Malawi commission probes education textbook cartel: Crackdown on anti-competitive behaviour
The Malawi Competition and Fair Trading Commission (CFTC) has launched investigations surrounding a possible cartel, collusion, price fixing and insider trading by internal and local textbook traders to the Ministry of Education, Science and Technology (MoEST).
CFTC Executive Director Charlotte Wezie Malonda confirmed to Nyasa Times that they want to crackdown on anti-competitive behaviour by some suppliers in the textbook industry.
The investigations into criminal practices follows a firm petition led by Human Rights Consultative Committee (HRCC), a network of 90 civil society organisations and NGO, which singled out a United Kingdom-based education text book supplier Mallory International who are in a joint venture with local company Maneno Books Investments.
“I can confirm that we received a few complaints about allegations of a cartel and other procurement malpractices hence our commencement of the investigations to get the bottom of the matter,” Malinda told Nyasa Times.
She said the investigations are underway.
“We are collecting and interviewing several officials. You will have to bear with us that criminal investigations of this nature take a long time to conclude so bear with us,” said Malonda.
However, Mallory International JV Maneno Enterprise deny wrong doing and welcome any investigation into the books industry that will exonerate them from the negative public perception.
Other companies being investigated are Jhango Publishers owned by Dr. James Ng’ombe, Pearson Education Africa based in South Africa, Dzuka Publishing Company managed by Mrs Maureen Masamba and UK based Trade Wings International.
A government official Wiliam Lapukeni, the Chief Procurement Officer at Ministry of Agriculture, he was moved from Ministry of Health and again transferred out of Ministry of Education following accusation of inside dealing with Trade Wings in the recent African Development Bank tender. He faced similar accusations whilst at Central Medical Stores.
Lapukeni is accused of passing sensitive procurement information to Trade Wings International which has resulted in the later taking legal action against the Malawi Government.
Trade Wings International did not respond to Nyasa Times questionnaire sent to their Director Raxit Shar Shah on the inside dealings accusations. Their company lawyer Ishmael Wadi could also not comment.
Nyasa Times understand that some tactics used by the cartel to suppress competition is bullying Ministry of Education officials during the procurement process and once a contract is given to another a non-participating company, they connive with publishers to trigger astronomical rises in textbook prices for new entrants for instance charging as high as US$20 for a book that normally sell at US$8. The price is on the high end of the scale.
The cartel also colludes with publishers to deny new entrants Letters of Manufacturer’s Authorisation to make their bids be disqualified for not being compliant.
HRCC and Forum for National Development (FND) allege that Mallory International JV Maneno Enterprises have been in joint venture business for over years at Ministry of Education and adopt cartel-like pricing for textbooks.
“In our investigations we established that since the start of this system, a consortium or a joint venture of Mallory International and Maneno Enterprises have been awarded contracts one after another until 2008 when the award was split between them and Papermine Limited – a Malawian Company. This did not go down well with the consortium,” reads the FND statement in part.
In an interview with Managing Director for PaperMine, Mike Uko, he said his firm went through a “hell of intimidations” when he was awarded a contract by Ministry of Education in 2008 to the point that he had to change his business from PaperMine to now Tiling Solutions in fear of his life.
Meanwhile, FND programs manager Fryson Chodzi has commended CFTC for commissioning the investigations on the Mallory and Maneno joint venture and their collusive behaviour.
“It is a welcome development because the cartel has been taking Malawians for a ride. As Malawians we need to take our destiny not being controlled by the imperialists. We will continue campaigning and demonstrating against government departments who abuse our people and deny them opportunities. Who said Malawian companies cannot deliver? We are saying government and her entities should give our indigenous people a chance,” Chodzi said.
He said it is high time to end the culture of collusion and operating in cartels – a criminal act under Malawi laws.
If found in wring doing, the companies involved would be banned from supplying their products and services to the Malawi Government and agencies besides facing prosecution which will turn the corner on deterring cartel behaviour.
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