Hoseah: Why legal reforms, consumer protection crucial

President of the Tanganyika Law Society (TLS), Dr Edward Hoseah

TANZANIA should enforce legal reforms to create a healthier and sound investment climate, the president of the Tanganyika Law Society (TLS), Dr Edward Hoseah said, while applauding the sixth phase government’s investment drive.

“It is high time the government reviews all laws that defeat the spirits of the investment drive, laws that are not in favour of investments and the private sector,” said Dr Hoseah, commending President Samia Suluhu Hassan’s administration for successfully promoting the country as the preferred investment destination.

While underlining the need for modernised legislative frameworks for investment, the TLS president, however, insisted that pro- tection of consumer interests must be part and parcel of the country’s investment drive.

Advertisement

Dr Hoseah made the remarks on Saturday while making his verdict on the debatable Scancem International DA (Scancem) planned acquisition of Tanga Cement,which resurfaced in the parliament recently, with some lawmakers issuing a warning against the deal.

Debating the 2023/24 budget estimates of the Prime Minister’s Office last week, a section of parliamentarians argued that the planned acquisition could lead to price spikes, especially when the manufacturer undertakes routine factory maintenance.

Bahi MP Mr Kenneth Nollo (CCM) was of the opinion that should the deal go through as proposed, it will lead to a monopoly, whereby the single manufacturer would be capable of fixing prices.

He warned that Tanzania would not afford to build de- cent houses if cement would be a luxury and citizens compelled to dig deeper into their pockets.

Mr Elibariki Kingu (Singida West-CCM) echoed Nollo’s concern, arguing that according to the Fair Competition Act, no company was allowed to control more than 36 per cent market share.

“The merger the honourable MP is referring to will create a market monopoly that surpasses the threshold in line with the law that was approved by this august House,” he said, warning that Tanzanians should thus brace for tough times if after all the merger is approved.

Dr Hoseah, formerly the Director General of the Pre- vention and Combating of Corruption Bureau (PCCB) appeared to second the parliamentarians’ stance, saying while no body is against big investors, it is important that fairness at the market place prevailed. “We want foreign investors.

Without business this country cannot develop… but a balance must be struck between business interests and consumer interests,” he stated.

“I have gone through the judgment by Judge Salma Maghimbi, Dr Godwill Wanga and Mr Boniface NyamoHanga and what I see very distinctively is that it protects the rights of con- sumers.

It is a unique case as it really underscores the protection of citizens, it is one of the cases that has clearly articulated the consumer protection,” said Dr Hoseah, adding; “this decision is important because it protects citizens and protects the pub- lic interests.”

“Industries as much as they want to make money, they should consider the protection of consumers, unfortunately this is not always the case in Tanzania,” he insisted.

Dr Hoseah urged various organs within and outside the government to respect the rule of law and follow the right procedures in seeking justice whenever they feel their rights have been vio- lated.

The acquisition saga dates back to October 2021 when Scancem International DA (Scancem)  a subsidiary of Heidelberg Cement AG, which owns Twiga Cement  and AfriSam Mauritius Investment Holdings Limited, owner of Tanga Cement, issued a joint statement that they had finalised the terms upon which the former would ac- quire a 68.33 percent stake in Tanga Cement.

The Fair Competition Commission (FCC) had initially approved the proposed 137.33bn/- takeover, but with the caveat that the acquiring firm should not shut down Tanga Cement; that it should continue to produce and promote the Simba Cement (Tanga Cement) brand, and that it was barred from laying off existing employees at Tanga Cement.

However, some players were opposed to the decision on the grounds that allow- ing the merger to go ahead would prevent, restrict, or distort competition in the market in violation of the Fair Competition Act, 2003.

It was on these grounds that Chalinze Cement Company Limited and the Tanzania Consumer Advocacy Society (TCAS) lodged an appeal with the Fair Competition Tribunal (FCT), which quashed the planned merger through its verdict delivered on September 23, 2022.

The judgment by the quasi-judicial FCT, delivered by Lady Justice Salma Maghimbi, Dr Godwill Wanga and Mr Boniface NyamoHanga, said in part: “Pursuant to the provisions of Section 11 (1) of the FCA (Fair Competition Act), having quashed and set aside the decision of FCC, the Tribu- nal prohibits the merger be- tween Scancem International DA and Tanga Cement.”

But the saga took a new twist after the FCC placed an advertisement on February 11, 2023 in which the Com- mission said it had begun reviewing and investigating afresh Scancem International DA’s intention to acquire control of Tanga Cement Plc, with the view to establish whether the acquisition was likely to harm competition or not. Commenting, Dr Hoseah said the FCC and the Fair Competition Tribunal were formed with the aim of en- hancing competition and fairness in the market, but the seemingly tug-of-war de- feats that purpose.

“If the FCC are not convinced with the existing laws, they should ask the government to initiate reform and take the matter to parliament to amend mischief, but based on the current laws, the decision of the Tribunal is final and binding,” he stressed.

Add a comment

Leave a Reply

Your email address will not be published. Required fields are marked *