Month: March 2017

Ethiopia: Cement Production Transforming Construction Sector

The construction industry is booming in Ethiopia. Years ago, the country had been importing cement at huge costs for its developmental projects. In 2010/11 the country imported 0.3 million tonnes cement by spending millions of USD. However, owing to the growing numbers of cement factories, these days, the country has begun exporting beyond meeting local consumption.

The number of cement and chemical producing industries has been increasing from 18 in 2003 to 66 in 2007 E.C. Specifically in cement, there are 13 factories that are producing over 12 million tonnes of cement per annum.

Industry Survey Supervision and Support Directorate Acting Director Simeneh Gizaw said that currently, the number of operational cement factories are 13; additional 3 cement factories that would commence production this fiscal year are under construction.

He said that the country is working to attain the five-year cement production target, raising the national cement production capacity to 17 million tonnes by 2025. The country is on the right track for producing sufficient cement product to the local demand. Moreover, in 2005 E.C, Ethiopia began exporting cement to neighboring countries and earning foreign currency which is a remarkable stride in the construction sector.

On the other hand, the engagement of foreign investors in the sector has resulted in higher production, income tax, job creation, knowledge transferring and technology advancement. They are also supporting to empower the local cement industries by organizing training programmes.

Besides increasing the production volume, the Ministry of Industry together with stakeholders is working to create conducive environment for the construction sector through supporting and supervising. According to Simeneh, the Ministry is working in the sphere of human resource development together with Adama Science and Technology University.

Currently, the country is constructing different mega projects such as the Grand Ethiopian Renaissance Dam, sugar factories, houses, industrial parks and railway among others. “For all these mega projects cement is one of the most important inputs.”

Mugher Cement Enterprise Director General Fekadu Deme said Mugher was the beginner in cement production and there has been production and quality increment in the sector since its establishment in 1957 E.C. The ensuing industries have also been playing notable role in the national building arena.

Mentioning his Enterprise’s 5000 tonnes of cement per day supply to country’s mega projects, Fekadu noted that the enterprise is working to increase sufficient and efficient product by modernizing system, technology and resources. Provided that other producers walk in similar road they might start exporting beyond supplying the local demand.

Today, the nation is consuming a higher amount of cement for its daily growing construction projects. Locally, the main cement consumers are the government, clients (contractors), development institutions (operators) and private owners. And the cement market is also growing from time to time.

According to Zelalem Hailegiorgis, CSA Business Statistics Directorate Director, in 2007 E.C, the country secured some 8.7 million Birr from cement and related chemicals’ sale, of which 177, 245 Birr is earned from export to Kenya, South Sudan, Somalia and Djibouti. Some 11, 143 jobs have also been created in the manufacture of cement, lime and plaster production within similar period.

However, when the nation stop importing cement and begin earning from export, still there is a question of quality and management. Dr. Engineer Gashaw Washa, Deputy Director of Ethiopian Construction Project Management Institute, believed that besides boosting the product volume, the nation must work to improve the quality of cement. As to him, the current motive in using cement is not efficient.

He said that since the product is among the perishable ones, cement should be used before its service time went out. The transportation and mixing process should also be operated in a full care.

To alleviate all the drawbacks and keep the quality of cement, there should be an organized association that would offer quality transportation service by receiving cement and mixing it with the needed construction chemicals within a proper atmosphere. According to him, the establishment of concrete processing association would help to prevent these problems.

While the current motive to produce cement is very inspiring, there should be proper concern for the quality and management of the product. “Even if the process of cement production in the country is improving due to the dispersion of foreign notable producers, the management is still low. And it should be one of the mechanism to draw a lesson about the management system from these producers. Starting from the packing, all the transportation and mixing process ought to be under a strong care.”

South Africa: Feature Phones Make Huge African Comeback

Smartphone sales in Africa are slowing down as feature phones drive growth on the continent.

According to data provided by industry tracker International Data Corporation (IDC) the smartphone market totalled 95.37 million units by the end of 2016.

While this represents growth of 3.4% year-on-year, it is significantly less than the double-digit growth trends of previous years.

However, the main driver of mobile phone sales have been feature phones which grew by a whopping 16.1%, taking the devices to 56% of the total African handset market.

