Agri-business

Zambia saves $36m from fertiliser

NKOLE MULAMBIA, Siavonga
ZAMBIA is saving over US$36 million every year following the liberalisation of the fertiliser market, the Competition and Consumer Protection Authority (CCPC) has said.
Meanwhile, CCPC is expected to start investigating cartels in four sectors of the economy next year.
CCPC executive director Chilufya Sampa said there has been a significant reduction in the price of fertiliser after the market was opened up in 2011.
“For 10 years, we were being supplied with fertiliser by two firms, but in 2011 the market was liberalised.
The reason is that a Zambia Public Procurement Authority regulation had some restrictions… but once the market was opened up there was an immediate drop in the price,”
Mr Sampa told journalists at a media workshop in Siavonga recently.
He said a benchmark exercise revealed that Tanzanian fertiliser prices are US$100 above a benchmark competitive rate while Malawian prices are about US$150 above the competitive rate.
“Because Malawi seems to be going through what Zambia went through so based on that we estimated that if Malawi prices were similar to Zambian prices there would have been a national saving of US$36.4 million while the corresponding saving for Tanzania would have been US$10.3 million if prices were closer to Kenyan prices,” he said.
He said there is a significant gap between international benchmark prices and those observed in each country.
Mr Sampa said CCPC expects fertiliser prices in Zambia to reflect additional transport distance and thus cost required to take fertiliser from the ports to end user.
On cartels, Mr Sampa said the practice is a cost to the public hence the planned investigations in 2015.
He named the sectors as construction, tourism, mining and financial services.




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