eTradequityA Newsletter of CUTS Africa

Year 12, No. 1/2013

Along with the rainy-season comes thetime of daily power blackouts

throughout the Nairobi area hamperingproductivity in offices and limiting thequality of life in homes. Currently,electricity consumers in Kenya are facingthe challenge of ever increasing electricitytariffs while having to cope with less thansatisfactory quality and reliability ofservices.

The CUTS study ‘State of the KenyanConsumer’ published in 2012 foundthat 76 percent of participants areexperiencing frequent blackouts as theirmain challenge in electricity services,while 70 percent were concerned abouthigh electricity tariffs. In short, theKenyan consumer is dissatisfied with theelectricity services provided by themonopolistic electricity distributioncompany Kenya Power. The partialunbundling of the electricity generationand transmission from distribution andretail starting in the 1990s has notbrought about any significantimprovement of the quality of electricityservices provided or a reduction inelectricity tariffs.

In stark contrast to the ground reality ofthe electricity sub-sector in Kenya, theMinistry of Energy has expressed in theirEnergy Policy Document of 2012 that“the overall objective of the energy policyis to ensure affordable, sustainable andreliable supply to meet national andcounty development needs”. In addition,the document states the policy objectivesof the protection of consumer interests aswell as the improved access to quality,reliable and affordable energy services.

The Energy Regulatory Commission(ERC), which was established in 2007 to

Consumer Participation inElectricity Reforms Gaining Momentum

CUTS AfricaEmail: lusaka@cuts.org (Lusaka)

Email: nairobi@cuts.org (Nairobi)Website: www.cuts-international.org/ARC

I N T H I S I S S U E

Kenya Slaps Oil Explorers ................... 2

EAC-EU Talks on Stalled EPAs ............. 3

China Lowers Trade Tariffs ................. 4

EAC to Cut Tariffs on Commodities .... 5

Climate Warning Centre in Nairobi .... 6

regulate all energy related sub-sectors inKenya including the electricity sub-sector, also has a consumer consultationmandate in the regulatory process.However, to date, consumer voices werehardly heard by the ERC due to the lackof a clearly defined engagement strategywith electricity consumers. Fortunately, anew law has been enacted in Kenya,which requires the appointment of aconsumer protection representative onthe board of every regulatory agency inKenya.

The Consumer Protection Act, 2012paves the way for more effectiveconsumer protection and consumerengagement in the regulatory process ofthe electricity sub-sector. However, thelegal provisions are yet to beoperationalised and board members to beappointed to the ERC and otherregulators.

In the face of this disconnect between theregulatory and policy provisions and thesignificant challenges faced by ordinaryKenyans in their daily electricityconsumption, CUTS Nairobi haslaunched a project which seeks toenhance consumer participation inelectricity reforms through research,capacity building as well as networkingand advocacy.

The project entitled, Regulatory Reformsin the EAC Electricity sector: A Case Studyof Kenya and Tanzania (REKETA) willbe implemented in Kenya and Tanzania.Key stakeholder of the electricity sub-sector including the Energy RegulatoryCommission as well as private sectorassociations and consumer groups(CSOs) will participate in various projectactivities in both countries. The urgency

of improved electricity service provisionand consumer participation in electricityreforms has been highlighted as prioritiesfor this sector in both countries.

The project will facilitate a number ofnetworking events in which consumergroups, civil society and private sectorassociations can directly engage indiscussions with the Electricity Regulatorsto have their concerns heard.

In addition, the REKETA project aims tobuild the capacity of consumer groupsand CSOs working on consumerprotection to understand enablinglegislation and policy provisions forconsumer participation in electricityreforms in Kenya and Tanzania.Advocacy strategies will be shared duringfour Territorial Capacity Buildingworkshops and eight Grassroots InterfaceMeetings to empower CSOs to engage inadvocacy with regulators andpolicymakers in order to achieve pro-consumer regulatory reforms in theelectricity sector.

Tradequity2 � Year 12, No.1/2013

Economics and Development

SALeads in Investor ConfidenceKwaZulu-Natal Premier, Dr Zweli

Mkhize, is confident that South Africacontinues to be among the preferredcountries for investment. He saidprofessional services firm, Ernst & Young,had surveyed 500 leading investors fromthree countries to see how South Africafared as an investment destination.

The survey showed an overwhelmingpreference for South Africa as aninvestment destination, with 41 percentof respondents seeing the country as thefirst choice on the continent.

