CONSUMER WATCH Vol.2 Issue 4

CUTS-AFRICA RESOURCE CENTRE

CONSUMER WATCH

A Bi-monthly Enewsletter Vol. 3, Issue No. 3, September 2007

CONTENTS

Editorial Comments
Benefit from Investment in Pay TV Sector
Electricity Problems: No End in Sight
Consumers Subjected to Higher Prices
Cement Shortage Hits Consumers
Corporate Social Responsibility: Celtel’s Diverse Interventions
Snapshots on Consumer Issues in Zambia

1. Editorial Comments
The observance of the consumer’s rights to correct and clear information regarding goods and services in the market is very important, more so in a liberalised economy. This can be seen from the recent confusion between the pay television company, Multichoice and its Zambian-based subscribers over the coverage of the English Premier League. Following the company’s failure to show 100-percent of the games live on its channels and its insistence on not reducing its prices, the subscribers in Zambia cried foul that it did not inform them in advance that the company had failed to secure the rights to televise the football matches.

Some soccer-loving subscribers have accused the pay television company of providing misleading information, which led them to purchase the company’s kits and subscribe services for which they would not be able to enjoy. The company’s acknowledgement that its information have been inadequate and misunderstood raises serious questions as to whether it did so deliberately.

Further, it strengthens the argument that customers should be provided with accurate information about goods and services about the market, to enable them to make well-informed decisions. The violation of consumer’s rights throws a challenge before regulatory body, i.e. the Zambia Competition Commission (ZCC), to enhance its monitoring of the behaviour of business houses, to protect consumers

Editor

2. Benefit from Investment in Pay TV Sector
The Pay Television sector in Zambia has received new investments, which is expected to boost competition among the service providers. The British television company, Gateway Broadcasting Service (GTV), a subsidiary of the London-based Gateway Telecommunications, is in the process of establishing its operations in Zambia. The operations will only commence after the Zambian Government grants the licence to GTV. The Zambia Consumer Association (ZACA) Executive Secretary, Muyunda Ililonga, welcomed the entrance of GTV in the Zambian market and urged the Government to expedite the issuance of pay television licences to encourage more players into the sector, as this is expected to improve service delivery and reduce charges.

However, as much as the coming of GTV is beneficial, what is important is for Pay TV companies to provide comprehensive coverage, so as to avoid situations where subscribers have to subscribe to multiple pay television providers, as this translates into higher costs for consumers

(Zambia Daily Mail, 22.08.07)

3. Electricity Problems: No End in Sight
The electricity supply in Zambia, by the country’s power utility company, Zambia Electricity Supply Corporation (ZESCO), remains unsatisfactory to both commercial entities and domestic consumers. Load-shedding has become a norm in a number of localities throughout the country, especially in low cost residential areas of major cities.

While ZESCO is putting blame on vandalism of its facilities by the public, general opinion indicates that the problems occurred due to the company’s inefficiency and concentration on exporting electricity to the neighbouring countries. The power problem has led to the dissolution of the ZESCO and the Energy Regulation Board (ERB). ZACA has welcomed the dissolution of the two citing the failures and called it a necessary oversight and direction in the energy sector

(Zambia Daily Mail, 14.07.07)

4. Consumers Subjected to Higher Prices
Consumers in Zambia are paying more for the domestically produced sugar. As a result of numerous complaints lodged with the ZCC by industrial and domestic sugar consumers regarding the high sugar prices being charged by the country’s leading sugar producer, Zambia Sugar PLC, the ZCC carried out an investigation to find out the facts. In the finding, it was recognised that Zambia Sugar PLC has been selling its sugar at US$1,200 per metric tonne in the domestic market, while supplying the same quantity to the European Union (EU) at US$600, and US$500 within Zambia.

The dual-pricing demonstrates how consumers have been exploited by business entities enjoying dominant and, often, monopolistic market positions against Zambia Sugar PLC. Therefore, the funding provides the basis for the Government to take appropriate action and protect the consumers who suffer at both ends: as direct consumers of sugar and indirect consumers of sugar products.

(The Post, 18.09.07)

5.Cement Shortage Hits Consumers
Continued shortage of cement has continued to affect the customers and the constructors. The country’s main producer and supplier of cement to the market, Chilanga Cement, now renamed Lafarge Cement, has failed to satisfy the local demand, which has led to the exploitation of consumers, as the price of the commodity has skyrocketed. In August, 2007, the company increased the wholesale price from Zambian Kwacha 35,200 (US$8) to Kwacha 39,100 (US$10), and currently the commodity is fetching about Kwacha 70, 000 (US$18.50), instead of Kwacha 45,000 (US$11.25), which is the recommended retail price.

The Ministry of Commerce, Trade and Industry (MCTI) has partly attributed the shortage of cement and the high prices to illegal cement dealers and has called for abolition of illegal cement vending as a temporal solution. Some sectors have argued that the shortage is a result of the company’s focus on exporting to the sub-region, rather than in the local market

(Zambia Daily Mail, 29.08.07)

6. Corporate Social Responsibilities: Celtel's Diverse Interventions
Celtel, one of Zambia’s leading mobile communications company, has continued with its corporate social responsibility (CSR) activities, focusing on education, music/art, culture and charity.

