Government:
Is a group of people who officially rule a country like president, ministers and civil servants.
Function of Government
The government perform the following function.
1. Protective functions.The government is responsible to maintain peace and security in the country and to defend the country against external aggression. For this purpose the government maintain police and the armed forces.
2. Administrative functions.The government is responsible for the administration of the country. Various administrative departments are established by government for this purpose.
3. Social functions.The government provides social services to public like education, health, housing, transport and communication etc. These services are vital for the welfare of the society.
4. Development functions.The development of different sections of the economy is not possible without the state help. The government should develop irrigation, transportation and communications, industrial and agricultural systems of the country for the rapid increase in the rate of economic growth.
5. Makes policies and laws and implement them so as to promote development of country.
6. Trade function.Facilitates trade within and outside the country.
Business.
Business applies to any activity carried with an intension of making PROFIT while standing a risk of LOSS. Business can be in form of trading, farming, transportation, communication, insurance etc.
THE ROLE OF BUSINESS
In economic theory business play two roles:
-They enter the market place as PRODUCERS of goods and services bought by consumers. They buy factor inputs from households in order to produce those goods and services. They are using various economic resources efficiently in order to attain high profits at a less cost.
GOVERNMENT INVOLVEMENT IN COMMERCE
The government can involve in business activities as follows:
1. Carrying out trading activities directly.
For this purpose, public corporations, parastatals, marketing bodies and local authorities are set up. These government bodies may be responsible for the production of some specific items or provision of specific services.
2. Controlling the activities of the private sector.
This is done by ensuring the production of better quality goods and protect the interests of the consumers. The government can control the activities of the private sector in various ways, such as consumer protection.
Consumer protection. Is the policy taken up by the government to protect consumers from being exploited.
3. The government buys shares in private companies.
CONSUMER PROTECTION
Meaning:
This is the policy taken up by law to protect consumers from being exploited by the business world. A consumer needs protection because he or she has to get support against unfair practice from seller includes
a) Being charged higher prices
b) Misleading advertisements
c) Selling of defective / expired goods
d) False description
e) Wrong quotation of weights and measures
f) Ignorance of their basic rights
g) Selling unhygienic goods (food stuffs)
The need for consumer protection (Reason for consumer protection)
1. To avoid overcharging.Many suppliers exaggerate the expenses they incur when buying goods from manufacturers. These traders give excuse such as high transport charges, taxation (e.g. VAT) and rental charges so that they can charge consumers very high prices.
2. To ensure correct weights and measures are used. Some traders use the wrong measurements and weights when selling goods to customers thus cheating them. This is very common with goods such as sugar, salt, beans, maize and wheat flour, rice which traders sell in small, weighed units.
3. To guarantee safety of foodstuffs and drinks.Some traders sell foodstuffs and drinks from unhygienic places and other traders sell foodstuffs and drinks that are out of date, half-cooked or stale. To protect consumers, therefore the Ministry of Health sets up standards which must be met by traders engaged in the sale of foodstuffs and drinks.
4. Eliminating misleading advertisements.Many business owners use persuasive, attractive and misleading advertisements to persuade customers to buy goods from them. Today it is common to find such advertisements “IT WASHES WHITER THAN WHITE”. This is not true as there is nothing whiter than white either something is white or not white but not whiter. Also some dealers of used vehicles display misleading adverts on television showing such vehicles jumping over buildings. This is very misleading as there is no vehicles which can go over building unless it is an aeroplane.Many cosmetics advertisements have misleading phrases, pictures and slogans.
5. To avoid sale of out of date (expired) drugs. In rural areas where drugs are scarce, drug dealers sell out of dated drugs to unsuspecting illiterate consumers. Also some people pretend to be doctors and prescribe wrong doses of drugs to consumers.
6. Consumer ignorance of their rights. Many customers do not know their rights. Therefore it is the duty of the government to protect them.
BASIC CONSUMERS RIGHTS
The basic consumer rights includes the following:
i. Right to safety.This means that right to be protected against the marketing of goods and services which are hazardous to life and property. The goods and services available for sale should not only meet their immediate needs but also fulfilling long term interests.
ii.Right to be informed.It means to be informed about the quality, quantity, potency, purity, standard and price of goods so as to protect the consumer against unfair trade practices.
iii.Right to choose.This means right to be assured, wherever possible of access to variety of goods and services at a competitive price.
iv.Right to seek redressing.Means to seek redressing against unfair trade or unscrupulous exploitation of customers. It also include right to fair settlement of genuine grievances.
v.Right to be heard.The right to be represented in various forums formed to be consider consumers welfare.
vi.The right to satisfaction of basic needs.It means to have access to basic essential goods and services, adequate food, clothing, shelter, health care, education and sanitation.
vii.The right to health environment.It means to live and work in environment which is not threatening to the well being of the present and future generation.
METHODS OF PROTECTING CONSUMERS
There are three major ways of protecting consumers:
i.Government initiated methods.
ii.Consumers initiated methods.
iii.Business initiated methods.
(i) Government initiated methods
The government protect the consumers in the following ways as the measures adopted by the government to protect consumers. In Tanzania the government has established some institutions to protect the rights of consumers including.