“Africa has always been a tough market for mobile phone companies to crack, and in 2016 that challenge got even harder,” said Simon Baker, programme director for mobile devices at IDC CEMA.

He added that currency fluctuations in North Africa and the devaluation of the Nigerian naira contributed negatively to the growth of smartphones.

But price also plays a key role in smartphone adoption in Africa.

“To grow significantly in these markets, vendors have to be able to address the continent’s large low-income population by providing phones that are priced very competitively. As such, global vendors are cautious of the lower-priced Chinese brands now entering the market and are keeping a close eye on them,” said Ramazan Yavuz, research manager for mobile devices in Africa at IDC CEMA.

Samsung leads the African market with 26 million units, followed by Transsion and Huawei.

IDC said that 3G handsets accounted for more than half of new smartphone shipments, but 4G devices increased their sales by 50%, leading the organisation to predict that 4G devices will dominate Africa by 2018.

Source: News24

Kenya: Sh4bn Hacking Suspect Lives Large and Brags Big

On January 20, Alex Mutuku boarded the Lady of Zanzibar, the 554-passenger ferry that operated between Dar es Salaam and Zanzibar and Pemba islands. Before that, he took a picture of the red ferry, also known as Kilimanjaro V. “I hope she takes care of me till there,” he wrote on Facebook.

It was Friday, and the time was 10.50pm. A friend immediately commented: “When I grow up, I want to be like you.”

Police now say the 28-year-old Mr Mutuku is the biggest nightmare for banks and other institutions and is a prime suspect in the hacking of the Kenya Revenue Authority’s computer systems.

On Tuesday, he was in a Nairobi court, charged with hacking the KRA system, leading to a loss of Sh4 billion.

A man who displays his exotic lifestyle on social media, Mr Mutuku is the envy of his peers.

Alex Mutungi Mutuku is not your ordinary IT expert and has other pending cases on electronic fraud. But that has not stopped him from his frequent travels. In mid-January, he posting his exploits while on a road trip from Burundi to Zanzibar through Tanzania.

“When you are busy sleeping, I am having a night swim at this neon-lit swimming pool,” he wrote about his experience at Safari Gate Hotel in Bujumbura before he took a bus ride by the shores of Lake Tanganyika.

AMAZING PLACE

“Nothing can stop me…I’m all the way up! All the way up!” he posted the next day from Zanzibar and listed his itinerary: Stone Town, Nakupenda Beach, Jozani Forest, Prison Island, Beit al Sahel, Beit Al Amani, The Old Fort, Christ Church Cathedral and Nugwi Beach.

At the beach, he took a few selfies and posted them on Sunday before going home. He wrote: “I can’t honestly say Zanzibar is a wrap because you need a whole two weeks or more to visit every place here. Sadly, I have to leave. This was the most amazing place I have ever visited.”

Back home, on January 25, he took a picture of his Kawasaki motorcycle, christened Ninja Monster: “I love you bae.”

Mr Mutuku, who denied the charges before Chief Magistrate Francis Andayi, returns to court next week, when it will either grant him his request to be freed on bond or allow the police to detain him for 40 days.

Meanwhile, he and other people, believed to be his accomplices and arrested together with him on March 8, continue to be under the custody of the Special Crime Prevention Unit (SCPU) and the Flying Squad, who have been pursuing hackers behind a money siphoning wave that has hit several institutions.

Mr Mutuku was arrested at his home in Roysambu’s Lumumba Drive and police accuse him of being part of a group that has been staging salami attacks on banks and financial institutions.

CYBER ATTACKS

In IT lingo, a salami attack is when small cyber attacks add up to one major attack that can go undetected due to the nature of this type of cyber crime. It is also known as salami slicing.

A police profile of Mr Mutuku says: “He is linked to Exposure Interlink Agencies Ltd and Tylex Construction Company Ltd.”

Police also linked him to five vehicles — a Toyota saloon registration KBX, a Toyota station wagon KBN, a Toyota van KAY, another station wagon KBV and a Land Cruiser KBY.

The profile says Mr Mutuku is a “self-employed programmer” and holds a BSc degree in information systems from the University of Nairobi, from which he graduated in 2012.

“He is skilled in Java, C++, Web languages, PHP, Python.”

Mr Mutuku’s friends who did not want their names published, said they know him as a software dealer and that he was on several occasions hired by companies to conduct penetration tests on their systems.

