The workshop was opened as set in the schedule at 2:33 p.m. by Prof. H. Amani who stated that the aim of the workshop was to develop and strengthen the competition law in the country. He then invited the Chairperson, Mr. J. Mrema, from the Ministry of Industries, to chair the workshop. On taking the chairmanship Mr. Mrema asked the participants to do a round of self-introduction. He then invited the first presenter, Mr. Kapella to present the draft report on the case of Tanzania Mainland.

2. First Presentation

Below are the highlights of Mr. Kapella’s presentation:

a) The report looks critically at the trade liberalization and the competition policy;

b) The country is moving from an economy that is centrally controlled to a situation where the government is withdrawing from controlling economic activities. It is therefore deregulating in the following areas:

i) monetary policy,

ii) fiscal policy,

iii) growing number of private and foreign investments,

iv) growing number of medium and large scale mining, industries, export earnings all of which have substantially increased.

c) Some of the major problems in the deregulating process are:

i) foreign buyers determine the prices for us;

ii) we have not succeeded in building confidence for foreign investors and therefore we need to put in place fair trade practices as a confidence building strategy;

iii) Our local consumers are unaware of what is happening, sometimes the information they get is piecemeal. We need to start awareness raising at grassroots level for consumers to get organized.

d) Other barriers face local firms to get into the markets to compete because:

i) to do business one must have sufficient capital and borrowing carries interest,

ii) the degree of accessibility to markets is constrained due to transportation costs, lack of storage facilities, multiplicity of taxes, high water and electricity costs, etc.

iii) we import more than we export.

e) To effect financial sector reforms there is need to assess competition policy and the law

f) In order for the sensitization programme at the grassroots to succeed, there is need to use simple language so that it is possible to reach a wider public at once.

g) There is need to establish proper sources of financing since donor funding is limited to little amounts.

3. Second Presentation: the case of Zanzibar

Mr. Ally Khamis Juma presented the report on Zanzibar. His presentation was based on power point slides and the key points of the presentation were that:

a) Zanzibar has a centralized economy;

b) Zanzibar Fair Trading and Consumer Protection is run by a Bureau which is an autonomous organ of the government and is headed by a director appointed by the President.

c) The function of the Bureau is to approve agreements and advise the government on matters of fair competition, consumer protection and related issues;

d) The power of the Bureau is to manage information related to its area of jurisdiction, to initiate proceedings and appoint prosecutors to conduct all cases that contravene the Act;

e) The achievements of the Bureau are:

i) progress on importing quality goods,

ii) general awareness from the public and business community;

iii) increased awareness from within formal institutions

iv) cooperation and active participation of public and other non-public organizations.

f) The Bureau has been facing short and long term constraints as follows:

(i) short term constraints include financial resource, motor vehicle, office equipment and understaffing;

(ii) long term constraints are: laboratory facilities, non-compliance of traders, and political interference.

4. Comments on the presentations

The participants made the following comments and reactions:

a) In what ways is consumer protection effected in Tanzania? There is need to discredit false advertisements;

b) The wrong doer, i.e. the one who makes false advertisement should bear the cost of corrective advertising. This would serve as a deterrent;

c) One of the problems encountered and common to African countries is lack of consumer power to protect their interests;

d) It is the statutory responsibility of consumer associations to give support to efforts made towards the protection of consumers. For example, although we have passed the Act we have not done enough work, we need to be up and running;

e) Since the establishment of PSRC, some money has been set aside for sensitization purposes; for example PSRC has US$500,000 and SIDA has US$ 350,000 set aside for establishing an agency for awareness raising;

f) It is important to put in place a mechanism for independent funding since funding through government budget is likely to be restrictive;

g) The relationship between competition and agency is a complex issue. Initially, these agencies were monopolies and there was no one to merge with, for example TANESCO and TTCL, we are now breaking the monopoly to ensure competition. TTCL have the mobile telephones as competitors. The next thing is to unbundle electricity into 4 or 5 competing agencies of production, distribution and sales

h) Why do we have two regulation bodies for Zanzibar and the Mainland?

