Umoja Fund to boost
shareholding
By Kizito Makoye, recently in
Dodoma
The Unit Trust of Tanzania (UTT) has unveiled its long-term strategy
to establish a collective investment scheme to be called ‘Umoja Fund’ in an
effort to enable majority Tanzanians acquire shares of companies listed on the
Dar es Salaam Stock Exchange (DSE).
The strategy was unveiled in Dodoma Saturday by UTT resource person Osward
Urassa at a one-day workshop for editors of media institutions and chairpersons
of press clubs.
Umoja fund will enable Tanzanians from across the country to buy units, which
will be pooled together in aggregating small savings into large funds.
A person will be able to pay Tsh. 3500 for 50 units instead of a market price of
Tsh. 5,000 and the dividends will be paid every six months.
According to Urassa, Umoja fund will be under the management of a Fund manager,
who should be an investment analyst. He said a majority of Tanzanians were yet
to know the advantages of investing in shares despite the public education by
DSE, and added Umoja Fund is geared to increase overall participation of
Tanzanians in share ownership “bringing the market closer to people” in which
they can do business within their own localities.
“Collective investment schemes work on the principle of pooling resources,
placing those resources in hands of professionals and allowing investors to
share the benefits arising out of investment of the pooled funds,” he explained.
Urassa said the strategy is in line with the government’s privatisation policy,
under which Tanzanians will get the opportunity to own shares of companies that
have gone through divestiture, such as TOL, TBL, TCC, SIMBA and DAHACO.
A most typical empowerment case for collective investment schemes is that of
Ghana. At one time, the Housing Finance of Ghana learnt it was difficult for
Ghanaians to access mortgage finance due to a failure to meet a 10 per cent own
contribution requirement. It later established a Unit Trust scheme to facilitate
savings.
UTT will ensure shares held in trust are distributed among Tanzanians in a
manner that will encourage and facilitate savings and wider participation by
citizens in the ownership of privatised enterprises.
back to headlines
EC offers 750m/- prior to
trade talks
By Timothy Kitundu
A delegation of the European Commission in Dar es Salaam last week
announced it will extend financial support to the Ministry of Trade and Industry
to the tune of Tsh.750 million for a special scheme to help Tanzania prepare for
forthcoming trade talks.
EC Press and Information Officer, Neema Kambona said in a statement the talks
will include negotiations of an Economic Partnership Agreement (EPA) between the
European Union (EU) and the Southern Africa Development Community (SADC).
“Out of the total support of Tsh.750 million, the EU will contribute up to
Tsh.590 million,” she said.
According to Kambona, EPAs are a key component of the Cotonou Agreement, the
framework for cooperation between the EU and 77 countries from Africa, the
Caribbean and Pacific (ACP) regions.
Its purpose is to enhance the ACP countries’ exports by linking regional
integration, EU development, aid and trade policy, while respecting the rules of
the World Trade Organisation (WTO) and the Doha Development Agenda.
Kambona said, EPA negotiations are held at regional level and for SADC the
substantive talks will begin in January 2005, following a period of
priority-setting for negotiations. By the end of 2005 , it is hoped that a broad
understanding will have been achieved on the main elements of the SADC-EU EPA
agreement and after the passage of accompanying legislation the EPA could come
into force in the beginning of 2008.
Priority areas in the discussions, Kambona said, are likely to focus on
improving regional integration within the SADC as EPAs’ main objective is to
help the ACP countries use regional integration as a step towards their gradual
integration into the world economy.
Additionally, it is part of the EPA approach that SADC countries, including
Tanzania, should be helped to benefit from improved access to EU markets by
measures that will allow for EU technical regulations and standards to be met
consistently by Tanzanian products.
Kambona said the financial support announced by the Commission will allow
Tanzania procure expert advice, both local and international, on each of the key
themes of the negotiations and to organise stakeholder workshops, training and
indepth studies.
The announcement of this support coincides with the decision to launch a new EU
project aimed at supporting the ACP countries in formulating their trade
policies and negotiating trade agreements.
Development efforts
harmonised to increase aid effectiveness
By Angela Mazula
Advocating for better results from development resources, African
governments, development banks, donor agencies and civil society organisations
have decided to join forces and strengthen development aid effectiveness.
This was revealed by Eric Chinje, Director of the African Development Bank (ADB)
speaking in Dar es Salaam this week at African regional workshop on
‘harmonisation and alignment for development effectiveness’ held at Golden
Tulip.
Chinje said international efforts to improve the effectiveness of development
programmes designed to reduce poverty and foster economic growth, are
harmonising and aligning polices among donors and partner countries.
Chinje explained the donors were discussing ways to work together more
effectively, in particular, the multilateral development banks and bilateral
donors though the Development Assistance Committee of the Organisation for
Economic Cooperation and Development.
