Editorial
Analysis
Victims of
Plane crash deserve compensation
Last week in The Express, we carried an exclusive story about the miraculous
escape of the pilot and passengers aboard charter plane Cessna-172 bearing
registration number 5H/PDK which crashed into the Indian Ocean soon after it
took off.
We published a detailed report on how Abdulmaji Ahmed and his wife Aziza Salum
survived through the ordeal but we, as like everybody else, are quite
surprised to find the Tropical Air Company to maintain an uncanny silence
about the unfortunate incident.
It is indeed strange that ever since the accident happened, Tropical Air
company has not come up with any statement or apology to the passengers for
which it seems a failure in their part. The silence suggests the company
probably is trying to shy away from the fact that it might be asked to
compensate the passengers.
As it is understood, the major cause of the accident was mechanical failure of
the aircraft. Though it might take a long time to ascertain what exactly went
wrong, it is the moral responsibility of TAC to be on the sides of the duo in
their hour of trepidation.
And it is even more quaint that no one seems to be talking about compensation
to the couple who are fortunate to be alive. Their torment, both psychological
and physical, is beyond any monetary compensation but at least the property
they lost should be covered.
Air transport companies are supposed pay the passengers for any inconvenience.
In this case, the pilot’s insurance also needs to be paid. Since legalities
are involved here, the government, specially the Ministry of Communication and
Transport, should also intervene to ensure justice is reached to the poor
couple.
It is important that those who are to blame for the accident are taken to task
so that justice can be made. Too many accidents are occurring in the country,
both involving air and road transport and sadly enough, in most cases the
reasons for the accidents are not discussed nor investigated.
If more effort and resources were put into finding the causes of the
accidents, lives of many Tanzanians woukd be saved.
We can only hope that good sense will prevail and justice will take its own
course.
Cotton harvests: Let the
government put emphasis
Cotton, in the past couple of years, has emerged as one of the commodities which
promises earnings for the government. It is projected that Tanzania will harvest
a total of 400,000 tones of cotton next year which is 62,000 more than this
year.
This offers the government an opportunity to utilize the crop and earn foreign
exchange. But at the same time, it depends on the provision of reasonable prices
and timely supply of inputs as well as favourable rains. Cotton prices for
2003/04 ranged between Tsh.100 to Tsh.225 per kilo depending on the grade.
To facilitate trade in cotton, government needs to be proactive and support both
the growers and traders alike to promote business and exports. Though the
Tanzania Cotton Association’s (TCA) special mechanization programme and the
ginning factories’ initiatives of assisting farmers are working full time,
government needs to support the initiative in a big way.
Since it is apparent now that bumper cotton harvests are expected next year, it
is only pragmatic for the government to see the significance of this commodity
and ensure that the harvest is realized.
Cotton buyers should also be facilitated with credit support to make sure that
the farmers get their payments on time and that they are encouraged to be
consistent in cotton farming, a crop that will earn the nation foreign exchange.
This will not only earn foreign exchange but also enhance growth of the national
economy.
Each country in Africa has its own commodities and if due emphasis is accorded
to the commodity; there is no doubt that African nations will see a difference
in their economic growth. Ghana produces cocoa, Sudan produces cotton, Kenya
produces tea, Congo and Zambia produce minerals and Nigeria is rich in oil.
Analysis
Privatisation:
Not beneficial for the common man
By Timothy Kitundu
The bulk of the privatisation exercise in this country has been
accomplished for worse or for better; but mainly for worse, especially in so far
as the exercise has affected (or should have affected) the real stakeholders.
According to PSRC, 135 out of the 259 parastatal entities that had been
privatised by the end of June last year went in their totality to Tanzanians,
while only 14 of them wholly went to foreigners. The remaining 110 are joint
ventures involving locals, foreigners and the government.
What are crucial here, of course, are not numerical strength, but the value and
importance of each of the entities in the socio-economic life of the nation. So,
to try to claim that Tanzanians have been doing good by being allocated so many
firms as against so very few that went to foreigners is pure literalism.
Only 15 out of the privatised 259 ex-parastatal organisations were disposed of
under the Management-Employee Buy-Out scheme (MEBO). Besides, nearly all the
entities that were disposed of under MEBO are marginal in both their
socio-economic status and performance on the eve of their sale.
Employees are being tossed out of jobs in endless retrenchment measures without
even being paid their terminal benefits in full or on time.
About 50,000 Tanzanians today reportedly share the fruits of privatisation
through the Dar es Salaam Stock Exchange.
It is known for sure that the 50,000 shareholders on DSE are not representative
of the Tanzanian population, more than 60 per cent of whom live in sheer
poverty, not knowing when or where their next meal will come from - or what it
will be!
Besides, to present a case that privatisation is going great simply because
50,000 out of a whopping 34 million Tanzanians are playing the stocks and shares
stakes at the Exchange Mart is stretching the imagination of many, and is beyond
belief.
The issue here is how the other 33 million-plus Tanzanians will get to
participate in owning their ex-parastatals.
There is no question that a few of the privatised parastatals are doing wonders
for their shareholders, and near-wonders for government coffers. The three per
cent royalty that mining companies dole out to the government is an insult to
this mineral-rich but otherwise poor, heavily indebted country.
Another perceptible result of privatisation is that the government is gradually
exiting from mundane tasks such as trading, and bringing the private sector more
and more into developmental activities.
The recent privatisation of the water utility firm the Dar es Salaam Water and
Sewage Authority (DAWASA) has sparked another argument from the media that such
an important institution touching the lives of Tanzanians has been a thorn to
them.
