Editorial
Analysis
The flip
side of technology
It was expected by many that four
months after the introduction of the scanning machine at the Dar port,
services of clearing cargo would drastically improve, but to everyone’s’
surprise the reverse has happened.
Many Tanzanian manufacturers have threatened to close down their factories if
necessary measures are not taken to halt the situation. It is said that the
new system takes up to 14 days to clear cargo at the port.
Before the introduction of the new Destination Inspection Scheme (DIS), it
took between 7 to 10 days for cargo clearing at the port, which was agreeable
to manufacturers who import raw materials from abroad for their factories.
While security on cargo has been greatly enhanced and tax evasion greatly
reduced using the new scanner machine, clearing of cargo has slowed down
allegedly because the clearance of documents are unnecessarily channelled
through Durban by TISCAN Limited.
It is also alleged that even those imports or exports to and from Kenya, where
the transit period for both cargoes is only one day if the destination is Dar
es Salaam and two days for Arusha, the designed cargo documents are also
channelled through COTECNA South Africa, making the process too long.
Whenever a new technology is introduced aimed at improving certain services;
its snags should also be identified and taken care of before creating
inconveniences. As for the channelling of documents through SA, authorities
ought to find out and act.
Industrial growth crucial to
poverty reduction
A report prepared by the Economic and Social Research Foundation (ESRF) linking
poverty to industrial growth, on behalf of the Confederation of Tanzania
Industries (CTI), was recently released. The report, among other things,
highlighted the importance of the country making use of its abundant natural
resources in order to positively fight poverty, which continues to hit huge
sections of country’s population, especially in rural areas.
Among other crucial issues, the report points out, it is necessary for Tanzania
to get rid of donor dependence syndrome if the country is to pursue the right
course of development. It is true the syndrome has percolated to all levels,
from national to personal, which we also think it is important to slowly get rid
of.
These indeed are challenges, which need not be ignored for they have a very
direct impact on the well being of the nation as a whole.
Tanzania is indisputably among developing nations which need much more effort
to reach levels that other African countries have reached, let’s take South
Africa as an example. The founder of this nation, Mwalimu Nyerere, had once said
that in order for a country to develop it must industrialise and tackle
unemployment.
Unemployment, however, is a complex universal phenomenon as it involves many
aspects.
In the case of Tanzania labour unemployment is more prevalent as compared to
other factors of productions such as land and capital. This is because there are
not many industries to absorb the population and most importantly unskilled
labourers.
There are still major constraints that affect industrialisation in
Tanzania. Even during the reform period, the national economy has continued to
suffer despite continued government efforts.
In the past couple of years, forinstance, there has been a sea of change in the
national economy and the international factors affecting it: steady depreciation
of Tanzanian currency, fluctuations in world oil market prices.
Despite the government putting poverty alleviation high on its agenda, the
Poverty Reduction Strategy Paper (PRSP) does not consider manufacturing among
its priorities.
Some of the recommendations of the report if implemented may give a fresh
momentum to the country’s war against poverty.
Analysis
Regional integration
within SADC: Future seems bright
By Timothy Kitundu
Although there are a number of
challenges facing the Southern African Development Community (SADC), the
region’s integration has a number of advantages, which if utilised and the
challenges addressed, its future is quite bright.
From a brief overview of recent developments in regional integration in southern
Africa, it can be observed that the countries in the sub-region have identified
many common challenges amenable to region-wise solutions ranging from
macroeconomic issues, trade and industry, education and health to infrastructure
developments and service delivery.
In SADC, member states have developed a number of protocols, which provide a
legal framework for their cooperation in various areas such as transport and
communications, industry and trade, finance and investment, natural resource
management and water.
Others include mining, energy, health, education, human resource development and
on aspects of security and politics. The protocols, when signed and ratified,
are mechanisms for locking countries into the same policies and approaches to
development.
It is indeed encouraging to learn from analysts that for SADC, the development
and negotiation of protocols are seen as progress per se, given that the time
for this often allows preparation on the country level for their implementation.
The other advantage towards regional integration has been mentioned as the
ongoing reforms, which are taking place in the region. Several SADC countries
have reformed the legal, judiciary and regulatory frameworks governing business
activities, including through accession to multilateral conventions and entering
into bilateral investment treaties.
Many state-owned enterprises have been or are in the process of being
restructured and privatised, while private sector involvement in the management,
financing and provision of infrastructure is encouraged a range of modalities –
albeit at varying speed and scope.
The SADC countries are actively promoting investment including through offering
a host of investment incentives. Although, on aggregate, the sub-region has
maintained its proportional level of foreign investment flows to Africa (about
35 -37 per cent) in the late 90s, it has failed to attract a proportionate share
of growing foreign direct investment (FDI) flows to developing countries.
The sub-region has attracted largely resource-seeking FDI and project finance,
associated with privatisation and public-private provision of infrastructure.
Intra-regionally, cross-border investment, particularly from SA and Mauritius,
has increased.
Economists affirm that economic growth has recovered in many countries since
1995. Four years ago, real GDP growth was estimated at more than eight percent
in the DRC, more than seven percent in Mauritius, nearly six percent in Botswana
and more than five percent in Tanzania.
