Archive for January, 2018

TA ISSUE 119

TA119 cover featured UN memorial ceremony in Beni, eastern Congo for Tanzanian peacekeepers killed by rebels (Al-Hadji Kudra Maliro)

President Magufuli cites successes, while activists cry foul
Peacekeepers killed in Eastern DRC
Action in Maasai land dispute
Obituaries
Reviews

A pdf of the issue can be downloaded here

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PRESIDENT MAGUFULI CITES SUCCESSES, WHILE ACTIVISTS CRY FOUL

by Ben Taylor

President Magufuli marked his first two years in office by celebrating ten key achievements. The Director General of Tanzania Information Services and Chief government spokesman, Hassan Abbasi, listed these as:

•Restoration of discipline among public servants resulting in an increase of productivity in service delivery.

•Control of government expenditure and enhancemant of value for money in all state funded projects. This included the removal of 32,000 names from the government payroll who were either ghost workers or public servants holding fake academic certificates, saving a total of TShs 378 billion.

•The anti-corruption war, including the establishment of an anti-graft
court, the dismissal of dishonest public officials and the arrest of the alleged masterminds behind the Escrow case.

•Increased control on the protection of natural resources such as minerals, including the signing of three mineral laws and changes which laid reforms in the extractive industry.

•Cost cutting measures that saw fewer foreign trips by government officials and cuts in the budgets for unnecessary workshops.

•Moving the government capital to Dodoma; Mr Abbasi described this as “a dream for a long time, at the beginning no one expected it would
be possible, but the dream has become true.”

•Reduced dependency on donors when it comes to implementing
development projects. He said this was made possible by an increase of government revenue collection of around 50%.

•Bringing social services closer to the people including provision of free education, implementation of water projects across the country, and increased budget for higher education loans.

•Initiation of the Standard Gauge Railway (SGR), starting with domestic funding, and the revival of Air Tanzania.

•The industrialisation drive which, according to Dr Abbasi, has revived 17 factories and “created a conducive environment that has attracted over 3,000 investors who are building factories all over the country.”

More detail on several of these points can be found elsewhere in this issue, including on mining (energy and minerals section), Air Tanzania (transport), and donor dependency (economics).

Assassination attempt

Tundu Lissu is greeted in hospital by fellow Chadema member Edward Lowassa.

This list of achievements was released two months after prominent Chadema MP, Tundu Lissu, suffered an assassination attempt in Dodoma. His vehicle was followed as he returned home from parliament in the early afternoon of 7th September 2017. Having reached his home, he remained in the car while his driver stepped out to investigate, whereupon unknown assailants fired a hail of bullets into the Landcruiser.

Sixteen bullets hit the politician, mostly in his lower abdomen and legs, but miraculously he escaped with his life. He was rushed to Dodoma General Hospital, where he spent several hours on the operating table before being flown to Nairobi. At the time of writing, around four months later, he is still recovering in Nairobi, making good progress, and reportedly about to fly to Belgium for further treatment.

Nobody has been arrested for the shooting. Lissu’s Chadema colleagues have called on the government to request assistance from the US, to bolster the investigation, but the Minister of Home Affairs, Mwigulu Nchemba rejected the suggestion.

Lissu gave an interview to the (UK) Financial Times from his hospital bed in Nairob, in which he said he believes he was the target of an assassination attempt. He added that in his opinion this is evidence of a campaign to “turn the country into a dictatorship”.

Government spokesman Hassan Abbasi said Lissu’s allegations were misplaced. “If anyone, including Mr Lissu, has any further evidence let him share it with investigators,” he said. “Tanzania is known for its unmatched peaceful and democratic political processes which are conducted according to the laws.”

In addition to his role as an MP and legal affairs spokesman for Chadema, Tundu Lissu is also president of the Tanganyika Law Society. He has been outspoken on a number of issues for several years, including criticising foreign mining interests for not paying a fair amount of tax, and taking issue with the government’s actions on gold mining, Air Tanzania and other matters. On the morning of his shooting Lissu was involved in an argument with the President over a report on mining issues.

Wider criticisms
Since President Magufuli came to office in 2015, there have been a growing number of people expressing concern with his approach to democracy and human rights.

