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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 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.
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.

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.

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.
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 sanit
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.
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.
  1. Price control Act
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.
  1. Business premises Rent Tribunal
This tribunal ensure that reasonable rents are charged by the landlords from their tenants.


The various laws used by the government to protect consumers include the following
  1. Sale of goods Act
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.
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.
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.
  1. Food and Drugs Act
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.
  1. Weights and Measures Act
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.
  1. Resale price Act
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.
  1. Trade description Act
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.
  1. Statutory merchandize marks Act
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.
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 bri
nging 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.
Consumer can protect himself or herself before and when buying by doing the following:
i.A consumer can gather enough information about the price of product before doing the actual purchase. This can be by moving around several shops and reading various bulletins which provides such information.
ii.A consumer should claim for necessary documents such as receipts, invoices warranty and so on when doing purchases. These documents will help him or her during the period of complication.
iii.A consumer should obtain the necessary advice from other people about a product which has been advertised in order to protected them cheated by unfaithful leaders.
iv.Also consumer can protect himself or herself via non government and non commercial consumer organization in the market.
  1. Price control advisory committee.
This is statutory committee set up by the government and representative of business, consumers and public authorities. It is charged with overseeing the price structure, review of prices, application from business concerns for price changes and recommendations to the Minister of finance.
2.Trade policies
These are policies created by the government to control trade. Examples of these policies include the following:
a. Export promotion
Export promotion is done through
i.Incentives given to investors in the export sector of the economy
ii.Export promotion organization (BET) Board of External Trade.
iii.Trade expansion through participation in existing international agreement e.g. Lome Convection
iv.Lowering of export tariffs
b. Protectionism
Protectionism is a part of the trade policy aimed at controlling imports and promoting exports as a safeguard to the economy against the adverse effects of international trade.

Forms of protectionism
Protectionism can be in different forms as explained below:
i.Import tariffs/duties.These are taxes on goods imported .Import tariffs lead to an increase in prices of imports in relation to local produced goods, the increase in price of imports influence local consumers to opt for locally produced goods and thus leads to fall in imports.
ii.Import quota.An import quota is a maximum amount of certain commodities to be imported at certain period of time, quota also discourage import.

iii.Exchange control.In this measures the central
bank provides limited amount of foreign currency to importers to limit them from importing larger quantities of imports.
iv.Embargo/Total ban.This is a policy of prohibiting import of certain commodities which have some negatives cultural or economic impact such as ponography, cocaine and second clothes.
c. Devaluation.The government deliberately reduces the value of its currency against other currencies. This lower the general price of locally produced goods and makes imported goods more expensive. In this way the consumers stops consuming imported goods and buy locally produced goods. This discourages traders from importing goods from other countries.
d.Revaluation.This is an action of the government of increasing the level of domestic currency. Revaluation aims at making imports cheap.

e. Trade Liberalization (Free trade). Free trade in international trade refer to trade policy where by a country eliminates all trade barriers such as tariff and import quota.

f. Business License.This is permitting document that allow a businessman to carry out a certain business. License are given by the government.

4. Fiscal measures.This are measures that influence economics activities by using taxes and expenditures. The government can control trade by either lowering or increasing tax.
5. Government Investments.The government facilities commerce by investing in the following:

a. Public services.The government provides some services to the public. These are type of services which cannot be provided by the private sector so efficiently e.g. Defence and law enforcement.
b. Capital and securities market.The governments is involved in capital market by issuing stocks and extending loans. It participate in security market by buying security from the public and selling them back to the public.

c. Public corporations.The government establishes public corporations to engage in production of goods and provision of services. E.g. Tanzania Electrical Company (TANESCO) ,Air Tanzania Company Ltd National Insurance (NIC), Tanzania Broadcasting Corporation (TBC) etc.

d. Provision of credits and subsides.The government sometimes establishes special fund for providing credits to business. It also provide subsides to producers.A subsidy is the government assistance to local producers inform of funds or reduced price of inputs,subsidies enables producers to produce goods at lower cost and thus reduce the price of local goods encourage consumer to prefer domestic goods than imported goods which become relatively more expensive.

  • To promote investment (both local and foreign) in the country, this is done by way presenting our investment opportunities, providing brochures, investors guides, e.t.c.
  • To facilitate investors from the initial stage of their investment to the last. This is from identification of land company registration, business licensing, work permit, residence permit, tax issues, etc. as one stop facilitation Centre.
  • To give investors after care services by visiting them and see if they have any problem that T.I.C can help so that they can smoothly. continue with business and eventually expand.
  • To advice government on investment policy issues.
The government has two ministries which are directly involved in facilitating commercial activities in the country.
These ministries are
i.Ministry of Trade and industries
ii.Ministry of Finance
In Tanzania, the ministry concerning with business affairs in the Ministry of Commerce and Industries. This ministries is responsible for the promotion and development of home and foreign trade. The ministry regulated the retail and wholesale activities. It also responsible for providing advisory services to traders. It controls all imports from other countries and protects home infant industries from unfair competition from foreign multinational corporations.
Even through organization of this ministry may always change, it is basically divided into the following departments:
i.Administrative department ii.Department of commerce iii.Department of industries.
i.Administration department (section)
This is charged with the responsibility of overall administration and formulating of the ministry’s policies.

ii.Department of commerce
This department is responsible for the promotion of commercial sectors i.e. Trading and commercial services.
This departments is sub divided into:
i.Internal trade section
ii.Commercial trade section
iii.Export trade guarantee section

1. Internal trade section
This section is concerning with the regulation of trading activities within the country. It is responsible for:
i.Ensuring that the weight and measures used by traders and businessmen are of required standards.
ii.Controlling prices of essential commodities such as fuel, sugar, etc.
iii.Ensuring that the essential goods are equally distributed within the country.
iv.Issuing of trading license to the prospective retailers and wholesalers.
v.Provision of training and advisory services to traders and ministry staff.
vi.Supplying business information and statistics to the business firms.
vii.Solving trade disputes.
2. External trade section
This section responsible for promotion and development of Tanzanian products in international market. Most of its activities are performed by the Board of External Trade (B.E.T) which was instituted in 1977 and started operations in the same year.
It was set up with the main objective of keeping a continuous review of export promotion policies in consultation with the concerned Trading and Industries Ministry. It makes an intensive study of the problems facing export of the country and makes recommendations to the government from the time to time for securing its policy adjustments to stimulate exports.
It gives particular attention to product development, improvement in export marketing techniques, provision of commercial services to exporters, import substitution. Etc.



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