Black Business Council PresidentNdaba Ntsele echoed these sentiments,+saying South Africa’s Brazil, Russia, India,China and South Africa (BRICS)membership since 2010 had sealed thecountry’s position as the continent’sdiplomatic and economic leader. The twowere among the speakers at the BRICSBusiness Forum, at Durban on March 26,2013. (BC, 27.03.13)

Growing Demand for PowerGrowing demand for electricity to

power economic growth will keep thereturns in the sector high, attracting moreinvestments. A surging population andexpansion of other sectors of the economy,such as manufacturing and agriculture willprovide the market for electricity, therebyopening revenue avenues for powermanufacturers.

The installed capacity is expected togrow at 19 percent between now and theyear 2030. The positive outlook of thesector is likely to attract more foreigncompanies with a huge capital base, a keyrequirement in electricity generation.

(DN, 11.01.13)

Kwacha SlipsThe Kwacha marginally lost ground

against the greenback and was expectedto continue being under pressure asdemand for the US$ remained robust.Interbank trading was characterised by athin trading with minimal activity seenon the corporate front.

The Zambia National CommercialBank Plc (ZANACO) daily news updatesnoted that the local unit temporarilytouched a day’s trough of KR5.400/5.4200. The Kwacha was expected to berange-bound in the short term andcontinue to trade in the range of KR5.380and KR5.450 on the interbank.

Copper rebounded from seven-month lows as some investors wentbargain-hunting and others closed outshort positions. But the gains were cappedby worries about Cyprus and uncertaindemand in China. (ToZ, 22.03.13)

SARB to Invest in PBoCThe South African Reserve Bank

(SARB) signed an agreement with thePeople’s Bank of China (PBoC) thatenables the Bank to invest in China’sinterbank bond market. The Chinesebond market is the world’s fifth largestbond market and it continues to growrapidly in both depth and liquidity.

The agreement enables the SARB toinvest approximately US$1.5bn which isroughly three percent of South Africa’sofficial gold and foreign exchange reservesof US$50bn. It will deepen therelationship between the SARB and thePBoC as part of the cooperation betweenChina and South Africa on a bilateral basisas well as within the BRICS context.

(www.allafrica.com, 26.03.13)

Oil & Gas Firms Eye EACMarketSix multinationals are planning to

enter the oil and gas exploration sector inEast Africa. Five Norwegian firms andOmani-based Petrogas E&P are eyeingoffshore and onshore oil and gasexploration sites in Tanzania, Uganda,Kenya and South Sudan.

However, oil and gas executivesattending the 6th East African PetroleumConference and Exhibition cited policyinconsistency and a lack of properinfrastructure in the region as the biggestimpediments to doing business.

Tanzania, Kenya and Uganda haveproposed new laws that will see theirgovernments earn more from oil, gas andmining through higher royalties to be paidby exploration companies.

(TEA, 05-11.02.13)

No Growth for 10 YearsFresh doubts are emerging over

Kenya’s ability to grow her exports withnew data showing the contribution ofexport earnings as a percentage of country’swealth has stagnated for a decade.

Data from the Africa Trade andInvestment Exchange, a UK-basedconsulting group helping link foreigninvestors with enterprises in Africa, showsthat the value of exports has remained atan average of 25 percent of the grossdomestic product (GDP) since 2003.

This is attributed to overdependenceof primary products and expensive exportprocedures that deny the country theopportunity to create more jobs andimprove the balance of payments.

(TEA, 23-29.03.13)

Kenya Slaps Oil Explorers

Kenya has revised upwards the minimum amount of moneyoil exploration firms have to spend on work programmes in

onshore and offshore areas. To qualify for award of explorationrights, firms applying for new acreage will be required to committo spending US$28.2mn in the initial two years of onshore and31.2 million offshore for the first three years.

A new terms sheet by the Ministry of Energy details theminimum work and exploration obligations, the mechanism forfirms to recover money spent on exploration if commercial oildiscoveries are made and profit sharing with the government.

The changes are the latest in a string of regulations Kenya hasbeen rolling out in the past two months as it seeks a bigger slice ofthe profits from a boom in oil, gas and minerals explorationbusiness. (TEA, 16-22.03.13)

www.theeastafrican.co

Tradequity Year 12, No. 1/2013 � 3

News on TradeEU Tightens Trade Screws

Namibia must conclude controversialtrade negotiations with the EuropeanUnion (EU) or lose its duty-free quota-free access for beef, fish and grapes to EUmarkets. Meeting in Brussels, the EUParliament’s International TradeCommittee (INTA) drew the line: eitherNamibia – as part of African-Caribbean-Pacific (ACP) countries that have not yetsigned the Economic PartnershipAgreement (EPA) – signs the pact byOctober 01, 2014, or it will lose itpreferential access to EU markets.

