Implementing ICT policy for the benefit of Namibian consumer

First printed in Consumer News Namibia magazine - Jan 2013 edition

As the world is changing with new technologies, Namibians are also finding these impacting on their lives. Twenty years ago there were less than 75,000 telephones and today we have more cellular phones than people. Thus it has become important to understand ICT policy and how it should be providing benefits to our citizens.

First, I wish to address our understanding of ICT and how we can integrate it into our governance systems and also our daily lives. I have struggled to find a term for this and the best I could find was “Progress through Technology”,  or in German, “Vorsprung Durch Technik”. I prefer to use the German expression because in German the word “Technik” not only means technology, but also the technique of studying and mastering the skills of something.

Thus my belief that Namibia needs to relook at their ICT Policy and include the mastering of ICT tools as part of their focus. These tools include the following:

• Social media revolution of sites such as Facebook, Twitter, Youtube, etc.
• Mobile telephony (not only smartphones but also older technologies such as USSD)
• Touch screen and tablets (in getting information to their constituents).

It is my opinion is that discrimination in the world in 2012 and beyond, is not based only on race, culture, gender, or geographical location, but more importantly in access to services and technology. Our country’s leaders must address this through ICT policies that are forward looking, and easily adaptable to changes in technology.

Looking forward
ICT and Human rights

Africa can use the latest technology to the benefit of all its residents. The attitude to education which is presently geared to becoming an industrial country, must be changed to a system where knowing where the information is available is more important than having the information in your head. This means moving from our present agricultural society to a knowledge-base society within the next decade.

Human rights are to be understood as something we are entitled to because we are a human being. With the advent of the Internet and more and more powerful ICT tools, some of the citizens of the world are being left behind. While the information on the Web might be available to anyone, availability of infrastructure to access the Internet in lacking in many developing countries. Two issues are thus defined in ICT policy,

• ·         access to the information, and
• ·          being given the education to use ICT.

Thus, just as the provision of water or housing, access to information and communication technologies must be provided by the government to its residents – in the same manner they provide libraries in the communities.

As for teaching ICT usage, in the Declaration of Human Rights, Article 26 it states:

(1) Everyone has the right to education. Education shall be free, at least in the elementary and fundamental stages. Elementary education shall be compulsory. Technical and professional education shall be made generally available and higher education shall be equally accessible to all on the basis of merit.

(2) Education shall be directed to the full development of the human personality and to the strengthening of respect for human rights and fundamental freedoms. It shall promote understanding, tolerance and friendship among all nations, racial or religious groups, and shall further the activities of the United Nations for the maintenance of peace.

In earlier times we referred to the three R’s being reading, writing and arithmetic. Today, using the computer as a e-reader, blog writer, movie uploader or collaborative social movement, has become just as important to learn at the primary education level.

The Namibian ICT policies should strive to…

“Develop the tools and systems to assist the management of our countries (government, civil society and private sector) in providing access to services and technologies to allow maximum quality of life to all who live here.”

Understanding B2B, B2C and G2B

First printed in Consumer News Namibia magazine - Jan 2013 edition

In today’s modern world we have so many new things and often they have long names. To make our language easier we use abbreviations like LOL (laughing out loud), especially when we write or sms. As a consumer it is important to understand the types of relations between suppliers and buyers and thus the terms we use such as Business-to-Business and Business-to-Consumer because we need to understand the regulations in each of these markets and how we are protected – or not.

In the diagram, it shows that the end user of a product or service can either be a consumer, a business or government. (C, B or G). In the same way, the supplier of a product can either be a consumer, a business or government. (C, B or G).

Thus if the supplier is a business (B) and the purchaser is a consumer (C) we refer to this type of transaction as B2C. If a person (C) sells their car in a private sale to another consumer (C) it is a C2C transaction.

Thus we have the following abbreviations

o    Government to Government (G2G) – For example, transactions that take place between central government and the decentralised functions at local and regional level, or purchasing of electricity by government departments from town councils.

o    Government to Business (G2B) – Services provided by Government to the private sector, for example the rental of industrial buildings by the Offshore Development Company.

o    Government to Consumer (G2C) – The provision of education or registering births and deaths is an example of services provided by Government. Some of these service are stipulated as a right and should be provided free of charge, while others are provided on a cost recovery basis.

o    Business to Business (B2B) – These include all services and products supplied to the businesses as part of their production process or for own usage. For example supply of copy machines or factories supplying goods to retailers.

o    Business to Consumer (B2C) – The consumer is the end user of a product or service, for example a retail store.

o    Business to Government (B2G) – These refer to transactions where government is the end user of a product or service. Most of these are done on a contract through a tendering process.

o    Consumer to Consumer (C2C) – These normally refer to transactions of sale between consumers and can also include legally enforced financial transactions such as child maintenance

o    Consumer to Business (C2B) – This normally refers to where consumers are paid a fee or commission for promoting a product or service on behalf of a company.

o     Consumer to Government (C2G) – These are transactions where fees are paid via online payments for services such as licence fees or taxes

In Namibia we have been discussing the electronic transactions legal framework, but, as in the case of the consumer protection laws, nothing has yet been tabled in Parliament. As we become part of the global village, and the accompanying international trade environment, it is important that we get the legal framework in place to protect us as consumers.

The myth of Namibia

She wants to satisfy the needs of all her children. She has granted the custodianship to our political, religious and civic leaders - and they will have to answer her when she asks -

"What have you done with the talents I entrusted to you?

How much does it cost?

First printed in Consumer News Namibia magazine - Jan 2013 edition

As I spend most of my year living on a guest farm, I very rarely have to buy anything other than my sins of cigarettes and alcohol. I have for some time been complaining about the prices of these items, but accept this as a burden I must bear for using them.