Lissu himself was arrested six times during 2017, and charged with sedition after criticising the President. Zitto Kabwe, who represents ACT Wazalendo, has also been arrested several times (see also economics section, this issue), as have other Chadema MPs and leaders including Halima Mdee and party leader Freeman Mbowe. On one occasion, Godbless Lema of Chadema was arrested for speaking seven minutes longer than his allotted time at a rally. Ester Bulaya, another Chadema MP, was arrested for planning a meeting outside her constituency.

Political rallies and meetings have been banned since 2016, except within an elected politician’s constituency or during official election campaign periods. A forthcoming new law – the Political Parties Bill – has been reported by the Citizen newspaper as set to give this ban, which is currently a directive from the President, permanent legal force.

Four newspapers have been suspended and many others threatened with suspension. Several people have been arrested for expressing opinions online. In December, a student of the University of Dar es Salaam who used social media to post photos of cracks in newly constructed accommodation blocks was arrested by the police.

By-election violence
Local council by-elections in 43 wards in November 2017 were marked by what the Citizen newspaper described as “an unprecedented wave of senseless political violence”, leaving dozens of people injured, some seriously. The ruling party, CCM, and the main opposition party, Chadema, traded accusations.

Following the conclusion of the elections, the Legal and Human Rights Centre (LHRC) published a report on the violence. The report outlined the flaws in the by-elections, including improper use of security organs, abductions by unidentified people, arrests and torture of opposition leaders and forceful removal of opposition agents from polling stations.

Acting executive director of LHRC, Anna Henga, said the flaws set a bad precedent for future elections and if left unchallenged they would lead to a breach of the peace. “We will witness growing revenge and political hate among people in the community, which could disrupt peace and security in the country,” she noted.

National Electoral Commission (NEC) director Ramadhan Kailima denied that agents had been chased from polling stations, noting that restrictions were done in accordance with the law and regulations.

Five TV stations were later determined by the Tanzania Communications Regulatory Authority (TCRA) to have broadcast clips from the LHRC report launch in coverage that was “seditious, unbalanced and unethical.” The TV stations have been fined.

Of the 43 contested wards, CCM were victorious in all but one, with the other seat won by Chadema.

Kibiti killings
While the police have claimed victory in Kibiti, to the south of Dar es Salaam, where there has been a wave of killings of local government leaders (see TA 118), concerns remain that the problem may be more entrenched and complex than first thought.

A journalist with the Mwananchi newspaper, Azory Gwanda, who had been reporting on the issue, disappeared in November from his home in Kibiti.

Unidentified dead bodies
In what is probably an unrelated development, a number of dead bodies have washed ashore on Coco Beach in Dar es Salaam, including 17 in a two-week spell in September 2017, according to traders and fishermen working at the beach. The bodies are reported to have been found wrapped in polythene bags, some with rocks tied to the body or with their wrists bound together with rope.

The Minister of Home Affairs, Mwigulu Nchemba, said the government was still investigating, but he suspected the bodies were those of illegal immigrants who had died during their journeys. “The illegal migrants, who include Ethiopians, Somalis and other nationals, are transported like goods… they are squeezed in lorry trailers, as a consequence of which some suffocate and die. Since they transport them illegally, they tend to dump them after dying and proceed with their journeys,” he explained.

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UK AID BOOST

DfID Country Director, Ms Elizabeth Arthy (left), who accompanied the visiting British Minister of State for Africa, Mr Stewart Rory and High Commissioner to Tanzania, Ms Sarah Cooke, at the State House in August with President Magufuli (photo State House)

UK minister of State for Africa, Rory Stewart, visited Tanzania in August 2017, to see how the UK is helping to improve education and health services, and boost jobs and prosperity in Tanzania. As part of his trip, the Minister announced $450 million in funding for development in Tanzania.

Speaking after a meeting with President Magufuli at State House in Dar es Salaam, the minister said “I am very excited to be in Tanzania and to witness the great strides that the country is making in education, providing access to clean water, fighting crime and stamping out corruption. As a key investor and development partner, the UK is committed to supporting the Government of Tanzania to boost economic growth and investment; improve the quality of basic services; and fight organized crime and corruption.”

The minister also visited various projects supported by the UK government, including a primary school and a nearby health facility in Dar es Salaam, the Port of Dar es Salaam and Songas Power Plant. He also met with business and civil society leaders and enjoyed a nyama choma lunch with young Tanzanians.

Dr Magufuli thanked the minister for visiting Tanzania, requesting him to send his regards to Her Majesty Queen Elizabeth II and Prime Minister Theresa May, for the support the UK had been extending to the country for development projects.

