Eliminate price cap on architecture and legal services, urges authority

Competition Authority of Kenya (CAK) Director General Francis Wang'ombe during an interview in his office. CAK's report has pointed out that to enhance provision of various services, professionals should be allowed to form joint cross-ventures that provide strong one-stop shops such as in the insurance, security stocks and banking sectors where banks have established agencies within their halls. PHOTO | SALATON NJAU | NATION MEDIA GROUP

What you need to know:

  • The Kenya Productivity Market Regulation 2015 study said controls on fees to be charged for various services locks out a highly potential demand that needs them.
  • The report also urged the government to eliminate contracts for cash agents to spur competition within the money transfer segment.
  • M-Pesa is a global success that has been celebrated for enhancing financial inclusion to far-flung areas due to its text based transfer mode that boasts of a branchless system relying solely on contracted agents who operate from kiosks, shops and restaurants among other businesses.

A Competitions Authority of Kenya (CAK) study report has recommended that minimum pricing limits set for legal and architectural services be done away with to foster growth.

The Kenya Productivity Market Regulation 2015 study said controls on fees to be charged for various services locks out a highly potential demand that needs them.

It said Kenyans would be the biggest beneficiaries as lawyers and architects advertise for their services leading to better qualities of lives of citizens who currently rely on quacks to service their various legal and building needs that end up endangering arm and limb.

Currently, lawyers and architects have a pricing manual that they must adhere to and are barred from advertising their services.

To enhance provision of various services, CAK said professionals should be allowed to form joint cross-ventures that provide strong one-stop shops such as in the insurance, security stocks and banking sectors where banks have established agencies within their halls.

The report also urged the government to eliminate contracts for cash agents to spur competition within the money transfer segment.

The Kenya PMR 2015 report says that Safaricom’s mobile payment service, M-Pesa dominates the scene with over 130,000 agents with its rivals having a combined foothold of less than 5,000.

In its report, CAK said competition in the market is good for business since transaction prices will go down while services will improve.

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M-Pesa is a global success that has been celebrated for enhancing financial inclusion to far-flung areas due to its text based transfer mode that boasts of a branchless system relying solely on contracted agents who operate from kiosks, shops and restaurants among other businesses.

The report also called for full elimination of porting charges to enable Kenyans to migrate from one mobile phone provider to another free of charge and any other encumbrances that could see them lose contact with friends, relatives and business partners.

The report said Safaricom continues to enjoy preferential treatment as the government is a major shareholder.

Currently, the firm enjoys access to a 4G licence allowing it to stream videos at a fee.

On radio spectrum used for wireless technology, the study said the facility should be evenly distributed to enable rivalry to thrive which would result in lower charges and better services.

The report said continued existence of a sole provider denies Kenyans benefits that accrue from competition.

It says there are chances that single sourcing of power exploration services by the government entities raises costs.

The report called on the government to shun single sourcing tendencies in power development ventures so as to ease the cost of realising the 5,000 megawatt power plan.