and Tanzania. The different brands should provide different tastes. “We have invested heavily and left no stones unturned to produce beers of European standard”, explains Franck Mrazek.

At first, Universal Breweries will only produce bottled beers, at the rate of 130,000 units daily. It plans to introduce canned beers at a later date while increasing its product variety. In the medium term, light and strong beers will also be added to the range.

The introduction of Universal Breweries – and competition – will change the landscape of the beer market. Consumers will certainly have more choice but should not expect to pay less for the new beers. There will be no price war. However, there will definitely be stiff competition on the shelves, with one company having to keep its customers, and the other to seduce and poach its rival’s clientele.

(L’Express, Outlook, 19.04.05)

Alleviation depends on growth

Alleviating poverty in Mozambique will depend on rapid economic growth, particularly in the next decade in the country, according to the Minister of Industry and Trade, Antonio Fernando.

Speaking at the opening of a Mozambique Business Forum, sponsored by the US Embassy, Fernando argued that the desired economic growth would depend on a growth in exports, which in turn depended on improving the capacity of the Mozambican private sector to compete in the international market.

He argued that the country’s growth was also dependent on improvements in trade and investment policies, as well on evolving a environment that could attract domestic and foreign investments. Such improvements ‘Must be an integral part of our strategy to promote rapid growth and reduce poverty’, he said. ‘The public and private sectors should, in an integrated and collaborative way, seek to eliminate barriers to trade and investment’.

But international trade presented major challenges to Mozambican businesses. The government, Fernando said, had to put the appropriate policy framework in place, and negotiate access to new markets.

To benefit from an increasingly globalised economy, a developing country like Mozambique had to boost its supply of goods. He however admitted that the country was faced with ‘supply side constraints’, which hindered its capacity to produce competitive goods and services, and put them on the market at a reasonable cost".

These constraints included poor physical infrastructure (such as roads, railways, ports and warehouses) which weakened capacity to move goods abroad rapidly, and lack of access to credit, insurance and export guarantees.

But Fernando also mentioned ‘absence of an efficient customs service’ as a constraint - even though for years the public has been told that Mozambique has dramatically improved the performance of its customs services, especially after the customs reforms were introduced in 1997.

‘Problems like inadequate computerisation, lack of transparent administrative procedures, and lack of trained and capable technical staff in the customs services raised the transaction costs of exports’, observed the Minister.

(Agencia de Informacao de Mocambique, 22.03.05)

Mozambique among investors' favourites in Africa

Mozambique is noting "growing attractiveness as an investment destination," according to the World Bank. The Bank's Multilateral Investment Guarantee Agency (MIGA), which facilitates foreign investments, is noting a steadily increasing interest in Mozambique.

MIGA provides non-commercial risk insurance to foreign investments in its developing member countries, as well as advisory services to help governments attract and retain investment.

MIGA played a role in getting massive foreign investments off the ground for the country for a number of projects - including the Mozal aluminium project, the Sasol gas project, the Maputo Port and the Marromeu sugar project.

Mozambique became a member of MIGA in 1994 and MIGA has facilitated roughly US$ 2.8 billion in foreign direct investment in the country to date, making it the sixth largest host country for MIGA-guaranteed investments.

MIGA's outstanding portfolio in Mozambique consists of nine projects in the agribusiness, infrastructure, manufacturing, oil and gas, services and the tourism sectors. The World Bank agency also provides assistance to Mozambique's Investment Promotion.

Among the large investment projects within the infrastructure sector currently going on in Mozambique is the Beira Railway Project. The ongoing project aims to make efficient passenger and freight transport system available in the Zambezi Valley, accelerate economic growth in the sub-region and increase international traffic.

Other large international investment projects are connected to the industrialisation of Mozambique, which offers among the cheapest labour of the region.

Apart from large-scale investments in infrastructure and industry, Mozambique is currently receiving a large number of smaller investments in its booming tourism sector. South Africans have already discovered the tourism potential in their neighbour country and Mozambique is being prepared to receive growing numbers of intercontinental tourist within few years.

(Afrol News, 25.02.05)

Namibia and the Textile Industry - golden fleece or threadbare hope?

Government and critics in the labour industry are at odds over the potential impact on Namibia's fledgling textile industry at the termination of the World Trade Organisation's (WTO) Agreement on Textiles and Clothing (ATC).

The ATC limited imports of textiles and clothing from developing to developed countries to safeguard industries in developing countries and control the level of market access for developing country imports.

The abolition of these quota has already caused the closure of factories in the region and left thousands jobless.

Government says it remains confident that the textile industry will not be severely affected and argues that it has a competitive edge because it benefits from duty-free exports to the US under the Africa Growth and Opportunity Act (AGOA) and to the EU under the Cotonou Agreement.

The closure of the Rhino Garments Factory has sounded a warning bell. Critics believe Namibia's preferential export benefits will not be enough to offset the cheaper production costs of major textile producers such as China, Indonesia and Pakistan.

In light of recent developments, Ramatex Textiles, which employs about 7,000 Namibians, has denied that its operations in Namibia will be short-lived, but has already started showing signs of its declining business.

