THE TREND ECONOMY: WHO SETS THE PRICES IN DR CONGO?
I have learnt during my existence that we have two witnesses, consciousness and God. I learnt from my university years that the law does not govern metaphysical relationships, or relationships of the heart. Religion meets the needs of the heart; science to those of the mind. Unproven religion and hopeless science stand facing each other and challenge each other without being able to defeat themselves. Some scholars have come to believe that faith is the courage of the spirit that leaps forward confidently to find the truth. Principles govern where once revelation was the driving force of Orthodox causes which sometimes gave life to heterodox effects. The law was for a while under the thumb of ordeal, the Inquisition and superstitious trials. In modern law, truth is a construction of thought. It carries epithets, like this blind justice which seeks the manifestation of judicial truth.
Things judged are thus held to be true, in the light of the law, without necessarily using the torch of Diogenes. The same scientists form the truth, without epithet, an entirely external idea and material: you get closer as you accumulate more facts. Iconoclasm, syncretism, eclecticism stumble, without winning, against triumphant Cartesianism. While the world is shaken by COVID-19, good communication would prevent our people from spreading the virus quickly. History will remember that this Friday, March 27, 2020, after the announcement by the Governor of the city of Kinshasa to make confinement compulsory for 4 days, Kinshasa and Kinshasa were more numerous to stock up on food and the like.
In the Democratic Republic of Congo, we noticed that the government had carried out an austerity policy from September of 2019, to meet the demands of budgetary orthodoxy. Unfortunately, we note the depreciation of the Congolese franc against the dollar and the rise in prices observed in recent months. This situation has become so alarming that we will never forget the day of March 27, 2020. Faced with the guilty silence of the Congolese government, thus violating article 10 of this law, exposing the population to covid-19, the spectacle of the rising prices on the market were there. Sugar, chicken, rice and beans, the prices of these basic foodstuffs in Kinshasa households have soared in the market inexplicably. Many of our fellow citizens were unable to stock up on the cinematic silence of the Congolese Minister of Economy.
The price of a scoop of beans went from 1,500 to 3,000 Francs. That of sugar has increased by 90%. A bag of rice now returns on average to 49,000 FC while it was trading at 30,000 FC, a few months ago, this is what justifies the title of our article, a resourceful economy, an economy that is incapable to stabilize and provide adequate responses to urgent situations to protect consumers. Currently, the law in force is that of 2018 which sets free prices and competition. To this end, Article 86 provides that: “All the provisions of decree-law 41-63 of 24 February 1950 relating to unfair competition, of the decree-law of 20 March 1961 as amended and supplemented by decree-law 83-026 of 12 September are repealed. 1983 on the regulation of prices and the departmental decree of 15 June 1987 establishing and operating the Competition Commission as well as all previous provisions contrary to this law. ” Unfortunately, in practice, it is observed that things do not often go as well as theoretically intended, and that many practices tend to distort competition, whether they be anti-competitive or restrictive practices. of competition, whether it be illegal or unfair practices.
The illustration of the day of March 27 can be striking testimony to us.Faced with this situation, a press release from the governor’s spokesperson tells us that the containment decision has been postponed due to non-compliance with prices by economic operators. I wonder, who sets the prices in the DRC ???
I. PRICE CONTROL
Free competition governs business life. This theory means that each economic operator is free to attract and retain customers, the damage resulting for an unhappy competitor being lawful. In essence, Article 6 of this Law provides that: “The prices of goods and services are freely fixed by those who make them available. They are not subject to prior approval but must, after they have been fixed, be communicated, with the file relating thereto, to the Minister having the national economy in his attributions, for an a posteriori control. ” Price control is justified by the reasons for which it is decreed and by the Context in which it takes place. These are:
II. Safeguard public order:
When economic operators set the Prices for products to be sold, they can exaggerate. And when the population finds itself in a context where it can no longer cope with exorbitant prices, it risks exploding and insecurity will set in and public order will be disturbed. Safeguards to avoid spillage in the application of prices, the government insists on the continuous presence of economic agents with economic operators, in order to monitor the market.
1. Who sets the prices ???
Companies freely set their prices, any price discrimination is prohibited (prices must be the same for customers who buy according to the same terms). In addition, certain rules guarantee healthy competition. The Congolese legislator has rightly provided for the freedom to fix the price in article 6; The prices of goods and services are freely set by those who offer them. They are not subject to prior approval but must, after they have been fixed, be communicated, with the file relating thereto, to the Minister having the national economy in his attributions, for an a posteriori control. We note that in practice in the DRC, this provision is not respected.
2. Who controls the prices?
Indeed, while formerly, the decree-law of March 20, 1961 gave competence to the Minister having the national economy in his attributions to fix the maximum price (or “homologated price”) or the profit margin of the products (new or opportunity) or services, at the stage of production and at all stages of distribution, today, it follows from the law on free prices and competition that the control and regulation of competition fall within the competence of ” a public body called the Competition Commission. It decides on the basis of requests relating to anti-competitive practices and those of unfair competition. The organization and operating procedures of the Competition Commission are set by decree of the Prime Minister deliberated in the Council of Ministers, on the proposal of the Minister having the national economy in his attributions. Note here that this commission never saw the light of day.
3. What does the law provide for in case of non-compliance?
Despite the existence of all the legal arsenal exposed in the previous lines, Congolese business practice offers us a disappointing spectacle on a daily basis. Indeed, breaches of price legislation are provided for in article 60 of this law in these terms:”Are constitutive of price offenses in particular:
1. illegal pricing practices;
2. triangular trade;
3. stock retention;
4. illegal possession of stocks;
5. failure to invoice;
6. non-transmission of price structures;
7. the non-publication of prices and commercial documents.
Lastly, the legislator punishes the practice of the illegal prices of a penal servitude of six months maximum and of a fine which does not exceed one hundred million Congolese francs, or one of these penalties only.
I have learned from Professor Bisa Michel that a bad political decision by a competent authority in times of crisis is more fatal than a missile launched at a country in time of war by enemies. The current price practice in the DRC, especially in Kinshasa, leaves us perplexed; we have the impression that the Congolese State is no longer in charge of fixing prices on the market and yet there is a legal arsenal which represses economic operators who do not respect the legislation on the matter. Article 10 of the 2018 law on freedom of prices and competition provides that: “In a situation of crisis, natural disaster or exceptional circumstances causing or threatening to upset the market balance through disorganization of capacity to supply and store products, the Government may, on a proposal from the Minister responsible for the national economy, regulate the prices of goods and services ”. The Congolese Government through its Ministry of Economy had to anticipate with measures to safeguard the balance of the market; unfortunately, thanks to its cinematic coma, the spectacle of the price increase especially during this period of health crisis not only makes it difficult for Congolese consumers to cope with the crisis, but also exposes the population to contamination by the so-called virus Covid-19. Faced with this situation, we plead with this note for the Minister of the Congolese economy to come out of his silence, from his cinematic coma, that he will propose to the government price regulation that will protect Congolese consumers from economic operators who behave as in the Natural Park.
By Paul Vinny, Attorney and student at DES / UNIKIN.
Assistant to the faculty of law of the university of Kinshasa, DR Congo