This past week however, I had to make purchases for the farm shop. Great was my concern when I could not work out the unit prices. By this I mean the items were not marked per litre or per kilogramme but only showed a price for the item whether it was packed in 200g, 375 litre or even more ridiculously, per 180g. Now how must I compare the prices between products if they are all packed in different sizes?

I believe, consumers can gain major benefits when unit prices are provided and are easy to notice, read and use. If a shop owner can show this together with an item’s selling price, it will increase price transparency and competition. But without pressure from consumers – retailers and governments rarely do anything to provide, or improve, unit pricing.

This is why more consumer organisations and consumers themselves should campaign for grocery retailers to provide best practice grocery unit pricing – price per standard unit of measure (per kg/litre/each, etc.) – for pre-packaged food and other grocery items.

The main benefit for the Namibian consumer is that unit prices allow us the opportunity to have value comparisons, including those between package sizes, brands, product types, package types, packaged/unpackaged products, and between ‘special offers’ and regular prices. (I always joke and refer to these as Omo and Surf issues – in other words we are used to buying a certain product regardless of price, but these days we all need to be more price conscious). The unit prices of the same product and of similar and substitute products are often big.

So we as consumers can use unit prices to get much better value for money and this can result in a very big saving and substantially reduce our total expenditure on groceries. For most consumers, especially the poor, and underpaid, food and grocery products account for a high proportion of total expenditure. Therefore, the benefits resulting from using unit price information can be significant for these and many other consumers.
Unit pricing also saves the shopper from spending time calculating unit prices themselves and helps them to spot hidden price increases when, as is common, the amount in the package is reduced but the selling price is not.

Personally, I was surprised when buying chocolate for a special friend to notice how much smaller the packaging is from when I last bought. At first I thought I was just remembering wrong from twenty years ago, but on closer examination I found chocolate bars are not only more expensive, but they are packed in smaller amounts as well.

Previously, in this column and on national television, I have complained about the lack of consumer laws and this must also be addressed as an important issue within this context. However, I also believe consumer organisations such as Namibia Consumer Trust, Consumer Lobby or the Facebook interest and lobby groups such as the Namibia Consumer Protection Group can play an important role in persuading supermarkets to provide unit prices voluntarily.

After all, even the retailer must understand their own cost price in this explosion in the number of package sizes used by manufacturers. (This retailing revolution has also occurred, or is occurring, in many other countries, especially developing countries where consumer laws are less than adequate.)

If we look around the world we can see some success. In Europe, pressure from consumer groups resulted in the compulsory provision of unit prices, initially only in several Scandinavian countries, and then in each of the 27 member nations of the European Union. In 2009, the provision of grocery unit pricing became compulsory in Australia after a long and hard-fought consumer campaign.

I wonder is this will work in Namibia?

(Column in the Namibian newspaper, 31 January 2013)

Micro lending or loan sharks?

First printed in The Namibian - 24 Jan 2013

Micro lending is a fast-growing sector and the Namibia Financial Institutions Supervisory Authority (Namfisa) has invited the public to comment on the industry.

Micro-lending refers to loans under N$50 000 which must be repaid over a maximum period of 60 months to the micro-lender, usually in instalments. According to Namfisa, micro-lenders are often unkindly referred to as ‘loan sharks’, but they consider it to be unfair to say the micro-lenders are always in the wrong when it comes to misunderstandings with their customers. They further point out that “while it’s true that micro-lenders’ interest rates are higher than bank rates, this is because they provide funds over a shorter period, and at greater risk of ‘bad debts’ if their customers fail to pay.”
The industry has grown rapidly and there are now almost 400 registered micro-lenders across the country supplying close to N$2 billion. Around half of this is supplied via pay-day lenders who provide loans with a repayment period of up to 30 days.

To understand the business model, let us first look at why interest is charged. In the beginning of banking, interest was used to offset the risk of providing the credit to the borrower. There are four risks (hazards):

• The costs incurred by the bank while providing the loan had to be repaid;
• Inflation means the lender will be able to buy less for the money as time passes;
• Scarcity – in other words once it is lent to a borrower at a specific rate, it cannot be used for another loan;
• That the borrower cannot pay back the loan

(Of these four, the only real difference the government can make is in reducing the risk of borrower’s inability to repay.)

The Ministry of Finance has determined that the annual finance charge rate may not be greater than 1.6 times the average prime rate in respect of a credit transaction. The prime rate is presently 9.25 percent and thus the highest a micro-lender should be allowed to charge would be 14.8 percent per year or 1.24 percent per month. From my limited research this week, I have determined that the rates of micro-lenders are 19.50 percent for loans longer than six months or 30 percent for short term loans that last up to 30 days.

There is some proposed self-regulation occurring with regards to clients with “over-indebtedness” – however this would mean sharing clients’ data across all micro-lenders. This would include sharing data on good clients - and this the micro-lenders are wary of. One possible answer is a national credit register where all credits of each person are recorded and thus ensuring no “predatory” marketing and less over-lending occurs. This would mean within your data there would be a “big brother” indicating when you have reached your debt level as determined by the legislation. I think you can see how this could mean less self-governance and a certain loss of self-determination and responsibility. At the same time, the organisation or corporate body that has the rights to hold your information must be well managed and regulated.

The suggestion of a national credit register was submitted to the Parliamentary Committee on Economics, Natural Resources and Public Administration in 2006 and has been part of discussions held with Namfisa in the creation of the Financial Institutions and Markets (FIM) Bill but I am not sure what is the status of such legislation since the Consumer Credit Chapter has been removed from the FIM Bill in March 2012.

My question to you, the reader, is: Do you want government to do something about the possible exploitation and would you accept the consequences of having a company keep all credit data about you and your family?
Follow me on twitter: @miltonlouw

Printed in The Namibian on 26 Jan 2013