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Economist gives Zambia's IGW fee thumbs-down

Economist gives Zambia's IGW fee thumbs-down
By Kabanda Chulu
Monday April 14, 2008 [04:00]

WORLD Bank lead economist Aaditiya Matoo has observed that Zambia’s economic liberalisation has not led to wider access to services. And Matoo said Zambia’s International Gate Way (IGW) licence fee of US$ 12 million was a monopoly undermining the growth of the telecommunications sector. Matoo, who was in the country, last week, said provision of services, was still higher as compared to other countries in the region.

“Inadequate access to services hurts Zambians not just in their role as consumers but it also perpetuates poverty by undermining the productivity of firms as well as their ability to engage in trade,” Matoo said.

“Actually there are serious imperfections in Zambia’s liberalisation of services and basically the country has been deprived of significant benefits because of reasons such as persistence of barriers to entry and competition and the inappropriateness of regulation and weak capacity of regulatory bodies and absence of policies to widen access to services.”

But when asked that the World Bank rushed Zambia to implement those policies, Matoo admitted that mistakes were made because the Bank insisted on full liberalisation without looking at strengthening of regulations.

He also urged civil society organizations to scrutinise and campaign vigorously against issues that seem to be working against people’s aspiration.

“It is true that liberalisation will not fully uplift Zambians out of poverty especially when you look at sectors such as tourism and banking that are performing better but they are largely controlled by foreigners,” Matoo said.

“Mistakes were made since the Bank was learning and it is still learning and it was not deliberate to persuade Zambians to follow that path because the advice given was meant to help.”

He said the higher IGW licence fees were a barrier to competition and was effectively shutting away both consumers and investors.

“Zamtel’s monopoly has cost and its de facto exclusion from the sector regulator’s jurisdiction (Communication Authority) is weakening competition in fixed, mobile and internet services and the prohibitive IGW licence fee of US$ 12 million deprive 30,000 households of access to telephone services,” said Matoo.

Labels: AADITIYA MATOO, HYPOCRISY, IGW, NEOLIBERALISM, World Bank

posted by MrK @ 4:45 AM