Why Rwanda’s new consumer protection bill doesn’t regulate prices

As Parliament reviews the proposed competition and consumer protection law, questions have emerged over its silence on price regulation. During a session on July 10, some members of the Committee on Economy and Trade expressed concern that, without clear guidelines on profit margins, the law may fall short in shielding consumers from exploitative pricing practices. They cited cases where traders import goods cheaply and resell them locally at inflated prices, potentially taking advantage of consumers' limited awareness and choice. The bill is intended to replace the 2012 law on competition and consumer protection, with a broader mandate to strengthen market fairness and consumer rights in both physical and digital marketplaces. ALSO READ: How Rwanda’s new bill seeks to protect e-commerce buyers MP Christine Bakundufite pointed out that significant price disparities for identical products indicate a lack of transparency that puts consumers at risk. “For example, one person might buy a computer at $1,000 while another pays $1,500 for the same brand. This often happens because consumers don’t know the market prices, leaving them vulnerable,” she said. While high prices for locally made goods can be explained by the expenses on importing raw materials and the associated production costs, some traders purchase products cheaply abroad and sell them in Rwanda at exaggerated prices. “A trader might bulk-buy products at a low price and sell them for triple the cost, which is excessive and unfair to consumers,” she said, questioning whether the bill includes provisions to regulate profit margins. Although trade is generally based on voluntary agreements between sellers and buyers, Bakundufite stressed the need for value for money and fairness in pricing. MP Marie Thérèse Uwizeye voiced similar concerns, pointing out that consumer choice is limited in cases resembling monopolies. “For instance, some life-saving medicines are only available through a single pharmacy. These drugs are priced exorbitantly, and since they are essential, the consumer has no choice but to buy them,” she said. “In such situations, consumer protection is obviously lacking.” Uwizeye added that price controls or caps should be considered in cases where products are essential and difficult to find, suggesting that prices should reflect a reasonable markup over manufacturing or procurement costs. In response, the Minister of Trade and Industry, Prudence Sebahizi, said that the main objective of the bill is to protect consumers while ensuring a fair market environment. To that end, he said, the bill addresses unfair business practices, particularly those where companies abuse a dominant market position to inhibit completion, whether it’s on the ground of product pricing or quality, he explained. He stressed the fact that, overall, Rwanda operates under a competitive market system which discourages direct government regulation of prices. In such a free market, he pointed out that the government does not regulate prices, except for utilities and, to some extent, medical products. ALSO READ: Government tables bill to prevent market domination from mergers Sebahizi hinted at the fact that the government may intervene if a business exploits its dominant position to unfairly drive up prices and block new market entrants, but not interfere if high prices coexist with healthy competition. “This bill can only intervene in the event a business using its dominant position in the market might impose high prices and at the same time prevent other players from entering the market. But if you impose high prices and other players are free to get to the market, then the consumer has a choice,” he told The New Times. “So, that's where we think in this free market, there is no need to regulate prices,” he observed, stating that consumers will normally gravitate toward more affordable options. Meanwhile, Sebahizi said that traders are expected to display product prices clearly, allowing consumers to make informed choices. “Selling the same product at different prices to different customers is considered malpractice,” he said. “While offering discounts is allowed, they should be applied equitably to all consumers.” Addressing cross-border and e-commerce purchase concerns MPs also raised concerns about consumer protection in the context of cross-border e-commerce, particularly when consumers receive substandard products. ALSO READ: E-commerce: Five new trends local players can leverage to spur industry Sebahizi explained how the bill addresses online transactions, indicating that if both the seller and buyer are Rwandan and the transaction occurs online, the bill applies to both parties. If the seller is Rwandan and the buyer is foreign, the law focuses on regulating the Rwandan seller. If the seller is foreign and the buyer are Rwandan, the bill still provides protection by allowing the government to scrutinise such businesses and, if necessary, block their operations in Rwanda. He stressed that any malpractice by Rwandan sellers operating online will be subject to legal penalties under the proposed law. Rights of an e-commerce consumer The bill proposes a number of rights that an e-commerce consumer is entitled to. This includes access to the terms and conditions before the conclusion of an e-commerce transaction; and to request from an e-commerce seller a refund, a repair or a replacement of the goods or service when the consumer receives goods that are damaged, defective, or different from those ordered or the goods that do not work as advertised or do not work for their intended purpose. The rights also include consumers cancelling a concluded distance contract within seven days from the date of the reception of the goods and bears cost that may be levied from returning the goods. If the payment for the goods has been made before the consumer cancels the purchase, the consumer is entitled to be refunded the payment made within 15 days from the date of cancellation.

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Why Rwanda’s new consumer protection bill doesn’t regulate prices