1. Editorial Comments
The electricity consumer has many complaints and concerns,
such as increased electricity tariffs, frequent electricity blackouts
just to mention but a few, and that, part of the solution to the problem
may now lie with the formulation of the Zambia Electricity Consumer
Charter. The Energy Regulatory Board (ERB) of Zambia in conjunction
with the Academy for Educational Development (AED) of the US drafted
the Charter. Zambia Consumers Association (ZACA) has, however, described
the draft charter as being one sided and not consumer representative.
The consumer has no say on the Charter since it only outlines the
consumer’s rights and responsibilities. What about the obligations
of the supplier? A commission, therefore, needs to be set up to address
concerns of the consumers.
On other hand, Zambia Competition Commission (ZCC)
has handled and managed to resolve a good number of consumer complaints
over the years. In the year 2004, consumer complaints increased significantly
by more than 300 percent as compared to the year 2003. However, the
Commission has faced numerous problems in resolving some consumer
complaints due to complaints failing to follow procedures. In this
regard, the Commission has come up with some guidelines intended to
assist consumers in their dealings with producers and sellers in the
market place.
In this regard, the ZACA and Consumer Unity and Trust
Society (CUTS) will strive to support the Government through the statutory
body established under Section 4 of the Competition and Fair Trading
Act, Chapter 417 of the laws of Zambia. This is ZCC to prevent anticompetitive
conduct thereby encouraging efficiency in business, resulting in greater
choice for consumers in price, quality and service; and also to ensure
that the interest and welfare of the consumers are adequately protected
in their dealings with the producers and sellers. This issue of Consumer
Watch examines some the issues consumers presently face in Zambia.
2.
Lack of Consumer Awareness Denies Quality Products
The ZCC is concerned at the high levels of consumer illiteracy
in the country, which has resulted in the general public not reaping
the full benefits of competition currently enjoyed in Zambia. The
Commission has noted that the consumers are not fully aware of their
rights and obligations and often take actions that jeopardise their
chance of winning claims from traders and/or businesses. The Commission
has faced numerous problems in resolving some consumer complaints
due to the complainants failing to follow procedures.
It is in this vain that the Commission is pleading
with the general public, consumer bodies and all relevant stakeholders
to build awareness on consumer issues and complaint procedures, so
that their testimony and evidence in court is irrefutable, should
the case reach the courts of law.
The Commission has been carrying out sensitisation
programmes for the last five years and has seen a considerable increase
in the number of consumer cases being reported. However, the Commission
has noted that most consumers have not followed procedures continuously
while purchasing goods/availing services and making it difficult for
the Commission to proceed with cases. Furthermore, many consumers
have not taken heed of the advice given to them by the Commission
to always Shop around for the best deal, before making a purchase.
Some of the cases that the Commission handles can
be avoided if consumers took time to ask for more information about
the product, compared price with quality and generally inspected the
goods thoroughly before making a purchase. And it is well within the
consumer’s right to inquire whether a product has a guarantee and
or warranty and for how long before it expires.
The Commission has also observed that many consumers
after making a purchase do not demand for a receipt, which is proof
of purchase. The Commission cannot start inquiring on a consumer complaint
without a receipt. A receipt is the only proof of purchase that also
helps Government collect taxes especially, the Value Added Tax (VAT).
Therefore, consumers would be helping the Government by demanding
for a receipt after a purchase.
A consumer should be aware of his/her obligations
in case a product bought has a problem or is found to be unsatisfactory.
When the product is defective , the consumer should immediately stop
using the product and let the seller/trader know as soon as possible.
Further, while in the care of the consumer, the goods must be taken
care of and not tampered with. This means that the product should
not be repaired and/or attempts made to have it fixed.
The product should be returned within the warranty
or guarantee period and in the absence of a guarantee or warranty,
the goods should be returned within a reasonable period of time. A
receipt should accompany the products as it shows the proof of purchase.
A person should only lodge in a complaint with the Commission after
having followed all the above and is not satisfied with the response
from the seller. Failure to following the above guidelines will render
the case to be invalid.
Similarly, in situations where a consumer purchases
a food product, which contains foreign matter, the procedure of reporting
the case is to immediately take the sample to the Department of Public
Health at the Lusaka City Council. A public health analyst will forward
the samples to the food drugs laboratory for testing and analysis
to determine what the foreign substance is.
