Exchange rates (April 1): $1 = Shs 548 – 570
£1 = Shs 1510 – 1,600
BANK INTEREST RATES have fallen substantially to an average of 15% and lending rates to 30-35%, following a fall in inflation in January to 26.6% – The East African
Minister of Finance Simon Mbilinyi has announced that the DAR ES SALAAM STOCK EXCHANGE will be launched on September 30,1996
THE BRITISH DEPARTMENT OF TRADE AND INDUSTRY has announced that a high profile British Trade Mission is being organised to go to Tanzania (at the time of the Dar es Salaam International Trade Fair) from June 29 to July 4 and that delegates will be entitled to a grant of £600 towards travel expenses.
Differences within the management of Sutton Resources in Vancouver about the strategy for financing the RICH GOLD AND NICKEL-COBALT HOLDINGS it has at Bulyanhulu and Kabanga-Kagera respectively were reported in January by ‘Africa Analysis1. Sutton President Mike Kenyon was reported as having said that he had been approached by companies in the US, Britain, Australia and Africa about development at Bulyanhulu where gold resources were estimated at 1.5-3.5 million ounces and that a sum of about $130 million, which could be raised, would be needed to develop the mine. Kabanga and Kagera would need a far bigger investment of up to $435 million; this project would be be too big for a small company to take all the way to production. Serious talks had begun with at least two major potential partners.
The PARASTATAL DIVESTITURE PROGRAMME is being accelerated. Starting originally with some 440 parastatals Tanzania had already divested 95 by the end of 1994 and now plans to complete the programme by dealing with 82 in 1996, eight in 1997 and the final four including TANESCO in 1998. One of the biggest deals in 1995 was the joint venture agreement between R J Reynolds Tobacco International which purchased 51% of the shares in the Tanzania Cigarette Company for $55 million. China has presented the Tanzania-Zambia Railway Authority with 30 new passenger coaches valued at Shs 5.40 billion on soft loan terms. This has enabled TAZARA to introduce two new express trains on the Dar es Salaam-Kapiri Moshi route – Daily News.
When new Finance Minister Simon Mbilinyi took over the very difficult task of BALANCING TANZANIA’S BOOKS he inherited from his predecessor the following financial projections for the 1995/96 fiscal year:
Revenue 707 US$ million (16.5% of GDP which represented an increase of 37% compared with the previous year).
Expenditure 901 US$ million (20.6% of GDP and including $221 million for development)
Difference: 194 US$ million
Thus, something had to be done. So, on December 31 a MINIBUDGET was announced which included increases in taxation on business licenses, petrol and diesel, alcohol and tobacco which were aimed at removing the remaining budget deficit. Progress so far? In the first quarter – revenue performance slightly better than estimated; recurrent expenditure $7.8 million more than projections because of the election costs and the introduction of a ‘cash budget system’. Release of substantial donor funds is still held up.
In April 1996 the Government published its BUDGET ESTIMATES FOR 1996/97 which make grim reading and indicate that recurrent expenditure can be increase by only 8.6% (in US$ terms) to $960 million compared with inflation at some 27%. Thus no improvements can be expected in the hard pressed social services sector. Education expenditure as a percentage of total recurrent expenditure will be only 2.1% – an increase of only 0.1% over 1995/96. 2.8% of the budget has been allocated for health. These figures compare with the largest single item – 36% of recurrent expenditure for servicing public debt! Defence claims the next highest amount (Shs 45.8 billion) followed by the Police (Shs20.2 billion) health (Shs 16 billion) and education (Shs 12 billion). No money has been allocated to any parastatal company. Qn the revenue side the Government hopes to collect $976 million. The budget is being planned under the assumptions recently agreed between the Government and the IMF ie. GDP growth 5%; reduction of inflation to 15% – Business Times. The passenger TRAIN SERVICE between Moshi and Voi in Kenya which was suspended 18 years ago after the collapse of the East African Community and the Lake Victoria Boat service from Mwanza to Kisumu were restored in January – Daily News.
The troubled NATIONAL BANK OF COMMERCE’s percentage of nonperforming
loans has increased to 62% over the past year compared with 57% previously but vigorous efforts are being made to recover $240 million owed to the bank. As part of its restructuring programme the bank has sold more than a dozen buildings and is in the process of retrenching some 2,500 staff – East African.
UGANDA’S GREENLAND BANK opened a branch in Tanzania on February 12.
WILLIAMSON DIAMONDS is producing in one month almost the same amount of diamonds as it produced in a year before the new plant was commissioned. 15,226 carats were produced in the whole of 1994 but 44,742 carats were produced between August and December 1995 – Business Times.