The president said while “a few people” in the country may be complaining about the ongoing reforms which include a ramped-up anti-corruption drive and tax evasion crackdown, coupled with heavy cuts to government spending, ordinary Tanzanians are now reaping the benefits of these measures. “We must nurture a culture of paying taxes for our development rather that depending on our development partners,” he added.

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FOURTEEN SOLDIERS KILLED IN DRC

President Magufuli expressed grief and shock when 14 Tanzania People’s Defence Forces (TPDF) peacekeepers died in December while on duty in North Kivu, in the Democratic Republic of Congo. 44 others were injured during the attack.

“I have been saddened and shocked by the reports of the death of the Tanzanian soldiers who were killed while in their peacekeeping mission in DRC,” said the President.

The UN Secretary General, Antonio Guterres, condemned the attack. “I want to express my outrage and utter heartbreak at Thursday night’s attack on United Nations peacekeepers in the Democratic Republic of the Congo,” he said. “I offer my deepest condolences to the families and loved ones of the victims, and to the Government and people of Tanzania. I wish a speedy recovery to all those injured,” he added.

The UN said in a statement that the attack is the worst on UN peacekeepers in the Organisation’s recent history, another indication of the enormous sacrifices made by troop contributing countries in the service of global peace.

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MULTIPLE ARRESTS FOR “HOMOSEXUALITY”

Authorities in Zanzibar in September 2017 detained 20 people accused of engaging in same-sex activities, another incident in an ongoing crackdown on homosexuality in Tanzania. Twelve women and eight men were arrested following a police raid on a hotel where the suspects were attending a workshop, said regional police chief Hassan Ali. “We rounded them up because we suspect that they were engaged in homosexuality in Zanzibar, which is illegal in Zanzibar and is against the law of the country,” he said, adding that police “will intensify (their) vigilance against those groups.”

Under a colonial-era law, “carnal knowledge against the order of nature” is a criminal offence in Tanzania. Sex among men is punishable by jail terms ranging from 30 years to life imprisonment.

A year earlier, in September 2016, the government temporarily suspended HIV/AIDS outreach projects targeting gay men. And in February 2017, the government stopped 40 privately run health centres from providing AIDS-related services, accusing them of catering to homosexuals.

It is reported that “several dozen” people have been arrested since December 2016 for “homosexuality” or “promoting homosexuality”.

More recently, in October, thirteen human rights lawyers and activists were arrested while holding a meeting at the Peacock Hotel in Dar es Salaam for “promoting homosexuality.” Lazaro Mambosasa, Dar es Salaam head of police, confirmed the arrests, stating that the “criminals” had violated Tanzanian law. The meeting had been organized by the Initiative for Strategic Litigation in Africa (ISLA), a Pan African organization whose mandate is to advance women’s and sexual rights. ISLA say homosexuality was not on the agenda at their meeting.

“Its aim was to explore the possibility of mounting legal challenges to the government’s ban on drop-in centres serving key populations at risk of HIV, as well as the ban on importation of water-based lubricants, an essential HIV prevention tool,” said a statement issued by Human Rights Watch, a partner of ISLA.

In a separate incident, a woman in Geita could face jail after a video of her kissing another woman and presenting her with a ring went viral on social media. She was arrested in the town after the clip of her at a party was widely shared.

President Magufuli has threatened to arrest and expel activists and to de-register organisations that campaign for gay rights.

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HUMAN RIGHTS WATCH REPORT BLOCKED

Tanzania’s Commission for Science and Technology (COSTECH) has blocked Human Rights Watch (HRW) from launching a report on abuses against migrant Tanzanian domestic workers in Oman and United Arab Emirates. Dr Willium Kindekete of COSTECH said the commission decided to ban the report because the researchers did not follow procedures.

He said HRW officials who were to launch the report have some immigration issues. “Their visas do not identify them as researchers, but just visitors; so they aren’t allowed to work in the country,” said Dr Kindekete.

HRW researcher on Women’s Rights in the Middle East and North Africa, Rothna Begum, said she had followed the correct procedures – including getting agreement for the launch from the Ministry of Foreign Affairs and the Ministry of Labour – but received information of the ban one hour before the scheduled launch. She noted that something must have happened behind the scenes leading to the ban. She added that the real focus of the research was to give a chance to the government to find a way forward in helping domestic workers from Tanzania abused in Oman and UAE.