Wallie Roux, Head, Research &Development, Namibia AgriculturalUnion said that although the 2014deadline will officially only be adopted atthe European Parliament’s plenary session,INTA’s decision is final. Namibia will nowhave to negotiate in earnest to meet thedeadline.

The EPA should not just boost trade,but also sustainable development inNamibia. Namibia also repeatedlycomplained that the EU is not treating itas an equal partner. (TN, 26.03.13)

Rail Link to Streamline TradeFive Southern African countries plan

to coordinate their rail services to bolstertrade through Africa’s largest port inDurban. The deal will do away withbilateral agreements which complicate theexport of copper, grain and containersacross five countries through South Africa.

Railways companies in the DemocraticRepublic of Congo and landlockedZambia, Zimbabwe and Botswana willstreamline their existing rail infrastructureto facilitate transport to South Africa’sIndian Ocean port.

The main objective is to align the fiverailway lines towards a unified railwaysystem on the North-South Corridor byestablishing a Joint Operating Centre inBulawayo. The deal will see rail take overvolumes which the region’s roads mostlycarry at the moment. (AFP, 14.01.13)

Zambia to Export Excess MaizeThe Zambian government will soon

start exporting excess maize stocks lyingin sheds throughout the country to createstorage space for the 2012-2013 harvest.Agriculture Deputy Minister RogersMwewa said the grain would be exportedto Malawi, Tanzania, Mozambique andZimbabwe.

The move arises from the recentnational food survey which was conductedwith the aim of ascertaining how muchmaize the country had in stock and howmuch was required for nationalconsumption.

He assured that government wouldensure that no grain went to waste as itwould put measures in place to make surethat it was properly stored.

(www.times.co.zm, 20.03.13)

Seed Harmonisation a ConcernThe proposed legislation that seeks to

harmonise seed in the Southern AfricanDevelopment Community (SADC) andCommon Market for Eastern andSouthern Africa (COMESA) region willmake it unlawful for farmers to re-planttheir harvested seed.

Kasisi Agricultural Training CentreDirector Paul Desmarais said that thegovernment should be wary of the newprotocol that seeks to harmonise of theseed laws in the SADC and COMESAregion as it is based on an understandingthat agriculture development shouldfollow the industrialised way of farming.

He also commended the governmentfor considering including organicprinciples in the new national agriculturalpolicy. (ZDM, 15.04.13)

SmugglingAffects TaxCollectionIncreased smuggling of agriculture

commodities has negatively affected thecountry’s tax base, Deputy AgricultureMinister Rodgers Mwewa said. Adding

that of late the country had seen a rise insmuggling of agriculture commodities, themove, he said was posing serious threatsto the food security of the country whichwas also losing money through taxavoidance.

He said that in as much as Zambiawas an active member of the COMESAwere trading was free at same pointsmuggling should not be encouraged as itwas reducing the tax base of memberstates.

Recently, the Commodity Trade inEastern and Southern Africa launched theharmonised cross border trade monitoringmanual aimed at monitoring informaltrade among countries in the region.

(ToZ, 22.03.13)

Free Trade Still a Pipedream!Differences over elimination of barriers

had deepened, denying the region largermarkets, economies of scale and promotionof trade. According to a new report by theEast African Community (EAC)Secretariat, rather than do away with non-tariff barriers, by December 2012 inaccordance with the EAC plans, somecountries have even created new ones.

This means businesses will have tocontinue incurring huge cost arising fromnon-tariff barriers (NTBs) – mainlyweighbridges, roadblocks, poorinfrastructure, unnecessary delays atborder posts and a lack of harmonisedimport and export standards, proceduresand documentation. (TEA, 05-11.01.13)

EAC-EU Talks on Stalled EPAs

The EAC willresume talks

with the EU tonegotiate a trade deal,ahead of a meeting in2013. EAC SecretaryGeneral RichardSezibera said seniorofficials will preparetheir part of the EPAnegotiations at theend of February 2013.