At the same time, the consumer should immediately
seek medical attention from a recognised medical doctor and obtain
a medical report showing whether or not there was injury (physical
or mental) to health resulting from consuming the particular adulterated
product. Depending on the test results and medical report, the consumer
has the right to seek damages from the courts of law in civil suit.
Using the same test results and medical report, the
Commission has inherent power to prosecute, in a criminal court, the
manufacturer of the product on behalf of the general public.
Therefore, the Commission is making an appeal to
the general public to know their rights, their obligations and the
right procedures of handling cases for successful end results. Without
following these procedures it is very difficult for the Commission
to perform its duties in protecting the welfare of consumers. The
fight for consumer rights starts with the consumers.
(Source: ZCC)
3.
Alleged Collusion amongst the Cellular Phone Providers in Zambia
It has come to the attention of the ZCC that some market
players in the mobile phone service sector are planning to engage
into some possible anticompetition collusion with a prospective international
new entrant. And should these intelligence reports be true, then not
only is the collusion likely to limit the growth and competitiveness
of this sector, but it is also likely to violate the consumers’ rights
in terms of choice, price and quality. Ultimately, this amounts to
undermining the objectives of having a market driven economy.
Specifically, it is alleged that the two mobile service
providers in Zambia have jointly or individually approached a potential
international new entrant into the mobile cellular phone service sector
to discuss various entry strategies into the Zambian market. The reports
indicate that these strategies are aimed at ensuring that the market
in Zambia only retains three players as is prevailing currently.
It is alleged that the said two mobile cellular phone
services providers have proposed a joint venture arrangement with
the prospective international new entrant. It is further alleged that
one of the two firms has proposed to this prospective entrant to consider
a takeover of its Zambian operation. What all this implies is that
Zambia is likely to be denied of Greenfield investment with its benefits
of the injection of new capital, creation of employment and contribution
to effective competition in the relevant market.
Further, these are serious allegations and if true,
are likely to prevent, restrict and distort competition to an appreciable
extent in the mobile cellular phone market in Zambia and thereby resulting
in breaking of Section 7(1) of the Competition and Fair Trading Act,
Chapter 417 of the laws of Zambia. The allegations would also appear
to be in contravention of Section 5(2) (c) and (h) of the Telecommunications
Act which aims at promoting and maintaining competition in the sector.
Consequently, the Commission is liasing with the
Communications Authority to investigate these allegations and take
appropriate action to arrest the situation.
(Source: ZCC)
4.
When will Diesel Shortages in Zambia Stop Haunting Consumers?
There is no doubt that frequent increase in fuel price
will have some short and medium term effects on the economy at all
levels, for instance, at company as well as individual level. One
very notable short term effect of fuel price increase is the high
food prices that have in turn influenced the annual rate of inflation
for the month of August in the year 2005 at 19.3 percent, which is
0.6 percent higher than the July rate. However, the non-food index
increase was mainly due to the increase in the cost of fuel. And Zambia
has witnessed a total value of trade decrease by 14 percent.
The slight rise from 18.7 percent in the month of
July had been attributed to the price increase in maize meal, maize
grain and other cereals. The Central Statistics Office (CSO) said
that of the total 19.3 percent annual inflation increase, increases
in food prices accounted for 10.7 percentage points while non-food
items in the Consumer Price Index (CPI) accounted for 8.6 percentage
appoint.
Given the fact that currently, those that have limited
access to disposable incomes in Zambia are in the majority, it would
not take too much for some businesses to price themselves out of reach.
One other short-term outcome was the suspension of British Airways’
Freights, which impacted York Farms adversely.
York farms limited lost close to US$100,000 each
week following the decision by British Airways to suspend freight
services from Zambia on account of the high aviation fuel prices.
British Airways handled a capacity of 40 tonnes of fresh produce into
the European market each week, which is over one-third of the volume
of exports each week. York Farms had to, therefore, find their own
way to enter the European market as there was currently no other airline
that was willing to fill the void due to the costs of jet fuel in
Zambia.
York Farms had the capacity to produce but this development
meant the produce could not be taken to the market. The cancellation
of cargo flights from Zambia by British Airways would have serious
repercussions on the growth of the non-traditional exports sector.
