For years, the image of Tanzania was that of an economic backwater: a peaceful and stable nation by Africa’s volatile standards, yet one held back by the socialist legacy of Julius Nyerere, the country’s founding father. Bigger geographically than Kenya and with a marginally larger population, estimated at some 55m, Tanzania is habitually contrasted with its northern neighbour: bureaucratic and state-led to Kenya’s dynamic and entrepreneurial.
That caricature is becoming outdated. It is true that Kenya is faster paced and marginally richer, with a gross domestic product per capita (at purchasing power parity) of $3,200 against $2,900 for Tanzania, according to the International Monetary Fund. In nominal terms, Kenya’s economy is worth $61bn compared with Tanzania’s $45bn. It is also true too that Kenya has led the way in technological advancement, particularly in the use of mobile money. But here, as in many other ways, Tanzania is catching up.
Official statistics put average economic growth at 7 per cent since the turn of the century, when Tanzania’s economy began to open up to market forces. That has prompted some scepticism, partly because of the seemingly remarkable consistency of the performance. Even so, a short stay in Dar es Salaam, the commercial capital, where skyscrapers are sprouting up and imported cars ride bumper to bumper along backed-up roads, is enough to convince many visitors that the economy has changed gear.
Now there is a new element. John Magufuli became president in November with an apparent determination to shake things up. In his first few months in office he has cleared the civil service of thousands of “ghost workers” and begun a campaign against tax evasion, both by foreign companies and local entrepreneurs, many of them connected to the ruling Chama Cha Mapinduzi party. (More controversially, he rammed through disputed elections in semi-autonomous Zanzibar). He has also tilted the budget sharply away from current expenditure towards development, including capital spending.
“We have a president who wants things to happen today — or yesterday,” says Adolf Mkenda, permanent secretary of trade and investment. He says that Mr Magufuli’s emphasis on poverty reduction and his loathing of government waste and corruption is hugely popular with a public impatient to see the benefits of growth. “You ask people on the streets and they are quite excited when they see us getting fired.”
Yet the problems are formidable. Growth in Dar es Salaam, driven by services, telecoms and banking, is impressive, if uneven. But the 70 per cent of people who live in the countryside, many of them subsistence farmers, are falling behind. Farming productivity is barely keeping pace with a population that is growing at just below 3 per cent a year. The population, which has quintupled since independence in 1961, could double again to more than 100m by 2035. Finding jobs for young people pouring into the labour market is a top priority.
100m
Tanzania’s potential population by 2035
So is powering the country and building the roads and ports that could turn Tanzania, with its long coastline and proximity to six landlocked countries, into an important transshipment centre. Under Mr Magufuli, Tanzania has shown more interest in the East African Community, an emerging tariff-free area with EU-style ambitions. The new president is seen to have played an important role in persuading his Ugandan counterpart, Yoweri Museveni, to opt to ship Ugandan oil via a pipeline through Tanzania instead of Kenya, as originally planned.
China, which has had close relations with Tanzania for decades — even the country’s military academy was built with Beijing’s assistance — is helping to finance much of the infrastructure, from roads and rail to a potential multibillion-dollar port at Bagamoyo, north of Dar es Salaam.
Power shortages have been partly alleviated in the commercial capital thanks to a Chinese-financed pipeline carrying natural gas from onshore fields in the south to Dar es Salaam. But far more work will be needed to sort out the energy problem. Only about one-fifth of the population has access to regular supplies.
Tanzania is more economically diverse, less indebted and less dependent on commodity exports than many countries on the continent. It is a beneficiary of low oil prices, a spectacular tourist destination for high-end travellers and emerging as a top-five African gold producer. It is also sitting on 55tn cubic feet of undersea gas. However, drawn-out negotiations with the likes of ExxonMobil and Royal Dutch Shell, coupled with a sharp drop in global prices, mean it could be many years before production starts.
The new government has also declared its intention to step up manufacturing and agro-processing, both to push the economy up the value chain and to provide jobs for the swelling workforce. Infrastructure will be key, but so will creating the right business environment. Benno Ndulu, central bank governor, says cleaning up the judiciary so that companies have speedy and dependable recourse to the law is crucial. Foreign investors used to Tanzanian courts will share his hope, but will not be holding their breath.
Much depends on the new government’s relations with business. Mr Magufuli has inherited Nyerere’s suspicion of the private sector. He has, for example, questioned the deals struck with foreign miners, including London-listed Acacia Mining, formerly Barrick Gold Africa, arguing that companies have been allowed to declare years of losses while paying dividends overseas. In April, Acacia was forced to make a $70m tax provision as a result of disputes with Tanzania’s authorities over past taxes.
Those close to Mr Magufuli say he genuinely wants to root out corruption and fly-by-night practices. “People believe sincerely there’s a new sheriff in town and that he means to do what he says he’ll do,” says Salim Ahmed Salim, a former prime minister.