Penetration tests are safety measures carried out through hacking of systems to ascertain the level of their vulnerability to hacking and pinpoint weaknesses and even fix the gaps in the security of a system.

“I have been friends with him for several years and all I know is that he is an IT guru and can fix a problem with computers in a flash,” said a source. “He also develops and sells mobile applications which are hosted on Google Play.”

Mr Mutuku’s life is displayed on his Facebook page. On January, 8, 2016, he posted a picture of himself holding a white dog while leaning against what seems to be his favourite motorcycle. There was a car in the background. He captioned it: “A house, two cars, bikes, a dog. What more could one ask for? Thank you Lord!”

The description matched that in his statement with police, in which he said his company only did the businesses of solving people’s “IT problems”.

UNDER SCRUTINY

“His statement is under scrutiny and sharing its contents will not be prudent at this particular moment as it contains a lot of details that we are using in our investigations as we pursue other suspects in his circles,” said head of SCPU Noah Katumo, adding that three other suspects believed to be linked to Mr Mutuku had been arrested and would soon be charged.

A day after Mr Mutuku was arrested two weeks ago, a laptop was found hidden in KRA’s main network chambers on the third floor of Times Tower and connected to one of the ports.

In 2015, Mr Mutuku was arrested on suspicion of manipulating and breaching Safaricom’s system and making away with electronic airtime worth Sh20,000.

He had earlier been accused of demanding Sh6.2 million in Bitcoins from NIC Bank in December 2014 and threatening to publish confidential information he allegedly obtained after hacking into the bank’s system. He was also believed to be behind the theft of the bank’s Sh2.88 million on diverse dates.

On March 7, 2013, he bragged on his Facebook wall that he was able to download a copy of the Daily Nation electronic newspaper for free using a programme he had developed in his first year in university.

“Wow! This program still exists! Developed it in my Freshman year/UON. Stumbled upon it in my Hard Drive and thought I would share it now… It downloads the whole Daily Nation e-paper free!” he wrote while sharing a link and a source code for the e-paper app.

Mr Mutuku topped his class at Kathiani High School, Machakos, with a mean grade of A (plain).

It is not clear whether he got married after his June 16, 2015 suicide attempt, when he slit his wrists after claiming that “Delvine”, a woman he had been dating, had cheated on him.

Kenya Power Staffers, 6 Others Arrested Over Theft of Street Lights, Vandalism

Nairobi — Eight people including two staff of Kenya Power were arrested over the weekend in connection to vandalism and theft of electricity distribution equipment.

This follows intensified operations carried out by the company’s security team countrywide to weed out vandals and illegal electricity connections.

Robert Njenga Githige, a driver attached to Kenya Power’s Nairobi West Region was arrested for failing to account for 36 street lights out of the 79 he had collected from Likoni Road Stores for delivery to Dagoretti Depot.

He appeared before Milimani Law Courts on Monday morning and was released on a cash bail of Sh300,000 and surety of Sh500,000 pending mention of the case that is scheduled to take place on April 10, 2017.

At the same time, five people were arrested at Kaunyweni village in Thatha, Machakos County in connection with vandalism of two 50 KVA transformers.

The stolen equipment was intercepted as it was being transported to an unknown customer in Meru.

Those arrested are Andrew Lusaba (Kenya Power staff attached to Matuu Depot), James Muli, (former staff at Mlolongo Depot), Godwin Lihali (Contractor) and the driver of the vehicle used to transport the transformers and his assistant.

Elsewhere, Vitalis Wanyama was apprehended at Kitale Depot for recklessly cutting down trees resulting to damage of a power line and poles. Another suspect, Linus Alweny, was also seized at Sports Club Estate, Uasin Gishu County while removing LV fuses from transformers in the area.

The arrests come less than a month after a Kenya Power staff was charged at Kajiado Law Courts for constructing an illegal line and uprating a transformer.

Kenya Power’s Security Services Manager Major Geoffrey Kigen (Rtd) cautions members of the public against engaging in illegal activities such as theft of electricity and vandalism.

Nigeria: Dollar Slips to N365 At Street Market, As CBN Crashes Rate Further

The dollar slipped further to N365 at the street market yesterday just as the Central Bank of Nigeria (CBN) announced reduction for school fees, medical bills and travel allowances from N375 to 360/$1.