He said the establishment of a technical group had begun to define sets of
policies and procedures that all could agree on.
Tanzanian President Benjamin Mkapa said at the meeting, there was a widely felt
need to intensify the coordination and harmonisation of activities among
development partners in order to accelerate poverty reduction efforts.
Foreign companies in Africa
predict employment growth
By Angela Mazula
A report on a survey of African
foreign investors has revealed over 50 per cent of companies expect employment
growth over the next three years.
One third of the respondents expected growth in employment and about 13 per cent
were expecting to reduce staff. The report said a relatively large proportion of
foreign companies based in Tanzania, Ethiopia and Nigeria were expecting
employment growth rates, while Kenya that had the highest share of companies
expected staff reduction over the next three years.
It said, in Madagascar, a relatively higher share of companies was expecting
significant staff reduction of over 20 per cent, whereas in Senegal not one of
the respondents expected to reduce staff.
In the next three years, companies dealing in leather and foot wear, textile,
wearing apparel, basic metals and metal products are anticipating employment
growth, according to the report.
Many respondents were rather optimistic about the growth of sales in local
markets - less than six per cent expected falling sales and only two per cent
anticipated no-sales growth, the report explained.
Coffee, cotton prices slide
By Express Reporter
During the month of August 2004, export prices of coffee declined as
the threat of frost in Brazil receded, while the price of cotton, “A index”,
declined against the backdrop of expectations of higher cotton production in the
US, India and Uzbekistan in 2004/05.
Conversely, prices of tea went up, mainly on account of unfavourable weather
conditions in tea-growing countries including Kenya, according to the BoT
Monthly Economic Review of August 2004.
The price of sisal (UG), according to the Review, remained unchanged at US$ 885
(about Tsh.973,500 per metric tonne). However, there are growing expectations
that the world market price of sisal might increase in the coming months largely
due to the persistent rise in oil prices, which will in turn, increase the
demand for synthetic fibres.
This move is expected to increase the demand for sisal and put an upward
pressure on prices. The price of cloves on the other hand went up largely due to
expectation of decline in clove production in Madagascar.
The prices of crude oil and white petroleum products went up, mainly in response
to concerns about disruptions in oil exports, from Russia, Gulf of Mexico and
the Middle East.
As for gold, the weakness of the US dollar against major currencies continued to
add an upward pressure on the price of gold.
NGOs speak up on
anti-poverty policies
By Joshua Mshana
REGULAR monitoring of economic and social impact of macro policies
is needed to ensure poverty and inequalities are reduced.
Mary Rusimbi, the executive Director of Tanzania Gender Networking Programme
(TGNP), said this in a statement made available to this paper yesterday.
“The broad outcome of the ‘growth and income poverty’ cluster ought to be broad
based, people-centred, gender balanced, so that equitable growth is achieved and
sustained, highlighting a people first position rather than profit first of the
market economy. Linkages need to be strengthened between rural and urban,
agro-production and processing and industry and services. The budget process
should be policy driven, participatory, pro-poor, gender sensitive and
transparently accountable to the Tanzanian public,” she said.
A network group of 11 Non-Governmental Organisations (NGOs) submitted a joint
statement to the government expressing their views on the Draft Poverty
Reduction Strategy 2 (PRS 2). They feel certain issues need to be made clearer
or changed in order to ensure that PRS 2 goals and outcomes are reachable and
effective in reducing poverty in Tanzania.
A major concern is the need to more fully mainstream equity and equality issues
in all three clusters of the PRS 2 framework, with respect to growth and income
poverty, quality of life and social well-being, and governance and
accountability. Of special concern are issues of gender, age and disability.
The network calls for a clear strategy to prioritise small-scale agriculture,
livestock-keeping and manufacturing, as the main base for employment, and
ensuring that investment in mining, tourism and manufacturing leads to
sustainable development and increased employment without damaging safety and
environment.
Regarding education, the networks recommended that the government should ensure
all children, including those with disabilities, pregnant school girls, orphans
and other most vulnerable children are able to effectively access and complete
high quality, child friendly, safe, gender sensitive and violent free basic
education.
NBC set to defend top position
By Express Reporter
The National Bank of Commerce (NBC) Ltd. is on course to cap the
year 2004 as Tanzania’s top and most profitable bank for the third consecutive
year.
NBC’s interim financial results for the quarter ended September 30, place the
bank in the lead position with an accumulated Tsh. 7.38 billion profit, up from
around Tsh. 5.5 billion posted by the end of June 2004 – the highest so far by
any financial institution in the country.
The bank’s continued fight to increase its market share also appears to be
yielding fruits as reflected in the steady growth of customer deposits, which
rose to Tsh. 373.9 billion as at the end of September from Tsh. 360.8 billion in
June.
