Competition in banking sector still low - BoZ
By Kabanda Chulu in Kitwe
Sun 03 July 2011, 20:50 CAT
THE banking sector has remained fragmented with insufficient and distorted competition resulting in rigidity of its activities, says Bank of Zambia governor Caleb Fundanga.
And Dr Fundanga has expressed concern that
the increase in financial institutions has not had a significant impact on promoting competition since most of the banks are too small.
During a business symposium for SMEs at the ongoing Zambia International Trade Fair, Dr Fundanga said competition was not strong enough to lead to a convergence of prices that would ensure that banks have more or less the same prices for their services and products affordable to most people.
“This can also explain why finance service providers are not revising their interest rates and charges in tandem with the movements in key macroeconomic indicators such as inflation,” Dr Fundanga said.
“Whereas BoZ is conscious to the fact that the financial institutions are in business and are therefore expected to make profits but there is need to make financial services more affordable in order to promote economic growth and reduce poverty levels in the country since low interest rates reduce the cost of doing business and encourage investments in key sectors of the economy.”
He said BoZ had recognised that competition was an essential element in the effective and efficient operation of a market economy.
“In this regard, the licensing regime encourages entry of players that will foster integrity, innovation and competition while deepening and widening the financial sector and we have a huge list of new applicants wishing to invest and open new banks in Zambia,” Dr Fundanga said.
“The presence of reputable financial intermediaries is expected to increase competition which in turn will lead to an improvement in the quality of domestic financial services and allocate efficiency of financial intermediation will eventually be translated into higher returns for domestic savings and greater efficiency in the pricing of credit and other risks and in the allocation of credit.”
Nevertheless, Dr Fundanga said the growth in the number of financial institutions has not had a significant impact on promoting competition since most banks are small.
“A few banks continue to enjoy an oligopolistic position and this in a way explains why some inefficiency remains in the provision of services,” said Dr Fundanga.
Labels: BANK OF ZAMBIA, CALEB FUNDANGA, COMPETITION, LENDING RATES
Read more...
Schweppes signs accord with CTC
Thursday, 09 June 2011 21:51
By Helen Mubvumbi
BEVERAGES manufacturer
Schweppes Zimbabwe Limited has become
the first company in Zimbabwe to sign a voluntary competition compliance agreement with the Competition and Tariffs Commission. The Competition Compliance Agreement shows a company's commitment to comply with the provisions of the country's Competition Act.
Speaking at the signing ceremony yesterday, Competition and Tariff Commission director Mr Alexander Kubuda said the signing of the agreement would benefit Schweppes so that it can detect in time any violation of the competition law.
"Competition is the blood of vibrant markets as it is aimed at enterprise efficiency and development in that it forces firms to become efficient and to be innovative," he said.
"Schweppes Zimbabwe's willingness to comply with the country's competition shows the company's commendable efforts of maintaining its position as an exemplary market leader and good corporate citizen.
"It enables the company to detect any violation of the competition law at an early stage to enable it to take the necessary corrective measures before the intervention of the commission."
Mr Kubuda said Schweppes decided to adopt the competition compliance programme, not because the company had violated any provisions of the Act, but because the company had grown through mergers and acquisitions to the extent that it had become one of the dominant players in the beverages industry.
Schweppes' signing of the agreement involved active efforts on the part of the company to comply with the provisions of the act with the primary objective of preventing violation of the country's competition law and promoting a culture of compliance within its structures.
Speaking at the signing ceremony, Schweppes Zimbabwe managing director Mr Charles Msipa said the compliance agreement is a milestone in the company's efforts to create a culture of competition in the country.
"As Schweppes, we ventured into the compliance programme to promote a culture of awareness of the laws, also to protect the consumers from the risk of being violated by our brands," he said.
Mr Msipa said the signing of the compliance agreement was at the back of localisation of the company last year and Schweppes would soon start a compliance programme to educate their employees on the rules and regulations that come with the Competition Act.
Zimbabwe's competition law, which is enshrined in the Competition Act is aimed at protecting and maintaining competition in the economy by preventing and controlling restrictive practices and monopoly situations, prohibiting unfair business practices and regulating mergers and acquisitions.
Labels: COMPETITION, TRADE
Read more...
ZCC requests powers to fine businesses contravening competition, trading Act
By Kabanda Chulu
Wed 02 Dec. 2009, 04:00 CAT
ZAMBIA Competition Commission (ZCC) has stated that it has no powers to impose fines or ask traders to remove the ‘no return, no refund’ notices from their business premises.