The export of cut flowers and fresh vegetables to the European market
currently earns Zambia in excess of US$60mn annually from the commodities
and 12,000 people are directly employed under the sector.
At an individual level, York Farms Limited employs
about 3,500 workers excluding those on out-grower schemes, and is
specialised in the export of fresh vegetables. This, therefore, implies
that the salaries of these individuals would have to be delayed causing
a very great impact on them. Source (Source: Zambia Daily Mail)
5.
Liberalisation of the Transport Sector and Public Safety
Transport is a vital component of economic development.
The Country’s transport programmes that are not well intended result
in networks and devices that deteriorate the conditions of the poor
and ignore the changing needs of the user and guzzle up a lot of public
finances. A good transport system generates expansion by facilitating
trade at national level and enhances access to basic needs, such as
health and Education facilities. Investment in transport raise growth
by increasing the social return to private investment thus inadequate
transport infrastructure is a constraint on agricultural productivity.
Prior to independence, the Zambia’s transport network
consisted mainly of North-South railroad corridors, which were built
to explore Zambia’s mineral resources in the copperbelt. After independence,
planners turned their attention to the provision of alternative routes
for Zambia’s external trade due to political instability in Angola,
South Africa and Mozambique. So far, very little was paid to the development
of Zambia’s internal transport network although the country provided
politically secure alternative sea routes to take care of its international
trade. The country provided fielded to develop an efficient and well
integrated domestic transport system and allowed the infrastructure
to deteriorate due to lack of maintenance, rehabilitation and replacement
programmes.
Transport is an imperative sector of the economy
as it provides a strategic means for sustained growth of the economy.
The Zambian Government has taken a number of policy measures, which
include liberalisation, Private sector involvement, commercialisation
and privatisation. The cooperating partners can, therefore, play a
big role in improving mobility through supporting the existing initiatives
in developing appropriate technologies by catering for disadvantaged
and marginalised groups.
The Zambian transportation system lacks a comprehensive
policy framework to access its needs, so that the development of the
transport sector proceeds with the requirements of other sectors of
the economy. Zambia, as a country, depends heavily on road and rail
transport. The Ministry of Communication and transport has come up
with a draft policy, which is being adopted by the Government.
However, there are issues and problems that came
together with the liberalisation of the transport sector, such as:
-
The high rate of road accidents on the roads,
for instance, over 900 people die on Zambian roads, each year. About
5000 people are injured as a result of poor driving, bad roads and
faulty vehicles;
-
The other issues are
determination of the level of sustainable investment between competing
transport modes, pricing for the services offered in the sector
and regulation of the industry;
-
Prices of goods and
services in the transport sector should cover full resource cost
to avoid misallocation of resources to the consumer;
-
Lack of effective regulatory
regime to manage the different service providers who have joined
the transport industry;
-
The road infrastructure
has a number of problems, such as poor funding, shortage of skill,
weak local contractors and poor institutional framework; and
-
Lack of deliberate policy
to address needs of the disabled and aged.
In conclusion, the Ministry for Communication and
Transport is responsible for the overall policy formulation and monitoring
of the transport sector and has the following departments charged
with various responsibilities. Even though charged with this responsibility,
no policy has been enacted to protect the interests of the consumers.
The road users also pay a fee for using the road but that money is
not directed to the intended use and hence continue damaging their
vehicles.
6.
Zambia Sugar Vibrant Corporate Social Responsibility
It has been said that corporate social responsibility
(CSR) is the continuing commitment by business to behave ethically
and contribute to economic development while improving the quality
of life of the workforce and their families as well as of the local
community and society at large.
Zambia Sugar is the market leader of sugar and downstream
products in Zambia. Zambia Sugar’s Whitespoon brand is popular and
widely distributed throughout the company’s vast branch network countrywide.
Zambia’s Sugar has an active social responsibility investment programme,
which has been structured to address specific needs in the surrounding
communities of its operations. The social investment programme is
aimed at empowering the community through provision of infrastructure
and sustainable capacity building to enhance and improve access to
education, medical and sporting services. The outreach under this
policy will include interventions to address socio-economic, cultural,
art, health, educational and sporting needs in the communities where
the company operates.
On Community based projects, the Zambia Sugar Community
HIV/AIDS awareness programme is, currently, being implemented through
six target areas.
