Cama demands price fall in govt-owned companies

Consumers Association of Malawi (Cama) has asked government to first push its own companies to reduce commodity prices including water and electricity tariffs in light of the kwacha appreciation and fuel price reductions before focusing on the private sector.

Cama executive director John Kapito said this in an interview last Friday in reaction to a government letter to the consumer rights group accusing it of failing to pressurise traders to reduce their commodity prices after the kwacha has gained value against foreign currencies.

Kapito wondered why government is not pushing its own companies, including the Electricity Supply Corporation of Malawi (Escom) and water boards, to slash their utility tariffs which were hiked in the course of government’s implementation of economic reforms.

“They [government] have the machinery themselves. Are they saying that they only had the machinery when things were going up and they don’t have the machinery to handle the situation when things are going down?” said Kapito.

He said government should also push Reserve Bank of Malawi (RBM) to reduce bank rates in light of the kwacha appreciation.

“Why can’t they start within their own shops by reducing those tariffs because those services have an impact on prices of commodities in the private sector? Why talking about external players when they have internal players?” said Kapito.

He also argued that government needs to consider time when the companies imported their commodities before calling for price reductions on the basis of the recent kwacha appreciation.

In a letter dated June 6 from Minister of Information Moses Kunkuyu, government accuses Cama of taking no action against traders who, it says, are defying calls to reduce commodity prices that largely rely on fuel prices which have gone down.

“Government feels it is daylight robbery for traders to refuse slashing their prices… Furthermore, government questions Cama’s reasoning that prices should not go down reportedly because the positive economic changes are temporary.

“Whether the changes are temporary or not, government thinks these should be reflected through the price reduction of goods and services that are chiefly reliant on the affected variables,” reads part of Kunkuyu’s letter.

The minister urges Cama to safeguard consumer rights with the same zeal it protested against high cost of living early this year: “In the spirit of collective responsibility, government is calling on the able Cama leadership to come out strongly to protect the rights of consumers. These are the very rights which Cama deemed trampled on by the depreciation of the kwacha that had resulted into prices of goods and services skyrocketing.”

Asked to comment on Cama demands for government to first push parastatals such as Escom and water boards to reduce their prices before focusing on the private sector, Kunkuyu on Friday said: “I agree with Mr. Kapito. What Cama is raising are pertinent issues but we don’t expect them to [just] be quite.”

Kunkuyu said government needs to first get reports from its companies in order to determine the way forward on whether to reduce their commodity prices or not.