Consumer Protection Crises

Despite its low purchasing power, Ethiopia, a country with more than one hundred and five million people, has one of the biggest market potentials in Africa. The consumer, however, is not very well taken care of. As the saying goes, consumption is life. When consumption and the patterns involved are affected, the intricacies of consumer protection come into the picture.

Ethiopian consumers are in many ways exposed to exorbitant price hikes, poor and substandard product quality, and a weak or no redressing mechanism for product and service defects. Poorly developed standards and the absence of regular inspection and quality controls are attributable to a weak technical and leadership capacity. The lack of comprehensive and regulated consumer protection governance is massive. This problem is common in many sectors; however the depth and breadth of the crisis related with food items is very frustrating, especially in recent days.

Few weeks ago, more than 180 bakeries were closed for selling subsidized flour for unauthorized buyers with more than double the price they purchased the commodity from government suppliers. They were also allegedly selling lower than the government-mandated weight of bread. Similarly, more than 150 producers and distributors of Injera, the nation’s main staple food, were identified for mixing Teff with non edible items, which are very unsafe for health. These problems show the crisis of consumer protection in the sector.
The prices of basic consumption items have, in general, skyrocketed after the Easter holiday. However, no one knows what the government is doing about it. This is not only frustrating, it is really embarrassing. Indeed, consumers are becoming victims of failed regulatory system on a daily basis.

Though no clear explanation has been given, the city administration has announced its plan of distributing Teff using the consumer cooperatives sales outlets at the grass root levels. When it comes to other indispensable consumer items, however, the city administration disclosed nothing about its intervention plans.

To have effective consumer protection governance, the regulatory framework and enforcement mechanism should be properly instituted. One of the issues here is staffing. Experts with the right mix and set of knowledge, skill, awareness and commitment should be employed.
Allocating enough budget to fully execute the mandate of the regulatory organ is very important. Regular data collection, compilation and analysis, and swift interventions on market irregularities are very important to manage crises before they mature and cause irreversible damage to consumers.

Even if a country has built a reliable system for effective consumer protection, there would still be loopholes where things pass unnoticed and eventually affect the consumer. Suppliers may take advantage of such regulatory oversight to advance their interests. Supply of inferior quality of goods, creating artificial scarcity by hoarding and stockpiling of goods, and arbitrarily increasing prices are often experienced in our markets. The victim is eventually the consumer. In such cases, identifying the source of the problem is indeed very important for meaningful interventions.

Many researchers argue that hoarding, which affects consumers because it contributes to price hikes, is the result of a scarcity of supplies. There are also other theories which explain that scarcity alone is an insufficient cause of hoarding. As a result, investigations on matters of unlawful stockpiling of supplies to create artificial shortage should involve the entire chain of suppliers of the goods, distribution channels, custom records, and the recent prices of the commodities locally and internationally. Monopolistic or oligopolistic attributes in the supply chain and distribution channels should be investigated to make the right mix of regulatory interventions.

Investigation and enforcement of consumer protection involves various stakeholders. Designing joint strategies and identifying common responsibilities among institutions that have stakes in the consumer protection system is very important. Institutions mandated on health, standards, education, trade, and manufacturing affairs have to be coordinated with the consumer protection regulatory body to systematically and sustainably address the emerging concerns of the consumer. Lack of regular coordination and neglect to the mandates of other stakeholders; the bad institutional culture of reacting only when problems surface, and the tradition of addressing problems on a campaign basis only instead of a concerted and detailed plan of action, contribute to why consumer protection has not become a culture in our country.

Gross negligence, which is a culture in our public life, to consumer protection exacerbates market failure. Especially now, because the political crisis is deep in the country, the situation has gone worse. The blockage of roads and lack of rule of law in many parts of the country has hampered the mobility of goods and services for consumers with reasonable prices, accessible channel and convenience. Surprisingly, this important issue which affects the entire population has neither attracted the attention of politicians nor the media. Some African countries with a population of only few millions have created vibrant consumer activism and civil societies advancing the interest of consumers. Ethiopia, however, has a long way to go because there is too little effort even to understand the scale of the problem from civil societies, government and the media, let alone to execute a concerted intervention to address the problem.


8th Year • July.16 – Aug.15 2019 • No. 76

Author

  • Abebe Asamere

    Abebe Asamere holds an LLB in Law and BA in Political Science and International Relations from AAU. He was a member of the executive committee and pro bono legal advisor of the Ethiopian Consumers Protection Association for six years. Later on he became president of the Association for about a year. Since 2000, he has been working as consultant and attorney at Law. He was also teaching business law at the School of Commerce at AAU on part time basis for several years. Comments can be sent to abebe.a@ethiopianbusinessreview.com or aasamere@yahoo.com

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Author

  • Abebe Asamere

    Abebe Asamere holds an LLB in Law and BA in Political Science and International Relations from AAU. He was a member of the executive committee and pro bono legal advisor of the Ethiopian Consumers Protection Association for six years. Later on he became president of the Association for about a year. Since 2000, he has been working as consultant and attorney at Law. He was also teaching business law at the School of Commerce at AAU on part time basis for several years. Comments can be sent to abebe.a@ethiopianbusinessreview.com or aasamere@yahoo.com