NBC was privatised in 2000 upon which Absa Group of South Africa acquired
majority 55 per cent shares, 15 per cent shares by the International Finance
Corporation (IFC) with the government retaining 30 per cent shares.
The Bank was last September voted the third top company in Tanzania, a rare
recognition widely attributed to its improved customer service and a
modernisation drive.
On-line branch connection, Internet Banking, Visa accredited ATM services are
among modern services introduced by NBC as part of a strategy to increase its
market share.
Early this year, NBC opened a branch at the Sea Cliff Village in Dar es Salaam
and later acquired Visa certification for its 29 ATM network with an eye on
having a slice of the growing tourism cake. Plans are afoot to increase the
number of ATMs to 41.
According to the third quarter financial results published by a section of the
local press, net interest income slightly increased to Tsh. 6.2 billion from
Tsh. 5.8 billion in June despite the reduced investment in government
securities. NBC had until the end of September invested Tsh. 86.3 billion in
government securities, compared to Tsh. 87.8 billion invested in the same
portfolio by end of June.
The financial results also reflect a continued growth in NBC’s loan portfolio
defying the odds of the rigid Land Act and inefficient court system, often cited
by other financial institutions as impediments to lending. NBC’s loans and
overdrafts shot up to Tsh. 175 billion in September from Tsh. 172.9 billion in
June this year.
Apart from its largest computerised countrywide branch network, NBC, according
to the Corporate Affairs and Communications Manager, Maxwell Pirikisi, has also
diversified into the provision of personalised banking services with solutions
that are tailored for individual client needs.
Lumumba market gets funding
By Kizitto Joseph
Over Tsh. 400 million will be spent to construct a shade at Lumumba weekend
market in Dar es Salaam. The mayor of Ilala Municipal Council, Abuu Jumaa, told
The Express last Tuesday construction work had started with the support of
various business companies.
He said Outdoor and the National Social Security Fund (NSSF) led the support and
that the municipal leadership is still looking for other companies for backing.
“Each shading structure costs Tsh. six million and we need about 68 structures
to cover the whole area. We don’t have the money but we depend on stakeholders
and already Outdoor and NSSF have confirmed their support,” explained Jumaa.
The market will be officially inaugurated in three months after the construction
of shades, he said.
PR firm wins Barclays award
By David Magomba
A Dar es Salaam-based public relations and advertising company, FSB
Tanzania Ltd, has won the first prize in the ‘Keep climbing with business
solutions’ promotion organised by the Barclays Bank (T) Ltd.
At a draw held at Instana Restaurant last night, FSB Tanzania was awarded a
computer, which will be complimented by a training course. The entire package is
worth Tsh. 1.4 million.
Under the ‘Keep climbing with business solutions’ promotion, customers who
registered for a business solution account during the months of July and August
with successful account applications, were automatically entered into draw and
stood a chance to win a personal computer together with a complimentary training
course.
Barclays bank Tanzania, Head of Retail Performance, Tirus Mwithinga said, “We
understand the challenges our customers face, that is why we launched Business
Solutions to help and support the business community in Tanzania.”
Mwithinga added, “We launched the promotion to increase awareness about the
Business Solutions Account and encourage business people in Tanzania to register
for the Account and enjoy the many benefits that come with it.”
Business Solutions is a unique, all-banking service that offers a range of
high-quality products and services tailored made to suit the needs of small and
medium size enterprises.
A Business Solution Account comes with several exclusive benefits such as a
current account, which provides customers with the option to choose different
tariff packages, a free cheque book, a dedicated Barclays business team to
assist customers with day-to-day banking requirements, telephone banking, a
savings account free of charge and fees and an opportunity to join the exclusive
Barclays Business Club.
‘Business Council has played
its part’
By Kizito Makoye
The Tanzania National Business Council (TNBC) has made remarkable
strides since its inception a couple of years ago and contributed to the strong
growth momentum and economic performance of the country.
TNBC annual report released Monday by its chief secretary and chairman of
executive committee, M. Lumbanga, said the Council has proactively established
measures to strengthen dialogue for the nation’s economic flexibility and
competitiveness.
According to the report, TNBC deliberated on three topics in its first meeting,
whose main challenges were tax reforms, improved regulatory framework,
protecting domestic industries, supply and cost of utilities and access to
finance.
The report says that new consultative avenues have been created and dominated
the policy formulation process, which has strengthened the private public
partnership in economic management.
According to the report, TNBC reached a consensus with the World Bank and the
International Monetary Fund to establish a specialised body, uniting prominent
foreign and local CEOs to debate on investing in Tanzania.
