BUSINESS AND THE ECONOMY

Speaking about the present state of the economy recently President Mkapa said that the unanimous endorsement of this financial year’s budget by Members of Parliament was a clear indication that the Government was determined to remove major problems that were an obstacle to economic growth. “Nuisance taxes, including development levy, which was really a kind of poll tax, have been removed to enable more Tanzanians to participate and contribute meaningfully to the country’s development process,” he said. On regional economic integration, the President challenged Tanzanians to be open minded and adopt positive attitudes towards the market economy, adding that highly skilled and experienced manpower as well as a strong capital base were a prerequisite for any country to enter into economic integration competitively ….. “Some Tanzanians are still pre-occupied with the mind-set of a closed and controlled economic system” he said. “I would like to advise such people that that era is long gone and they should instead realise that regional economic integration is inevitable and we should be prepared to play an active role lest we be left behind while our neighbours progress.”

The Government has been under sustained attack in parliament and elsewhere over the performance of the Parastatal Sector Reform Commission (PSRC). Some MPs demanded to see all the contracts that the PSRC had entered into for the sale of parastatals. Minister of State (President’s Office) Planning and Privatisation, Dr Abdallah Kigoda, assured Parliament that the activities of the PSRC would be evaluated.

President Mkapa opened the new $30 million 970-metre-long Rufiji Bridge on August 2nd. It was described in the Guardian as possibly the best and longest overpass in the East and Central African region. It is expected to greatly ease the chronic transport problems in the southern regions of Tanzania. CCM efforts to make the ceremony into a CCM occasion were frustrated by CUF supporters who pulled down CCM flags.

Opposition has been growing to the continued heavy payments being made by the Government to Independent Power Tanzania Ltd (IPTL) -see Tanzanian Affairs No 75. Business News reported on July 25 that the Parliamentary Sectoral Committee on Investment and Trade had described the monthly bill of2.5bn/-, which TANESCO pays to IPTL, as economic sabotage and had demanded disciplinary action against those involved in signing the contract. Opposition spokesman for the ministry, Issac Cheyo (Bariadi East -UDP) asked what disciplinary measures had been taken by the Government against the officials who signed the IPTL contract. On August 14 the Guardian reported that IPTL, the thermal power generation plant in Dar es Salaam, was to be converted into a gas firing plant. The government announced the setting up of a commission to study conversion of the plant which had begun commercial operation in January last year. IPTL sells electricity to TANESCO under the terms of a 20-year power purchase agreement. The Government said it had secured a credit from the International Development Association (IDA) and intended to apply part of the proceeds of the credit to finance the conversion study which is expected to start in December and last for one and a half months. The major source of Tanzania’s electricity is from hydro power plants. However, because of incessant drought associated with power rationing, inviting the private sector to engage in power generation was seen as one way of getting rid of the problem.

TANESCO’s tough new South African management took the drastic step of cutting off power to Zanzibar for three hours one day in July and vowed to continue cutting power to the islands if power bills were not settled. TANESCO Director General Rudy Huysen said power was restored after Tshs. 174 million was paid by the Zanzibar Fuel and Power Corporation (ZFPC) as part of its monthly bill of about Tsh. 419 million.

The construction of the Songo Songo natural gas pipeline, which is likely to greatly improve the power supply situation in Tanzania, is proceeding apace and is scheduled for completion in May next year. However, the media report that local job seekers, who were hoping to secure jobs with the company undertaking the project, have been expressing anger that the contractor had hired foreigners, mostly Indians, for menial jobs which could be done by locals.

Tanzania Breweries Limited (TBL) has said that the company is experiencing about 20 -30 per cent decline in sales following Dar Es Salaam Regional Commissioner Yusufu Makamba’s order for bars to close at 11.00pm. TBL Public Relations Manager Aggrey Marealle said that about 20,000 bar attendants had lost their jobs in the 4,000 bars and other alcohol outlets officially registered in Dar Es Salaam. He told the press that it was most likely the Government would suffer in revenue collections following the beer sales decline. He said that on average bar owners who were selling about 15 crates of beer a day were now selling about eight. He agreed that there was a 1968 law prohibiting drinking after 11.00pm but said that times had changed, which made the law redundant. The law was passed when the main economic activity was agriculture but today a variety of activities were performed in the urban areas. He said Dar Es Salaam alone accounted for 40% of all commercial activities and that any hitches in the way commerce was conducted in the city would have grave economic consequences – Mwananchi.

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