City Water, the new company that is managing DAWASA, has been accused of hiking
water tariffs hence making life unbearable for ordinary Tanzanians.
Water privatisation in Dar es Salaam has neglected the needs of poor people,
despite the World Bank’s assurances that access to water for poor residents
would be improved. The Bank used the promise of a US$ 143 million about Tsh. 143
billion loan to push through an inappropriate project in the face of public
opposition.
Water bills have risen sharply - by 40 per cent according to one estimate -
since City Water took over in 2003. The World Bank expects prices to double
eventually. Consequently poor families are turning to unsafe water supplies
rather than paying the increased bills.
It is claimed that City Water, which is part owned by the UK-based company
Biwater, disconnects whole areas in an attempt to get people with illegal
connections to pay up. In poor districts there is anger at the high prices and
poor service. ActionAid was told of water bill collectors being chased away with
dogs and knives.
Perhaps the most controversial issue that was reported by the media was the
preparations of privatizing the only micro finance bank in the country, the
National Microfinance Bank (NMB) used by the majority of common Tanzanians. The
bank was formed following the sale of the National Bank of Commerce.
The government pressed for the diversification of NMB despite a strong objection
by Members of Parliament. It was reported that the bank was making loss to the
extent that 11 out of 89 branches were the only branches that operated with
profit whereas in reality the case was the reverse.
Although NMB is the third most profitable bank in Tanzania, a wrong picture was
portrayed deliberately to pave the way for its privatisation.
Furthermore experts had said that there was no need for the government to
subsidise NMB by Tsh. 2.4 billion annually (this being 60 per cent of NMB’s Tsh.
12 billion operational and reform costs over a period of three years) while in
reality NMB makes a profit of over Tsh. five billion a year.
Further reports indicate that while privatisation has drastically increased
government revenue; humiliating phenomenon such as labour disputes, infringement
of workers rights and poor working conditions have been on the increase.
A good example is the case of Tanzania Telecommunication Company Limited, which
has been continually in turmoil since its privatisation prompting workers to
file cases at the High Court, which they won. This may be attributed with
adherence or non-adherence to labour laws, which were much respected in
state-owned enterprises
At its meeting in Cairo on
Friday, OPEC agreed to pare back production to support the oil price, which
has fallen towards $40 per barrel in recent weeks. Has the producers’ cartel
acquired a taste for pricey oil?
Joseph, one of history’s more inspired economic pundits, famously predicted
seven years of great plenty, followed by seven years of famine, in the land of
Egypt. How fitting, then, that the latest meeting of the 11 members of the
Organisation of the Petroleum Exporting Countries (OPEC) should be held on the
banks of the Nile, for the cartel is entering its seventh year of bounty from
the oil markets. From a trough in the winter of 1998, oil prices have since
risen more than fourfold. OPEC members will reap a windfall of over US$300
billion this year alone.
But in the spirit of the Biblical Joseph, OPEC is now making provision against
a possible reversal of its fortunes. The riches of the autumn have already
faded. A barrel of light, sweet crude, which sold for over US$55 in October,
fetched less than US$41 on Wednesday—and the dollar itself (the currency in
which oil prices are almost always denominated) is not what it was. OPEC fears
that prices overshot in the autumn and that its members oversupplied the
market in response. At its meeting in Cairo on Friday December 10th, members
agreed to restrain their output by about 1m barrels per day (bpd), thus
reinstating the official quota of 27m bpd, which they have all but ignored in
recent months. The decision takes effect on January 1st but will probably not
be fully implemented until February.
Did prices overshoot, and has the market now turned? Greed and fear—the greed
of speculators and the fear of terrorism—detached the oil price from its
foundations earlier this year, OPEC argues. “Non-commercial traders”, who buy
and sell oil contracts without ever getting their hands on the black stuff,
built up big “long” positions earlier this year, amassing contracts to buy oil
at some future date. Now those positions are a good bit shorter, a sign that
the speculators are cashing in.
At the same time, the threat of terrorism has added as much as US$10-15 to the
price of a barrel of oil, according to Saudi Arabia’s oil minister, Ali Naimi.
In the spring, terrorists murdered foreign workers in both Yanbu, in the west
of Saudi Arabia, and Khobar, in the east. The American state department gave
warning that Saudi oil infrastructure would remain a tempting target. But the
state department itself was not immune. This week, five gunmen stormed the
fortified American consulate in the Saudi city of Jeddah, killing five staff
members, one guard and three members of the security forces, who ultimately
repelled the attack.
with precious little to spare: only about 1m bpd in an 83m-bpd market.
By failing to invest in a plumper cushion, OPEC has left the market vulnerable
to nasty surprises, such as a terrorist attack, civil unrest or a harsh
winter. Saudi Arabia has recently added 500,000 bpd to its production
capacity. It is also contemplating a further boost of 1.5m bpd in due course.
But other members of the cartel are not as keen. Why make costly investments
in capacity that is meant to go “spare”, they ask?
OPEC’s more far-sighted members fret about the long-term implications for the
world economy of high and volatile oil prices. But others have grown quickly
accustomed to the style in which high prices have kept them. Venezuela, among
others, depends on bumper oil revenues to sustain its populist welfare state.
One Iranian oil official recently commented that $50-70 per barrel was “not
really a high price”.
Though the oil price may have overshot this year, crude is likely to remain
quite expensive. The OECD reckons that the long-run equilibrium price of oil
will rise from $27 last year, to about $35 in 2030 (in 2000 prices). For the
oil producers, the years of plenty may number many more than seven.
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