The investors’ round table meetings (IRT) was established in 2002 as a special
and elevated committee adding value to the existing consultative framework and
reporting to the TNBC as the supreme body.
THA goes hi tech
By Express Correspondent
The Tanzania Harbours Authority (THA) is encouraging the use of
modern technology through a drive to improve its communication and operational
systems.
Speaking to The Express, Samson Luhigo, Director General and Chief Executive
Officer of THA, said there was major investment in communications and computer
systems.
He added THA had paved the way for an ever-growing computerisation of
operations. New equipment and software had been introduced for an efficient and
transparent data interchange network.
Luhigo said the investment had led to an improvement in quayside operational
procedures such as cargo tracking, through increased use of data capture
methods.
Bus stands to be privatised
By Kizitto Joseph
The Dar es Salaam City Council (DCC) in collaboration with the Dar
es Salaam Bus Owners’ Association (DARBOA) has privatised two bus stands in Dar
es Salaam Region.
Tonny Ishengoma, the Association’s secretary, said last week the move aims at
stopping chaos created by welcoming groups at the bus stands.
“We plan to privatise about 99 private bus stands in Dar es Salaam,” added
Ishengoma.
According to him, the private companies will ensure security for passengers and
control crowds of jobless people at the stands. Under the privatisation process,
passengers will get into buses in a queue rather than scrambling for buses. This
will control theft and ensure cleanliness at the bus stands.
Already at various bus stands in Dar es Salaam Region, including Tabata Mawenzi,
security companies have taken up the task of securing passengers and their
property. However, there is no noticeable improvement in the transport services.
David Mwaibula, chairperson of the Dar es Salaam Transport and Licensing
Authority (DRTLA) has advised the government to establish a transport board that
will ensure removal of jobless people at bus stands and restore peace and
tranquillity to passengers.
'Chinese should invest in
mining'
By Kizitto Joseph
China has promised to convince its business people, both in private
and public sectors, to invest in the mining sector in Tanzania.
Chinese Ambassador Yu Qingtai gave the promise last week on his visit to the
office of the managing chairperson of IPP Ltd, Reginald Mengi.
“Business people should put emphasis on mining sector since we still need to
acquire wealth from natural resources,” he observed.
He said Tanzanian business people want to invest in the sector but often lack
knowledge, and need special training and intervention.
Earlier, Mengi told the ambassador that Tanzania had made noticeable efforts to
develop the mining sectors but still lacked the expertise to manage the sector
even though the growth of national economy depended on it.
He said the relationship between the two countries could be used in such a way
that Chinese businesses are motivated to invest in Tanzania.
Lower prices offset export
gains
By Timothy Kitundu
The increase in the export volume of most traditional goods during
the month of August 2004 enabled Tanzania to export goods and services worth US$
115.2 million (about Tsh.122.1 billion) compared to US$110.5 million (about
Tsh.121 billion) recorded in July 2004.
The latest BoT Monthly Economic Review for August 2004 indicates the impact of
the increase in export volume was minimised by the decline in export prices as
supply of these commodities in the world market increased as per the
seasonality.
On annual basis, the Review reveals, goods exports increased to US$ 1,252.6
million (about Tsh.1,377.2 billion) from US$ 1,027.8 million (about Tsh.1,129.7
billion) recorded the previous year.
The signs of recovery in the global economy have partly increased consumer
spending that led to increased demand for exports.
Non-traditional exports rose from US$805.3 million (about Tsh.885.5 billion) in
the preceding year to US$1,021.3 million (about Tsh.1,123.1 billion) following
increases in exports of minerals, manufactured goods and horticultural products.
Kigoda commits to farm sector
By Express Correspondent
Tanzania was committed to building a healthy and robust economy,
where the guiding hand of government, enlightened legislations and transparent
governance, enhance private initiatives and encourage local and foreign
investments.
Abdallah Kigoda, Minister of state in the President’s office, planning and
privatisation, asserted this while launching the progress report of Tanzanian
National Business Council Meeting (TNBC) at Hotel Royal Palm this week.
He said the main objective was to create a conducive investment climate and
reduce the cost of doing business in the country.
Speaking on export development strategy, he observed the export credit guarantee
fund with a capital of Tsh. 19.6 million is in place, which covers the
agricultural sector (coffee and cotton) and manufacturing (textiles).
He said the main objective is to attract investments into the agricultural by
providing special incentives.
Coca-Cola joins anti-malaria
crusade
By Angela Mazula
The Coco-Cola Company in collaboration with Population Services
International (PSI) has initiated a fight against malaria in the country.
Speaking to the press Tuesday this week, Kippi Warioba the company’s Country
External Affairs Manager, said the number of deaths from malaria in Tanzania
each year remains at around 100,000 and the number of malaria cases remains a
staggering 16-18 million.