-
Women Groups: The HIV/AIDS women’s
groups are being reached through the clinic sensitisation programmes
and community programme. Pregnant mothers attending antenatal clinic
receive HIV sensitisation. Community awareness for women in each
of the townships is ongoing through markets and housing canters.
Video shows on HIV/ADIS are from time to time conducted on the estates.
Married women and single ladies focus group discussions on HIV/AIDS
are also held in the community;
-
Youth Outreach Programme: The
youths constitute the largest vulnerable population on the estate.
Youth friendly sensitisation and outreach programmes are conducted
to youth groups on the estate and in churches as well as in schools;
-
Home-based Care: Home-based
care programme have been established in some of the townships on
the estate under the hospices of the Catholic Church with support
from Zambia Sugar to provide home care services to chronically ill
patients;
-
Workplace programme: Behaviour
change communication programmes based on workplace are held from
time to time in various departments both during recruitment and
as ongoing programme during normal working period targeting permanent
and seasonal workers;
-
Condom Distribution: Condom
distribution has considerably increased and a number of supply points
have been opened up on the whole estate and the rate of condom usage
has increased; and
-
Voluntary Counselling and Testing Programme
(VCT): Zambia Sugar has a Voluntary Counselling and Testing
(VCT) programme at the main clinic.
On health, Zambia Sugar is at the moment rehabilitating
wards at the Mazabuka District Hospital. Two wards have been commissioned
whilst the maternity is under construction. The total cost of these
works are K400 million (roughly US$80,000) Zambia Sugar has also funded
the procurement of heavy duty laundry dryers and a 160 KV generator
set at a cost of approximately K200 million.
On education, Zambia Sugar fully supports the Nakambala
private school and extends support to the four GRZ schools on the
estate through housing the members of staff and provision of security,
water and electricity. It hosts almost on a monthly basis study tour
from primary school to college and university levels. In order to
provide practical training and exposure to tertiary education students,
Zambia Sugar, offers industrial attachment each year to number of
students.
(Source : Zambia Sugar PLC)
Status of Consumer in Zambia
Zesco
wants to hike tariffs again
From 1997 when the ERB was established, it has received 10 applications
from Zambia Electricity Supply Corporation (ZESCO) seeking upward
adjustments on retail electricity tariffs. ERB awarded the power company
an 11 percent upward adjustment in tariffs, following 15th application,
the company was dissatisfied and has now lodged a petition against
ERB seeking the board to approve an additional 15 percent increment
it had initially applied for.
ZESCO Director, Rhodnie Sisala, said that the 15
percent increment the company was seeking was necessary to meet its
operation requirements. Sisala also added that the company is offering
the cheapest electricity bills in the region and the 15 percent increment
was just meant to smooth and improve its services, though he did not
give comparison figures. “We are having a lot of difficulties in our
operations. This increment we are seeking is not to burden our customers
at all. In fact, people must appreciate that our tariffs are still
the lowest in the region,” he said. Following ZESCO’s recent application,
several organisations complained that the high power was disadvantageous.
The Zambian Association of Manufactures (ZAM) objected
that the proposed increase would make the ’small’ manufacturing sector
less competitive to new investors. The ERB quarterly newsletter adds
that ZAM complained that the utility company was overcharging the
industry and subsidising the low rate and rural areas by way of generating
electricity using diesel, which ZAM said was costly compared to the
money ZESCO was collecting.
The ZACA also contended that consumers could not
afford to meet further increase of electricity tariffs; thus, ZESCO
was supposed to appreciate the fact that it was operating in an economically
depressed market where the majority of people were poor. Zambia has
the largest generation capacity, second only to Mozambique in Southern
Africa Development Community (SADC). Largely, this could give ZESCO
competitive advantage over the other countries in terms of actual
power connection to households and in terms of prices for electricity.
But even with an enormous power generation capacity, ZESCO only caters
for 22 percent of the country’s total population; through it exports
to countries, such as the Democratic Republic of Congo and Namibia,
said Lawrence Musaba of the Southern Africa Power pool (SAPP).