Policymakers and businesses are growing impatient over the delay in concluding thetalks on trade pacts between Europe and East Africa that were started five years ago. InDecember 2012, the EAC secured a two-year extension from the EU Parliament inwhich to finalise the trade talks, pushing the January 2014 deadline to January 2016.

(TEA, 09-15.02.13)

www.theeastafrican.co.ke

Tradequity4 � Year 12, No.1/2013

News on Trade

Trans-border Trade BoostExperts in Information and

Communication Technology from SouthAfrica have embarked on an exercise toboost trans-border trade betweenZimbabwe and South Africa byhighlighting investment opportunities inZimbabwe.

The South Africa group led by KelvinOnuoka has engaged the ZimbabweMinister of ICT, Nelson Chamisa, andother stakeholders.

Chamisa said there was a need tohighlight the importance of ICT in thedevelopment of Zimbabwe. Chamisaurged the regional and internationalcompanies to invest in the survival of theICT sector.

He said that they are working on astrategy to lure back Zimbabweans in theDiaspora through ICT training anddevelopment programmes which willcreate more investment opportunities forZimbabwe. (TZ, 15.02.13)

Slow Pace of Trade TalksThe COMESA, Africa’s largest trading

bloc, has expressed concern at the slowpace talks for a tripartite free tradingagreement with two other regional tradingblocs are going. COMESA has beenhaving negotiations with the SADC andthe EAC for a tripartite free tradingarrangement.

The negotiations were launched inJune 2011 to start with a six-monthpreparatory phase, while actualnegotiations were scheduled to havecommenced July 2012. The meetingscheduled in March 2013 in Zambia’sLivingstone is expected to provide cleardirection on the negotiations that arebehind schedule. It is expected to tacklesubstantive issues of the free trading

arrangement, which was mooted byregional leaders in October 2008.

(TS, 11.02.13)

AfDB Package for TradeThe African Development Bank

(AfDB) unveiled its ‘Trade Financepackage’, to the tune of US$200mn, whichwill support Ecobank TransnationalIncorporated’s trade finance activities inAfrica.

The AfDB’s support will enableEcobank to enhance its trade financeconfirmation capabilities, avail medium-term liquidity support to ETI’s subsidiariesto provide appropriate trade finance toAfrican small and medium enterprises andlocal corporates, and demonstrate appetitefor Africa risk.

The first facility would be a three-yearunfunded ‘Risk Participation Agreement’of US$100mn and under this, the AfDBwould share with Ecobank, through itssubsidiary EBI S.A based in Paris, France,the ‘default risk on a portfolio of qualifyingtrade transactions originated by issuingbanks in Africa’ and confirmed by EBI S.A.

(AM, 01.03.13)

Drop in Port TariffsSouth African exporters of

manufactured goods are set to see porttariffs fall by about 49 percent as TransnetNational Ports Authority (TNPA) movesto bring port charges into line with thegovernment’s industrial policy to promotethe manufacturing sector.

Transnet Chief Executive Brian Molefestated that the colloquium that whileTNPA’s overall revenue from port tariffswould not be reduced, there would be asignificant restructuring of the tariffs tobring pricing into line with thegovernment’s industrial policy.

The port costs for exportingmanufactured goods would dropsignificantly while the cost of exportingunbeneficiated goods would increasesignificantly. (www.iol.co.za, 07.03.13)

TradeGrowth to Improve in 2013Maersk Line South Africa (Pty) Ltd,

a subsidiary of the world’s largestcontainer shipping company, sees amoderate trade growth for the countryin 2013 after a challenging 2012.

There were significant socio-economicchallenges in the local market, includingthe impact of industrial action in the miningand agricultural sectors during the secondhalf of 2012, and a decline in consumerspending on the back of rising fuel,transportation, electricity and food costs.

This trade report follows on the backof the Maersk Group 2012 results, whichshowed an improved profit of US$461mafter the losses posted in 2011, whileSouth African operations are anticipatingmid-single digit growth in both theimport and export sectors in 2013.

(www.cbn.co.zl, 05.03.13)

Electronic Cargo Clearance SetKenya will automate cross-border

trade procedures at ports of entry, cuttingby more than half the time it takes toclear imported goods through the port ofMombasa in October.

The Electronic Single Window Systemwill provide a platform for exchange oftrade-related documentation and helpreduce the clearance time from eight dayson average to a maximum of three days.

The Kenya Trade Network Agency(KenTrade) says the system could savethe economy Sh.26.2bn lost throughinefficiencies in cargo clearance.