However, of particular concern is the poor growth performance of the largest
economy, SA, and the second-largest SADC economy, Zimbabwe, which has been
experiencing a socio-economic and political setback, with threatening disruptive
implications for regional integration in SADC.
The SADC is poised to achieve regional integration given that the following
challenges are met and appropriately addressed. They include:
About 40 per cent of the sub-region’s population (76 million people) is
estimated to be living in extreme poverty. Poverty is increasing despite the
recent higher growth rates in the sub-region, due to increasing unemployment.
Unemployment is estimated to have increased from 30.5 per cent in the mid 80s to
nearly 51 per cent (51 million people) in 2000.Even in Botswana and Mauritius,
which are among the region’s best economic growth performer, unemployment is
rising.
There is insufficient and often poorly maintained infrastructures as well as
limitations in regional linkages, no less due to legislative and administrative
constraints, are deterrents to trade and investment.
Whereas SADC countries appear to be performing well in providing universal basic
education (except Mozambique and Tanzania), they are under-performing (including
SA) in providing secondary and tertiary education. This could be seen as a
serious structural weakness, given the increasing importance of skills in the
globalising world economy (with knowledge-intensity being crucial in enhancing
competitiveness).
The sub-region is facing yet another threat to its development in having the
highest adult HIV/AIDS prevalence rate in the world. Estimated HIV/AIDS
prevalence rates among adults in the late 90s ranged from about 36 percent in
Botswana, 25 percent in Zimbabwe and Swaziland and 20 percent in SA and Zambia.
Estimates indicate that the adverse social and economic impact of HIV/AIDS will
be substantial, affecting GDP growth, labour supply, income inequality, domestic
saving, productivity, and human, physical and social capital. The spread of the
pandemic will most probably further compound the problem of poverty in the
region in the foreseeable future.
Given that the SADC countries exert all their efforts towards addressing the
said challenges, regional integration should become visible.
The shift in SADC’s agenda from sectoral cooperation to market integration would
require not only continued cooperation in specific sectors/areas, but also
stronger linkages within and between the various sectors or areas of cooperation
if it were to be a success.
Booming
Chinese interest in Africa is not just about oil
Trade with Asia is up, its investors flock to
Africa’s oil wells, its businessmen agree cosy ties with African ministers. For
Asia, read, above all, China. Local analysts of African business are in a frenzy
about the new wind from the East. At a recent oil and gas conference in Cape
Town, speakers lined up to describe the rush. One produced a map of Africa,
highlighting new Asian oil interests: it was a forest of Chinese flags.
Asia now takes about 13% of African exports. A China-Africa Business Council
formed this month in Beijing reckons that two-way trade was some $18 billion
last year, a nine-fold increase on 1999. Chinese officials expect it to grow to
$30 billion within two years.
Chinese investment in Africa still lags that from America and Britain. But a
recent World Bank study records its “astonishing” growth in the four years to
2002. More is on the way.
Oil is currently the big draw. Unlike their increasingly publicity-sensitive
western rivals, the Chinese have no qualms about making deals with oil-rich
dictators, however corrupt or nasty. State-owned China National Petroleum
Corporation, eager for secure long-term supplies, has bought 40% of a large
project in Sudan. Chinese workers recently built a 1,600km pipeline there, in
just 11 months.
Chinese firms—as well as Indian ones—moved into Sudan after American investors
left (the United States applies sanctions to Sudan, which it now accuses of
genocide). Other westerners also hold back, fearing the bad publicity that
forced Talisman, a Canadian oil firm, to quit a few years ago.
It is a similar story elsewhere. Western oil firms fear that deals with famously
venal rulers, as in Angola, will come under ever-closer scrutiny: for example,
under an “extractive industries initiative” pushed by Britain last year to
encourage more openness.
Firms from China face no such restraints. In March its government dished out a
$2 billion soft loan to Angola, in exchange for 10,000 barrels a day of oil.
Over the past year some very senior Chinese politicians have toured other
oil-rich countries, such as Gabon and Nigeria, cooking up similarly close ties.
Peter Draper, a trade expert at the South African Institute of International
Affairs, calls it China’s “ethical advantage” over rivals.
Oil is not alone. Chinese firms reportedly have spent some $100m in the past two
years in Zambia’s once-decrepit copper industry. South Africa’s exports to China
have more than doubled in five years, and increasingly they are raw materials
such as coal and gold, not manufactures. Minerals probably drive China’s
friendship with Zimbabwe.
A $200m deal to supply fighter jets and other military goods was reported
earlier this year. Zimbabwe also promotes tourism from China and twice-weekly
direct flights from its capital, Harare, to Beijing, are about to take off.
Several state contracts were struck recently with Chinese firms. Much of
Zimbabwe’s shrinking tobacco crop is now sold to China. If western mining
companies are eventually squeezed out, the Chinese will be well placed to move
in.
back to headlines
| Business News | Forex Week | Money Market | Corporate Report |
| Business Opinion | Bank Interest Rates | Capital Market Focus |