BUSINESS & THE ECONOMY

SHOCK OVER COOPERATIVE DEBTS
Members of the National Executive Committee of the CCM Party have expressed shock over the huge debts cooperative unions owe the banks, the Committee’s Department of Mass Mobilisation and Political Propaganda said in a statement on October 12th 1989.

The Committee directed that the following cooperatives should, by January 1989 pay their debts or explain why they should not be deleted:
Nyanza Shs 5,250,000,000
Shinyanga Shs 3,440,000,000
Ruvuma Shs 1,570,000,000
Mara Shs 1,450,000,000
Mbeya Shs 1,340,000,000
Kagera Shs 1,270,000,000
Tabora Shs 1,200,000,000

The next day, during a short meeting of the National Assembly in Dodoma, the Member for Shinyanga Urban twisted a debate on a new Written Laws Bill by rejecting the amendment on the Cooperative Law and suggesting instead the suspension of its application and a change towards free marketing of crops. He said that the Cooperative Law, which provided for a monopoly to be given to cooperative unions, was a barrier to people seeking their own markets.

The member for Bariadi said that high interest charges on the unions were among the reasons for their poor performance. Shinyanga cooperative union was paying Shs two million in interest charges. A Nominated Member said that the marketing boards were a burden to cooperative unions and that they should be scrapped as they were useless – Daily News.

MWINYI OUTLINES INVESTMENT CODE
During a state visit to Japan in late December 1989 President Mwinyi gave the first indications of the shortly to be announced Investment Code for Tanzania. The President listed, at a meeting with Japanese economists, the eight areas of priority for investment. They were agriculture and livestock development, tourism, natural resources (forestry, fisheries, fish farming, game cropping and wildlife ranching), mining and petroleum development, (particularly oil and gas, gold, diamonds, gemstones), manufacturing industries (including agro-based industries, steel and metal engineering, printing and publishing, pharmaceuticals and electrical engineering ) construct ion (hotels, houses, warehouses), transport and transit trade.

On investment protect ion the President said that Tanzania will undertake to maintain a legal framework that will give guarantees of protection to foreign and domestic investors. Tanzania would join the International Centre for Settlement of Investment Disputes (ICSID) and the Multilateral Investment Guarantee Agency (MIGA).

On incentives he said that initial investments would be granted a tax holding on profits for the first five years of production. Constraints on foreign exchange remittance would be minimised. The President spoke at length about the importance of the private sector and appealed to the Japanese business community to invest in Tanzania – Daily News.

TANZANIA DEVALUES AGAIN
Tanzania devalued its Shilling again on December 4th 1989. This time the devaluation was by 17.1% to a new value of Shs 190 to the US dollar. The Bank of Tanzania said that the devaluation was meant to sustain recent gains in the agricultural and industrial sectors.

SWEDEN GETS TOUGH ON TAZARA
The Swedish Aid Agency (SIDA) has lashed out at ‘bad management and indiscipline’ in the Tanzania Zambia Railway (TAZARA) and threatened to pull out its multi-million dollar support unless the two states tackle the problems. In identical scathing letters to the Ministers of Communications in Tanzania and Zambia the Director General of SIDA said that it was not in the interests of Sweden nor the TAZARA owner countries to finance investments in the railway as this would merely replace resources being wasted due to bad management and indiscipline.

He noted that when the line was handed over to Tanzania and Zambia in 1976 there were 128 locomotives. Of these, only 39 were in operation in October 1989, another 39 were awaiting repair and 50 had been scrapped. Between July 1986 and August 1989 12 locomotives, 140 wagons and 26,500 sleepers had been damaged in 145 accidents costing roughly US$12 million. This excluded losses on salvage operations, opportunity losses and permanent loss of market share. The procurement of 350 new wagons by TAZARA with Swedish support would merely cover about seven years of wreckage of wagons at the present rate he said.

Sweden is in a US$ 4O million agreement to aid TAZARA. The total amount of aid being provided by all donors is US$ 150 million. Sweden had offered to help finance a thorough review of the TAZARA management system by an experienced consultant.

An official of the Finnish Development Authority said that though they had not yet evaluated a Finnish supported project involving the supply of rescue cranes and rerailing equipment, casual observation would show that there was a state of indiscipline and slackness within the authority’s management.

An official with the Norwegian Development Agency who spoke on condition of anonymity said there was a state of turbulence in TAZARA.

A USAID representative however stated that he did not see the problems that other donors had ‘capitlised on’ but that his agency would be ready to offer short course training in management. USAID is providing 17 locomotives and manpower training to TAZARA.

Speaking a month earlier TAZARA General Manager Standwell Mapara said that the railway, after several loss-making years, now seemed to be on the right lines. It would shortly be one of the most profitable lines in Africa. It had recorded losses of US$37 million in its first seven years but since 1984 it had begun to make meaningful profits. In 1986/87 it had earned a surplus of US$413,000.

The line was now carrying one million tons of freight – double the carrying capacity of 1986 and this would shortly increase to 1.6 million tons thanks to the modernisation programme being supported by eleven Western countries and international agencies – Business Times/Daily News.

CABINET RESHUFFLE
President Mwinyi reshuffled his cabinet in September 1989. He took over the Defence portfolio himself and moved five Ministers. This followed the departure of Mr Salim Ahmed Salim for his new post as Secretary General of the Organisation of African Unity. A full Ministry of Information was set up and the International and Regional Cooperation portfolio which was under the ministry of Foreign Affairs was shifted to the Ministry of Finance.

Shs 2 BILLION IN BRITISH AID
The British Government has agreed to give Tanzania £10.4 million (Shs 2.47 billion) in support of its Economic Recovery Programme. Some £4.5 million will also support English teaching. The programme will be expanded to cover 324 government and private secondary schools and will concentrate on a reading programme and in-service training for Tanzanian English language teachers.

Britain’s support for the University of Dar es Salaam will continue with the provision of 3508,920 to institute a MS Education programme in Applied Science at the Department of Zoology and marine Biology.

Tanzania’s Police force will receive £358,250 to assist in training programmes for criminal investigation and prevention.

The Songea-Makambako road built by Britain, will receive £1.57 million for extension of the existing maintenance project and the rehabilitation of the Lilondo quarry.

PARASTATALS RECEIVE ‘CLEAN’ REPORTS
More than half of the 396 parastatal accounts audited for the year ending June 30, 1989 received clean reports, The total of 51.5% is the highest proportion yet achieved. Another 35% of the account s were given qualified audit reports. 176 accounts disclosed profits and 189 recorded losses – Daily News.

SHERATON TO MANAGE KILIMANJARO HOTEL
According to the November 10th issue of Tanzania’s ‘Business Times’ Sheraton International will assume the management of the Kilimanjaro Hotel in 1990 under a partnership agreement with the Tanzania Tourist Corporation. Seven other hotels, including the Lake Manyara Lodge, Ngorongoro Lodge, Kunduchi Beach Hotel and the Mafia Lodge will also enter into joint management agreements with Accor, a French fir~ which Is already managing the Mount Meru Hotel. All the hotels are to undergo extensive repair and expansion at a cost of some US$35.0 million to be provided by a consortium including Swiss, German and Yugoslav firms plus the European Investment and African Development Banks.

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