BUSINESS NEWS

Exchange rates (August 18): $1 = TShs 612 £1 = TShs 920

World Bank Resident Representative in Tanzania Ronald Brigish told a press conference in May that while the GDP GROWTH in Sub-Saharan Africa averaged 3%, Tanzania was now growing at a rate of 4% p.a. Tanzania had bright prospects and could register economic growth of even 10% like Uganda. The country’s POVERTY was exaggerated, he said. He thought that Tanzanians were probably consuming more than twice the official GDP per capita of $120 p.a. and that the difference was caused because figures for the informal sector, small scale mining and trade were not included in official statistics – Daily News.

Exchange controls by the Central Bank of Tanzania have been removed on the strong recommendation of the IMF. Restrictions on payments and transfers of money whether they be for imports, education, transport, travel or repatriation of investment income were officially removed on July 15 but many observers reacted with caution to the move wondering whether it was in the best interests of the country – East African. The National Assembly ratified on April 24 a 1994 agreement between Tanzania and Britain which gives FAVOURED STATUS to investors from the two countries. The agreement enables the aggrieved party in the case of nationalisation to refer the dispute to the International Centre for Settlement of Investment Disputes or to a special joint arbitration tribunal in the case of other disputes – Daily News.

A USAID STUDY has singled out antiquated socialist-era laws still on the statute book as major impediments to investment. Reference was made to the legal monopoly in grain marketing of the National Milling Corporation even though the government had liberalised marketing through executive directives; these could be contested in court. The stagnation in coffee production was partly due to the Nationalisation Act of 1973 which gave the government powers to seize commercial farms of over 50 acres. Such old laws should be repealed to encourage investors – Business Times.

The new TANZANIA REVENUE AUTHORITY started work on July first. Its Commissioner General is Mr Melickzedec Senare. It is the only body authorised to recommend tax exemptions to the Treasury and is empowered to attach property for auctioning without reference to the courts. It has received a grant of $2.5 million from the USA, $0.49 million from the World Bank and 2.7 million Kroners from Denmark to help with start up costs. The UK firm Coopers and Lybrand assisted it in drawing up its staff scheme of service and remuneration package. World Bank funds are being used for communication equipment to enable it to communicate with all customs posts in the country. At the inaugural ceremony President Mkapa instructed the authority to raise tax collection to an internationally comparable percentage of the GDP. He said that in Tanzania it was only 14.6% compared with 23% in Kenya, 32% in Zimbabwe and 45% in the European Union – Daily and Sunday News.

A 10,000-line computerised DIGITAL TELEPHONE SYSTEM which identifies both fake and genuine subscribers has been installed in Dar es Salaam – Business Times.

The leasing of the SA0 HILLS SAWMILL to a Norwegian company at $198,000 p.a. on May 15 is expected to boost the country’s dwindling wood industry. Nortan AS will pump in $3.4 million for rehabilitation. The parastatal Tanzania Wood Industries Corporation’s (TAWICO) output declined from 21,419 cu.m. in 1991 to 8,515 cu.m. in 1994 and profits turned into losses. The company’s nine other subsidiary companies are to be privatised – East African.

Tanzania has jumped from 16th to 7th position among 20 African countries with the highest income from TOURISM – from 1.3% in 1993 to 2.3% of African tourism revenue in 1994. South Africa, Tunisia and Morocco lead the list – Business Times.
Locally made WINE has virtually disappeared from the market because of the collapse of the Dodoma Wine Company (DOWICO)> The company, which produced a million litres in 1983, has stopped purchasing grapes because of liquidity problems – Business Times.

A Tanzanian company, Superdoll Trailer Manufacturers (STM), has won the International Africa Award which is awarded each year by ‘Editorial’ an international publishing company to companies which produce high quality products and provide good service. Almost 50 companies were represented at the award ceremony in Senegal – Business Times.

CASHEWNUT PRODUCTION has increased dramatically from 17,059 tons in 1990 to 81,000 tons in the 1995/96 season. Farmers are now using sulphur pesticide and improved seeds under the Cashewnut Improvement Programme (CIP) – Daily News.

At a meeting convened on June 18 for the 1,000 strong ‘Tanzania Shop Owners Association1 addressed by the Commissioner of Income Tax, which was designed to allay their FEARS OF THE NEW REVENUE AUTHORITY, less than 50 people turned up; none were from the large Tanzanian Asian membership – Business Times.

At a meeting of the ‘Tanzania-UK Business Group’ in London on July 22 Director General of the Investment Promotion Centre Samuel Sitta revealed that an INVESTORS FORUM was being planned for November 5 to 8 at the Sheraton Hotel, Dar es Salaam; he admitted that the ‘One Stop Investment Centre’ had not yet become a reality but hoped that improved and accelerated procedures for investors would be announced at the conference (Thank you Ron Fennel1 for this item – Ed).

The start of work on prospecting for what is expected to be one of the biggest GOLD MINES in the world in Shinyanga Region is being held up by the need to evict 7,000 illegal miners. They will be relocated to other areas. The company has already spent $3.8 million in initial work in the area – East African.

The Kuwait Fund has agreed to finance a $13.8 million TELECOMMUNICATIONS NETWORK in Zanzibar to be installed by the Tanzania Telecommunications Company and Ericsson AB (Sweden) within 16 months.

The COOPERATIVE AND RURAL DEVELOPMENT BANK (CRDB) was privatised in July. It is now owned by 10,000 individuals, cooperative unions and private companies, each limited to not more than 5% of the shares plus the Danish International Agency (DANIDA) which has 30%. They jointly raised $3.4 million to buy the bank – East African.

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