She said HRW interviewed 87 people including Tanzanian officials, trade unionists, recruitment agents and 50 Tanzanian female domestic workers who worked in Oman and the UAE. “All the respondents said their employers and agents confiscated their passports. Many worked long hours (up to 21 hours a day) without rest. They said they were paid less than promised or not at all, forced to eat spoiled or left-over food, shouted at and insulted daily and physically and sexually abused.”

The report, “Working Like a Robot’: Abuse of Tanzanian Domestic Workers in Oman and the United Arab Emirates” was released by Human Rights Watch on their website. It found that Tanzanian domestic workers in Oman and the United Arab Emirates (UAE) face excessive working hours, unpaid salaries, and physical and sexual abuse. Abusive visa-sponsorship rules in those countries and gaps in Tanzania’s policies leave the women exposed to exploitation, according to the report.

There are thousands of Tanzanian domestic workers in the Middle East. While some have decent working conditions, many others face abuse, said Human Rights Watch.

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PREGNANT SCHOOLGIRLS – MORE CHALLENGES

When President Magufuli announced early in 2017 that schoolgirls who get pregnant would no longer be allowed to return to school after giving birth, there was an outcry among gender activists and others (see TA 118).

These protests did not succeed in changing the President’s mind, however, and the new policy remains unchanged. Moreover, two other recent developments threaten to create more challenges for schoolgirls.

First, in his Independence Day speech the President announced he was going to pardon two convicted child rapists, the singers Nguza Viking, known as Babu Seya, and his son Johnson Nguza, known as Papii Kocha. Their conviction dated back to 2003, when they were found guilty of raping ten girls aged 6-8 years. After the pardon, the pair were released almost immediately, having served 13 years and have since paid a visit to the President at State House.

It has long been believed by many in Tanzania, particularly young people, that Babu Seya and his son were framed in retribution for actions that caused the then Minister of Foreign Affairs (and later President) Jakaya Kikwete to take great personal offence. During the election campaign in 2015, the leading opposition presidential candidate, Edward Lowassa of Chadema, called for their release. The president’s move is seen as a nod to this strand of public opinion. It also has the effect of suggesting, without ever saying so explicitly, that the current President believes the rumours, and differentiates his “firm hand” style of leadership from the perceived “bend-the-rules” approach of his predecessors.

However, there is little or no evidence to support this conspiracy claim, and the court that convicted the two singers in 2003 heard from a large number of witnesses including children and medical experts. The conviction was later upheld by the Court of Appeal.

The pardon drew praise from some quarters and criticism from others. The President received cheers from the crowd as he announced the decision in Dodoma, and much of the reaction on social media has been in support of his decision.

However, opposition MP, Zitto Kabwe, posted a series of tweets on twitter: “So we must believe street rumours instead of competent authorities? Then we will be a banana republic. … Same President ordered pregnant girls not to go back to school after delivery. … This is the message the president sends to girl child of Tanzania. … I am appalled by his decision to pardon convicted rapists.”

Petrider Paul, of Youth for Change, in Tanzania, said the pardons sent a “terrible” message to perpetrators of sexual violence and devalued their victims. “It is unfair to the victims of these crimes and it sends a bad message to perpetrators that they can get away with it,” she said.

Around the same time, the Regional Commissioner of Mwanza, John Mongella, called for pregnant schoolgirls to be arrested, “so that they will be forced to reveal the names of those who impregnated them”. At the opposite end of the country, in Tandahimba District, Mtwara Region, several pregnant girls were later arrested together with their parents and pressed to reveal names. The fathers are said to have gone into hiding.

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ENERGY & MINERALS

by Roger Nellist

Tanzanian mining – some progress
2017 was a particularly dramatic year for Tanzania’s mining sector. The mineral sands export scandal resulted in the sackings of senior government personnel and far-reaching changes in the governing legislation and administrative machinery for management of the country’s mineral resources. In our feature article, TA118 presented the background to the saga and highlighted the radical responses initiated personally by President Magufuli.

Whilst things now seem to be settling down on the gold mining front, in recent months the President’s crusade against proven and presumed malpractise in the mining sector has turned to the country’s tanzanite and diamond operations.