With the abolition of quotas, countries elsewhere in the region have faced a rapid decline in export potential. Factories in Lesotho, South Africa, Mauritius, Madagascar, Kenya and Swaziland have already starting retrenching workers or closing down completely.

But Permanent Secretary of Trade and Industry Andrew Ndishishi firmly believes that Namibia will not face the same fate.

"The new situation created as a result of the termination of the ATC will not threaten the prosperous existence and further development of the textiles and garments sector in Namibia," he said in a statement outlining Government's perspective on the country's textile industry.

Ndishishi maintains that much of the debate around the future of Namibia's textile industry has been "speculative" in nature and not based on an understanding of international trade agreements.

The government views the industry as a springboard for it to progress to more sophisticated, capital-intensive sectors.

Still, Government officials insist that all is not lost and that Namibia has advantages over major textile producers who do not enjoy preferential market access to the US and EU.

"Of course we cannot rule out the fact that the abolition of quotas will increase the level of competition from the major low-cost clothing and textile producing countries like China," said Ndishishi.

 

But he added that Government hoped to guarantee the benefits it reaps from AGOA through a free trade agreement the Southern African Customs Union (Sacu) is currently negotiating with the US.

Government is also banking on a Special Textile Safeguard (STS) in terms of which WTO countries are allowed to invoke restrictions on China, to protect their own markets.

This, along with the anti-dumping restraints imposed on China until 2016, and export duties imposed by China itself on textile products, will lessen the impact on less competitive textile and clothing exporting countries such as Namibia.

Ndishishi said Government was actively working on establishing cotton gins to stimulate cotton growing in Namibia and the region and boost the Namibian textile industry.

 (The Namibian, 22.04.05)

ECB announces 6% hike in bulk electricity tariff

The Electricity Control Board (ECB) has announced a six per cent increase in the tariff of bulk electricity, in Namibia to be effective from July 2005.

ECB Chief Executive Officer Siseho Simasiku informed that the tariff increase took the previous year's inflation rate into account in addition to various other factors.

NamPower (the national power utility of the country generating and transmitting electricity) had recommemded tariff increases of 20 per cent for the electricity supplied to municipalities and other large power users, 15 per cent for mining customers and 20 per cent for export customers.

Because electricity demand is beginning to outstrip the supply in the region, Simasiku said closer co-operation was needed between utilities and investors to ensure that there is adequate and sustained investment in power generation and transmission to meet the growing demand To this end, SADC energy ministers have mandated the Regional Electricity Regulators Association (RERA) to organise an international power sector investment conference to be held in Windhoek in September.

The aim of the conference, said Simasiku, is to bring together all electricity stakeholders from the region including financiers, operators, equipment suppliers and project promoters to discuss the urgent matter.

Currently Namibia is focusing on major projects such as the Kudu gas-to-power project, the Lower Kunene hydropower scheme and the Caprivi Link inter-connector into Zambia.

Namibia is also a member of Wescor, a regional company established to harness the untapped hydropower potential of the Inga Dam in the Democratic Republic of Congo for the benefit of the DRC, SADC and Africa as a whole.

Simasiku said it was likely that electricity tariffs would continue to increase over the next five years.

He said it was the duty of the ECB to make sure that NamPower stayed afloat, while at the same time protecting consumers from unreasonably high tariff increases.

Tariffs are normally used to protect domestic industries from foreign competition and to raise revenue for the Government.

(The Namibian, 01.04.05)

Celtel advocates fair competition

Celtel Uganda recentlylaunched its campaign – ‘Making Life Better’. The following is excerpts from an interview with the firm’s Managing Director Tim Bahrani

Q: What does this theme mean?
It is a promise to clients. When you communicate with customers, you shouldn't just say I am the best, but tell them what is in store for them. We are honouring our promise.

Q: How are you honouring this promise?
Making life better is about quality. We upgraded our network to a state-of-the art switch after which we shall move to coverage. Between September last year and July this year, we shall have 70 and more excess new coverage sites. We have launched products like "Me to you" and electronic loading of airtime. We have wider distribution and more kiosks. Our pay phones charge Ush 200 across all networks. We are giving one price to clients to enable them call anyone.

Q: What is the status of the telecom industry?
It is changing. Subscribers will be seeing Celtel more. Four years ago, we lost market share and are back with a vengeance. People have an alternative, unlike before.

Q: You will soon celebrate 10 years in Uganda. Any comments?
A lot of things happened in the 10 years. Technology and its price have changed a lot. In the past, we have been accused of being very expensive, but the price of base stations today is about five times cheaper than before.

On our anniversary, we shall consolidate achievements. We are here for the long-term and are part of Uganda's transformation.

Q: What does the taking over of Celtel by MTC, the Kuwaiti company, mean for subscribers?
For clients, the promise continues. MTC bought Celtel because they liked the way Celtel operates in 14 African countries. For the client, it is good because they (MTC) put a lot of oil money behind us. There are going to be lots of investments. For employees, it is great because we are going to be here for a long time due to the good investments. MTC wants Celtel to remain as a unit, so we are all going to keep our jobs. It's a win-win situation.

