To wax lyrical, the sun has set on the
spirit of free market enterprise but its
moniker is brighter than ever. The EPRDFites
have, to the last man, praised the virtue of
their policy of “free market enterprise,”
price caps, controls, and all.
They have gone the distance in condering how
best to continue to impose price controls.
What measures should be taken? Who is best
positioned to implement these measures?
The fairness, balance, and effectiveness in
designing the measures are yet to be counted
among the policymakers’ strong suits. Their
cherished hope for the economy’s compliance
remains unanswered as the market refuses to
fall in line. Supply retreats as demand
grasps thin air.
Policymakers seem not to realise that they
would have done better trying to woo the
market into submission rather than bludgeon
it over the head and drag it kicking and
screaming to a dark cave.
Yet, a dark cave is exactly what they have
dragged the market into. Using unoriginal
and unimaginative methods, they have
attempted to dominate with a Dergesque
formula. It did not work then; it is not
In the midst of all the clubbing and
dragging, policymakers have overlooked one
major detail. The existence of the Trade
Practice and Consumers Protection Authority,
as per Article 31 of Proclamation 685/2010.
The proclamation goes on at length and in
detail about the powers of execution and
adjudication that have been bestowed on this
authority, but to no avail.
The proclamation was printed in August 2010,
and ratified by Parliament the month before,
in June; yet, for all the words in print,
there exists in actuality no such authority.
The proclamation does not call for a novel
entity. It is based on the earlier Trade
Practice Proclamation, which was ratified
and then printed in April 2003, before being
referred to the PM’s office in May 2010.
Unlike its successor, the 2003 proclamation
resulted in a commission of inquiry chaired
by Neway Gebreab, economic adviser to the
PM. This body served as the examiner, judge,
and jury of complaints submitted to it by an
In spite of all the capabilities of this
ambitious commission, it was scrapped due to
a “lack of provisions needed to provide
legal solutions for trade practice
problems,” according to the corporate
communications officer at what was then the
Ministry of Trade and Industry (MoTI).
Apparently, the ministry wanted a bigger
stick. A strongly worded amendment was hoped
to discourage traders from manipulating the
system. The result is that policymakers, in
their zeal to provide a free market economic
policy with the ensuing appropriate
practices, have written the words for their
ideal unit “to protect the business
community from anti-competitive and unfair
market practices.” The judicial powers and
duties of the as yet unborn authority read
much the same.
This new and improved authority was to have
been the implementing arm of the Ministry of
Trade (MoT) to micromanage the market. It is
this ministry that has been charged with
setting up and structuring the authority.
While the director general is to be chosen
by the Prime Minister, the nomination is to
come from MoT, and rumour has it that the
list of nominees is to comprise those who
have served the ministry well in the past.
However, it is paradoxical that the very
same ministry to set up this authority would
be the one to decide that small vendors
should put up with the raw hand they have
been dealt, as the nature of business is
sometimes taking a loss. Just as ironic is
the PM’s threat to have state enterprises
import supplies in abundance, seemingly to
reduce prices and relieve consumers, but in
effect putting importers out of business.
The reality remains that consumers have
nowhere to turn to air their grievances
against the suppliers of products or
If a customer has a meal in a restaurant and
gets food poisoning, something that happens
more often than it should, where can he go?
Should a customer walk into a clothing store
and be tricked into purchasing an expensive
brand only to find out that the tags had
been fiddled with, to whom does she turn for
This authority was to have come to the
rescue. Had it become corporeal instead of
remaining only black ink on white paper, it
would have had the power not only to
regulate businesses but also to protect
consumers. It would have been MoT’s fire
brigade wherever there was smoke.
This authority was conceived for the
protection of the consumer, as its name
conveys. It would have been the enforcer of
quality. Once born, it was to bring to
justice the matters that cause conflict
between suppliers and consumers.
Among the many duties described in the
proclamation is that of ensuring market
transparency, raising public awareness on
certain issues that may arise, and
curtailing unfair trade interests.
This is to include influence over mergers to
ensure that one corporation or conglomerate
does not corner the market.
There may be no need to go as far as price
fixing if this law takes form and becomes an
Specially equipped for investigation, the
authority could idyllically conduct a survey
of products and services and come up with a
standard. Had this authority been in force
before the eve of Genna 2010, the ministry
might not have embarrassed itself so by
imposing slapdash price caps. They might
have known better than decreeing edible oil,
without specifying which kind, to be sold at
16.50 Br per litre.
The initiated price caps might not have been
so painful had the ethereal Trade Practice
and Consumers Protection Authority proposed
prices for products and services as well as
an avenue along which to proceed after
research. It would certainly not have fared
It would serve as the filler for the gap in
trade, giving advice to big and small
businesses that may be unaware of their
practices being in conflict with the
consumers’ interests, before moving on to
the ugliness of enforcement.
What is questionable is the manner in which
this authority is tailored. To have one
entity serve as investigator, prosecutor,
judge, jury, and executioner is frightening.
Where has the legitimacy of checks and
balances that come with democracy gone?
A guiding principle for this proclamation is
that a business person with a “dominant
position in the market” may not abuse it.
Policymakers’ intentions are to protect the
underdog in the area of trade.
Unfortunately, for all concerned, “The road
to hell is paved with good intentions.”
Using the public’s need for a champion, to
create a Goliath of an entity with so much
latitude in its dealings, can only lead to
more grief. The public needs someone they
can turn to when products and services lack
quality; not an authority which has the
right to kick down doors, flash an ID card,
and rifle through drawers.
The very totalitarian approach to this kind
of “justice,” should have died long ago with
the Fascist movement. It seems as though the EPRDFites see its merit where most other
governments have given up.
The state refuses to loosen its grip on the
throat of the economy, but the tighter it
clings, the weaker the market becomes.
Interference in the minute dealings of the
economy from the macroeconomic status has
been proven time and again to be unhealthy
for the market.