The CBN in a statement said it is to sell FX to banks at N357/$1, while banks will sell to their customers at N360/$1 for invisibles (BTA, Medical bills, fees etc).

“The CBN has released the sum of $85 million for sale to Deposit Money Banks (DMBs) at the rate of N 357/$1 for onward sale to retail end-users at not more than N360/$1, for invisibles such as Basic Travel Allowance(BTAs), medicals, school fees, etc,” the statement indicated.

The Bank yesterday, also offered the sum of $100 million to authorized FOREX dealers in the interbank wholesale window to meet the requests of genuine wholesale customers.

CBN’s Acting Director in charge of Corporate Communications, Isaac Okorafor, said the rates in the interbank window for wholesale transactions would still be determined by activities in the interbank market.

Traders in Abuja and Lagos said the market currently is into confusion as they are no specific rate for the forex. According to Ibrahim Shehu, most traders are avoiding buying the dollar even as low as 360 due to the inconsistency of the rates.

Ethiopia: Cement Production Transforming Construction Sector

The construction industry is booming in Ethiopia. Years ago, the country had been importing cement at huge costs for its developmental projects. In 2010/11 the country imported 0.3 million tonnes cement by spending millions of USD. However, owing to the growing numbers of cement factories, these days, the country has begun exporting beyond meeting local consumption.

The number of cement and chemical producing industries has been increasing from 18 in 2003 to 66 in 2007 E.C. Specifically in cement, there are 13 factories that are producing over 12 million tonnes of cement per annum.

Industry Survey Supervision and Support Directorate Acting Director Simeneh Gizaw said that currently, the number of operational cement factories are 13; additional 3 cement factories that would commence production this fiscal year are under construction.

He said that the country is working to attain the five-year cement production target, raising the national cement production capacity to 17 million tonnes by 2025. The country is on the right track for producing sufficient cement product to the local demand. Moreover, in 2005 E.C, Ethiopia began exporting cement to neighboring countries and earning foreign currency which is a remarkable stride in the construction sector.

On the other hand, the engagement of foreign investors in the sector has resulted in higher production, income tax, job creation, knowledge transferring and technology advancement. They are also supporting to empower the local cement industries by organizing training programmes.

Besides increasing the production volume, the Ministry of Industry together with stakeholders is working to create conducive environment for the construction sector through supporting and supervising. According to Simeneh, the Ministry is working in the sphere of human resource development together with Adama Science and Technology University.

Currently, the country is constructing different mega projects such as the Grand Ethiopian Renaissance Dam, sugar factories, houses, industrial parks and railway among others. “For all these mega projects cement is one of the most important inputs.”

Mugher Cement Enterprise Director General Fekadu Deme said Mugher was the beginner in cement production and there has been production and quality increment in the sector since its establishment in 1957 E.C. The ensuing industries have also been playing notable role in the national building arena.

Mentioning his Enterprise’s 5000 tonnes of cement per day supply to country’s mega projects, Fekadu noted that the enterprise is working to increase sufficient and efficient product by modernizing system, technology and resources. Provided that other producers walk in similar road they might start exporting beyond supplying the local demand.

Today, the nation is consuming a higher amount of cement for its daily growing construction projects. Locally, the main cement consumers are the government, clients (contractors), development institutions (operators) and private owners. And the cement market is also growing from time to time.

According to Zelalem Hailegiorgis, CSA Business Statistics Directorate Director, in 2007 E.C, the country secured some 8.7 million Birr from cement and related chemicals’ sale, of which 177, 245 Birr is earned from export to Kenya, South Sudan, Somalia and Djibouti. Some 11, 143 jobs have also been created in the manufacture of cement, lime and plaster production within similar period.

However, when the nation stop importing cement and begin earning from export, still there is a question of quality and management. Dr. Engineer Gashaw Washa, Deputy Director of Ethiopian Construction Project Management Institute, believed that besides boosting the product volume, the nation must work to improve the quality of cement. As to him, the current motive in using cement is not efficient.

He said that since the product is among the perishable ones, cement should be used before its service time went out. The transportation and mixing process should also be operated in a full care.

To alleviate all the drawbacks and keep the quality of cement, there should be an organized association that would offer quality transportation service by receiving cement and mixing it with the needed construction chemicals within a proper atmosphere. According to him, the establishment of concrete processing association would help to prevent these problems.