But Mr Salim argues that the new president, accused by opponents of authoritarian tendencies, will have to institutionalise change rather than take on everything himself. Still, Mr Salim argues, if the new government can rationalise the business environment, Tanzania — stable, economically diversified and growing quickly — is ripe for further investment. “If corruption is tackled,” he says, “this country has tremendous potential.”
Those of you who know me well are familiar with an interesting part of my life from 1993. I left Port Elizabeth, South Africa. I spent 8 months in a Xhosa tribal village in the Eastern Cape Province of South Africa.
When I arrived the young people in the village were delighted to see me. They were honored that a Europeans would want to live among them and come to understand them better. The older people in the village were sullen and skeptical. They kept calling me "baase" and "master." When they did this I would smile at them and tell them that I was no one's boss or master.
When I arrived in the village I felt self-conscious. I was six feet-tall and the average village inhabitant was five feet-tall. More obviously I was white and everyone else was black.
After about three days something miraculous happened. I stopped feeling self conscious. I stopped seeing the people in the village as black.I started to see them as people with strengths,weaknesses, and problems like all of we humans.
The people in the village were amazing. The average person only had two years of formal education. Yet everyone spoke English, Afrikaans (The Dutch language), Xhosa (their tribal language) and another tribal language like Zulu. They were not dumb or primitive. I felt sad that they had not had more chances in life.
I could write a book about my 8 months there. But it was one of the most beautiful and uplifting experiences in my life. It led to my being allowed to vote in the first all-race election in South Africa.
At about the same time a very idealistic 26-year old woman from Newport Beach,California, started to do the same thing in a township near Cape Town. Her name was Amy Biehl. She was a distinguished young academic with a bright future. Her experience did not have the happy ending that mine did. She was literally stoned to death by some inhabitants of the township.
What happened to Amy has haunted my psyche for 23 years. Why did she have to die and why did I survive the same experience?
Yesterday I was reading the New York Times book section. I discovered a book about Amy, her tragedy and what happened afterwards. The title is We Are Not Such Things. I was touched and bought a copy.
When Edafa, a former militant from Nigeria’s restive oil-rich Delta, joined a government-funded programme to train as a welder in Malaysia, he dreamt of setting up his own business. But after three years of joblessness and frustration, he is now using his skills to blow up oil pipelines.
The 28-year-old has returned to his previous life, carrying out attacks for the Niger Delta Avengers, the latest group to lead an insurgency that is creating havoc forAfrica’s largest oil industry.
The rise of the Avengers since the start of the year reflects the anger that is coursing through towns and impoverished villages across the swampy Delta as President Muhammadu Buhari’s grapples with Nigeria’s worst economic crisis in decades.
“President Buhari forgets us in the Niger Delta, and we are the source of Nigeria’s income,” Edafa, who did not want his full name used, says in his home town of Ughelli, where there is rarely electricity and women cook over firewood and draw water from wells. “We want him to hear our cry.”
Attacks by the militants — who say destroying oil wells and the pipelines snaking through their communities is the only way to be heard — reduced oil production by about 700,000 barrels a day to 1.5m b/d in May. As a result, Nigeria slipped from its position as Africa’s top oil producer.
Repairs have pushed output back up by at least 200,000 b/d. But the blow to production has been disastrous for Mr Buhari, a former army general who won elections last year.
The cash-strapped federal government has yet to secure funds to plug a $11bn deficit in this year’s budget, while many state governments have not paid salaries for months.
And the poverty that blights the Delta — despite its oil riches — is partly to blame for Edafa’s and others’ return to militancy. Each time he participates in an Avengers’ “operation” he earns 20,000 naira ($70).
The Delta has a long history of rebellion against the oil industry. Edafa’s eight-month training programme in Malaysia came only after he laid down his gun as part of a government amnesty deal in 2009 with other militant groups.
He wanted to open his own welding shop, support his family and provide jobs to the droves of idle young men in Ughelli, which sits atop one of the country’s most productive gasfields.
Instead, he joined the ranks of the unemployed.
‘It’s very easy when people feel disillusioned, disconnected, and unattended to, for them to return back to the ways they know in order to survive’
He blames corrupt former officials whom he alleges stole start-up funds he and other retired militants were promised. He does not see a brighter future under the new government, which he perceives to be biased against his southern region as it is led by Mr Buhari, a northerner.
“It’s very easy when people feel disillusioned, disconnected and unattended to for them to return back to the ways they know in order to survive,” says JonJon Oyeinfe, a local activist.
Many of the Avengers’ demands — including greater control of the oil wealth and the development of basic infrastructure — reflect those of previous insurgencies. But frustrations have been exacerbated because of the way Mr Buhari is seen to have dealt with the Delta.
In the early days of his presidency, he was deemed to be ignoring the region. When the attacks on infrastructure began, he vowed to “crush the criminals” behind them.
His belligerent statements chimed with threats by successive governments that promised to defeat the militants. But none succeeded, partly because the insurgents have far better knowledge of the region than the military.
Mr Buhari has yet to visit the Delta since taking office. Such a visit would be a symbolic gesture, which one local chief called “low-hanging fruit”.