He added about 35 per cent of health facility attendance last year was due to
malaria and approximately 40 per cent of total deaths were due to either
uncomplicated or severe malaria, where one Tanzanian - usually a child below
five years or pregnant woman - died every five minutes.
“It’s due to this reason that Coca-Cola saw the need to support government
efforts to fight malaria and we believe that by Coca-Cola supporting the fight
against malaria, we shall be building a healthy nation,” he stressed.
Coca-Cola will donate Tsh two for every bottle of 350ml coca-cola drink sold and
the money collected will be used to buy treated mosquito nets, which will be
donated to vulnerable members of society including the disabled and orphans in
Dar es Salaam, Tanga and Coast Regions and Zanzibar in boarding schools.
Alex Mwita, Manager of the National Malaria Control Programme, said other
private sector companies too must join in anti-malaria efforts.
Romanus Mtunge, Deputy Director of PSI, said the impact of malaria on the
Tanzania economy is colossal. The economic cost to Tanzania is approximately Tsh
350,000 million a year, which is equivalent to 3.5 percent of the Growth
Domestic Product (GDP).
According to him, research shows that families with malaria harvest 40 percent
less crops than those who are not suffering from malaria or its after effects.
How Aids orphans fall prey to
child labour
By Timothy Kitundu
Once regarded as a medical problem, HIV/AIDS has now proved to be
beyond that. Experts in the field have substantiated that the scourge is more a
socio-economic problem than a medical problem.
That is why HIV/AIDS, which has played a vital role in the increase of orphans
particularly in Iringa Region in the Southern Highlands, has forced elder
children to take up the responsibility of bringing up their young siblings.
The children, who in most cases have lost both parents as a result of HIV/AIDS
deaths, have been forced to go and work as domestic workers, in plantations and
sometimes in more dangerous environments such as sex workers in the case of
girls.
In some rare cases, these children have remained in the care of their
grandparents, who are poor and less energetic hence they are regarded as
worthless in terms of labour. But the most shocking aspect is that in both cases
children have to drop out of school to enter the labour market for the sake of
taking care of their young siblings.
I came to learn about the alarming situation after paying a visit to Iringa
Region recently in the districts of Iringa, Mufindi and part of Njombe distirct.
I met one of the girls, who had lost both parents.
The girl, Adela, became a mother at a tender age of 16. She told me she is
originally from Makete, where HIV/AIDS has taken a hard toll. She lost both
parents and she had to take care of her two young brothers aged 6 and 8.
Adela, who is now married, thanked a charity organisation working in support of
orphans for taking care of her young brothers who, she said are now schooling
back in Makete. The organisation, she said, is providing shelter and school
fees for her young brothers.
Before getting married, Adela said, she had to work as a domestic worker to buy
food for the young brothers. She assumed the responsibility of a parent at the
age of 16.
It is a fact that following this trend, Iringa region is among the regions with
a high number of children engaged in child labour. But the number of these
children has apparently been brought down by support from NGOs and other charity
organisations supporting orphans.
One of them is the Tanzania Home Economics Association (TAHEA), Iringa region,
which has been supporting orphans in terms of school fees and study material,
through various programmes including the use of renowned volunteers known as
Mama Mkubwa in Makete.
TAHEA is a professional Association of Home Economics, Nutrition and related
social sciences such as Agriculture, Education, Community Development, and
Social welfare with the aim of building a democratic society with improved
living conditions, sufficient food and strong economic base. Established in
1980, it has branches in 21 regions of Tanzania.
The TAHEA Iringa Projects Coordinator, Betty Masima said in Iringa recently that
they believe in fighting child labour from the source, this means that
supporting orphans so that they continue with training in colleges, secondary
schools and primary schools, thus staying away from child labour.
“What I can say is, for over 8,000 children that we have supported since 1992,
we have been able to prevent the same number of children who otherwise would
have entered the child labour market,” Masima observed. The concept of
controlling child labour at source has been effective. Among the positive
results include reduced or prevented child labour among orphans who are
supported, reduced school-drop out among orphans supported and improved school
attendance for those under support programme.
On the other hand, other programmes though have their orientation in supporting
orphans are actually aimed at fighting child labour. Mama Mkubwa volunteers in
Makete programme, for example, are trained to offer counselling to orphans on
psycho-social and support. This prevents children from thinking of child labour.
These volunteers (Mama Mkubwa) are selected by the children themselves at hamlet
level and among their responsibilities include paying visits at child-headed
households and for families cared by sick parents or elderly people on a weekly
basis.
Also these volunteers form peer groups, where they share information on how best
to assist these children. TAHEA has so far trained 40 Mama Mkubwas in three
villages of Isapulano, Ivalalila and Ndulamo and have managed to reach 450
children.
