Editorial

• Global Fund: Accountability important

• Commendable job by Telefood Tanzania

Analysis

• EA Most Respected Company survey: Recognition and challenge
• Dollar fall will come at a price for all

Global Fund: Accountability important

Last week, Tanzania was a host to a very important forum which brought together experts and other stakeholders on the issues of HIV/AIDS, malaria and tuberculosis. The meeting was a significant one as Tanzania is one of the countries hard hit by the three diseases.
At the Global Fund meeting, it was resolved that Africa be the major recipient of grants disbursed by the Fund, most probably because of its economic position and taking into consideration that it is more vulnerable compared to western countries.
The grant, totalling US$ three billion (about Tsh.3.3 trillion) has been allocated to Africa not so casually, but because there is proof that Africa genuinely needs such funding. It was also because of competitive proposals that Africa won the grant.
Recipients of the funds were classified as 51 per cent for governments; 25 per cent for non-governmental organisations (NGOs); private sector, faith-based organisations, academic institutions each to receive five per cent; four percent is to be directed to the affected communities.
Despite the funding by various donors, complaints have been surfacing from all corners of the country. Some institutions question whether the funds are used as intended since the cases of diseases are increasing. There is also evidence in some cases that funds meant for HIV/AIDS do not reach the beneficiaries.
It is high time all authorities ensure the funds are used for the intended purpose. An effective follow-up method should be devised to ensure those who receive the funds account for them cent by cent.
 

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Commendable job by Telefood Tanzania

Last week, Telefood held a dinner gala in Dar es Salaam to raise funds for its various projects. This is an annual event where corporates join forces to raise funds for the marginalised sections of the society.
This time around several  companies, including Tanzania Breweries Limited (TBL), Standard Chartered Bank, Channel Ten and others were at the forefront, donating for Telefood. This is indeed a good thing as it shows solidarity within the society.
Telefood is celebrated  worldwide  as part of the World  Food  Day. The campaign of broadcasts, concerts and other events  to raise public awareness on the plight of hungry poor people and getting civil society to join  hands with government in the fight against hunger, is important.
 Ever since Tanzania joined Telefood campaign in 1998, under the patronage of Mama Anna Mkapa, funds totalling US$ 290,000 were raised in the country making it the sixth largest contributor to the Telefood global fund.
It is also encouraging to note that mini projects such as maize production, piggery, vegetable gardening, grain milling run by women in rural areas, have been flourishing  giving hope to the marginalised people.
The success of Telefood projects is due to the cooperation  among  stakeholders of the Telefood committee, who have played an active role  according to Mama Anna Mkapa.
The first lady was pleased by the fact that beneficiaries have been utilising funds effectively in accordance with set objectives. The women in rural areas have made remarkable strides by effectively using the money in spite of little or no formal education at all.
FAO representation in Tanzania opened in 1977, has also played a significant role as its programmes are compatible with government policies and strategies for agricultural  development.

