HomeOpinion & AnalysisColumnistsProposed Consumer Protection Agency requires adequate resources

Proposed Consumer Protection Agency requires adequate resources


Guest column: John Makamure

The Zimbabwe Parliament Portfolio Committee on Industry and Commerce is currently conducting public hearings on the Consumer Protection Bill, a draft piece of legislation gazetted on December 21, 2018.

The purpose of the Bill is to protect the consumer of goods and services by establishing the Consumer Protection Agency, and regulation of consumer advocacy organisations.

It will also repeal the Consumer Contracts Act [Chapter 8:03], and to provide for matters incidental to or connected with issues of consumer protection.

The issues of consumer protection come at a time when the new dispensation is implementing fiscal austerity measures aimed at reversing decades-old economic decline.

Austerity measures by nature tend to hit hard the final consumer as government drastically cuts expenditure or subsidies on certain public goods and services.

Cuts in government expenditure allow market forces to rule supreme.

In an environment of supply side constraints, prices of goods and services will go up, thereby eroding consumer welfare.

The situation is always worsened by unscrupulous suppliers of goods and services, who have a tendency of hiking their prices in order to profiteer.

Recent developments in Zimbabwe attest to this unjustified behaviour when suppliers adjusted their prices in line with the fall in the exchange rate when the exchange rate only comprises a small proportion of the total costs of production.

The Consumer Protection Bill, therefore, comes at the right time to cushion consumers from these unscrupulous businesspeople and the vagaries of an austerity programme that government has no choice, but implement in order to address the fundamental problem bedevilling this economy, which has an unsustainable high fiscal deficit that has stoked money supply growth and inflation.

A good legal framework on consumer protection will promote and protect the fundamental rights of consumers, which include the right to consumer education; the right to fair value, good quality and safety of goods and servicess, among others.

Clauses 4 and 5, which provide for the establishment and functions of the Consumer Protection Agency, are instructive.

The functions of the agency are centred on the protection of consumers from unjust, unreasonable, improper and unacceptable, deceptive, unfair and fraudulent conduct and trading practices.

The agency shall also promote fair business practices by co-ordinating and networking consumer activities and consumer organisations.

Further, the authority promotes consumer awareness and empowerment by referring and appearing before any court of law.

These are important tasks to be undertaken by the agency. Related to these key functions is consumer awareness and education in order to build a vibrant consumer movement that is vocal against unfair trade practices.
What is clear from this mammoth task to be executed by the agency is the need for adequate resources.
The issues of consumer protection are so important to Zimbabwe that we cannot afford to allocate meagre budgetary resources that cripple the operations of the agency.

Clause 7 empowers the minister, in consultation with the agency and, subject to the Constitution, regulates the fund in terms of section 18 of the Public Finance Management Act [Chapter 22:18], to establish the Consumer Protection Fund.

The Consumer Protection Fund shall be applied for the purpose of enabling the agency to fulfil its functions and to capacitate consumer protection organisations.

The Consumer Protection Fund shall be funded from monies appropriated by Parliament; monies received by the agency by virtue of the regulations made in terms of the act; monies obtained by means of loans raised by the agency with the approval of the minister, in consultation with the Finance minister; interest on investments; donations, grants, bequests, contributions or royalties received by the agency; fees, levies and other income accruing to the agency from registration, accreditation or any services provided by the authority; and such other monies as may vest in or accrue to the agency, whether in the course of its operations or otherwise.

I am happy that the Consumer Protection Agency is not constrained in its fund-raising drive.

It will be wishful thinking to expect the agency to be adequately funded from the fiscus when government is in the midst of an austerity programme.

The agency must, therefore, come up with innovative consumer protection programmes in order to attract more donations from development partners.

The width and breath of the country will be crying for the services of the Consumer Protection Agency — so fund raising will have to be stepped up.

The agency will accredit consumer protection advocacy groups.

This is critical if awareness and education is to benefit the majority of the population.

The Consumer Protection Agency on its own will not be able to cope.

I would like to conclude by saying that the Consumer Protection Bill is in line with international principles on consumer protection.

According to the European Union, improved transparency and better informed transactions resulting from well designed and implemented consumer policy result, not only in better solutions for consumers, but also in improved market efficiency.

Effective consumer protection is, therefore, an essential element of a properly functioning market that Zimbabwe is trying to create.

It aims to guarantee consumers rights vis-à-vis merchants and, in addition, to providing enhanced protection for vulnerable consumers.

The recent financial crisis in the western world demonstrated that consumer protection rules have the potential to make markets fairer and improve the quality of competition.

Empowering consumers and effectively protecting their safety and economic interests have become essential goals of European policy.

John Makamure is the executive director of the Southern African Parliamentary Support Trust. Feedback: johnma@sapst.org; @john_makamure

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