In their initiative of controlling child labour at source, TAHEA has been able
to support a total of 1,697 children in 2003 out which 1,480 are primary schools
children while 217 are of secondary school level.
Of the supported children in 2003, 821 were boys while 876 were girls. However,
statistics for those undertaking vocational training were not immediately
available. The number of children under the support this year (2004) could not
be given as the process is ongoing.
Masima said very few children were withdrawn from child labour and sent to
schools and vocational centres as the process is an uphill one compared to
fighting child labour at source. Most withdrawn children find it difficult to
condition themselves to the learning environment.
In their future plans, TAHEA intends to replicate Mama/Baba Mkubwa approach in
other villages and equip them with psychosocial knowledge, HIV/AIDS prevention.
Also in the plans is fund raising for the Mama Mkubwa programme. This is all
aimed at fighting child labour at source.
However, TAHEA faces a number of challenges which if addressed could contribute
immensely in fighting child labour at source: Mama Mkubwa are overwhelmed by the
alarming increase in number of orphans and vulnerable children. Other problems
are lack of funds to assist more orphans and vulnerable children, the increasing
number of widows, limited funds to support orphans for vocational training and
lack of funds to support more orphans and their caretakers. The challenges if
not addressed might hamper the initiative of fighting child labour at source.
TAHEA has shown the way and it is now the responsibility of all organisations
involved in this war to adopt a similar method to fight child labour at source.
The government and ILO should scrutinise the initiative and give support to
TAHEA and others like it in their war against child labour.
A productivity primer
The most common way to measure economic
efficiency is not the best
Productivity growth is probably the single most important indicator of an
economy’s health: it drives real incomes, inflation, interest rates, profits and
share prices. Investors’ belief that America’s “productivity miracle” will
continue helps underpin higher share-price valuations there than in Europe and
to support the financing of the country’s huge current-account deficit. European
economies, in contrast, are thought to be much less productive, thanks to their
rigid labour markets.
Economic commentators toss around the term “productivity growth” as if there
were one widely agreed definition. There isn’t. America’s favourite measure is
output per man-hour in the non-farm business sector. Since 1996, this has
increased at an annual average rate of 3 per cent double the pace of the first
half of the 1990s.
Growth in GDP per man-hour across the whole economy has been more modest: 2.2
per cent a year on average since 1996, roughly the same pace as in France and
Britain but faster than in Germany and Italy. Still, it remains true that the
growth in GDP per man-hour quickened in America after 1996, while it slowed in
most European economies.
Yet all this reflects only labour productivity. A better measure is multi-factor
productivity (also called total factor productivity) which tries to capture the
efficiency with which inputs of capital as well as labour are used. If workers
are given better machines and equipment, this will automatically boost output
per man-hour, even if there is no gain in overall economic efficiency once the
extra capital spending is taken into account.
David Owen, an economist at Dresdner Kleinwort Wasserstein, argues that
investors should look at multi-factor productivity instead of labour
productivity, because it is a better proxy for an economy’s return on capital.
If faster labour productivity growth is entirely the result of heavy capital
spending by companies, it may not deliver good financial returns.
The snag is that multi-factor productivity is a lot harder to measure. It is
much easier to add up the number of hours being worked than to value the capital
stock. The best comparable figures are published by the OECD. By this gauge
America’s productivity gains in recent years look somewhat less miraculous:
average annual growth in multi-factor productivity has increased only to 1.2 per
cent since 1996, from an average of 0.8 per cent in the first half of the 1990s.
Indeed, multi-factor productivity growth has been faster in France since 1996,
at 1.4 per cent a year (see chart). Britain’s growth has been identical to
America’s. Even Germany’s (0.9 per cent ) has not lagged by much.
Fuel prices should be
regulated
In any country, particularly developing
nations, the price of fuel affects every sector and the ones who suffer most are
the poor and low-income earners. Once the price of fuel goes up, prices of all
other commodities and services follow suit.
Tanzania is no exception to this rule. In Dar es Salaam City, a trip within the
Central Business District (CBD) used to cost around Tsh.1,000 but after the fuel
hike, the minimum taxi fare has gone up to Tsh.1,500 and above.
As fuel gets dearer, food stuff mainly sourced from upcountry, becomes
unaffordable as their prices skyrocket following the rise in transport costs.
Other examples are the price of energy such as electricity; price of water and
others services rendered. These are highly influenced by the rise in fuel price;
even if power plants do not depend on fuel they still use lubricants.
A few months ago, commuter bus fares in the whole country were raised following
the hike in fuel prices. These included upcountry bus fares which had to be
hiked to cushion inflated operational costs.
Low-income earners are the ones highly affected by fuel hike as they have no
alternative. They depend on everything that has to be transported; they depend
on commuter transport and they depend on food supplies from upcountry.