While the current motive to produce cement is very inspiring, there should be proper concern for the quality and management of the product. “Even if the process of cement production in the country is improving due to the dispersion of foreign notable producers, the management is still low. And it should be one of the mechanism to draw a lesson about the management system from these producers. Starting from the packing, all the transportation and mixing process ought to be under a strong care.”

Nigeria: FEC Approves N80bn for Second Niger Bridge, Roads Construction in 12 States

The Federal Executive Council, FEC, yesterday, approved N80 billion for the construction of roads in 12 states of the federation.

It also approved N150.84 million for the consultancy and engineering design for access roads 1 and 2 to link Asaba in Delta State, Onitsha in Anambra State and the Second Niger Bridge.

In the same vein, the council gave its nod to the construction of a 5km road to link Ring Road III to Wasa Junction with Karshi-Ara-Apo Road in the Federal Capital Territory, FCT, Abuja, at the cost of N2.454 billion.

The Minister of Power, Works and Housing, Babatunde Fashola, alongside Minister of FCT, Bello Mohammed and Minister of Information, Lai Mohammed, made the disclosures while briefing State House correspondents at the end of the FEC meeting presided over by President Muhammadu Buhari at the Presidential Villa, Abuja.

According to Fashola, the 12 states include Adamawa, Taraba, Sokoto, Zamfara, Bauchi, Plateau, Osun, Kwara, Kano, Oyo, Enugu and Kaduna.

He said: “The second is approval for 12 roads in various states. The roads are at the cost of N80 billion.

“The approval is also for the engineering and consultancy design for access roads 1 and 2 to link Asaba in Delta State and Onitsha in Anambra State to link the Second Niger Bridge project.

“Subsequent to the award of further works on the Second Niger Bridge, we have started work now by this approval on the design of the link road that will connect the two states to the bridge.

“The design is expected to be completed in six months and we will start procurement and as the bridge advances we can then connect the two states. The contract sum is N150.840 million.”

The minister, who noted that the Council gave approval for various power projects, said: “There was also approval for power projects. It relates to the extension of the consultancy and project management contract. It is an existing contract for the Katsina Wind Energy Farm project. It was awarded in 2010 and should have been completed in 2013.

“The expatriate who was implementing it was kidnapped and when he was eventually rescued, he never came back and that delayed the project.

“But we have revived the project. A new contracting team is back on site. The contract of the consultants representing us has expired and so we are extending his contract to cover new period of completion.

“The last contract on power approved is the power sector recovery programme which we presented to council. It is a programme that comprises many policy actions, operational and financial interventions that need to be carried out by government to improve transparency, service delivery, performance of DISCOS, transmission companies, the entire value chain in order to create more viable power sector that is private sector driven.

“Some of the highlights of the programme are how to simplify and reduce the cash deficits that have accumulated as a result of previous unilateral reductions of tariff by the last administration during the running of the elections, how to make the DISCOS viable, accountable, responsive to customers, ensure stability of the grid and expansion of the grid and transparency and communication within the sector.”

On his own part, the Minister of FCT, Bello Mohammed, stated that three key infrastructure projects were also approved by the council.

The projects include the Abuja Mass Transit Lot 1B (26.77km) which is from Ring Road I; the construction of remaining part of Lot 1A (5.76km); rolling stocks and workshop equipment for maintenance of trains.

The $1.79bn projects awarded to China Civil Engineering Construction Company, CCECC, would be funded by NEXIM Bank.

Other projects for the FCT are Jahi District Infrastructure, which cost was put at N19.473bn and a 5km road to link Ring Road III to Wasa Junction with Karshi-Ara-Apo Road estimated to cost N2.454bn.”

Nigeria: CBN Sets Upper Limit for Dollars Sales to Customers

The Central bank of Nigeria, CBN, on Monday directed all deposit money banks to immediately commence the sale of foreign exchange to their customers at not more than N360 to the dollar.

The spokesperson of the CBN, Isaac Okarafor, said all customers requesting forex for their basic transport allowance and personal transport allowance, tuition and medical fees, would henceforth get at an exchange rate not more than N360 to the dollar.