Q: Do you have any policy request for the Government?
A level playing field. The Government has recently imposed a 10% tax on mobile phones, not fixed lines. The fixed line today is different from the one of past years. It is connected to a copper wire, not for the poor and is CDMA technology. Why should one have 10% tax and the other not? Either you make it uniform or leave it. Competitors are using the fixed line technology to compete against me who has only mobile. That is unfair to the consumer.

(The New Vision Online, 28.04.2005)

Electricity body defends self on tariff rise

The Electricity Regulation Authority has defended itself on the hiking of power tariffs saying the increase would help the country generate revenue to improve capacity and cope with power shortages.

The government is introducing thermal generation, which is expensive and requires more capital to support its sustainability.

The Chief Executive Officer of ERA, Eng Dr. F.S. Ssebbowa, has recently said during a meeting with industrialists that the agency was trying to boost regulatory efficiency in order that to better the investment climate in the country. He said that the government aims to ensure a cost-effective tax structure and put the interest of consumers at the forefront in policy decisions.

He asserted, “We wanted to send price signals that encourage consumers to use peak hours and use power efficiently and also to provide fairness across consumers’, while responding to queries of manufacturers on the power tariff increase. The manufacturers had complained that the tariff had been increased but load shedding still remained prevalent in the country.

(The Monitor, 11.04.05)

Launch of Simu 4 U takes rural telecom to new level

As the competition in the telecommunications sector gets tougher, the public payphone service, whose reform has been somewhat slow, has got new dynamism with the launching of Simu 4 U by Uganda Telecom Ltd.

Particularly designed for low-income sections of the population, the service is notably expected to have a dramatic impact in rural areas where access to telephone has long been a dream luxury to many on account of the cost and distance.

The company's Managing Director, Mr Aimable Mpore underscored this during the launch of the service, saying Simu 4 U would revolutionarise communication in poorer parts of Uganda when the rollout is completed, in the next three months.

A total of 3,000 phones, he said, are to be installed across the nation, easily eclipsing any rural phone extensions so far by either of Uganda’s Telecom rivals.

"Our long term goal is to ensure that most Ugandans especially those in rural areas do not have to walk long distances to make a telephone call," Mpore said.

This innovation in public pay phone service is the latest chapter in frantic efforts by the nation's three telephone companies to lure greater numbers of customers using ever-cheaper call rates. It adds to a similar earlier product, Tele Saver -mobile public pay phone units outfitted with long life batteries that made them highly adaptable to electricity-starved rural settings.

MTN, which is locked in cutthroat competition with UTL long started its own version of a cheaper, rural phone service called Village Phone.

The stakes in public phone services remain high, evidenced by the colossal amounts of resources that companies are injecting into the area: Simu 4 U alone cost UTL a whopping USh5.6 billion, adding to significant amounts already spent on Tele Saver.

While the foremost advantage of the nationwide rollout of cheaper public pay phone services is compressing distance in accessing these services, the innovation is also spawning a whole other range of opportunities: employment via manning booths and customer-attendance, distribution networks, more savings in reduced travel expenditures and others.

20 payphone wheel chairs were donated to Uganda Association for the Disabled, which Mpore said was part of the company's objective of using the Simu 4 U service to bring real changes in poor peoples lives. 20 percent of the revenues generated at each booth will be earned by the attendant.

Mpore said the company used new telephony equipment to design the most convenient tariff rate; a national call unit (15 seconds) costing Shs100 while East African region costs Shs200, the rest of the world uniformly goes for Shs500.

Unit costing mostly favours quick-call customers and is also in response to widespread dissatisfaction with minute-based charging system, which often compels a customer to pay for airtime he didn't utilise.

The State Minister for Housing, Mr Francis Babu, said the rapid launch of the new and cheaper phone services by UTL and other companies is an indictment of skeptics who had vehemently railed against the government policy of privatisation and prioritisation of the private sector.

(The Monitor, 12.04.05)

Ugandan Business Council established in Dubai

The Ugandan Business Council (UBC) was launched in Dubai at a ceremony hosted by the Dubai Chamber of Commerce and Industry (DCCI). Mr. Abdulrahman Ghanem Al Mutaiwee, Director-General of the DCCI, praised this initiative of the Ugandan government, and hoped this would further the understanding and mutual cooperation between the two countries.

He went on to say that Dubai was the hub of trade in the Middle East, and specialised in international and diversified exhibitions. He suggested that the DCCI would hold a UAE trade exhibition in Kampala, Uganda next year in order to demonstrate its interest in expanding trade in the region.

Mr Mutaiwee said that Uganda needed to attract foreign direct investment, by promoting infrastructure facilities, and utilising its human and natural resources.

Nathan Nabeta, Ugandan Minister of State for Trade, pointed out the favourable geographical location of Uganda, situated as it is on the Equator at the source of the Nile. Uganda is bordered by Kenya, Tanzania, Rwanda, Congo-DRC and the Sudan. It is served by the Kenyan seaport of Mombassa and the Tanzanian seaport of Dar es Salaam. He said these factors, together with the fact that many airlines service Uganda, augured well for increased trade.

(AME Info Business News, 01.03.05)