Reacting to Consumer Unit Trust Society (CUTS) Zambia coordinator Angela Mulenga who urged the Commission to impose stiffer penalties on traders found wanting, ZCC public relations officer Vaida Bunda yesterday stated that it was not wrong for such notices to be placed in business premises unless they led to misrepresentation of a product quality, quantity or price function.
She stated that in a case where a trader with such notice had been found wanting, the Commission intervened to have the consumer refunded or given a replacement.
“If the trader fails to comply with ZCC, the case is then taken to the small claims court since currently, ZCC has no administrative powers to ask the traders to remove such notices from their business premises nor does it have powers to impose fines on traders found wanting,” Bunda said.
“In the draft bill currently under review and to be tabled before Cabinet and Parliament next year, the Commission has requested for administrative powers to fine businesses contravening the competition and fair trading Act.”
She explained that a ‘no return, no refund’ notice could only raise genuine concern if it was misleading consumers into thinking that even when a product was defective, they could not in any circumstance return it to the trader and claim for a refund or replacement.
“A trader in most cases puts up such notices to discourage consumers from returning the product after finding a similar one at a much cheaper price in a different shop. This then shows that a consumer should shop around before making a purchasing decision,î stated Bunda.
On Monday, Mulenga urged the ZCC and other relevant authorities mandated to safeguard the plight of consumers to mete out stiff punishment on any business house flouting trading practices and violating consumer rights through the ‘no return, no refund’ notices.
Labels: ANGELA MULENGA, COMPETITION, CUTS, ZCC
Read more...
Zimbabwe is very peaceful: Miss DRC
TH.
Wed, 21 Oct 2009 16:01:00 +0000
ZIMBABWE is a very peaceful country with hospitable people who are humble and receptive, contrary to what the western media has been peddling to the world. This was said by Miss DRC, Diane Mizumi, at Herentals College talent show held at Stodart grounds in Mbare last Friday.
She said she was surprised to see hospitals and schools with healthy people, which contradicted what she had read in the Press before her trip to Zimbabwe.
“The international media reports on Zimbabwe differ from what I am seeing on the ground.
“They portray the country as manifested with diseases and hunger and I expected to see people dying of cholera with no schools and hospitals open but it is the
opposite of what I am seeing,” she said.
She said her first-hand experiences will help her market the country as a safe tourism destination.
Speaking on the talent show, Mizumi said there were a number of potential candidates who could scale to greater heights judging from the pool of contestants
who took part in the talent show.
“There are many potential contestants who can make it in the modelling and arts industry and I have seen many beautiful and handsome youths at this show,” she
said.
Miss DRC said the young lads needed to be supported to boost their confidence, as the modelling industry had lately become lucrative.
Mizumi was in the country at the invitation of her Zimbabwean counterpart, Miss Tourism Zimbabwe, Vanessa Sibanda, to witness the Sanganai/Shanganani Tourism Expo. TH.
Labels: COLOUR REVOLUTIONS, COMPETITION, MISS ELECTIONS, ZIMBABWE
Read more...
ZCC nods National Breweries, Trade Kings deal on Maheu
Written by Chiwoyu Sinyangwe
Monday, August 31, 2009 3:41:27 PM
THE Zambia Competition Commission(ZCC) has approved National Breweries’ purchase of the Maheu business of Trade Kings Limited. ZCC director for consumer and public relations, Brian Lingela, stated in a press release that the approval was conditional, in that National Breweries Limited should not engage in anti-competitive pricing to eliminate potential competitors in the Maheu product market.
“The board recognised that while it was not in the interest of expanding the base of entrepreneurship by prohibiting Trade Kings to sale its Maheu brand in order to raise capital for its steel and other projects in Zambia,” Lingela stated. “ZCC will activate a vigilant monitoring system to ensure that the merged company does not frustrate new entrants through abuse of its dominant position.”
Lingela also stated that although the transaction had the potential to raise competition concerns in the Maheu product market through creation of a monopoly, the competition status quo remained substantially the same as there was already a de-facto monopoly in the sector.
Trade Kings held 98 per cent of the total market share for Maheu in the country while National Breweries, a subsidiary of Heinrich Syndicate held an insignificant 2 per cent.