“The CBN will sell to commercial banks at N357 per dollar,” Mr. Okorafor said. “Banks are to post the new rates in their banking halls of their branches immediately.”

He said CBN would send examiners to banks to ensure the new rates are implemented, warning that banks are prohibited from selling forex meant for invisibles to bureau the change..

Last week, inter-bank market transactions ended on a high, with Naira closing at about N375 to the dollar on Wednesday.

Traders were optimistic that the national currency value could rise to about N350 against the dollar.

Zimbabwe: Mudede-Run Immigration Department Refusing Bond Notes

THE immigration department is rejecting payments in bond notes at a time the government is threatening to prosecute retailers who are also refusing the surrogate currency or charging a premium for its use, NewZimbabwe.com has established.

In a bid to address crippling shortages of the preferred US dollars, government last November launched the bond notes, decreeing that they had the same value as the American greenback.

Activists protested the move at the time and the market is now showing its own scepticism about the claimed value of the surrogate currency. A three-tier pricing system has since emerged whereby retailers charge a premium for those paying in bond notes.

On Wednesday, the Reserve Bank of Zimbabwe repeated warnings that retailers would face prosecution over the issue.

“I am aware of (illegal) activities that are happening. Some of the retailers have a three-tier pricing system; for bond notes, swiping and US dollar. I want to be very clear about this, (it) is illegal,” deputy RBZ head Kupukile Mlambo told business leaders at a meeting in the capital.

“We have not taken any action on anybody, but we have the Bank Use Promotion Act that we can invoke. I really want to encourage retailers doing so to relook into that.

“The last thing we want is to start arresting people. We want a friendly (environment) because this is a contested environment.”

However, NewZimbabwe.com has established that the Tobaiwa Mudede-run immigration department is also rejecting payment for some services in bond notes.

A company official who visited department offices in Harare to renew residency permits for her foreign investor bosses said she was shocked when told she could not pay in bond notes.

“First, I was told that we must now pay $100 to have the permit stamped on each passport, which is a new requirement,” the company executive said, preferring not to be named to protect the identities of her bosses.

“Secondly, they refused payments in bond notes. I was told that I could only pay in US dollars which is ridiculous because it’s near-impossible for one to get these from the banks.

“When I protested, asking why the government was refusing its own money, the immigration officers said they were only following a ministerial directive to that effect.”

Efforts to get a comment from Mudede and Home Affairs Minister Ignatius Chombo were not successful late Wednesday.

However, People’s Democratic Party (PDP) spokesman Jacob Mafume said; “It’s madness that they impose a currency which they (government) do not want to use themselves.

“But then these bond notes are not money. They are a vehicle for theft.”

Outrage over the immigration department’s insistence on US dollar payments for residency permits exploded on social media last month.

Said Natasha Stals Greef on the ZimVine Facebook page; “Im in shock…

“My aunt has just been to the immigration department to have her Zim residents permit stamped and they are refusing payment in bond notes. Like wtf???

“It’s their government that made this paper money and now they don’t want to use it. Sorry for the rant but I just had to…”

One Karen Munyati explained; “Their argument is that immigration fees have always been charged in for ex and so they cannot accept bond notes as they are not forex.”

Susanne Garnett responded; “This is not an immigration fee; this is for Zimbabwe-born people to get a residency stamp purely because they choose to hold a different passport. They don’t do this anywhere else. It’s all about punishment and revenue.

Justine Roberts added; True, but the problem in this instance is that this resident’s sticker *by definition* is for people with foreign passports who are *permanent* residents of Zimbabwe …

“… the vast majority of which have lived here all of their lives, and have no more access to USD than any other Zimbabwean!!

“Of course, they can ask for immigration permits for foreigners who are visiting in USD, but to not accept bond notes from permanent residents is just wrong!

One Regan Lavendale concluded; “The point here isn’t about swiping but about using the bond note which the Government of Zimbabwe stated is LEGAL TENDER & is the same value as the US Dollar!

“I remember some time back that the Reserve Bank Governor saying that all government departments should accept BOND NOTES as LEGAL TENDER!!”

South Africa: Competition Commission – Fresh Produce Dealers ‘Collude’ to Up Food Prices and Muscle Out Emerging Black Farmers

The Competition Commission is waging war on corporate collusion and on Thursday it conducted raids on nine fresh produce market agents. The implicated companies deny the allegations, but it could be another case of corporate collusion affecting the poor. By GREG NICOLSON.