(BD, 01.03.13)

China Lowers Trade Tariffs

China is dangling lower tariffs and regulatory reforms to woo Kenyan traders in a bid to cement commercial relations

that are heavily slanted in its favour. Africa’s industrial productsnow attract only 8.9 percent tariff while agricultural productsface 15.2 percent, said Yao Chenxi, Economic and CommercialCounselor, Chinese Embassy, Nairobi.

Three years ago China removed NTBs, such as import quotas,licensing and designated bidding as well as more than 400 tarifflines. According to Chenxi “China has only retained administrative

licensing control on matters of public safety and the environmental concerns in line with international conventions and WTO rules”.While its goods have increased to dominate the African market, in the last 10 years, only South Africa has made inroads into

China’s market. (BD, 20.03.13)

www.businessdailyafrica.com

Tradequity Year 12, No. 1/2013 � 5

Regional Round Up

ECOWASAdopt Regional CETRegional ministers of finance endorsed

a new region wide tariff regime for WestAfrica in another important milestone onthe road to a customs union of the 15ECOWAS Member States.

The five band tariff regime, subject often years of internal negotiations drivenby the technical committee of theCommissions of the ECOWAS and theeight-member West African Economic andMonetary Union (UEMOA), wasmodelled on the UEMOA tariff regimefollowing the 2006 decision of Heads ofState and Government of the region.

Under the new regime, five percentduty is applicable for 2146 tariff linesunder the basic raw materials and capitalgoods category, 10 percent for the 1373tariff lines that qualify as intermediateproducts category while 20 percent dutyis reserved for the 2165 tariff lines thatfall into the category of final consumerproducts. (www.news.ecowas.in, 25.03.13)

�Star Performers� in PovertyA raft of trickle down economic

policies adopted by East Africangovernments to fight poverty seems to bebearing fruit with new global datashowing that poverty levels in the regionhave significantly dropped.

The UN said in the HumanDevelopment Report 2013 that povertyreduction drivers in developing countriesexceeded expectations, helping uplifthundreds of millions of the poor into anew ‘global middle class’.

Another report by Oxford University’sPoverty and Human DevelopmentInitiative ranked East African countries,mainly Tanzania and Rwanda, among the‘star performers in fighting povertyworldwide’. (TEA, 23-29.03.13)

Integration Challenges AheadFive regional blocs including the

COMESA and SADC are facingchallenges in attaining the free movementof persons across countries, as the continentmoves to attain a FTA by 2017. Zimbabweis a member of both COMESA andSADC.

According to an information note,Assessment of progress on regionalintegration in Africa, the Arab MagrebUnion, EAC and Economic Communityof West African States (ECOWAS) haveachieved enormous results.

The note said that despite the progressmade several obstacles are hampering andundermining the integration process. Thecontinent is moving towards establishinga Continental Free Trade Area by 2017and has tasked regional economiccommunities to drive the process.

(ND, 27.03.13)

Monetary Union Inching CloserThe East African Protocol on

Monetary Union could be finalised beforethe end of 2013 following the adoptionof the final report to establish a regionalsingle currency ahead of a Novemberdeadline.

The assigned high-level task force isexpected the first identify the design andthe name of the regional currency and thencarry out a regional sensitisation campaignon the protocol in all the partner states.

The report was adopted in Kigali,Rwanda on February 23, 2013. Theheads of state set in November 2013 asthe new date to sign the monetary unionprotocol. (TEA, 09-15.03.13)

Single EAC Mark of QualityEast African business executives have

called for a quicker roll-out of the proposedharmonised quality standards for the EAC,citing it as the biggest threat to regional

EAC to Cut Tariffs on Commodities

Imports into the EAC countries from two key African trade blocs will continueenjoying zero tariffs for one more year. From January 01, 2013, imports from the

COMESA and the SADC, will continue enjoying preferential treatment, courtesy ofthe EAC Customs Management Amendment Bill, 2012 passed in December 2012to replace the EAC Customs Management Act 2004 which expired on December31, 2012.

According to the provisions of the EAC Customs Management Act (2004) goodsimported by EAC Partner States under COMESA and SADC attract preferentialtariff treatment as prescribed in each of the member states’ legislation. However, goodsfrom COMESA entering EAC member countries, apart from Tanzania, are exemptedfrom an external tariff. (TSA, 07.01.13)

trade. The East African Business Council(EABC) said the lack of mutualrecognition of the marks of quality issuedby the bureau of standards in the region isthe main NTB frustrating cross bordertrade.

