Tanzania News Online (8) - 10/27/97

Tanzania News Online (8) - 10/27/97


Edition #8 27 October 1997

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A fortnightly update of news from Tanzania




At the beginning of October, donors expressed their reservations on the attainment of goals of the Development Vision 2025. To some of them, the vision is a 'dream' of what Tanzanians expect the level of socio-economic development will be in 25 years time. And to some donors, and even some development economists,the vision is not different from the Arusha Declaration and its ambitious goals of achieving a high level of economic development and egalitarianism. The vision has gone beyond the Arusha declaration by advocating the creation of a semi industrialised and diversified economy in which agriculture would be modernised and the contributions of such sectors as mining, manufacturing, construction and power would increase from the current 14 per cent to 40 per cent.

Similar ambitious goals have been incorporated in the vision to raise the per capita GDP in terms of purchasing power from the current US$570 to US$30,000 which is more than six times in twenty five years. While the document has generalised challenges, policies and strategies,it has fallen short of quantifying private and public investment to achieve such ambitious and economic goals. Donors have indicated that for the objectives of the vision to be realised, the problem of corruption should be tackled first.

The vision means good governance in terms of building institutional capacity, but transparency and accountability in relation to curbing corruption are not given their due weight. Corruption is a major problem in attaining development goals, according to the World Bank, because it acts as a disincentive to local and foreign investors by increasing the cost of doing business in the country. Corruption has also, of late, eroded donors confidence because of lack of accountability in the use of donors funds bringing about a situation where funds disbursed do not bear any relationship to physical implementation of projects in social and economic sectors.

Another major weakness of the Development Vision is its vague articulation of incentives to investors and its generalisations on creating an enabling environment for the private sector. The document fails to address strategies to promote and develop a viable private sector which would man the productive sectors of the economy as the government retreats to its traditional functions of maintenance of law and order, security and provision of social services. There is no mention of how the public sector would invest annually in the economic and social infrastructure or how much the private sector will inject into the economy annually to attain the projected high economic growth rate of over 8 per cent annually.

Government expenditure is normally a function of revenue collected but the vision does not address expanding the tax base to 24 per cent of GDP, consistent with public expenditure necessary to sustain a high rate of growth in social and economic sectors. The weakness of planning in Tanzania is not adequately addressed, which includes absence or lack of reliable statistical data, be it agricultural and industrial production statistics or the consumer price index, donors observed. It is for this reason that five year development plans were abandoned as being unrealistic in favour of the more easy to monitor Rolling Plan and Formard Budgets.

Looking at the meagre resources expended in social sectors, it is difficult to visualise, even in twenty five years time, how such ambitious social sector goals can be attained. These goals as articulated by the vision include increasing primary school enrolment from 70 per cent to 100 per cent and also increasing enrolment in secondary school from the current 15 per cent, to 60 per cent. Similarly, given the current sanitary conditions in Tanzania, it is difficult to see how investment in primary health care and curative medicine would raise life expectancy from 52 to 70 years. At a time when most urban areas are almost forgetting what tap water is, it is unrealistic to contemplate that in 25 years Tanzanians access to clean and safe water will have risen from 50 to 90 per cent.

With lack of credit and other forms of support to the informal sector and micro-enterprises, it is unrealistic to think of the eradication of abject poverty by the year 2025. Does the free market economy need a development vision or better economic policies? This is a question better left unanswered by the team of the experts who have completed the Development Vision. Experts think that what Tanzania needs is micro-economic stability as reflected by low and stable prices, prudent monetary and fiscal policies which would be an incentive for inflow of private capital into the country. A comprehensive export strategy would increase export earnings to finance development and reduce reliance on donors funding for development.

As Theo Mushi, an economist and journalist observed, the Development Vision has noble goals, but for them to be realised, Tanzania's limitations and constraints in development administration need to be adequately addressed.



Power rationing has increased in Tanzania through October, as the water levels shrank further in dams supplying the country's main hydro-electric generators, an official of the state run Tanzania Electric Supply Company (TANESCO, said recently.

"According to our latest reports, the water level at Mtera Dam is now only 0.63 metres above the minimum," the TANESCO official said. "It is the lowest water level ever in the history of Tanzania and the situation is really bad," he added. "We are now finishing the last drop of water from the dam and after this there will be no more water to draw electricity from, because they (the turbines), will automatically switch off at the minimum level". Power cuts, which can last for up to 15 hours a day, are also likely to be increased to up four times a week, the Tanesco official said.