“The board observed that the same market arrangement is likely to remain after this transaction and further entrenchment of dominance will not arise because entry costs into Maheu production were low and the market was fertile for any prospecting entrants,” stated Lingela.
And commenting on the transaction, ZCC executive director Thula Kaira said it was unfortunate that most transactions the Commission considered were of a big scale and went beyond the ambit of an average Zambian business individual or company in terms of the kind of price tags on businesses that were up for sale.
In the Maheu business case, the amount was US $20m.
Kaira said this transaction was a balancing act between a willing seller and a willing buyer and that in the absence of an alternative offer, ZCC could not stop Trade Kings from exiting the market for any reason.
“Since National Breweries is listed on the Lusaka Stock Exchange, we hope ordinary Zambians will be interested to buy shares as a way of participating in the shareholding,” said Kaira.
Labels: COMPETITION, NATIONAL BREWERIES, TRADE KINGS GROUP, ZCC
Read more...
‘Zain, MTN shouldn’t participate in Zamtel shares purchase’
Written by Chiwoyu Sinyangwe
Tuesday, August 18, 2009 2:51:53 PM
ZAIN Zambia Plc and MTN Zambia should not participate in the purchase of 75 per cent Zamtel shares to allow the entry of another company, Zambia Competition Commission (ZCC) stated yesterday. Commenting on the pending sale of three quarters of the country’s biggest Information Communication Technology (ICT) company, ZCC stated that the entry of a new player would enhance competition in Zambia’s telecommunication sector.
ZCC stated that it supported the partial privatisation of Zamtel, observing that the move was expected to enhance efficiency and effective competition in the telecommunication industry.
“We envisage enhanced competition in the telecommunications sector should we have a new entry through the partial privatisation,” ZCC director for Consumer and Public Relations, Brian Lingela was quoted in the official press statement.
“We would like to see another independent company other than MTN or Zain take over the assets of Zamtel as this will greatly increase competition in the telecommunication sector.”
And ZCC stated that state owned companies in a fast changing telecommunication sector would always offer little competition because they were protected by government and received subsidies, conditions that did not foster a competitive spirit in the management of such companies.
“ZCC also expects that once Zamtel operates as a competitive business, it is likely to result into lower tariffs for consumers and increased coverage particularly for Cell Z subscribers,” ZCC stated.
“Over the past few years, for example, Cell Z, a Zamtel subsidiary has remained a ‘sleeping giant’ and has not been aggressive in expanding its coverage to most rural and urban areas. This situation has provided insignificant competition to other providers such as Zain and MTN. In its current state, the company would have to exit the telecommunication market if it operated within a competitive environment to the detriment of consumers.”
ZCC also urged the government to revise laws governing the telecommunication sector in order to ensure that all companies operating in the sector were placed on an equal footing for effective competition to occur.
Labels: COMPETITION, MTN, PRIVATISATION, ZAMTEL, ZCC
Read more...
State-owned companies shouldn't be exempted from competition law
By Kabanda Chulu
Friday January 11, 2008 [03:00]
ZAMBIA Competition Commission (ZCC) has submitted draft proposals to government which recommend that state-owned companies should not be exempted from the competition law. ZCC acting executive director Thula Kaira yesterday said the draft proposals would result in amending the 1994 competition and fair trading Act in order to make it more responsive to the challenges facing the Zambian market. He said certain areas in the current Act were not clear hence the commission found it difficult to enforce the law.
“The position currently obtaining whereby the Act states that government must be exempted from the competition law must be stopped because it is not clear to what extent the exemption must be applied to public owned companies especially when these companies are dominant,” Kaira said. “The exemption clause in the Act is not clear, for example, Celtel can be punished for anti-competitive practices but it becomes difficult if similar cases are raised against Zamtel since it is government-owned and must be included in the exemption clause.”
Kaira said there was also need to have a competition and consumer tribunal to be put in place to ensure quick dispensation of cases.
He further noted that the consumer law was not adequate to protect people because it was too fragmented, resulting in higher cost of enforcement.
“Need has arisen to have law covering all sectors in order to ensure full protection for consumers because consumer rights are synonymous with human rights and another challenge is that the commission has no powers to punish offenders administratively through fines and penalties but just recommend to courts of law, which is costly to prosecute hence we are proposing the creation of a tribunal to arbitrate cases in a quick and fair manner,” said Kaira.
