Transcript Shreya Kaushik Faith Mwamaba (CUTS)

By: Shreya Kaushik and Faith Mwamba
CUTS
October 13, 2015 – Mulungushi International Conference Centre, Lusaka
Outline
 Staple Food
Key Findings
– Farmers Input Support Programme
– FRA Price Setting of Maize
 Bus Transport
Key Findings
– Bus Standards in Zambia
– Fare setting process in Bus Transport
– Route Rationalisation
Staple Food
Key Findings
Farmers Input Support Program (FISP)
 Procedure of fertilisers procurement seem to enable participation of limited
number of private fertiliser suppliers, thereby stifling competition.
 This has resulted in participation of a handful of private firms in fertiliser supply
in Zambia. Firms seem to have found it more convenient to collude than
compete.
Key Findings
Farmers Input Support Program (FISP)
Goal: Infusing competition principles in public procurement of fertilisers under
FISP
Approach
 CCPC is currently investigating the process of procurement tender allocation to
private players under FISP
 CUTS would support CCPC : understanding the regulatory framework of
procurement supply and distribution process of fertiliser in Zambia
 Preparing an ‘institutional guideline’ for procurement of fertiliser
Key Findings
FRA Price Setting of Maize
 Reduced price volatility as variation in prices reduced by 13.5%
 Prices were set at a high level, which positively impacted only a handful (28%) of
Zambian farmers who are net-sellers of maize – while negatively affecting nearly
half of the farming community (48%) and having no impact on the remaining 24%
 High prices offered by FRA for maize increased revenue burden on Govt., already
bearing high costs in subsidising fertilisers (FISP programme). It also induced
farmers towards a culture of mono-cropping (of maize due to its high prices) and
reduced private sector engagement in the sector
Key Findings
 Goal: Understanding the floor price setting mechanism of FRA (Additional
Research)
 Approach:
 To understand the rationale & price determinations for setting of maize prices
by FRA;
 To make recommendations on best practices in setting the floor prices.
 Understand the reasons of lack of private sector participation in maize
procurement
 Methodology: In-depth Interviews and the FGDs of stakeholders
Bus Transport
Key Findings
Current Situation
In Zambia, specifically, intra city bus transportation is:
 characterized by low quality second hand buses
 high load factor results in uncomfortable rides
 general dissatisfaction among consumers (about 70%) – fares perceived too
high for quality of service
Key Findings
Bus Standards in Zambia
Quality Control: Lack of coherence between the fares vis-à-vis the quality of the
service.
 Most of the buses plying in Zambia are second hand buses. The quality of the
bus and the services that they provide are generally not good.
 The ‘first come first load’ principle at bus termini does little to give incentives to
operators to invest in quality as they are assured of patronage regardless of the
condition of the bus.
 The quality control system for public buses needs to be enhanced to ensure that
only buses of good quality are allowed on the roads.
Key Findings
Bus Standards in Zambia
 Goal: to have better standards for bus seats in Zambia
 Approach:
 Brainstorming sessions-Discussion with key stakeholder on the impact of the
lack of such standard on the consumers;
 Developed a way forward
 Development of the standard is underway
 CUTS will be invited to provide comments on the draft standard
Key Findings
‘Fare setting’ process in bus transport in Zambia
 Based on the data for the intra-city bus transport, bus fares have been increasing faster than the fuel price, which could
reflect that the fares may have been pushed by other factors outside fuel.
 However, if fuel is the major input into the fares, then the bus operators have generally been able to utilise the fare
setting regime to their advantage
 The results of the survey show that the average fare per trip for the intra-city route is about ZMW4.94 (about US$0.82),
which is higher than in other countries.
 Commuters spend about 8.6% of their income on transport.
 The respondents in the intra-city transport indicated that they do not have any bargaining power to negotiate fares.
Commuters are thus generally not satisfied with the fare setting process
 In the intra-city transport sector, while the operators have largely benefited from the pro-competition reforms, the fare
setting process is stilled skewed in the operators’ favour.
 This calls for a relook at the fare setting process or a closer enforcement of the current system to ensure better
representation of passengers
Key Findings
‘Fare setting’ process in bus transport in Zambia
Goal: to have a process based fare setting mechanism for bus transport
Approach
 We have prepared a discussion paper on international best practices in bus
transport reforms which touches on fare setting processes
 We have shared the discussion paper with the ministry of Transport
 Already there are plans underway for having a scientific formula for fare setting.
So CUTS findings and suggestions will be incorporated in the same
Key Findings
Route rationalisation
 There is currently no route allocation framework in Zambia: operators are
licensed as intra-city and inter-city operators and can operate anywhere on such
routes.
 This reduces accountability for the players as they do not have any incentives to
invest in goodwill and good practices
 Once an operator is licensed they can operate anywhere based on profitability.
 This results in other areas of town which are not deemed profitable to have
limited availability of public transportation.
Key Findings
Route Rationalisation
Goal: to identify the reasons for the lack of route rationalisation ( Additional
Research)
Approach;
 Undertaking a further research on the winners versus losers approach on
the lack of route rationalisation in the city of Lusaka
THANK YOU!!!
([email protected] and [email protected])