1.Weights and measures Department.This requires businessmen to use recommended weights and measurements when selling goods to consumers. It requires manufactures to indicate the correct weight on the goods or on the packing material. This department is under Ministry of commerce and industries who officials travel around the country to check and confirm the efficiency of the weighing scale.
2. Setting up bureaus of standards.These set up standards for the quality of various products made or imported into the country. A standards bureau has a standardization mark that it puts on any goods to be tested and approved. An example of such a bureau is the Tanzania Bureau Standards (TBS)FUNCTIONS OF TANZANIA BUREAU OF STANDARDS(TBS)Tanzania Bureau Standards is a government agency whose function is
i.To ensure that high quality of goods produced by manufacturers by taking random samples.
ii.To take action against manufacturers who produce inferior goods.
iii.To ensure the quality standards of the product are maintained, produce locally or imported from other countries.
iv.Preparation of the standards relating to products, measurements, materials, quantity, weight and moisture content etc.
v.Certification of industrial products.
vi.Quality inspection of imports at legal ports of entry.
vii.Improvements of measurement accuracies and dissemination of information relating to standards.
viii.To keep close liaison with and render efficient service to industry, trade and commerce in direct parts of the country.
- Price control Act
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This Act is meant to safeguard consumers from being overcharged. The government fixes the price of certain goods especially essential commodities, so that the traders do not sell above the fixed price. This is very common with essential commodities like sugar. Salt, soap etc. These price are published by the Minister of finance when presenting the National budget every year.
- Business premises Rent Tribunal
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This tribunal ensure that reasonable rents are charged by the landlords from their tenants.
LAWS USED BY GOVERNMENT TO PROTECT CONSUMERS(Legal measures)
The various laws used by the government to protect consumers include the following
- Sale of goods Act
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This affords protection by setting down conditions and warrantees expressly by the seller to the buyer. The Act provides for five conditions and two warranties in the protection or vulnerable position of the buyer.
Conditions
i. The seller has the legal right to sell the goods.
ii.The goods sold by descriptions do in fact correspond with the description.
iii.That the goods are reasonably for the purpose intended by and made known to the buyer.
iv.That the goods are of merchantable quality.
v.That when goods are sold by sample, the actual goods sold are of the same quality as the sample.
Warranties.
i.That the goods are free from any charge in favor of third person.
ii.That the buyer shall have and enjoy quite possession of goods purchased.
- Food and Drugs Act
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This provides protection of the public by prohibiting adulteration of foods, medicines etc. They require manufacturers to list the ingredients used in the process of making them.
- Weights and Measures Act
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This provides protection to consumers by prescribing weights and measures for the use in business transaction. Its require testing and sampling of all weight and measures used by business concern and regular inspection to insure that all scales confirm to the established standard. This makes it a criminal offence if the weight or any other form of measurement is wrong.
4. Hire purchase Act
This lays down a prescribed form for the scale of goods by hire purchase or credit sale. This act makes it necessary to detail the cash price, deposit, servicecharges, hire purchases or credit sale value, repayments terms and time period covered. In addition, right and duties of the buyer are set out in written agreement. Also the legal remedies are available as set out in the act.
- Resale price Act
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The resale price and maintenance act prohibited manufacturers and other suppliers imposing conditions for the maintenance of minimum prices of resale. The act also prohibits the enforcement of such prices by the withholding of supplies from those dealers who fail to observe rules.
- Trade description Act
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This requires goods sold to the public to bear correct descriptions and trademarks. It’s also protect customers from misleading advertisement, under this Act, it is a criminal offence, punishable by fine or imprisonment to make a false or exaggerated claim to a goods or services.
- Statutory merchandize marks Act
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This is designed to ensure that the sale of goods under trademarks is genuine and hence to protect consumers where false or forged trademarks or descriptions of goods of a misleading nature is used.
(ii)Consumers Initiated methods
These are methods which are adopted by consumers to protect themselves through forming consumers associations.
Consumers Associations
Is an association formed by consumers to safeguard themselves. The Tanzania Tenants Association is a good example of consumers association in Tanzania.
Consumers association normally deal in:
- Protesting higher price charged by businessmen.
- Informing the government on their inferior quality products sold to them by manufacturers.
- Taking legal action against businessmen who abuse the consumers.
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Consumers association can be explained as committees setup by consumers themselves to safeguard their interests. This may be setup with help of local councils. Any consumer is free to become a member of such an association payment of small fee. The association on carries out investigation into product regarding quality, prices, design and gives the results to members through published booklets. Consumers are then able to find out where the best bargains are.
(iii)Business Initiated Methods
These are methods which are adopted by businessmen to protect themselves through forming Business Associations.
Business Associations
These are formed by businessmen and are concerned with bringing up sufficient and satisfactory standards of goods and services to customers.A system known as Resale (Retail) Price Maintenance (RPM) was introduced by association, which attempts to control the price at which their products are sold to consumers, such that wherever the goods are found, the price is the same or proximate to the required rate. In East African countries the system works well with beer, soda, cigarettes, petroleum products and transport rates.