Important agreement reached with Barrick Gold (Acacia)
On 19 October at a ceremony presided over by President Magufulu in State House, and after three months of intensive high-level negotiations between the government and Barrick Gold Corporation, the two parties signed a framework agreement which in the words of Barrick’s chairman (John Thornton) signals “… a modern, 21st century partnership that should ensure Acacia’s operations generate sustainable benefits and mutual prosperity for the people of Tanzania, as well as for the owners of Barrick and Acacia”. (Barrick – a Canadian multinational based in Toronto – is the world’s largest gold producer and is the parent company of Acacia Mining plc whose Tanzanian gold mining operations triggered the crisis last year. Tanzania is the African continent’s fourth-largest gold producer and Acacia is its largest miner).

Although there are still important details to be negotiated between the two sides, it is expected that the agreement will put an end to the acrimonious state of affairs that has existed between Tanzania and Acacia over the last year. It is understood that the main principles agreed are: (a) the net profits (‘economic benefits’) generated by Acacia’s operations will be shared with Tanzania on a 50/50 basis from now on; (b) additionally, the government will take a 16% stake in the venture (with a new company being established in Mwanza to reflect the new shareholding arrangement, under which Tanzanians will also be appointed to the Board); (c) all income of the company will be banked in Tanzania, no longer abroad, and any disputes will be settled in Tanzania, not internationally; and (d) significantly it has also been agreed that a smelting plant will be built in Tanzania so that the gold, copper and silver produced by Acacia can be processed in the country, obviating the need to export the raw materials. These terms are a big departure for Tanzania and are expected to create more jobs and revenues and generally boost the domestic value-addition from the country’s substantial gold mining operations.

Two other important matters have also been agreed in principle, with the details yet to be worked out. First, arrangements will be established to ensure that the local communities surrounding the gold mines benefit more from the mining operations, and that the mine workers will be much better treated (in terms of contracts, housing, health and social services and the like). Second, Acacia will make a “good faith” payment of US$300 million to the government whilst experts from the two sides continue to haggle over the enormous amount (US$190 billion) that Tanzania has demanded by way of unpaid taxes, fines and interest.

This deal (which was to be approved by the Acacia Board and shareholders) has been acclaimed as especially good news for Tanzania. At the televised signing event the Minister for Constitutional and Legal Affairs, Professor Palamagamba Kabudi (who led the government negotiating team with Barrick), clarified that – with the 50/50 profit split, 16% government shareholding and the other payments to be made by the company – Tanzania’s overall share should amount to about 70%. President Magufuli said “Now that we are all shareholders, we can sit down over a cup of coffee and amicably resolve any outstanding issues”. The deal means that, as a shareholder, the Tanzanian government will be involved in key decisions governing the gold operations (such as investment, employment and training of Tanzanians, procurement of goods and services, and marketing). There appeared to be investor relief too, as Acacia’s London-listed share values rose 16 percent on news of the agreement.

Nevertheless, there continues to be fall-out from the 2017 saga. In the autumn, because of the original ban imposed on the export of gold and copper concentrates, Acacia scaled back production at one of its three gold mines (Bulyanhulu) and retrenched about 2,000 workers. This led to fears of serious impacts on their families and the local economy and worries from banks that many of the mineworkers would default on the personal loans that had been extended to them.

Then, a day after signature of the framework agreement, a senior representative of Acacia said his company did not have $300 million with which to pay the upfront “good faith” sum. That prompted Barrick to announce that it would meet part of the bill. Finally, in the first week of November Acacia’s top two executives – Chief Executive Officer (Brad Gordon) and Chief Finance Officer (Andrew Wray) – resigned and the Board announced their replacements. It was unclear whether their departures were directly related to the October framework agreement with government, but commentators hinted that the two had been excluded from the negotiations that Barrick had conducted effectively on Acacia’s behalf.

More widely, a few experts were predicting in September that no Tanzanian mining venture would be economic after the recent changes in the mining tax laws, and in early October, two weeks before the Barrick agreement, a government spokesman denied that Tanzania was moving to nationalise mining operations. He said: “The laws are not intended to lay the ground for nationalisation but seek to ensure sovereign ownership of natural resources … in conformity with international principles. … The government will continue attracting and protecting investors in the mining and other sectors so long as they adhere to the law and regulations”.

Diamonds and Tanzanite
In July 2017 the Bunge Speaker appointed two parliamentary teams to probe alleged malpractice in Tanzania’s diamond and tanzanite mining operations. Reporting to the Prime Minister and President in early September both teams were very critical of the country’s mineral sector regulatory bodies (especially the Ministry of Energy & Minerals, where the last three Ministers were singled out for having supervised the gemstone industry poorly); they pointed to the likelihood of substantial tax losses whilst also questioning missing revenues in that Ministry’s accounts.