This means that price hike forces them to dig deeper in their pockets. But as
they have very little or no saving at all, they become victims of circumstance.
It is high time now - although we are in a free-market economy - the government
devised means of controlling fuel prices. Let prices of other commodities be
controlled by market forces; fuel is a different matter.
Cell revolution waiting
to happen
In India, the number of mobile phone
users is now greater than the number of people with landlines; this according to
the Indian Telecommunication Authority (TRA). The number of Indian mobile phone
users is today 44.5 million, while those with landlines are 43.9 million.
The mobile phone market has taken the leading position in the telecom market
since April his year, with 1.2 million new users choosing their operators.
According to Morgan Stanley, the investment bank, the Indian telecom market will
grow by 40 per cent by the year 2007.
Stakeholders predict that at least 110 million mobile users will enter the
Indian market within the coming three years. The market is growing steadily,
partly thanks to the stiff competition that struggle to get hold of any
prospective customers.
In Tanzania the figures are rather more modest, with 1.5 million Tanzanians
using mobile phones; this, according to the Deputy Minister for Transport and
Communications, Dr. Maua Daftari. Vodacom is by far the biggest operator,
followed by Celtel and Mobitel.
Many are urging the government to introduce and facilitate the spread of the
mobile phone network to remote areas of the country. It seems as if providing
landlines to the people is no longer a priority, rather the mobile phone
technology should be accessible for all.
The Tanzania Telecommunication Company Limited (TTCL) looks like a loser in this
game, where more and more Tanzanians choose not to have a landline but are happy
to invest in a mobile phone.
Already, there is stiff competition among the mobile operators to win over the
trust of any prospective clients. This is likely to increase when Zantel will be
allowed to enter the market in the near future.
At the moment, Zantel has 80,000 customers, compared to Vodacom’s 850,000
customers. As analysts predict, harder competition will enlarge the market with
price reductions for consumers and subsequently more mobile phone users.
What is needed is for the government to provide a conducive climate for these
mobile phone operates to invest in. The companies should be able to extend their
networks, provided they do it with regard for the environment, local conditions,
etc.
However, mobile phone operators also need to cooperate in order to offer the
best possible services to their customers. This could, for example, mean sharing
of network masts, instead of building separate masts for each company.
All in all, there is plenty of scope to do better for the customers.
Machinga back to work in
Mwanza city centre
By Emmanuel Lazaro, Mwanza
The Mwanza City Council has failed to implement its by-law that
prohibits hawkers to operate in the City centre.
Investigations revealed the hawkers (machinga) are speedily returning to the
City centre to run their businesses at the same spots, where city militia
obstructed and arrested them.
In some of the areas abounded by machinga, including the famous Makoroboi
Street, Rwegasore Street, Regional Bus Terminal Station and the area outside the
Main Market, pedestrians and cars are being inconvenienced.
Some machinga boasted the City Council had surrendered and failed to remove the
hawkers after discovering there were poor preparations at the new areas
allocated to them.
However, some Mwanza residents and businessmen, told The Express that the
exercise of removing the petty traders from the city centre was clouded by
political issues.
It is leant that when the machinga approached political leaders, especially of
the ruling party (CCM) and asked their assistance, threatening not to vote for
the ruling party in the coming local government elections and the general
elections of 2005, if they were moved from the City centre.
Two months ago, the City Council forbade petty traders to conduct business in
the City centre, claiming they were ruining the city scenery. After fierce
protests and even violence, the petty traders were moved to areas identified for
them outside the city, including the Buzuruga area.
Mikumi water company services
suspended
By Kim Aidan, Mikumi
Residents of Mikumi in Morogoro face imminent water crisis after
Kilosa District Commissioner (DC) Colonel Issa Machibya terminated the services
of Mikumi Water Company for an indefinite period.
Speaking to reporters in Mikumi town last week, the company’s chairman Macsham
Nzunda said, the step taken by the DC without communicating to the
management,isan uncivilised act and indicates hate against the management.
In fact, Nzunda said, he could not understand why his company was targeted as he
was on safari; claiming, it may be because his company failed to honour the
promise it made during the meeting with the Minister for Water and Livestock
Development Edward Lowassa to donate Tsh. one million.
On October 19 this year, he added, Minister Lowassa visited Mikumi and during a
meeting promised to contribute Tsh. 200 million to the town’s water project on
the condition that residents contribute five percent of the amount, that is Tsh.
11 million first.
In that meeting, Nzunda said, Mikumi Water Company promised to donate Tsh. one
million on condition that town residents contribute Tsh.10 million first; they
had so far contributed an amount of less than Tsh.500,000.