But some businessmen in the region add that local politicians also bear responsibility for people’s anger. They point to former state governors such as James Ibori, who is in prison in the UK for fraud and money laundering, for failing to use the billions of dollars of oil revenues allocated to their budgets for development.
The energy sector has long been a source of corruption and patronage at all levels of government.
“Young men are resorting to violence to force the government to have a listening ear to their plight,” says Jude Isiayei, a local pastor.
‘Young men are resorting to violence to force the government to have a listening ear to their plight’
The amnesty that ended the last insurgency was mainly implemented under the watch of Goodluck Jonathan, Mr Buhari’s predecessor who is from the region, and brought a semblance of stability to the Delta for five years. But it was also seen by many Nigerians as being a “bribe for peace”. Mr Jonathan is criticised by some traditional leaders for not doing more to develop the area.
Amnesty stipends have been one of the few steady sources of income for Deltans in recent years. Mr Buhari had pledged to cease the programme by the end of 2015, although it has since been extended until 2018. But former militants say they have not received their stipends for months.
Low oil prices have meant another cash-generator — oil theft of various sorts — has become less profitable. Years of oil pollution has also eroded traditional livelihoods such as fishing and farming. The result is that young Deltans have few options, which risks creating more recruits for the militants.
Sheriff Mulade, a local leader, says: “The only employment the government has been able to create for the youth of the Delta is militancy.”
Johannesburg - Africa’s biggest mobile network by subscribers, MTN [JSE:MTN], has hired another top banker to join its team amid a management shake-up.
MTN on Thursday evening announced the appointment Kholekile Ndamase as deputy head of mergers and acquisitions, effective September 10 2016.
Ndamese joins MTN from Rand Merchant Bank (RMB) where he led the equity financing business and focused on providing financing solutions for mergers and aquisitions.
Ndamese also occupied other management roles during his 12-year tenure at RMB. Prior to working at the First Rand Group, Ndamese worked at Accenture.
“Kholekile brings extensive experience to the role, particularly in transaction origination, structuring and execution. His knowledge and skills are essential to the attainment of MTN’s broader growth strategy, as we continue to focus our efforts on developing our participation in adjacent sectors,” said Phuthuma Nhleko, executive chairman for the MTN Group.
Earlier this week, MTN announced that it has hired former Barclays Africa Group’s head of investment banking, Stephen Van Coller, as vice president of strategy and mergers and acquisitions.
Meanwhile, the company also said that its chief financial officer Brett Goschen is leaving the company after 14 years’ service.
All these changes come before Rob Shuter, a South African national who is the current CEO of the European Cluster at Vodafone Group, is set to become MTN Group’s CEO in 2017.
Harare - Darkness hung over Harare's central business district, which looked dark and abandoned by 19:00 on Wednesday after Pick n Pay, OK Zimbabwe, Chicken Inn and Nando's outlets closed down at 18:00.
These were the few businesses that were open on Wednesday as protests called to raise public disgruntlement over corruption, delayed salaries for civil servants and cash shortages halted economic activity.
Banks such as Standard Chartered and Stanbic did not open on Wednesday while the country was also hit with a WhatsApp outage.
The instant messaging platform was however restored later in the day amid government warnings that those sharing information about the protests will be arrested.
"We are packing up and closing down early today because there has been no business. We normally close very later after 22:00, but we also have to get home early," said an employee at a Nando's outlet in central Harare as she served the last two customers for the day.
Pick n Pay and OK Zimbabwe supermarkets also closed at 18:00 on Wednesday. Petrol stations had also closed shop, although some were still open at the time of writing, while others did not undertake business throughout the day.
"Food Lovers Market is not one of my shops and it's closed. It's the largest supermarket in Avondale," tweeted businessman Shingi Munyeza, who runs franchised restaurants such as News Cafe in Harare.
In Zimbabwe, Chicken Inn, Nando's and Steers franchises are run by Zimbabwe Stock Exchange-listed Innscor Africa Limited.
WATCH: Shocking police brutality during Zim protests
Reports from Bulawayo, the second largest city, also indicated that business activity had been low. There were also reports that some white men had been arrested in Victoria Falls while staging protests.
More than 110 people were arrested in Zimbabwe on Wednesday during a nationwide shut-down that the authorities later said was a "flop", according to reports by the state Zimbabwe Broadcasting Corporation.
Seventy-five people were arrested in Bulawayo, 19 in Harare and 17 in Victoria Falls, the ZBC said in separate reports.
Police spokesperson Senior Assistant Commissioner Charity Charamba told reporters that 17 people had been arrested for staging unsanctioned protests in Matebeleland North, while another man had been nabbed for possessing a "home-made petrol bomb".
Despite this, some government officials insisted it had been business as usual. President Robert Mugabe's Zanu PF party held a politburo meeting in the capital as the mass protests and stay-away grounded business and economic activity.
Follow Fin24 on Twitter, Facebook, Google+ and Pinterest. 24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.
Yahoo!
Google
Digg
del.icio.us
Facebook