The draft proposals were compiled by ZCC together with various stakeholders and have been submitted to the Ministry of Commerce so that the minister can present the bill to parliament for amendments.
Labels: COMPETITION, PARASTATALS, ZCC
Read more...
Commission mandated to implement competition policy
Competition Act The Competition Act (Chapter 14:28) is the principal legal instrument dealing with competition law and policy in Zimbabwe. The Act grants the Competition and Tariff Commission powers to ensure that the Commission meets its mandate for the implementation of the competition policy in Zimbabwe. The powers granted in terms of the Act enable the Commission to meet its main objective of promoting and maintaining competition in the economy of Zimbabwe.
Powers of Commission to Investigate
The Commission is granted, in terms of section 28 of the Act, the powers to undertake investigations into any restrictive practices, mergers and monopoly situations.
Where there is an alleged anti-competitive behaviour, the Act empowers the Commission to carry out either a preliminary investigation without notice or a full-scale investigation.
Where the Commission considers it necessary to conduct a full-scale investigation it must publish a notice in the Government Gazette and in a newspaper circulating in the area covered by the investigation as the Commission deems to be appropriate outlining the nature of the proposed investigation and inviting all interested persons or parties willing to do so to submit written representations with regard to the investigation.
After the publication of the notice the Commission is empowered by the Act to conduct a public hearing into the matter as part of the full-scale investigation. In conducting a hearing the Commission has the powers conferred upon a commissioner by the Commissions of Inquiry Act [Chapter 10:07], except the power to order a person to be detained in custody. The provisions of the Commissions of Inquiry Act relating to an inquiry and to any person summoned to give or giving evidence at the inquiry shall apply in the same manner, while making the necessary alterations, in relation to an inquiry in terms of the Competition Act.
This means, among other things, that the hearing must be held in public, though the Commission is entitled to exclude any particular person for the preservation of order. The Commission also has the power to regulate the proceedings of the hearing, meaning it may make any such rules as it deems necessary for its own guidance and for the conduct and management of the proceedings before it. This includes the power to set the hours, times and places for sittings and also to adjourn sittings from time to time and to such places as it thinks fit.
The Commission also has the power to summon witnesses to give evidence, to cause the oath to be administered to them and also to call for the production of any documentary evidence, though a person so subpoenaed to give evidence or to produce the documentary evidence shall be entitled to the same privileges as he would have in a magistrates court.
A person subpoenaed to give evidence or to produce documentary evidence and fails to do so, without sufficient cause, or who refuses to be sworn, or refuses to answer fully and satisfactorily, or who gives false evidence shall be guilty of an offence and liable to a fine and/or imprisonment. The Commission shall also have the power to order that any person who wilfully insults any commissioner or disturbs the proceedings be removed from the proceedings. The commissioners shall be immune from any action or suit resulting from the proceedings. The Commission shall also ensure that the rules of natural justice are duly observed and take all reasonable steps to ensure that any person likely to be affected by the outcome of the investigation is given an opportunity to make representations thereon.
l Produced by the Competition and Tariff Commission, Tel: (04) 771126-9/ (04) 773563-4 in conjunction with the Department of Anti- Corruption and Anti- Monopolies, Tel 707091.
Labels: COMPETITION, THE HERALD, ZIMBABWE
Read more...
Economic competition vital - Daka
By Florence Bupe
Thursday July 26, 2007 [04:00]
SCIENCE, Technology and Vocational Training minister Peter Daka has observed that economic competitiveness is essential for the provision of high quality standards. Speaking at the opening of the National Training Course on Quality Management Systems ISO 17025 at Cresta Golfview Hotel yesterday, Daka said it was vital to have healthy economic competition in every institution as a way of ensuring sustainable quality management.
“It goes without saying that economic competitiveness of any establishment is directly linked to the quality of goods and services provided by such institutions. Quality management is indeed an essential tool in ensuring that such establishments are able to have their fair share of the market if only their goods and services ascribe to the highest quality,” he said.
The National Training Course has been organised by the International Atomic Energy Agency (IAEA) under the theme ‘Quality Management Control Using Nuclear and Related Technologies’. IAEA mobilised K1.2 billion and offered staff training to facilitate the establishment of a Cancer Centre at the University Teaching Hospital (UTH).
Daka urged course participants to ensure that they utilise the training opportunity to impact positively on the Zambian economy.
Labels: COMPETITION, IAEA, PETER DAKA
Read more...