In the education sector, the company initiated a Project called ‘Build Our Nation’, which has been running for over two years, and has been providing educational support to the vulnerable and needy schools, through donating school desks and literacy materials and infrastructure renovation. In terms of culture, Celtel continues to play a significant role in supporting traditional ceremonies in Zambia. It has also been promoting local arts, especially music.

The company has also in the past embarked on a project to uncover untapped musical talent, through the Star Search Project. In addition, the company makes donations to charitable organisations, with a view to helping the underprivileged in the society. Indeed, Celtel has a very encouraging CSR programme, which other business entities should emulate.

(Celtel Pull Out, Zambia Daily Mail, September 2007)

7. Snapshots on Consumer Issues in Zambia

Escalating Bread Prices
The cost of basic commodities in Zambia has been subjected to steady rise in the recent past. However, though Zambia has recorded stabilisation and improvement in inflation, economic growth, etc., it is surprising that the prices of basic commodities are still on the rise.

According to the Millers Association of Zambia president, Caleb Mulenga, the price of bread is expected to be increased due to shortages in wheat supply and increase in the price of wheat. The Association contends that the farmers prefer to export their wheat to other countries, from where they fetch more money and the Zambia National Farmers Union (ZNFU) has failed to intervene on account of a free market economy appreciating in the country. The option of importing wheat is also being considered expensive by the Millers. Given the importance of wheat in the food sector, the consumers will not only experience increases in bread prices but also other wheat products, should the wheat problem continue.

(Zambia Daily Mail, 30.08.07)

Residents to get Better Water Supply
Many reports of water problems often go without any meaningful action that can address the undesirable situations. However, Chingola residents are set to enjoy better water supply, following the Mulonga Water and Sewerage Company’s commissioning of four water kiosks to help alleviate water shortages in Kasompe township of Chingola

The Managing Director of the water utility company, Emmanuel Mutale, revealed during the commissioning ceremony of the Kasompe Water Supply Improvement Project, financed by the Devolution Trust Fund. He informed that the reduction in water losses, due to the repaired network and planned metering, would help in increasing the accessibility of water for many people. This is important, as it will improve sanitation and reduce the cases of diseases caused by lack of safe drinking water.

(Zambia Daily Mail, 16.07.07)

Dangerous Toys in the Market
Consumers should be cautious while purchasing toys from the market. It came to light that some potentially dangerous toys, imported from China, are on the shelves and the Government will soon submit a report on the issue, following its investigations. The toys are believed to contain either lead paint or tiny magnets that children may swallow

The consumer body has also called on the individuals, who have recently purchased the toys, to seek help from ZACA or other regulatory bodies, such as the Zambia Bureau of Standards, so as to help the investigations. The toys have caused huge concerns, even at the international level. The international toy manufacturer, Mattel, has recalled millions of toys that were supplied to the US and other countries

(Zambia Daily Mail, 30.08.07)

Exposed to 'Poisined' Fish Trade
A recent report indicated that the consumers are exposed to poisoned fish trade, as the fish died mysteriously in the Western Province of Zambia. The Province is known as a one of the sources of the tastiest fish. It took more than a month to establish the cause of the death of the fish in large numbers.
The Mongu District Commissioner, Namakau Mubita, confirmed that people were picking and eating the dead fish and that the authorities took long to identify the cause of the problem. Given the weak monitoring of trade activities, there are high chances that the fish may have found its way to other districts, which is potentially dangerous to the consumers.

(Zambia Daily Mail, 10.08.07)

About the Newsletter

Consumer Watch newsletter is a joint initiative of the CUTS ARC and ZACA, published with the objective of enhancing consumer welfare through sensitisation, information dissemination and capacity building of consumers, business entities and government. While addressing consumer concerns, the newsletter focuses on bringing out issues such as violation of consumer rights and measures to be taken by the relevant authorities to protect stakeholders.

CUTS ARC 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 give an analysis on current consumer concerns in the country.

Contact Us
Consumer Watch Newsletter: Composed, published and distributed by: -
Consumer Unity & Trust Society – Africa Resource Centre (CUTS-ARC)
4^th Floor, Main Post Office Building, P.O. Box 37113,
Cairo Road, Lusaka, Zambia,
Ph: 260.1.22 4992, Fx: 260.1.22 5220,
E-mail: lusaka@cuts.org
Web Site: www.cuts-international.org

and

Zambia Consumers Association (ZACA)
Suite 91, 2^nd Floor – Afcom House Building,
Corner of Obote / Zambia Way Avenue
P.O. Box 21641, Kitwe, Zambia,
Telephone: +260 2 224193, Fax: +260 2 224193
Mobile: +260 97 800018 / 095 910691 / 095 910692,
E-Mail: zaca@zamnet.zm

The news/stories in this Newsletter are compressed from several sources. The sources given are to be used as a reference for further information. CUTS-ARC and ZACA gladly welcome comments, suggestions and contributions from our esteemed readers.