A business reporter recently called me and wanted to find out what would happen if a company treated its clients poorly. I straightaway understood the reporter’s concern. The reporter’s worry shall be put to rest when PSF launches the code of business ethics…which will act like a Bible for companies. The code is full of Do’s and Don’ts. As we wait for the code, there are all sorts of poor business practices going unchecked and the consumers have continued to suffer. And because they (consumers) have fewer options, they painfully buy/consume. Until the introduction of strong consumer protection organisations to influence operations positively, companies and parastatals have continued ripping off people. With Adam Smith’s (an all-time economist) free market economy theory, the government shall never fix prices save for a few commodities that may cause multiplier effects if left to whims of the forces of demand and supply. But through the Rwanda Utility Regulatory Authority, government is expected to tame some bad business practices. What is even more dangerous, when prospective investors sense bad business practices, or unfair dealings in the market they choose to take their money elsewhere. Total spending will be greatly reduced if consumers feel ripped-off or not getting actual for their monies. I am sure most of you have heard of Rwandans traveling to neighboring countries to do mass shopping for weddings, Easter and Christmas or their domestic wares. Where’s the problem?Critically looking at the economic sectors, there’re considerably few players. And the lower the quantity supplied the higher the price. But let’s ask ourselves; what is causing this persistent low supply in Rwanda? First of all, the level of enterprising among Rwandans is very low. Despite the scarcity of most commodities, people are hesitant to take up the business opportunities to fill gaps. But why are they hesitant? There is need to revisit requirements, rules and regulations to start business in Rwanda, across the board; small, medium and large. The taxable base is still very narrow, meaning; a few that brave and start bear the burden. After the International Tax Dialogue conference held here in Kigali last week, the tax bosses need to craft practical solutions to widen tax base in Rwanda to spread the tax burden. Believe me, the squeezing will eventually soften and more people will be encouraged to start businesses in various sectors. Out of the estimated 8.6 million Rwandans, there are only about 72,000 (only 0.8 percent) businesses (large, small and medium), according to the recent business operators census conducted by PSF. With over 85 percent of total businesses Micro Small and Medium Enterprises (MSMEs), which are mostly informal, Rwanda needs a turnaround to promote such businesses to the formal sector—doing competitive trade. Supply of commodities on the market shall eventually increase, prices will go down and businesses will certainly desist from bad practices. A few bad practices I do not expect CEOs of companies mentioned herein to take offence but instead should work around solutions to improve their businesses. In the banking sector, a number of banks, including KCB (Kenya Commercial Bank), Access Bank, BCR (Commercial Bank of Rwanda) have been reported by fellow banks for poaching senior staff from one other. Banks complain that they invest a lot of money in equipping their staff with relevant skills through rigorous internal capacity building initiatives, only to be snatched away. This might be argued that it is bad practice that needs to be checked. Simtel, the sole operator of the Rwandan switch for inter-bank ATM services is doing poorly. ATM machines are most of the times out of service. The bank managers I have talked to say Simtel switch is very inefficient. In other countries, to avoid long queues in banks, cash withdrawals to some limit have to strictly be done using an ATM card and if a client chooses to withdraw at the teller, he is charged heftily. But this cannot be achieved when it to obtain an ATM card takes ages. Besides Simtel and banks have not sensitized and publicized enough the use of ATM cards. Three months ago I walked into Fina Bank to withdraw some money and had unfortunately forgotten my cheque book at home. I was charged Rwf1000 for a cheque leaf. Just last week I found out that the same cheque leaf now goes for Rwf2, 500 which is about the cost of the whole cheque book. I asked the branch manager why the drastic increase but he could not substantiate. Walk into Fina Bank at any hour of the day, there are normally very few clients compared to what you will find in BCR or Bank Populaire. Then ask yourself how they manage to pay off salaries. If the bank cannot market well its products to attract more clients, why should then the few loyal clients suffer? This is indeed bad business practice. Bank Populaire was last year granted commercial bank status by the central bank. This means it can now play the same ball game like others…providing the same competitive services. I was shocked to find out that the bank still uses hand-filled deposit/withdraw booklets. Salary earners holding accounts with the bank always get their pays two weeks late. With the high liquidity the bank enjoys, everyone expected stiff competition and better services following its graduation to a commercial bank. This is yet to happen. In the telecommunication sector efficiency of these companies is gauged on the reliability of its network and services. The two mobile telephone companies; MTN and Rwandatel experience network breakdowns that affect a range of their data and voice services. Subscribers complain of drop calls and very low speed internet. This is bad business practice because it is greatly affecting business growth. Surprisingly no single company ever attempts to compensate subscribers. This is ethically wrong. There are a lot other bad business practices going unchecked on the market, across all sectors. My advice to stop this is that the country should make it as simple and less costly as possible such that people are encouraged to invest. The writer is a communications expert with Private Sector Foundation (PSF).