The diamond probe identified huge differences in diamond production statistics kept by different organs of government and, startlingly, asserted that “…. one high-level government leader was given a gift of diamonds with a current value of $200 million”. Amid public and parliamentary controversy, that leader was not named.

Decrying the secrecy surrounding tanzanite mining, the other probe team suggested that only 20% of Tanzania’s tanzanite production passes through official channels (the remainder disappears through smuggling) and that government gets only about 5% from the likely global sales and other disposals of that gemstone, which is uniquely produced in Tanzania.

As with gold earlier, government responded robustly. In early September London-listed Petra Diamonds (which owns 75% of Williamson Diamond Ltd) temporarily suspended diamond mining at its Shinyanga Williamson mine after a parcel of diamonds destined for export to Antwerp had been seized by government on 31 August at Dar’s international airport and some of the company’s key staff had been detained for questioning by the authorities. It was alleged that the diamonds had been deliberately under-valued by half (with a declared preliminary value of some $15 million instead of nearly $30 million established through a government re-valuation of the stones) as a result of possible collusion between mine workers and dishonest officials. Petra’s share price fell by 28% on news of the seizure but the company maintained that it had sought and been granted all relevant export documentation, and even published copies of the government’s certificates on its web-site.

On tanzanite, in mid-September whilst on a visit to the north, President Magufuli ordered the military to build a wall around the tanzanite mining areas at Mirerani (close to Mt Kilimanjaro), allowing only one way in and out of the mine, and to install enhanced electronic security equipment, so that smuggling of the precious stones can be stopped and the government can secure its proper share of their worth. Mirerani is the only known tanzanite mine in the world. Magufuli also instructed the Bank of Tanzania to start buying stocks of tanzanite to boost its reserves.

It is understood that following the conclusion of the gold framework agreement with Barrick, the President ordered government officials to commence talks with diamond and tanzanite miners with a view to reaching similar agreements.

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BUSINESS & THE ECONOMY

by Ben Taylor

Government claims ownership of Airtel Tanzania
President John Magufuli has instructed Finance and Planning Minister Philip Mpango to institute measures that would enable the government to acquire full ownership of Airtel. The government currently owns 40% of the company’s shares.

TTCL board chairman Omar Nundu and CEO Waziri Kindamba said the company had officially embarked on a “war to recover the firm’s lost shares”. “Airtel … is an asset of Tanzania Telecommunications Co.,” said President John Magufuli. “A terrible game was played. I don’t want to say more than that.”

Airtel Tanzania is now jointly owned by the government of Tanzania through TTCL (40%) and Celtel Tanzania BV, an affiliate of Zain Africa BV which was acquired by Bharti Airtel International in November 2010.

TTCL’s case is being built using records traced back to 1998, when the Cellnet Company was launched under TTCL’s full ownership. Cellnet operated until 2001 when it was rebranded to Celtel Tanzania, again under the ownership of TTCL which owned the entire operating infrastructure installed at a cost of $5 million.

The company was later sold and rebranded as Zain and thereafter as Airtel Tanzania. Subsequent decisions by the then TTCL management and board of directors, as well as, the Treasury Registrar reportedly handed control of the mobile firm to private investors in what TTCL is now arguing is free-ride ownership at its expense. The corporation claims it invested $82 million in the early stages of establishing the company.

A TTCL board meeting in 2005 is in the spotlight for approving the transfer of TTCL’s 10.25 million shares to an investor Mobile Systems International (MSI), which boosted its share to 60% against 40% of the government. Bharti Airtel acquired the 60% shareholding in 2010.

“We would like to highlight that our acquisition of the said 60% share-holding in June 2010 was in full compliance with and following all approvals from the Government of Tanzania,” said Bharti Airtel in a Business & the Economy 17 statement. (The Citizen, Bloomberg)

Reduced dependence on foreign finance
A report by the National Bureau of Statistics (NBS) and the Ministry of Finance and Planning shows that government revenue from foreign sources has been cut from 46% in 2003/04 to 13% in 2015/16. Foreign sources include official development assistance (ODA / aid) and other grants and loans.