Low water levels caused by severe drought influenced by the 'El Nino' weather phenomenon sweeping most of East Africa, have left the main electricity-generating Mtera Dam in Tanzania at its lowest ever level. The Mtera Dam fuels the major Mtera and Kidatu power stations. The official said that except for a few places in northwest Tanzania that receive power from neighbouring Uganda, the entire country would be affected by the electricity crisis, but the impact would be hardest in the capital Dar es Salaam. Foreign investors, donors and diplomats said power rationing, expected to continue until the arrival of the short rains normally due in November or early December, could severely affect the economy.

"The impact can only be negative, it adds to the infrastructure problem already here and in the end the clients will pay for it," said a South African investor. One donor representative said that without a constant supply of electricity, industrial production was certain to slow down, depressing income levels and pushing fuels prices up. The International Monetary Fund estimates underlying inflation in Tanzania to be less than 10 per cent, but overall inflation has been pushed up by skyrocketing food prices, risen over 20 per cent in the last year. However, one foreign economist, working in the banking sector, said that since more than half of Tanzania's economic output comes from the agricultural sector, which is not energy intensive, the impact on the overall economy might not be as severe as feared.

The electricity crisis in Tanzania has roots in government debts to TANESCO and unpaid bills, mostly from parastatal institutions, of some 14 billion Tanzanian shillings, or more than US$20 million, according to official figures. This debt has made Tanesco unable to buy fuel and spare parts for diesel generators for use in times of severe water shortages.


A five day suspension of Representatives from the Civic United Front (CUF), was given by House Speaker, Mr Pandu Ameir Kificho, in Zanzibar recently. The CUF is the main opposition party in the Isles of Zanzibar and Pemba which with the main land form the United Republic of Tanzania.

Invoking Section 70(3)(3) of the regulations of the House of Representatives, the Speaker barred CUF Reps from attending House sessions due to their continuos disregard of House orders. Mr Kificho announced the order a day after he issued a one day suspension of CUF legislators for failure to attend the opening session of the House the previous day. A Representative can be suspended for five days as a first offender, which the speaker applied in a collective manner to the CUF Representatives. The penalty can be extended to 20 days should they fail to observe House procedures in the future, Mr Pandu stated.

Under the same section, the Speaker has powers to suspend any member for failure to respect the Speaker's status and attend session as required. Mr Haji Omar Kheir, Tumbatu Representative for Chama Cha Mapinduzi (CCM, the ruling party), had in July tabled a private member's motion urging the Speaker and the House to act decisively against CUF members staying away from the House and refusing to make contributions to debate. The habit had continued for the two years since the holding of the general elections on a multiparty basis in October 1995, he pointed out.

CUF Representatives have vowed not to co-operate with the CCM dominated legislature as they do not recognise the victory of Isles President Dr Salim Amour. They insist that the presidential poll was won by the CUF candidate, Mr Seif Sheriff Hamad. Opposition representatives feel that the motion did not fulfil legal requirements such as being brought to the notice of the Representatives two days prior to its formal presentation to the full House. The motion also did not carry the presenter's signature, they noted.

Mr Abubakar Khamis Bakari, the opposition chief whip in the House, said that they had been anticipating the decision. The opposition believes that the Speaker was being directed by 'higher authorities' to take specific actions on House proceedings, he stated. "It is absurd that Mr Kificho is taking such a step now, at a time when the CUF has presented objections to the private member's motion. The opposition has already stated its lack of confidence in Mr Kificho's leadership," he stated. He said that the suspension will not change their position on what is going on in the House and he stressed that the Speaker was only facilitating their resolve to stay away.


Both waiving taxes on imported grain and selling rice donations at low prices were likely to harm growth in the agricultural sector in the country, a researcher has asserted. Dr Haji Semboja, a consultant with the Economic and Social research Foundation (ESRF), in Dar es Salaam explained recently his position to the press.

