Editorial

• Plastic recycling crucial to eco-balance
• Companies should go public

Analysis

• Debt cancellation an opportunity to boost growth
• Globalisation, SAPs encourage child labour

Plastic recycling crucial to eco-balance

The indiscriminate use of plastic bags has been, for the past few years, a controversial topic in the urban centres of Tanzania. This is because of the environmental hazards posed by plastic material.
 In most shopping centres in the country, particularly supermarkets in Dar es Salaam and other urban centres, the first thing to catch the eyes is that almost every item bought is wrapped in plastic bags.
 As a result, experts say almost every household in Dar es Salaam produces half a kilogramme of discarded plastic bags. If measures are not taken soon to curb the over use of plastic bags, the environmental balance will be greatly upset.
 Experts also say that if plastic bags are consistently used and no measures are taken to recycle them, the passage of rain water into the soil could be blocked and the results are known to everyone.
 The measure taken by a local firm, Simba Plastics, to recycle plastic waste is commendable and needs more support.
 The project, which is being supported by the United Nations Industrial Development Organisation (UNIDO), is a small scale programme and what is being done is just the tip of the iceberg.
 In its efforts to contain the problem, the government has done very little. For example, last financial year, the government introduced a fiscal measure imposing excise duty on plastic bags, but it had a negligible impact.
 What the government is needed to do now is totally banning the use of plastic bags. But that is a bit difficult as a lot of youths are employed in selling plastic bags.
 Alternatively, the government should strengthen projects to recycle plastic wastes as demonstrated by Simba Plastics. The government should not leave the matter in the hands of the private sector and UNIDO alone.  
It should start implementing the international conventions it ratified; one of them being the 1992 Rio de Janeiro Convention on the protection of bio-diversity and ecology. The government should act now as tomorrow might be too late.

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Companies should go public

The pace of listing at the Dar es Salaam Stock Exchange (DSE) is not encouraging.
This is because of several factors including lack of awareness and private companies fearing disclosure requirements, which are one of the listing conditions.
Private companies are organized as family companies. Owners are not ready to let the family cake be shared by others. The time consuming exercise of going public and the associated costs has also been a major concern for the private companies.
The above factors have left out private companies on the DSE list. For the case of privatised companies, some have not attained the track record required for listing purposes.
But the main factor which corporate, especially family companies, most do is not to disclose their financial results in a move to dodge taxes. However, it is hard to prove that some companies have two accounting books—one for the taxmen and the other for the shareholders/partners and so forth.
Nevertheless, these companies do not know what they are missing when it comes to raising cheap capital. This is despite the efforts made by both the Dar es Salaam Stock Exchange (DSE) and Capital Market and Securities Authority (CMSA) for companies with listing potential.
The advantages of listing a company at DSE overtake the disadvantages. Among many benefits, the CEO would adhere to forecast achievement suggested by the board of directors thus pushing the success of the company in a short period.
Another benefit is free advertisement-coverage the company receive from the media whenever shares appreciate/depreciate or when announcing dividends. In short the company will be in media limelight throughout the year.
But the biggest boost for listing is the source of raising cheap capital rather than borrowing from a commercial bank. Besides, the company can easily obtain a loan or an overdraft because its status is publicly known and default risks are less. In a simple language the company would not be on the blacklist of the credit bureau.
But in the Third World, financial reports disclosure is not that easy—people are too corrupt to the extent that they are only thinking and investing for tomorrow, not for the long-term.
For that reason we think its time for the companies to start thinking about going public—all big international corporate names we hear today—Land Rover, NIVEA, Microsoft, British America Tobacco (BAT), Heineken, Barclays Bank, Standard Chartered Bank are listed.