(Source The Advocate)
Provide
free international gateway, urges ZACA
The ZACA has urged the Government to take up measures to liberalise
the international gateway to benefit consumers. ZACA’s Executive Secretary,
Muyunda Ililonga, said that the association has received numerous
complaints from consumers who were failing to access international
calls and the high cost. It is high time that the Government took
up steps in liberalising the gateway because we want consumers to
benefit.” He further added that competition in the mobile phone industry
should not be constrained by outdated laws. He said that if the country
was to develop there was a need to look at competition and take up
effective measures. Ililonga said that the current situation has resulted
into high cost for international calls adding that the state should
liberalise the gateway and benefit mobile phone operations. “We see
the domination of the gateway by Zamtel for lower prices and communication
is very important for the development of any economy,” he said.
Ililonga observed that Zambia has the highest telecommunication
charges in the region compared with other countries. He also commended
Celtel for the intention to reduce tariffs by 50 percent. “This is
what consumers want, they want to afford phone calls which are currently
expensive yet we have the possibility to reduce them,” he said. President
Mwanawasa, therefore, issued a 90-day ultimatum to the ministries
of Transport and Communication, and that of Commerce, Trade and Industry
to come up with Cabinet Memorandum to facilitate the liberalisation
of the gateway. Mwanawasa said that the directive was to ensure that
the implementation was speeded up to catch up with technology.
(Source: Zambia Daily Mail)
Could
consumer charter solve electricity consumer’s grievances?
The need to have and to put in place a consumer Charter for electricity
consumers has been long over due. Finally, we can say that the efforts
of the Energy regulation Board (ERB) are beginning to bear fruit.
However, there are still complaints and concerns from many electricity
consumers about increased electricity tariffs, unjustified electricity
bills, frequent electricity blackouts and power supply terminations
without notices. Part of the solution to problem may now lie with
the formulation and implementation of the Electricity Consumer Charter.
On the July 14, 2005, the ERB and the HM consultancy
services organised a meeting in Lusaka as part of a series of meetings
that the consultancy firm has been organising, to discuss the contents
of the draft charter. Prior to coming up with the Consumer Charter,
the ERB, Academy for Educational Development (AED) had organised public
discussions around the country aimed at obtaining stake holders and
public inputs and contributions. In addition, ZESCO, being the major
electricity supplying company in the country, equally made some significant
contributions during the process. In addition, the ERB Director for
Consumer and Public Affairs Agnes Phiri explained that the charter
was a pledge of trust between the consumer, the supplier and the regulator.
She pointed out that despite some concerns from some members of the
public, the charter would not be legally binding. The Charter will
mainly be intended to provide guidance and protection to the electricity
consumers by stating consumer’s rights and responsibilities.
She further disclosed that the ERB in collaboration
with some major stakeholders, have developed a standard on quality
of consumer service in the Electricity supply industry. The document,
which has been published under the authority of the standards council,
also had some significant inputs from the Zambia Bureau of Standards.
The main stakeholders were drawn from various institutions and organisations,
namely the Copper belt Energy Corporation, ESKOM South Africa, Kariba
North Bank Company, Zambia Consumers Association, ZESCO Limited, Engineering
Institution of Zambia and the Ministry of Labour and Social Security,
to name but a few, constituted a technical committee to prepare the
document. The standard details minimum requirements for measuring
the quality of consumer service provided to consumers by electricity
undertakings in Zambia. It is intended to give the ERB a common basis
for evaluating quality of consumer service when granting distribution
and supply licenses, monitoring the performance of licenses on an
ongoing basis, and dealing with consumer service complaints.
Phiri concluded by saying that the standard was at
the implementation stage and that the most important thing was having
it enforced. She said that prior to developing the standards; the
ERB had to embark on a capacity-building programme for the energy
sector. The seventeen-paged document has set specifications on issues
ranging from, consumer complaints and enquiries, processing of requests
for supply, penalties for non-payment, locked premises, disconnecting
the supply, consumer education etc. Further, the document has set
minimum standards in processing of request for service, frequency
of meter reading, penalties for non-payment and meter accuracy queries.
(Source: The Advocate)
About the Newsletter
‘Consumer Watch’ E-newsletter is a joint initiative
of CUTS-ARC and ZACA, published with the objective of enhancing consumer
welfare through sensitisation, information dissemination and capacity
building of the consumers, business entities and government. While
addressing consumer concerns, the newsletter would focus 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
provide an analysis on current consumer concerns in the country.
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