5. Responses from the Presenters (Mr. Kapella)

a) Consumers are not well organized on the Tanzania Mainland. If the Competition Authority (CA) intends to succeed it has to have pressure groups or activists to sensitize the general public;

b) To put in place such groups that effect corrective advertisement, it has to be budgeted for.

c) Having one control agency for the whole country should be alright. The Act talks of the United Republic of Tanzania; however, trade is not a Union issue;

6. Comments from Mr. Mkocha, (Fair Competition Commissioner)

Mr. Mkocha said that he was glad the report on Competition Authority has been made and he thanked ESRF and CUTS for producing it. The report, he said, was the first of its kind in Tanzania. The highlights for the rest of his comments were that:

a) Competition Authority in Tanzania is not yet operational. To make CA operational, a format with legal, research and consumer departments has been prepared and submitted to the government for approval;

b) Why has it taken so long? The initiative to start CA which was initially called ‘Fair Trade Practices’ took place in 1994 when the Price Commission was dismantled;

c) A small team (task force) was formed in 1995 to prepare the Act; however, when the parliament was dissolved the Act was forgotten until 1996 when it was found that the Act had a serious fault, there was no structure in place and the Commissioner could not make one;

d) During that time there was a feeling that the Planning Commission was not needed and the work it was doing, including that of the ‘Fair Trade Practices Act’, (the name which made it associated with trade) was placed under the Trade Ministry without the task force;

e) Now the Act has been passed and we realize that it is important for CA to be independent;

f) We need to start with advocacy, to explain to the stake-holders what is it that competition regime can offer, when competition is good the customer affair takes priority. We also need to sell the case studies where they can attract the most publicity;

g) There is need for patience on the part of the general public while the structure, personnel, office space, etc. are being set up.

7. Comments from the Participants

a) In Tanzania competition is something new, other countries like South Africa, Kenya, Zambia were quite advanced, how can Tanzania cope?

b) In cross-border trade the custom union should not start without a common competition policy. The GTZ is one of the bodies trying to propose the structure for EAC custom union to follow that of the European Union (EU). Once we have a common market, we should have common rules;

c) The terminology used is confusing, what is the difference between ‘Unfair trade practices’, ‘Anti-competitive trade practices’, ‘Restrictive business practices’, ‘Unfair competition’?

d) The word ‘Trade’ is misleading, that is why the original name of the Act, ‘Fair Trade Practices Act’ has been changed to ‘Fair Competition Act’, the whole idea is, if a practice is curtailing competition it is unfair business.

e) Services of professionals such as lawyers, engineers, doctors and others should also be exposed to competition, claiming not to do so because of customers’ interest is price fixing.

f) When other countries started market economy they had a Ministry of Restructuring, in Tanzania we had the Planning Commission, therefore in our case the lines of responsibilities are not very clear.

g) We need to start by educating a steering committee that will run CA; as for TRA there was no need for educating it because the issues of tax collection have been in existence since the colonial days. For CA we need to have the committee to go out there to see how CA work is done.

h) There are two aspects to the issue under discussion, the first is that where we have several suppliers we want to create competition among them; secondly, where there is monopoly, e.g. a railway line from DSM to Kigoma, we do not put in place another line just to create competition; but we need to regulate by introducing a tripartite: One, the government as service provider, two, the investor needing guarantee on the investment and three, the consumer wanting good services. We need to agree on how the interests of each can be addressed.

8. Chairman’s intervention

The Chairman intervened to say that there was need to propose a third case study for a company that is multinational. After some suggestions areas of focus were identified as:

- Pricewaterhouse and Coopers

- Leasing of the container terminal,

- Banks – the death of Greenbank,

- Railways – TRC and TAZARA,

- Air transport – ATC and Kenya Airways merger,

It was agreed that these will be refined and will zero in to specific case studies such as Pricewaterhouse for companies that achieved a merger, and Railways and Air transport for cross-border companies.

9. Closing

The Chairman briefly summed up the presentation saying that in the case of the Mainland the presentation had been a critical examination of what was in place while that on Zanzibar, what was in stake. That there was need to have some rules and regulations to work with while entering into globalization. The workshop came to an end and was closed at 5:59 p.m.

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