EABC called for fast-tracking of theharmonisation of products’ standards forcommodities to boost free movement ofgoods across the border. The lobbyexpressed concern about delays inreviewing existing EAC harmonisedstandards. (TEA, 16-22.03.13)

Tourism Market to WaitPlayers in the East African tourism

sector will have to wait longer before anattempt to market the region as singletourist destination materialises, nearly eightyears after the proposal was first fronted.The talks are still ongoing aiming atformulating a strategy to start issuing singletourist visas for the whole region andmarketing it as a single destination.

Ministers in charge of tourism areexpected to meet in June 2013 todeliberate on fast-tracking the process,which is also expected to developmechanisms for movement of people inthe industry through the harmonisationof policies and laws. (DN, 14.03.13)

www.theeastafrican.co

Tradequity6 � Year 12, No.1/2013

Environment/Consumer Issues

Zambia�s Fuel Prices HighestZambians pay the highest fuel prices

in the region as they subsidise industrialand commercial customers, says EnergyRegulation Board (ERB) Boardchairperson Dr George Chabwera, addingthat ERB plans to restructure fuel pumpmechanism to separate domestic fromcommercial and industrial consumers tocorrect the pricing mismatch.

There was need to introduce markingson petroleum products for various sectorsto ensure prices of petroleum products arereduced. He said petrol consumers weresubsidising diesel consumers who weremostly commercial and industrial resultinginto high fuel prices.

The ideal solution to this situation isto mark the product because then oneknows what product is going to theindustry and that going to consumers.

(TP, 10.01.13)

CCPC to Regulate Promo TextsCompetition and Consumer

Protection Commission (CCPC) wantsmobile service providers in the country tostop sending promotion messages to theconsumers without their permission. TheCCPC intends to engage the ZambiaInformation and CommunicationsTechnology Authority (ZICTA) to comeup with a mechanism to compel theservice providers to stop the trend.

Hanford Chaaba, Public RelationsOfficer, CCPC said the Commission wasin a process of engaging ZICTA to ensurethat mobile service providers gotpermission from the mobile users beforethey could send their promotion messagesto them.

He said it was unfortunate that themobile service providers had continuedcontacting the consumers throughmessages and phone calls to advertise their

promotions unnecessarily, sayingconsumers had the right to choice.

(ToZ, 25.03.13)

KQPartners with Etihad AirwaysKenya Airways has partnered with

Etihad Airways to expand its globalnetwork through a new codeshareagreement. Titus Naikuni, ManagingDirector said the airline would also launcha new three times a week service betweenNairobi and Abu Dhabi, the UAE capital,effective June 2013.

He said Kenya Airways would initiallyplace its KQ code on Etihad Airways’existing daily service between Nairobi andAbu Dhabi, and onwards to 32destinations on Etihad’s global network.

The agreement paves way for greatercollaboration between two airlines on jointprocurement of services for groundhandling, heavy maintenance, trainingand cargo operations. (TP, 25.02.13)

Reduction in Mealie-Meal PricesCivil Society – Scaling up Nutrition

said that the slight reduction in the cost ofliving in Lusaka following a reduction inmealie-meal prices does not bring morejoy because prices went beyond thenormal.

William Chilufya, Coordinator, CivilSociety – Scaling up Nutrition said that ifZambia had a properly decentralisedsystem, late delivery of farming inputswould be out of question.

Commenting on the Jesuit Centre forTheological Reflection’s statement that thecost of living for a family of five in Lusakarecorded a slight reduction in January dueto downward adjustments in mealie-mealprices effected late in 2012, Chilufya saideven the reduction in mealie-meal was notwithin the levels that ordinary Zambianswould afford.

He said people needed other types ofnutrients from different foodstuffs.

(TP, 25.02.13)

WB Helps in Lake ConservationThe World Bank has given Sh274mn

to 82 community groups in westernKenya to protect the environment. Thefirst tranche of Sh74 million was given tothe communities by the Lake VictoriaEnvironmental Management Programmefor eradicating environmental degradationaround the lake basin.