The measure would be counter-productive because it would discourage local producers and affect choices in consumption of food which would have an effect on prices, further discouraging local farmers, he said. Tax exemption used to encourage food imports was not right policy in the Tanzania case since the country has large farming investment opportunities. These remain under-utilised for lack of appropriate incentives, he maintained . He argued that by granting tax exemption on imported food or reducing prices on imported grain, the government was likely to push local products out of the market.

Rice donated to the country was being sold at a relatively low price as compared to grain produced locally, he earlier noted. "Economically, it is better to offer it free rather than selling it at a lower price. This gives a bad signal to local producers and will effect food choice by consumers as well as pull down the market price itself," he explained. "Since famine was nothing new in the country, as it was engendered by poverty just as it could be brought about by drought, why should there be new rules due to drought while the same needs existed due to poverty," the researcher demanded.

The government should look into long term strategies to curb the poverty that generate famine rather than taking ad hoc measures, he argued. Despite the introduction of cost sharing in health and education, which would ostensibly provide the cash incentives for people to expand their farms, this had not happened. This can partly explain the food crisis in many parts of the country, the researcher concluded.


A 30 month Korean textile firm based in Dar es Salaam is to shut down in the near future. Opened in February 1995, the experiment in garment manufacturing in the country is a Gooryong (T) Ltd firm. It was specialising in producing shirts for export. Management sources said recently that more that 700 employees have been sent on compulsory leave while retrenchment arrangement are finalised.

The plant had eight production lines and more than half have ceased to operate. "We have been told that the terminal benefit will range from TSh 60,000/- (USD 100) for those in the company for two years and down to Tsh 30,000/-(USD50) for the rest," one employee told a local newspaper. More than half the staff were casual labour.

Management has indicated they do not intend to close the firm for good but were practising `a hire and fire' system. After closing the Dar es Salaam factory, the management would reopen a similar plant in Tanga (a town north of Dar es Salaam), to take advantage of cheap labour and premises. If the firm closes its doors, it will join other firms pushed out of the market following trade liberalisation, that often pushes inept state firms into liquidation.


Tanzania has been listed as one of the Least Developed Countries (LDCs) that registered a significant rise in the amounts of foreign direct investment (FDI) last year. The estimation has been given in the current issue of the World Investment Report, published last month following the United Nations Conference on Trade and Development (UNCTAD). It listed Tanzania third after Cambodia and Angola. Cambodia attracted 350m dollars, and while Angola reached 280m dollars, Tanzania came a distant third with 180 m dollars in FDI commitments, the report indicated.

Liberalisation, privatisation and stepped up efforts to expand size of markets through channels like preferential trade areas were reasons for increased FDI flows, the report noted. The partial privatisation of the Tanzania Breweries Ltd in 1993, had boosted the inflow of investment from countries like South Africa. A major brewery group had acquired 50 percent of TBL shares. Engen, a petrochemicals firm also based in South Africa, last year felt encouraged to built an oil terminal in Dar es Salaam with the chance that it would set up a network of retail fuel stations, report said.

The report concluded that southern African countries will be able to attract more investment from South Africa, since the latter is naturally placed to become the regional growth pole.


Committees charged with supervising the conduct of judges and magistrateshave been formed in judiciary at regional, zonal and national levels to check corrupt practices. Chief Justice Francis Nyalali made the observation at a press conference following a meeting with former World Bank President Robert MacNamara recently in Tanzania.

Committee members, chosen among judges and magistrates, after scrutiny, would soon be announced. Regional and zonal committees would handle cases involving magistrates and the national committee would control the conduct of judges, he said. Judges and magistrates suspected of misconduct will be questioned by committees which can take disciplinary measure such as issuing warnings and where necessary forward their cases for further action, including court action, he explained.

Mr MacNamara, the co-chairman of Global Coalition for Africa, was told that procedures for the recruitment of magistrates and the appointment of judges were being reviewed. He said that a rigorous examination of the applicant is undertaken to ensure that positions and promotion are awarded to deserving persons. "We first consult legal institutions to suggest names of lawyers to become judges. They are screened in order to get three names, then presented to the president for appointment," he elaborated. Mr MacNamara led a high level World Bank mission from the Global Coalition for Africa and Transparency International.


From: (Africa_news Network) Date: Mon, 27 Oct 1997 08:17:03 +0200 Subject: TANZANIA NEWS ONLINE #8 Message-ID: <>

Editor: Ali B. Ali-Dinar

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