EXCHANGE RATES (August 11): £1 = TShs 1270. $1 = TShs 789
Negotiations for the Amalgamated Banks of South Africa (ABSA) to take a majority shareholding in the National Bank of Commerce (NBC) have been completed but signature is held up following a court injunction obtained by employees -Daily News.
China Human International Economic and Technical Cooperation has acquired 62% (leaving 38% with the government) of the shares in the Mbeya-based Kiwira Coal Mine. A large number of the 1,500 workers will be made redundant; coal production is expected to increase from 100,000 to 300,000 tons per year -Guardian.
The long-standing dispute between TANESCO and the Malaysian-financed IPTL over the power plant that has been built in Dar es Salaam but not yet started operations, looks like continuing for some time. The International Centre for the Settlement of Investment Disputes (ICSID) has fixed a hearing date for the case in June 2000. Meanwhile the government has successfully fought off a case in the Court of Appeal which would have forced TANESCO to start paying $3.62 million per month to the Malaysian company. This could have plunged TANESCO into serious losses.
The National Employment Promotion Bill of 1999 rules that no employer will employ a foreigner in any class of employment the appropriate Minister may declare to be employment in which citizens only may be employed. No foreigner will be employed unless he has a work permit. Government officers have started visiting places employing foreigners to ensure compliance with the new law. Over 5,000 expatriates applied for work permits since January 1997 and 2,900 others applied for extensions of their work permits. Some 7,000 now held such permits -Daily News.
The Tanzania Telecommunications Commission has increased the number of firms licensed to offer mobile phone services. In addition to TRITEL and MOBITEL which have already started, the new companies are the Tanzania Telecommunications Company (TTCL) -which plans to have 500,000 lines by the year 2004 -plus Planetel and Zantel -Guardian.
THE 1999/2000 BUDGET
The main features of the 1999/2000 budget introduced in Parliament by Finance Minister Daniel Yona on June 10 were as follows:
-To help investment -from July 1 rates of duty to be based on the degree of processing with the lowest rate for investment goods and the highest for consumer goods. Strategic and investment goods -zero %; raw materials, capital goods and replacement parts -5%; semi-processed goods and spare parts -10%; fully processed goods and motor vehicle spare parts 20%; and, consumer goods 25%.
-To help the low paid -minimum taxable income raised from Shs 20,000 to Shs 45,000. Minimum wage was later increased from Shs 17,500 to Shs 30,000 per month.
-To encourage tourism -air charters and aircraft to be exempted from VAT.
-To help civil servants -pension and health insurance funds to be introduced; monthly pensions for retired officers to be increased from Shs 2,000 to Shs 10,000.
-To encourage greater use -customs duty on computers to be reduced from 20% to 5%;
-To help local government -receipts from a number of cesses and taxes now levied for central government use to be transferred to local governments.
The latest economic data:
Estimated GROWTH RATE -4.9%; it was 4% in 1998-1999 (Zanzibar was -0.4%). Total FOREIGN DEBT -$8.29 billion (Shs 5.5 trillion); Shs 488 billion to be repaid in the 199912000 fiscal year compared with Shs 101 billion in the previous year. Total LOCAL DEBT -Shs 850 billion. Shs $70 million was received last year from seven donors plus $25 million in Structural Adjustment Credits.
Anticipated EXPENDITURE: Shs 1.16 billion -Shs 921 million recurrent (Shs 240 million for civil service salaries and Shs 681 million miscellaneous expenditures) plus Shs 243 million for development. Shs 822 billion would be from internal sources including Shs 762 billion from taxes
REVENUE collected by budget day (May 21) Shs 531 million.
EXPORTS: $672 million in 1998-99 compared with $717 million in the
previous year because of lower quantities and lower prices, the financial
crisis in Asia and the EI-Nino rains.
IMPORTS: $1,246 million; 9% up on the previous year due to the growing
demand for transportation and construction goods and equipment.
FUTURE PRIORITIES FOR EXPENDITURE: health, education and water.
There will be NO BORROWING from banks.
INFLATION RATE planned to drop to 5% compared with 8.8% last year.