ECONOMY-TANZANIA: Poor Phone And Fax Lines Keep Investors Away

By Moyiga Nduru Reprint | | Print |

Moyiga Nduru

DAR ES SALAAM, Jan 30 1998 (IPS) - A visibly frustrated Tanzanian secretary fumbles here with a fax machine and stack of papers trying to transmit a message to clients in the northern part of the country. She fails.

“We have been trying to fax a message to Arusha and Moshi since 8:00 a.m. this morning,” says her boss, Mariott Kalanje, the executive director of the Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA). Arusha and Moshi are located in northern Tanzania, on the border with Kenya.

Kalange says they have only managed to fax one message to Moshi since 8:00 a.m. “And it is now 2 O’clock (pm),” he says. “I don’t think investors will tolerate this kind of environment,” he adds.

“Investors want good telephone and fax lines. They want good roads and rail lines. They want regular electricity. They want their assests protected under Tanzanian laws,” the TCCIA executive director points out.

Kalanje says he is unhappy that Tanzania still adopts the traditional method of attracting investors by offering a tax relief. “We meet many investors who say they don’t mind paying tax the same day if the atmosphere they work under is favourable.”

His views are shared by his colleagues who further list the factors hindering foreign investment, considered to be one of the catalysts for economic growth, in this East African nation.

“It is a shame that a country endowed with so many natural resources should have a per capita income of less than 120 US dollars, a life expectancy of 52 years, hospitals without medicine, chronic shortages of electricity and potable water, poor roads, and a telephone distribution density of about 0.3 per 1000 people,” TCCIA President David Mwaibula said in a paper presented in a workshop here recently.

Despite its problems however, investors have shown a keen interest in the country’s tourism sector. According to Ami Mpungwe, Tanzania’s ambassador to South Africa, South African investors are interested in the country’s hotel and game industry.

Tanzania, with a balance of payment of about 800 million U.S. dollars, wants its tourism industry to be a major foreign exchange spinner in the 21st century. It aims to earn more than 500 million U.S. dollars a year from one million tourists by the year 2025.

According to the latest official figure here, only 326,000 tourists visited Tanzania in 1996, compared to neighbours Kenya’s 700,000 and Uganda’s 250,000.

Tanzania’s earnings from tourism have stagnated at below 230 million dollars a year, official statistics here show.

South Africans have invested in Tanzania’s mining sector and in the beer industry. Indol, a subsidiary of the South African breweries now owns 45 percent of the shares in the Tanzanian Breweries Ltd (TBL).

A 1995 export promotion study shows that if export potential is tapped in non-traditional agricultural products, mineral and tourism export earnings could realise 1.7 billion dollars in the next five years.

“Tanzania, with a domestic market of over 30 million people, is a good location for investment. It is surrounded by six land- locked countries (Uganda, Rwanda, Burundi, Malawi, Zambia and the Democratic Republic of Congo) all of whom would source their supplies from Tanzania if we had them,” says TCCIA vice-president Steve Mwora.

Ugandan President Yoweri Museveni, however, believes the trick for attracting meaningful investment is for a large bloc of countries to forge political and economic integration, instead of going it alone.

“Our markets as individuals are very small, only 20 million people in Uganda, but when you invest in COMESA you have access to 300 million people in the COMESA area,” the Ugandan leader said here recently.

“This is a considerable market. We can, therefore, no longer afford to go it alone. Our goal is to work towards greater economic and political integration of our region… Under COMESA we are reducing tariffs and I am confident that we shall achieve the zero-tariff target by the year 2000,” Museveni said.

COMESA, the Common Market for Eastern and Southern Africa, groups the Comoros, Lesotho, Madagascar, Mauritius, Namibia, Sudan, Swaziland, the Democratic Republic of Congo (former Zaire), Uganda, Kenya, Tanzania, Malawi, Ethiopia, Eritrea, Zambia, Zimbabwe, Mozambique, Angola, Rwanda and Burundi.

Some Tanzanians have pinned their hopes on the estimated one billion U.S. dollars pledged by the donors in December 1997 to help meet Tanzania’s development needs in 1998.

Next week, Tanzania’s foreign minister Jakaya Kikwete will lead a high-level delegation from the East African Cooperation (EAC) — made up of Kenya, Uganda and Tanzania — to Japan, Belgium, the United States and Britain to seek investment to rebuild a dilapidated road network.

“We are going to introduce ourselves as a single investment area. We will also discuss possible support to rehabilitate our road network,” Kikwete told a press conference in the Kenyan capital, Nairobi, this week.

The EAC was revived in 1993, 16 years after its predecessor the East African Community collapsed following sharp ideological differences between Tanzania’s leftist founding father Julius Nyerere and Kenya’s then leader, Jomo Kenyatta who embraced the capitalist economic system.

A tripartite accord signed by the three countries in 1993 calls for regional cooperation in all the spheres of trade and research, as well as for the free movement of people, goods and services and capital within East Africa.