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Analysis  

Debt cancellation an opportunity to boost growth
By Kenge Abduel

The US government, last week, announced its robust new debt forgiveness plans for the heavily indebted countries. Two countries, Tanzania and Uganda, are among the 27 countries that could see a 100 per cent write-off of their debts. 
The positive move for Tanzanian and Ugandan economies from the US should not pass unacknowledged.  
The Tanzanian government has said it supports the plan 100 per cent that seeks to convince the country’s creditors to cancel all outstanding multilateral external debts.
 Senior Permanent Secretary in the Ministry of Finance, Gray Mgonja, said “the government supports US moves and anyone who is fighting to rid Tanzania of its external debt which has been a burden to the economy and development”. 
According to the latest Bank of Tanzania report, Tanzania’s current external debt stands at about US$ eight billion (Tsh. eight trillion) despite many creditors’ benevolence that led to cancellation of multi-lateral debts. 
In fact, according to the Treasury, the UK is also doing the same. All Paris Club (creditors) countries — UK, US, Canada, Germany, France, the Netherlands — have cancelled their debts to Tanzania, except Japan, that has only cancelled government-to-government debt, but not commercial debts. 
The greatest external debt burden stems from oil debt, particularly to Arab oil-producing countries. It is an old debt as now the Tanzanian government does not purchase oil following the liberalisation of the petroleum sector some five years ago. 
It is claimed the oil-producing countries are not ready to cancel the debt as they, too, consider themselves developing countries unlike Tanzania’s Western creditors.
 The radical American initiative is scheduled to be discussed at the annual meeting of the Bretton Woods institutions in Washington early next month. 
The proposal is likely to win support from a large majority of the 184 member nations of the World Bank and International Monetary Fund. But the giant lending agencies are said to be having misgivings about the plan’s impact on their financial stability. 
While creditors are pushing plans to have 100 per cent debt forgiveness, the ruling party which has been in power since the birth of this nation, should really practise good governance — Tanzania has a minister dedicated to this.
 The magnitude of the debt could not have gone that far had the rulers been honest with the funds and used them for purposes they were loaned for.
We must almost make sure our economic development strategies are sound and implementable.
 For any country to develop, it should borrow; like in corporate, one needs capital. Leaders have to behave like chief executive officers, who always weigh the consequences of borrowing.
But for poor countries ruled by corrupt leaders, a lot of money from creditors is meant for fattening one’s belly. This fund mismanagement — lack of good governance — has brought Tanzania where it is today — with huge debt burden. 
However, since the third phase government took over in 1995, the country is once again creditable. A number of economic revamp strategies have been well implemented and the economy is heading in the right direction. But the government should not relax as a lot is still at stake. 
While the government appreciates and support the creditors, we wananchi are happy as debt cancellation means the country would have more money to spend on development activities, let us sincerely work very hard towards economic prosperity. 
It can be done, as in 1960s most African countries’ economies were better off than those of the Far Eastern countries. The economic differences seen today weren’t always there.

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Globalisation, SAPs encourage child labour
By Timothy Kitundu

Globalisation, which has made the world a global village, coupled with Structural Adjustment Programmes (SAPs), has led to the increase in worst forms of child labour (WFCL).
SAPs accompanied by privatisation and retrenchment of workers, has greatly upset the labour balance in a way that every one in a household has to work. Children are, therefore, not spared.
 Before independence, the lifestyle of urban dwellers was structured in such a way that it gave no room for employing children to work as house girls. At that time, housewives took care of the children and other household chores.
 Even the school curricula was set in a way that it discouraged child labour. In most secondary schools, girls were taught subjects such as cookery, home economics and needle work so that after school they settled at home and took care of the household chores. 
This had its advantages and disadvantages. For example, women were confined to homes, taking care of kids while men worked outside. To women, this was a denial of basic right: working and earning money.  
The advantage of this system was that there was no room for employing house girls as all the chores were undertaken by house wives. This means child labour was very minimal. Unfortunately, that is no more the case. 
With the advent of SAPs and later globalisation, a number of issues cropped up. First of all, the government which was the main employer pulled out of business that was taken over by the private sector.
 This move had an adverse effect as far as the labour market was concerned. The privatisation of large scale state-owned farms now attracted more labour in the form of children.  
The new owners found it profitable to employ children who have less domestic commitments and can work long hours without complaining. They are also paid less compared to adults.
 Child labour again was encouraged following the increase in investment by private sector players as well as foreign investors. Earlier, when the government and its state-owned corporations were the employers, labour laws were strictly adhered to.
 But to the new private sector investors, adhering to labour laws - such as observing the minimum employment age, equal pay for work undertaken and others - seemed to erode their profit margins. In general, unlike in the public sector, enterprises in the private sector are profit-oriented.
 Today, the domestic sub-sector could constitute the largest number of child workers compared to mining and construction. This is caused by the change in roles of women, who are now working side by side by men in offices and factories. 
Because of the economic hardship, both the parents are obliged to be away from their homes the whole day. Some parents are engaged in the private sector as entrepreneurs but all the same it means struggling hard for men and women in order to survive.
 This leaves them with only one alternative and that is to employ houseboys and house girls to take care of the chores that women used to undertake. These chores include all domestic activities and taking care of the children. On the other hand, it is sometimes difficult to prove that children under the age of 18 are employed in almost all homes in urban areas. 
This can be substantiated by the employers themselves. Recently, the Trade Union Congress of Tanzania (TUCTA) organised a two-day training of its members in the areas of democracy in trade unions. Other subjects covered included child labour and ILO’s core conventions. 
The participants from the Tanzania Teachers Union (TTU), who are definite employers in their homes, admitted they are obliged to employ young girls/children as house girls.
 A secondary school teacher (female) from Temeke district admitted there was a tendency to employ children as house girls as they concentrate on their jobs being still too young to pay attention to other issues such as chasing men. 
“Secondly, we prefer children as they do not threaten our marriages like young girls would,” she confided.
 Another teacher (male) from Ilala distrct disagreed with the female colleague, saying that women or rather their wives were the authors of child labour in their homes. He claimed most men prefer to employ grown-up girls as they are mature and can handle all household chores properly.
 It is now an indisputable truth that SAPs, globalisation and some married couples are the authors of child labour in Tanzania. Commitment is the only seeming solution to curb child labour. Additionally, all organisations engaged in the war against child labour should be adequately supported.
 Facilitating trade unions, which are the partners the war against child labour, could be another good solution towards eliminating the problem. Trade union trainers can conduct seminars, workshops and training sessions for their members so that they change. 
Once there is will and commitment and each household says no to employing children as house girls, that will be one step forward towards eliminating child labour.

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