Zambia’s Competition and Consumer Protection unit tips manufacturers ……..as large mines shun inefficient local suppliers.

By John Chola – January 4, 2012. Zambia’s Competition and Consumer Protection Commission has found that the mining companies that sought merger authorizations from it are complying with the law and conditions given to them. CCPC Executive Director Chilufya Sampa says among the conditions given to the mining companies were that the merged entities should honour agreements that the firms had entered into with local suppliers to the mines before the merger. Earlier the Commission demanded that the merged entities should take reasonable steps to ensure that jobs and investments were created by virtue of the transactions being authorised. The Commission has meanwhile committed to continue monitoring not only the mining sector but every other sector that has competition concerns to ensure that a level playing field is created. Meanwhile Sampa has told this newswire that the Commission and Consumer Protection Commission has over the last few months received a number of complaints from mine suppliers, that most of the major mine contracts are given to foreign firms and not local firms. Following the complaints CCPC from January 9, to 20th, 2012 undertook a tour of the Copperbelt and North Western Provinces to verify and have first hand information on these allegations. The Commission has since learnt that mines give most contracts to foreign owned companies owing to Zambia’s lack of a large manufacturing base. He says the local mine suppliers rely on manufacturers outside the country making them uncompetitive because they compete with authorised distributors of these goods or the original manufacturer of the goods. “For as long as Zambians do not take to manufacturing their own equipment, the mines will always favour importing from the Original Equipment Manufacturers (OEMs) because they are cheaper”, the CCPC Executive Director observed. The Commission team had several meetings with different mines and relevant stakeholders including the mine suppliers. Sampa says the Commission noted that most mine suppliers do not have adequate capital making them to usually rely on a down payment before they could supply any goods. In addition, it has been observed that since local suppliers do not have well established distribution networks with the Original Equipment Manufacturers, they usually fail to provide goods and services in good time. “I would encourage the Zambia Association Manufactures and all other mine suppliers to seriously consider setting up manufacturing plants for some of the products being supplied to the mines. In a liberal economy, you do not necessarily need to wait for Government to tell you what you should do but for the private sector to recognize market niches and take advantage of such openings”, Sampa said. End….//