Environment Secretary Alice Kaudisaid the Ministry had designed a civiceducation programme to enable thecommunity members conserve theenvironment. LVEMP CommunicationOfficer Nicolas Manyolo said they wereseeking to reduce emissions of industrialeffluent into lake Victoria by up to 30percent by 2015. (BD, 26.03.13)

Kenya to Switch to Digital TVAbout one million analogue television-

set users in Nairobi now have untilSeptember 15 to invest in digitalconvertors after the day was settled on asthe new switch off date. The date, agreedupon by the CommunicationsCommission of Kenya (CCK) andConsumers Federation of Kenya (Cofek),ended a stalemate between the two partiesthat had reached the courts.

The two parties also agreed thatmeasures to help reduce the cost of theset-top boxes be looked into over andabove increasing the licensed vendors fromthe current 22. CCK is to addresswarranty issues and ensure, to the extentpractical, availability of sufficient digitalsignal strengths within Nairobi andoutskirts which will be affected by phaseone of the planned switch off.

(BD, 15.02.13)

Climate Warning Centre in Nairobi

As the ravaging effects of climate change start hurting poor countries, the UNhas set up a centre to aid the transfer of climate-related technology and

expertise to developing countries. Set up in Nairobi, the centre, ClimateTechnology Centre and Network (CTCN) will work to facilitate adoption oftechnology to enable developing countries reduce greenhouse gas emissions andimprove resilience to changing weather patterns, drought, soil erosion, and otherimpacts of climate change.

A UNEP-led consortium will act as the host for the Climate TechnologyCentre. The 2010 UN Climate Change Conference agreed on a new TechnologyMechanism to improve the transfer of climate-related technology encompassing energy efficiency, renewable energy, early warningsystems, and other fields. (TS, 20.03.13)

Tradequity Year 12, No. 1/2013 � 7

Special Article

– Abridged from an article that appeared in the Daily Nation, on March 26, 2013

New Law makes the Kenyan Consumer KingMuthoki Mumo

The Consumer Protection Act, 2012,which came into effect, provides that

all regulators must appoint a representativeof consumer rights bodies to their boardof directors. This requirement has been thesubject of a running battle between theConsumer Federation of Kenya (Cofek)and the Communications Commission ofKenya, the regulatory authority for thecommunications industry in Kenya, withthe federation suing to have the courtcompel the commission to appoint itsrepresentative to its board. It now has legalbacking.

“There shall be consumer representation onall regulatory bodies and the respectiveappointing authorities shall have due regardto accredited consumer organisations andthe Advisory Committee in making suchappointments,” reads the Act. The otherorganisations required to reconstitute theirboards are the Energy RegulatoryCommission (ERC), the Capital MarketsAuthority (CMA), the CommunicationsCommission of Kenya (CCK), and theInsurance Regulatory Authority (IRA).They have been accused of ignoringconsumers’ concerns in favor of pursuingbusiness-friendly policies. Consumerrepresentation is expected to change this. Itseeks to end an era where consumers andtheir concerns were relegated to footnotesto making them the kings.

“There has been a definite vacuum in theregulation of consumer matters. This willremedy that,” said Prof Joseph Kieyah ofthe Kenya Institute of Public PolicyResearch and Analysis (KIPPRA).

However, acquiring and keeping seats inthe regulatory boards will by no means bea smooth ride. For one, consumerorganisations in Kenya are a fragmented,poorly funded, and sometimes shadowylot. In a 2012 report titled The State ofthe Kenyan Consumer, the ConsumerUnity & Trust Society (CUTS), noted thatcivil society groups and consumerorganisations had limited capacity to carryout their mandate and often had little orno government cooperation and support.

“(There is) lack of long-term support from government departments for consumerorganisations. (Another challenge is) uncooperative regulators and a lack of consumersupport,” says the CUTS report. Dissenting voices have also warned that the new Actmay simply be used for profiteering even among the “legitimate” consumer rightsassociations. While acknowledging these challenges, Mutoro said the newly effectedlaw makes explicit provisions for the regulation of consumer rights associations.

Only those organisations registered under the Societies Act for purposes of consumerprotection will be allowed to nominate members to the nine-member AdvisoryCommittee that is tasked with spearheading consumer-friendly policies. Cofek, inparticular, has expressed disdain over the manner in which the CCK has handled thematter of digital migration, even going to the courts to challenge the commission.Mutoro publicly chided the ERC for increasing the price of fuel.