The report indicates that the fall in dependency on foreign sources is largely a result of increased domestic revenue, mainly resulting from ongoing expansion of economic activities and improved efficiency in revenue collection by the Tanzania Revenue Authority (TRA).

Total revenue collection reached TShs 15.8 trillion in the 2015/16 financial year, up from TShs 3.39 trillion in 2003/04.

Possible land ownership by foreigners
The Ministry of Lands, Housing and Human Settlements Development has raised the possibility of allowing land ownership by foreign nationals in Tanzania. Under the current arrangement, foreigners are not allowed to own land in Tanzania but are granted ‘durative rights’ to have access to land for investment through the Tanzania Investment Centre (TIC).

A new National Land Policy is proposed, which will put in place new mechanism for land administration and management in the country. This includes enabling foreign land estate developers to have title deeds to the land after which they can sell their houses on the open market.

The Minister, Mr William Lukuvi, said it was time the policy was changed to accommodate changes in the land sector. “The government finds it appropriate to amend the policy to improve land administration and management in the country,” he explained.

The Minister explained that with the new policy the government seeks to survey and plan the entire 948,000 square kilometres in Tanzania and allocate land for industry, agriculture and residential areas. The envisaged new policy will also introduce a requirement to have land officials at village level in order to curb land conflicts and rampant selling of land.

The new policy has been developed in consultation with key stakeholders, and now awaits official endorsement from the meeting of permanent secretaries and finally the cabinet.

Disputed economic data
A disagreement flared between opposition MP, Zitto Kabwe, and the Bank of Tanzania (BoT) over official economic data. Kabwe conducted his own analysis of BoT data on inflation and the money supply, concluding that the rate of GDP growth was around 0.1%, much lower than the official estimate of 5.7%.

In making this claim, Kabwe tapped into widespread public unease at the state of the country’s economy. This view says that clampdowns on tax evasion and corruption have over-reached, leading to a shortage of cash in the economy and a slowdown in growth. Indeed, even official BoT data shows sharp declines in lending to the private sector and in the broad money supply, and smaller declines in both imports and exports, lending some credibility to Kabwe’s argument.

However, economists such as Justin Sandefur of the US-based Center for Global Development (CGD) have argued that elements of Kabwe’s analysis are flawed, though agreeing that there are grounds for concern. “Even if the official growth figures aren’t wrong, the opposition’s main critique still applies,” he wrote.

Following the publication of his analysis, Kabwe was arrested and charged both with sedition and under the Statistics Act. This latter charge represents a test case for the controversial law, which criminalises the publication of false or misleading statistics.

Meanwhile, the World Bank has cautioned against growing public debt in Tanzania. Speaking at the launch of a Tanzania Economic Update (TEU), World Bank Africa Chief Economist, Albert Zeufack, said that across Sub-Saharan African, “debt is rising very fast such that it’s almost crossing the HIPC levels which is not sustainable.”

According to the new TEU, the level of public debt in Tanzania has increased by more than 30% over the past 5 years, although this debt remains sustainable at around 40% of GDP by June 2017. The report states that increased level of public debt in recent years has been driven by increased non-concessional borrowing from both the domestic and foreign markets.

“In 2016/17, the cost of public debt service increased significantly, consuming about 14% of domestic revenues,” reads the report. The report argues that Tanzania’s public debt “appears to remain sustainable”, but adds that “additional short-term borrowing could increase liquidity vulnerabilities, especially if a significant portion of new loans is contracted on the domestic market. Thus, the debt portfolio needs to be monitored closely, as the growth of domestic debt could exacerbate tight liquidity conditions, while increased debt service costs could reduce the fiscal space for development spending.”

Observer newspaper reports contentious links between Vodacom and Tanzanian elites
An investigation by the (UK) newspaper, the Observer, into the African interests of British mobile phone company, Vodafone, has raised significant questions about the selection of local partners when the company established Vodacom in Tanzania.

The paper reported that in 1999, a company owned by Rostam Aziz acquired a 10% stake in Vodacom Tanzania and that by 2007, he had increased his shareholding to 35%. Local investors were required to lend money to Vodacom to enable the firm to expand its network, but the Observer found that Vodacom lent the money to Mr Aziz’s company so that he could meet this obligation. His share purchases were not funded by these loans.

