Exchange Rates (April 14, 1994):
US$ = Shs 502 – 513
£ Sterling = Shs 745 -764
EAST AFRICAN BANK GOVERNORS REACH AGREEMENT.
Governors of the central banks of Kenya, Uganda and Tanzania have reached agreement on a series of measures on inter-state trade and the removal of currency restrictions. It is not known how long it will take to implement the governors’ recommendations.
LESS RED TAPE NEEDED.
Speaking at a dinner meeting of the Tanzania-UK Business Group in London, Mr Patrick MC Laughlin, the Minister with Special Responsibility for Africa in Britain’s Department of Trade and Industry, said that Tanzania’s economy could reap big benefits if the authorities dispensed with current bureaucratic practices when doing business with foreign investors. If it did not, “UK Investors would continue to find the pursuit of many opportunities a wearisome task” he said.
PACE OF PRIVATISATION.
Among recent investments in Tanzania are the five-star hotel under construction on the golf course in Dar es Salaam (financed by the Aga Khan Fund for Economic Development and Britain’s CDC), provision of a local and international mobile telephone service (Tanzania Posts and Telecommunications and a Malaysian firm, Technology Resources Industries) and a restructuring of the Ministry of Agriculture (Islamic Development Bank). But, Arab and Asian investors have expressed the view that the pace of privatisation has been slow in Tanzania because there are not enough black African entrepreneurs involved to satisfy oldguard socialists who fear a return to market control by ‘outsiders’ – African Business, March 1994.
BUSINESS SERVICES CENTRE.
A USAID sponsored Business Services Centre will be opening in Dar es Salaam shortly. It is designed to help the local private sector through a combination of training, advisory and information services – Business News, March 4.
STOCK EXCHANGE.
Dr. Charles Kimei, Director, Economics and Statistics at the Bank of Tanzania, has stated that Tanzania has embarked on a law to enable the licensing of securities and capital market dealers. “We are looking towards forming a stock exchange in about two years time” he said and added that a public training programme to this end had already begun – Lloyd’s List February 21.
PRETENDING.
Business Times columnist Joe Dotto has been writing about the recent strikes amongst teachers, medical staff and other workers. ‘Everybody knows’ he wrote ‘that public employees in Tanzania have been on strike for twenty years. The strike began with the famous Clause 15 of the then TANU Party guidelines which threw out of the window the rules of office discipline and overthrew the office boss in favour of the liberation of the workers.. . . .on its part, the government then decided to pay back in kind’. It had started to pay its workers monkey wages – peanuts. A government employee summed up the situation – ” the government pretends to pay us and we pretend to work for it”.
AMERICAN MULTI-NATIONAL COMES TO TANZANIA.
A new multi-billion shilling company by the name of Colgate-Palmolive (Tanzania) Ltd has been established. It is a partnership between the well-known American consumer products company that operates in 170 countries and IPP in Tanzania – Family Mirror
STOWAWAYS.
According to the South African-based Managing Director of P and I Associates (Marine Surveyors) the initial reason why they opened an office in Tanzania before Kenya was the high level of stowaways coming from Tanzania. Once we managed to deal with that problem we found that our services were more in demand from shippers dealing with trade with South Africa – Lloyd’s List February 21.
INCREASING IMPORTANCE OF INFORMAL SECTOR.
Dar es Salaam University economist Nathanael Luvunga has stated that informal sector employment in Tanzania now covers 22% of total employment. There are 1,402,000 informal sector enterprises employing more than 2.5 million people he said. The sector’s contribution to GDP increased from 10.3% in 1985 to 32% in 1991
CHARGES RAISED.
Air Tanzania Corporation (ATC) raised fares and cargo charges for domestic routes by 30% with effect from April 1st because of what the managing director described as the continued depreciation of the Tanzanian shilling against the US dollar and £ sterling.
WITHOLDING TAX.
The Dar es Salaam Merchants Chamber has complained bitterly about the government’s introduction of a 2% witholding tax on the private sector because it involves a lot of extra paper work. But the Commissioner of Income Tax has pointed out that parastatal companies have been paying this tax for some time and that the protests probably reflect a lack of a ‘tax compliance culture’. Honest businessmen would be helped because tax would be payable in instalments rather than in a lump sum at the end of the year. The latest development, as the Bulletin goes to press, is an apparent admission by the Attorney-General, after a request for clarification from the Confederation of Tanzania Industries, that applying the tax to private business would be contrary to the provisions of the income Tax Act (1973). The Government is also said to be considering the introduction of a Value Added Tax to replace sales taxes for industrial and other firms – Business Times.
PRE-SHIPMENT INSPECTION.
The government has appointed Cotena Inspection SA on a three-year contract to carry out preshipment inspection, tax-collection and monitoring of the tax collection services. The aim is to protect Tanzania’s foreign exchange resources and to increase the amount of customs duties collected.
NEW BANK.
A private indigenous bank – the First Adili Bank – which is to emphasise initially merchant and investment banking is hoping to start operations within the next few months.
EXPORT PROCESSING ZONE.
Officials of the Zanzibar Investment Promotion Authority (ZIPA) and the Zanzibar Free Economic Zone Authority (ZAFREZA) report that some 208 projects designed to generate up to 6,000 jobs have been approved. But most of the projects have not gone beyond the feasibility stage. Consultants have expressed reservations about the idea of turning Zanzibar into a free port because of the lack of a core of local investors, managerial ability and a developed labour force. There was also the possibility of processing zones being established around Dar es Salaam where the environment would be more suitable – Business Times, March 4.