The Competition Commission on Thursday raided nine fresh produce dealers based at the Johannesburg Market and Tshwane Market after the Department of Agriculture, Forestry and Fisheries reported cartel conduct, which could limit the development of black farmers and raise prices in the food sector – affecting vulnerable households the most.

According to the Competition Commission, the country’s largest fresh produce market agencies were suspected of slashing prices to undercut market entrants, before raising prices when smaller companies run out of stock – aiming to suppress competition – and using identity to discriminate on price. The case is the latest in a number of high-profile investigations by the Competition Commission, dedicated to probing anti-competitive behaviour.

Competition Commissioner Tembinkosi Bonakele said the food sector is a priority and cartels of any size will be hounded. “The Commission is concerned with the prevalence of collusion in the food sector, as higher prices of these commodities affect the most vulnerable households. The poor spend a disproportionally high percentage of their income on food. Also, cartel activities in this sector serve to keep out emerging black farmers and agents out of the market.”

The nine companies suspected of collusion are Botha Roodt Group, Subtropico, RSA Group, Dapper Market Agents, DW Fresh Produce, Farmers Trust CC, Noordvaal Market Agents, Marco Fresh Produce Market Agency, and Wenpro Market Agents CC. “Given the sheer size of the suspects, the suspected cartel conduct results in large proportions of freshly produced fruits and vegetables being sold at much higher prices than the average daily selling price,” said the commission.

It accused the companies of agreeing to charge “way below” market price in the mornings, forcing smaller competitors to match the low price, and then increasing prices later in the day when the smaller competitors have run out of stock. This would force new entrants to the market, as Bonakele noted, potentially emerging black farmers, to close as they would sell their stock below market value, without sufficient stock to continue trading when agents increase their prices.

“During the search the commission will seize information, documents, data and records that have a bearing on the investigation,” said the Competition Commission’s statement. It said there were sufficient grounds to act on a violation of the Competition Act.

Sipho Ngwema, spokesperson for the Competition Commission, said that while investigations continue it seems black-owned companies were affected “not exclusively, but largely”. Those who discriminated on identity could relate to race or whether the agents had a favourable relationship with you, “but the people who bear the brunt are largely black people”.

Thursday morning’s dawn raid, he said, was in search of evidence to corroborate claims that the alleged colluders lowered their prices in the morning to squeeze out smaller fresh produce agents before increasing prices later in the day to boost profit margins after smaller producers had run out of stock.

Daily Maverick on Thursday tried to reach a number of the implicated companies.

Anton Vos, managing director of Subtropico, said his company co-operated fully with the investigation. “There’s no such thing as price fixing; there’s no cartel,” he said. Issues of supply and demand determined prices. He claimed the investigation is “wrong”.

Jaco Oosthuizen, managing director of RSA Group, said: “We are giving our full co-operation in this information gathering exercise, and will continue to do so, and as far as trading and operations go, it is business as usual.”

As yet, the Competition Commission has not referred the suspected companies to the Competition Tribunal.

The commission has recently made news for investigating cases against banks accused of manipulating dealings in foreign currency, particularly the trading of the rand. Unilever has been targeted for dividing markets related to goods in the bakery and cooking sector. Recruitment advertising agencies have also faced the commission’s wrath for allegedly agreeing on listing prices.

The case against the banks has been the most publicised case, largely because the financial sector has been criticised as a leading symbol of “white minority capital”. On Wednesday at the Competition Tribunal, the Competition Commission’s Makgale Mohlala defended the decision to allow CitiBank, involved in the forex collusion, to settle for R69.5-million.

Colluding companies can be fined 10% of annual affected turnover (affected turnover relates to a company’s turnover in the period the infringement was committed, not the whole company turnover). Often they settle for much less when companies confess to their crimes and implicate others. Even those who don’t snitch on their fellow colluders are often allowed to settle for less than 10% due to a focus on expediency. Criminal charges for collusion were introduced last year, but no cases have as yet come before the courts, largely because infractions currently being exposed were committed before the law’s promulgation.

The allegations against the fresh produce agents, as Bonakele suggested, might affect poor South Africans the most. Given its pursuance of recent cases, the Competition Commission won’t rest until it finds out.