Vodafone says that by 2012 Aziz’s company owed Vodacom and Vodacom Tanzania a total of $52.5m, though this is disputed by Mr Aziz. In 2014, he sold half his stake, netting $240m, and Vodacom is now looking to buy out the remainder of his stake. The deals have led to him appearing in Forbes as Tanzania’s first dollar billionaire.

Aziz became an MP in 1994 and later the national treasurer for the ruling party. He helped to fund and managed President Jakaya Kikwete’s campaign for the 2005 elections. In 2007, a US embassy cable noted his “extraordinary influence”, quoting a fellow politician who said: “I don’t know what magic that guy has, but he is the power behind the throne.” In 2011 he resigned as an MP amid corruption allegations that he strenuously denies.

The former chair of the UK parliament’s Public Accounts Committee, Dame Margaret Hodge, questioned whether Vodafone could have done more to ensure that ordinary Africans benefited from the transactions. “Vodafone should not just hold its nose while the wealthiest in Africa get even wealthier,” she said. “They could have used their power to ensure that, where there were local ownership rules, the ordinary people of the country benefited, rather than the wealthy elite.”

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FOREIGN RELATIONS

by David Brewin

Israel
Relations between Tanzania and Israel have become much warmer during the last two years following a surge of tourists from Israel and the visit of Israeli Prime Minister, Benjamin Netanyahu to Uganda. Planes full of Israeli tourists now arrive regularly at Kilimanjaro and Zanzibar airports. However, as this edition of TA goes to press the surprising decision of President Trump that the USA will move its embassy from Tel Aviv to Jerusalem could have serious consequences for relations between the two countries.

Trade and diplomatic relations between Tanzania and Israel were first established in 1963 but were severed in 1973 following the Arab-Israeli war, while diplomatic relations were re-established in 1995. Israel has been operating until recently from its embassy in Kenya in its dealings with Tanzania. The number of tourists visiting Tanzania has risen from 3,007 five years ago to 14,754 in 2015. The Israeli Ambassador said Tanzania was now among African countries that Israel has been looking to for business and diplomatic cooperation.

Relations were strengthened further when President Magufuli expressed his intention to open an embassy in Tel Aviv in a letter addressed to Israeli Prime Minister Benjamin Netanyahu, and hoped that the establishment of an embassy in Dar would make it easier to process visas and help to boost trade between the two countries.

Turkey and Portugal: rail contract
A joint venture between one Turkish and four Portuguese firms has won a tender for construction of 205 km of Tanzania’s new standard gauge railway, part of the 1,216 km stretch that will eventually link Dar es Salaam with the rest of the country as well as with Rwanda and Burundi. The two firms beat 39 other bidders to win the tender after meeting both technical and financial criteria for implementation of the project, which will take 2½ years. The line will run parallel to the existing central railway line built by the Germans 120 years ago. This consortium will be responsible for the stretch linking Dar es Salaam with Morogoro.

Oil exploration
Tanzania has entered into an agreement with Uganda to help in the search for oil in Uganda’s Eyasi Wembere Basin and Lake Tanganyika. This puts in doubt Tanzania’s previous agreement with Democratic Republic of Congo signed a year ago to work on joint oil exploration in Lake Tanganyika.

Charm offensive
President Abdel Al Sisi of Egypt recently visited Tanzania as part of a four-state tour of Africa. His objective was to drum up support for Egypt’s position on the use of water in the Nile Basin prior to a meeting of the countries through which the Nile flows. Tanzania recently ratified a Nile basin common framework agreement that Egypt opposes as it lobbies for its own renegotiated and updated Common Framework agreement.

President Al Sisi pledged support for the Nile Basin countries in return for favourable sharing terms of the Nile waters which he said were a matter of life and death for his people. The Nile Basin countries dispute Egypt’s historic share of the Nile’s waters.

Fears over Kenya dam proposals
A 10-year plan to build several dams on the river Mara and its tributaries could pose a threat to the rich animal and plant life of the Serengeti ecosystem. The river Mara flows from Kenya into Tanzania and is the only permanent source of water for Masaai Mara and Serengeti reserves and the herds of wildebeest and other wildlife that migrate between the two countries. Conservationists are concerned that the dams will reduce or even eliminate flows in the river at some times of year and lead to environmental problems, and could spark a diplomatic row between the two countries unless the East African community agreement is invoked in support of sections of the proposed project. Experts say that international efforts are needed soon to save the Serengeti as Kenya stands to reap all the economic benefits from the dams while Tanzania could remain saddled with environmental problems.

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