Mozambique: Driving schools want to increase fees, Competition Authority disagrees – AIM report

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Mozambique: Driving schools want to increase fees, Competition Authority disagrees – AIM report

7:45 CAT | 03 Mar 2022

Photo: TVM

Mozambique’s Association of Driving Schools (AECOMO) has said that its decision to increase, by 7.5 per cent, the costs of the training required to obtain a driving licence is “irreversible”, following the latest market price rises of spare parts, fuel and other essential materials for the sustainability of the activity of the schools.

AECOMO spokesperson, Julio Boene, on Tuesday in Maputo told AIM that the previous increase in driving school fees was in 2018, but since then there has been an exponential price rise of the necessary material, coupled with the outbreak of the Covid-19 pandemic, in March 2020, which halted the schools’ activities for over six months.

To make matters even worse, Boene pointed out that when the government decided to ease the restrictive measures put in place to stop the spread of the pandemic, it allowed the driving schools to re-open but cut the number of students allowed to attend classes by half (from 30 to 15).

“We conducted a study and concluded that we have to hike the prices, as the activity had become unsustainable, after the increase in the prices of various raw materials which are essential for the activity. This posed the need to adjust the fees and the move is irreversible,” Boene said.

Under the new price-list, in force since Tuesday, the fee for a driving licence for heavy vehicles is now 11,500 meticais (about 182 US dollars, at the current exchange rate) whereas previously it was 10,300 meticais. For light vehicles, the driving licence will cost 9,500 meticais compared to 8,300 meticais before. The driving licence for motorcycles which was 5,500 now costs 6,700 meticais.

The new price-list has also increased the fees for the endorsement of driving licences.

However, on Wednesday the Competition Regulatory Authority (ARC) ordered the association to back off and suspend immediately the move or any other decisions that might hamper competitiveness.

Addressing a press conference, the ARC Chairperson, Iacumba Aiuba, told reporters that the authority was seriously concerned with the decisions and recommendations adopted by some bodies, such as AECOMO, which limit their members freedom to determine autonomously their commercial policy.

“The violation of competition laws not only reduces consumers’ well-being, but is also detrimental to competiveness among the companies and service providers, penalising the economy as a whole,” Aiuba said.

Aiuba was effectively accusing AECOMO of acting as a cartel, determining the prices that all of its members should charge.

The pricing by an association of companies, even if merely indicative or recommended, will be seen as restrictive to competition, as it may influence the commercial policy of the associated companies, he claimed.

Aiuba demanded “an immediate restoration of effective competition”. He insisted that AECOMO had no right to fix fees, and each individual driving school was free to fix its prices, in line with its operational costs.

There are over 100 driving schools affiliated to AECOMO across the country.

Watch the TVM report.