Once the members of the Advisory Committee are appointed and consumer rights’representatives seconded to regulatory bodies, they will have the formidable task ofbringing the rights of the customer into focus in a market where these rights have beenconsigned to the back burner for years. Before the gazettement of the Act, the rights ofKenyan consumers were addressed in no less than nine pieces of legislations implementedby as many agencies. Although not necessarily incompetent, these agencies were oftenunable to deliver their consumer protection mandate due to overlapping responsibilitiesand competing priorities.

“They have other priority objectives apart from consumer protection and the latter isoften a secondary role, which faces implementation challenges,” notes CUTS. The newlaw will, therefore, consolidate the breadth of consumer protection provisions frommyriad sectors under one overarching regime.

Further, the new law provides Kenyan consumers with unprecedented protection andempowers them to seek redress. In line with provisions made in the Constitution,consumers will now be free to pursue class action suits without first seeking the approvalof the courts. This is bound to be a game changer locally. As the ease of filing such suitsincreases, companies are likely to be wary of sparking the wrath of consumers andrisking heavy fines in damages.

However, although the law might be in place, Kenya’s consumer base remains unawareof its rights and might, therefore, need aggressive public education before it can starttaking corporates to task.

The newly effected law makes explicit provisions for theregulation of consumer rights� associations

Publications

Tradequity newsletter: Composed by CUTS International Lusaka, Plot 3653, Mapepe Road, Olympia, P.O. Box 37113, Lusaka,Zambia, Ph: +260.211.294892, Fax: +260.211.294892, E-mail: lusaka@cuts.org, and CUTS Nairobi, Yaya Court 2nd Floor, No.5, Ring RoadKilimani off Argwings Kodhek Road, PO Box 8188, 00200, Nairobi, Kenya, Ph: +254.20.3862149, 3862150, 20.2329112, Fax: +254.20.3862149,Email: nairobi@cuts.org. Published by CUTS International, Head Office: D-217, Bhaskar Marg, Bani Park, Jaipur 302016, India,Ph: 91.141.2282821, Fax: 91.141.2282485, E-mail: cuts@cuts.org, Web Site: www.cuts-international.org

The news/stories in this Newsletter are compressed from several newspapers. The sources given are to be used as areference for further information and do not indicate the literal transcript of a particular news/story.

SourcesAFP: Agence France Presse; AM: Africa Manager; BC: Biz Community; BD: Business Daily; DN: Daily Nation;TEA: The East African; TN: The Namibian; ToZ: Times of Zambia; TP: The Post; TS: The Standard;TSA: Trademark Southern Africa; TZ: The Zimbabwean; ZDM: Zambia Daily Mail

Economiquity

The January-March 2013 issue of Economiquity carries an article entitled, ‘Indo-Pak TradeNeeds a Push’ in its cover story which states that last two years have witnessed a number of

promising developments on commercial relations between India and Pakistan. Recent developmentsshow that Pakistan has provided de facto MFN status to India. The Indian establishment shouldlook at it as a deferred success of its diplomatic efforts.

A special article by Anders Aslund states a successful stabilisation programme must appearfinancially sustainable so that it can restore confidence among creditors, businesses, and people.

Another special article by Sophia Murphy and Timothy A Wise says that Global leaderssquandered 2012, but prospects for resolving the food crisis in 2013 seem better.

This newsletter can be accessed at: www.economiquity.org/

FORTHCOMING

SMEs Development in the Devolved Governance SystemPolicy Options for Institutional and Regulatory Reforms in Kenya

This Policy Brief recommends the need to initiate inclusive private-public dialogues; support the establishment of strongerbusiness associations at the county level; formulate specific county led SMEs policies aligned with the overall national SMEs

policy framework; establish tailored training institutes for SMEs at the county level; develop SMEs oriented financial institutionsin counties; establish an import and export bank for SMEs; need for the central government to coordinate the SMEs issues in thecountry and establish a SMEs development organisation.

Policy Brief

An Investigation into Zambia’s Agriculture DevelopmentFramework and its impact on smallholder farmers

This Policy Brief highlights outcomes from a research study undertaken in Zambia which assessed Zambia’s Agricultural Growth Framework and its contribution to the improvement of SmallScale Farmer’s Livelihoods. In doing so, the structure of the agriculture sector in Zambia country wasexamined, including the challenges that prevent small-scale farmers from developing into large-scalefarmers. The paper also presents the various policy recommendations to improve the situation.

www.cuts-international.org/ARC/Lusaka/pdf/Policy_Brief-An_Investigation_into_Zambias_Agriculture_Development_Framework_and_its_impact_on_smallholder_farmers.pdf

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