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Analysis  

EA Most Respected Company survey: Recognition and challenge

By Timothy Kitundu
Last week, an important event took place in Dar es Salaam where East Africa’s Most Respected Companies were honoured. The results of the fifth East Africa’s Most Respected Companies survey were announced a week earlier in Kampala, Uganda.
This year’s results were a bit different from last year’s as the survey format was refined to name the overall winner and three companies were picked for awards in each of the six categories. In Dar es Salaam, the event was hosted jointly by PricewaterhouseCoopers and the Nation Media Group. 
The initiative does not only throw challenge to East African companies to sustain growth, it is also a barometer whereby these companies can consolidate their positions by striving to grow, by investing more, creating more market space, and exploring new and effective ways of working with the company’s manpower.
Apart from striving for growth, the companies taking part in this award are able to present themselves to scrutiny from their peers – and this can only be achieved through improvement of infrastructure, harmonising and streamlining tax systems in the region and the creation of an enabling environment to boost investment.
 It is obvious, the companies will be working towards high standards of customer care, integrity, professional management, innovation, employee care courage and high involvement in social responsibility, which were the parameters used to pick the most respected company.
The initiative will also provide a way for companies to measure their endurance and survival in the ongoing liberalisation, which has opened its doors in the region, in other words this is a test whether companies can face the challenge posed by liberalisation and continue to survive.
Speaking at the event held at the Royal Palm Hotel in Dar es Salaam, PricewaterhouseCoopers Tanzania leader Leonard Mususa said the methodology used in the survey was aimed at ensuring that only the best companies are picked.
He explained the survey is conducted through interviews of randomly selected CEOs in Kenya, Uganda and Tanzania, by an independent research company on behalf of the Nation Media Group and PricewaterhouseCoopers.
The CEOs have to state the companies they most respect and the reasons why. “Being an opinion survey, the reasons advanced for the selection of a company, as well as the selection, are equally important to us – we do not set the criteria for selection,” Mususa remarked.
In this year’s survey, participants had to answer one more question. They were asked to mention the most important actions they want governments in East Africa to take to improve the environment in which they do business. This was also important as governments have a role to play in ensuring that a fair playing level ground for companies is created.
In this year’s survey, a total of 250 CEOs out of 400 approached participated in the survey. Out of these, 90 were from Tanzania. The results of the survey showed a pattern similar to previous years’. Companies with a strong presence in more than one country had a better showing.  
However, there are quite a number of businesses that mainly have a single country presence that have done very well. In the survey, East African Breweries was the overall winner for the fifth year in a row.
Mususa mentioned the companies that participated with their categories in brackets as: Barclays - EA, Stanbic Bank - EA, Standard Chartered Bank - EA, Citibank - EA and CRDB - Tanzania (Financial services), Homegrown, Unilever Tea - Kenya/Tanzania, Madhvani group - Uganda, Kilombero Sugar - Tanzania, and Tida - Uganda (Agriculture).
 In the services category, the following companies participated: Kenya Airways  - EA, Aga Khan Hospitals - Kenya/Tanzania, Nakumatt Supermarkets - Kenya, ATCL -  Tanzania, and Scandinavia Bus Service - Tanzania. In the Hotels and Tourism category were Serena Group - EA, Sarova Group - EA, Royal Palm - Tanzania, Holiday Inn   - Tanzania/Kenya and Kampala Sheraton.     
Mususa mentioned the others as the ICT category which had Safaricom - Kenya, TTCL/Celtel - Tanzania, Vodacom Tanzania, Mango (UTL) - Uganda and MTN – Uganda. In the manufacturing category were; Bidco Oil – Kenya/Uganda, Bamburi Cement, Mukwano Group of Companies, Unilever EA and General Motors.
In the survey, the region’s CEOs revealed that the number one reason why companies are respected is high quality of products and services, which ranked at 59 per cent, while the second reason which ranked 38 per cent is consistently high performance levels (timing of dividends).
The other reasons included continuously well managed, which rated 33 per cent, good growth and expansion 25 per cent and corporate social responsibility 21 per cent. The survey which was conducted at regional level with a major objective of thinking of excellence in global terms and the East African region, is a good stepping stone in that direction.
As a move to creating a conducive business environment, the region’s CEOs were also asked to name the three most important actions that they wish their Governments to undertake. Whereas 33 per cent wanted the tax system to be streamlined and harmonised regionally, 47 per cent wanted a dramatic improvement in infrastructure. About 36 per cent wanted a more favourable investment environment put in place, 32 per cent wanted improvement in governance while 28 per cent wanted to see governments fight corruption.
This year’s East Africa Most Respected Company survey is over and the winners awarded, what remains now are challenges to be faced and addressed. This is for the companies as well as the governments.
The actions that have been suggested to be taken by governments should be considered. After all, when companies perform well it is the governments that benefit as the companies will be in a position to pay more taxes and other levies.

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Dollar fall will come at a price for all

The United States is set to turn a blind eye to the sliding dollar and a deaf ear to protests about its fall, but experts smell trouble for all in what looks like an effective devaluation of the world’s reserve currency.
While a messy, uncontrolled slide in the dollar may help cut record US trade and budget deficits, it transfers the pain to its creditors and could rebound on the United States by inflicting a longer-term dent on the dollar’s prized reserve currency role.
The risk that central banks around the world look to diversify their holdings away from dollars was highlighted by Federal Reserve Chairman Alan Greenspan last week.
In a speech seen to accept the inevitability of a dollar decline to help ease US deficits, Greenspan warned foreigners face an “unacceptable amount of concentration risk.”
With too many of their eggs already in one basket, he said, foreigners will be increasingly reluctant to bankroll rising US trade and budget deficits with ever more purchases of its bonds, equity and other assets without much higher returns.
In the absence of more concrete efforts to rein in the budget, economists said that Greenspan was explaining the logic that the dollar will take the heat.
Many economists agree and say this should be a big concern for both US policy-makers as well as US creditors.
“Further substantial increases in the US net debtor position would raise the prospect of a substantial US dollar depreciation, with the associated capital losses inflicted on its creditors,” said Philip Lane, professor of international macroeconomics at Trinity College, Dublin.
“In turn, this may threaten the special status of the dollar, also in light of the emergence of the euro as an alternative reserve currency, and raise the rate of return required by foreign investors on dollar instruments.”
Despite the emergence of the euro five years ago, more than two-thirds of foreign reserves — well in excess of US$ 2 trillion — are still banked in dollars and US bonds.
The decades-old reputation the dollar has as a liquid, long-term store of value means the United States has to date received cheap and risk-free foreign funding in its own currency from foreign governments seeking to bank their reserves safely.
Foreign central banks, for example, are set to finance some 60 percent of the US budget deficit for 2004.
But this cheap financing has, in part, allowed the US budget and trade deficits to blow out to unprecedented levels without any penalty on the US government and has heaped pressure on the dollar to weaken to keep attracting investment.
Resisting this dollar fall to keep exports competitive in the United States, many central banks in Asia and elsewhere have amassed even more dollars — with just Japan and China now holding more than a trillion dollars in reserves to date. The Economist.

 

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