For a long time now, Mikumi Ward Councillor has been pressing for the water
company to contribute the whole of Tsh. 11 million, which is against the
promise they made, Nzunda observed.
But Mikumi Ward Councillor, who is also the chairman of Kilosa District Council,
Isore Makarius, refuted Nzunda’s statements, saying Machibya’s decision had come
after Mikumi residents lost confidence in Mikumi Water Company’s management.
The company’s management, Makarius said, was unacceptable to Mikumi residents,
as it was not transparent in reporting statements of income and expenditure at
various meetings as it used to be in former days.
Mikumi Water Company was stopped from providing services effective November 2,
this year, until a new team is chosen to restore public confidence.
RC acknowledges collaboration
By Nestory Ngwega, Tanga
The Tanga Regional Commissioner Captain (retired) Jaka Mwambi has
thanked various religious institutions for collaborating fully with the
government in development matters.
The RC said this over the week during iftar at his home Raskazone area.
The collaboration, he said, paved the way for the implementation of different
development schemes, beneficial for many in the region.
He said the situation also helped to maintain peace and tranquillity which is
important for development.
335 tonnes of cotton for
processing in Morogoro
By Merline Mhamaka, Morogoro
A total of 335 tonnes of cotton was collected by the Morogoro
Farmers Cooperative Union (MOFACU) from farmers in Kilosa district since the
cooperative started processing the crop.
MOFACU Manager Anthony Chalamila revealed that out of the 335,440 kilos
collected, 223,272 kg was from the New Msowelo Farm.
The cooperative purchased the cotton with help from a Dar-based businessman, who
enabled the purchase of 112,168 kg of cotton worth over Tsh. 30 million, at a
rate of Tsh. 250 a kilo.
With the money, Chalamila said, MOFACU had been able to purchase cotton from the
areas of Makuluwili, Dumila and Msowelo.
Youths warned against wasting
loan money
By Merline Mhamaka, Morogoro
Young men have been advised not to use development loans given to
them for funding marriages, but for setting up their businesses and for economic
betterment.
Morogoro Mayor, Francis Kayenze gave the advice when handing loan cheques to 41
youth groups from 19 wards of the municipality, in a brief ceremony held at
Morogoro Municipal Council Hall.
Many young men, he observed, misuse loans and plunge deeper in poverty as they
fail to repay the borrowed money.
Kayenze advised young women not to squander the money on “kitchen parties”and
use it to fund their economic activities.
“The community should be aware that loans are not just for starting businesses,
rather, loans are for bettering businesses which are already established,” he
observed.
The use of the loans, he said, should be in line with government objectives.
If the government wants the loans to be used for agriculture, the beneficiaries
should use it for the said purpose.
Meanwhile, Morogoro Municipal Youth Development Fund Coordinator Stephen Ditenya
said the loans incorporated 41 economic youth groups from all wards of the
municipality and each ward established an average of three groups.
The loans amounted to Tsh. nine million, he said, adding, initially, 214 groups
whose loans amounted to Tsh. 64.2 million, asked for loans from the Municipal
Council.
But with many groups failing to abide by loans conditions and others having no
projects started, they cannot be given further loans, he explained.
This year, 43 youth groups will be given loans, said Ditenya. They will be given
Tsh. 9.2 million to undertake business, out of the sum of Tsh. 26 million
earmarked by the Morogoro Municipal Council.
Kigoma coop collects over
half million kilos of coffee
By Damas Ayuke, Kigoma
A coffee farmers’ cooperative originating from Matyazo in Kigoma has
collected over half a million kilos of coffee from its members and coffee
farmers in Kigoma District.
RUMACO chairman, Alhaaj Yahya Mawisa told The Express of the total Arabica
coffee, which prospers in Kigoma district, which collected, 1,802 kg had been
processed by their factory, since its inception last October.
Mawisa added RUMACO coffee cooperative incorporates villages such as Kalinzi,
Mkongoro, Mukibanda, Mawenyi, Mmbanga Nyamhoza, Mukigo, Manyovu and other
villages in Kibondo District, which produce Arabica coffee.
Alhaaj Mawisa said, the farmers who many a times are not paid cash after the
product reaches RUMACO, will start being paid after their coffee has been
processed and sold.
RUMACO has received a coffee processing machine worth Tsh. 150 million from
Germany, which was donated by a missionary of the Anglican Church, Thomas Mayer.
The processing machine has a capacity of processing 480 bags of coffee daily,
effectively and with efficiency.
Earlier, the farmers were transporting their coffee for processing in Moshi,
where the coffee was also sold, but received very little money due to many
levies.
Mawisa urged Kigoma government to help coffee farmers in the region by producing
coffee seedlings in enclosures, so that the farmers can get seedlings easily,
instead of roaming about looking for them.
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