Monday, January 23, 2012

Dar es Salaam’s car business a blessing or curse?

Dar es Salaam’s car business a blessing or curse?

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DAR ES SALAAM, TANZANIA - Of recent, Dar es Salaam city has been dotted with car showrooms where reconditioned vehicles, mostly Japanese, are sold.
(Vehicles at one of the showrooms in Dar es salaam Photo By Kenan Kalagho)
The prices are far lower than new cars imports. Hundreds of these showrooms are seen within and on the outskirts of Dar es Salaam City where old structures have been pulled down.Forexample Ali Hassan Mwinyi Rd in Kinondoni area of the City, along Morogoro Rd and Kilwa road, among others.
Most of the car imports are brought in from Dubai, Japan and China where it is believed the prices of reconditioned vehicles are relatively low.
My previous employer, Jafarai Michael said, bought his reconditioned Toyota Rav4 model at only US$$8,300 directly from Dubai. With Customs clearing at Dar es Salaam Port, the final cost was $12,300. The difference in price for similar models being offered at City showrooms is a hefty $22,000.
It is estimated that around 50,000 imported vehicles pass through the Dar es Salaam every week and almost a quarter of such vehicles end up in Dar showrooms while others are being transported to the land locked neighboring countries of Zambia, Zimbabwe, Malawi, the Democratic Republic of Congo and other countries.
An economist with the Confederation Trade of Industries (CTI), Hussein Kamote, says that the cars in Dar es Salaam city means that the economic poison of individual Tanzanians is improving and that there is a demand for vehicles in the country.
(Traffic jam at one of the streets in Dar es salaam, the importation of used vehicles has resulted into traffic jam in most of African cities Photo By Kenan Kalagho)
He noted that a lot of companies offer their employees car loans a facility that encourages imports.
It is no wonder that one will see the dotted cars showrooms at several locations such along the Ali Hassan Mwinyi Rd in Kinondoni area of the City, along Morogoro Rd and Kilwa road, among others, spotting signposts reading: "Japan used vehicles sold here".
In these showrooms different models of vehicles are sold from Toyota, Nissan, and Mazda are showcased selling at prices sellers will bargain for.
However, Kamote cautioned that the influx of such used cars could be unwanted types in the countries of manufacture - in other words cars that could sooner or later become scrap.
"You will realize that many of these vehicles are 'used vehicles' and in such manufacturing countries there are almost at every time "new brands" that flood their local markets making it necessary for owners of older models to keep aged vehicles.
"You will realize that in the past there was a lot of congestion at the Dar es salaam port that that took up space for other imports. Some businessmen turned the port into their sales yards, not any more,' he noted.
Of course most showrooms in Dar City are in bonded warehousing facilities controlled by the Tanzania Revenue Authority. The vehicles in these facilities must be fully paid Customs duties to TRA before being released to buyers.
A Toyota Mark II will cost a buyer between $13,000 and $16,000, whereas a Toyota Rav4 goes for $22,000 at the show room - which is far more expensive compared than direct imports to individuals.
The influx of cars in Dar city, a city already bogged down jam, is certainly not a blessing to commuters.  "I use almost two hours every day going to work from Makumbusho area to Dar  City centre - "Ms Fatuma Mboga complained.

Bulk oil imports hits cash snag

Bulk oil imports hits cash snag

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DAR ES SALAAM, TANZANIA - Take off of the newly adopted bulk oil importation which was to begin from January, 2012, failed to start as scheduled for lack of financing to operate the system.
The petroleum products importation system, to be undertaken by the Commercial Petroleum Company Limited (COPEC), is expected to import into Tanzania some 540,000 tones of oil products worth $500 million.
The new system has been devised by the Government to cut the number of oil importers aims to curb price fluctuations of fuel prices in the country which was distorting the pricing of the products.
In an exclusive interview with the East African Business Week in Dar es Salaam last week, the Senior Principal Marketing Officer, Leo Lyayuka, said COPEC company has yet to secure oil stocks as COPEC was still arranging for the sources of funds to run the company
"We are still looking for sources of funds from banks and other financial institutions to see whether we can proceed with the business of bulk oil fuel procurement … we are in discussion with financial institutions."
The first oil consignment was supposed to have been in Dar es Salaam towards the end of December 2011.  The Tanzania Government announced its plans to engage in marketing petroleum products to stabilize prices and provide competition to the private oil marketing fraternity in a bid to guard against oil price distortion of the strategic fossil fuel.
The move was undertaken after experiencing after the 50-plus foreign oil marketing firms operating in the country formed an oil cartel in a liberalized environment.  When EWURA - the Energy and Water Utilities Regulatory Authority (EWURA) - towards the end of last year announced new pump prices which were lower than the previous fortnight, a group of oil marketers shut down their fuel station and thereby forcing a critical shortage of oil products in the country.
However, Lyayuka says the Government is determined to ensure that the newly introduced oil importation mechanism works successfully.
"We still haven't been able to start operations as a company, but as a subsidiary company of Tanzania Petroleum Development Cooperation (TPDC)."
When pressed for the take of the system, Lyayuka said "I don't know when it will begin… but financing discussions are going on."

Pressure forces Dar es Salaam to pay teachers’ arrears

Pressure forces Dar es Salaam to pay teachers’ arrears

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DAR ES SALAAM, TANZANIA- The Tanzanian Teachers Union has called off a national strike that was supposed to be staged countrywide this month before schools open, following the release Tshs 22.5 billion (US$7.8 million) to settle the teacher's overdue arrears.
Speaking with the East African Business Week in Dar es Salaam the President of the Tanzania Teachers Union, Gratian Mukoba, said that the association has decided to call off the strike after seeing the Government's good will of listening to the teachers' demands.
Mukoba said that the Teachers Union had received from the Government the relevant documents for the payment of the amount last week the amount which will be channeled through the districts councils and the Ministry of Education and Vocation and Training not later than January 15.
The Teachers Union has previously threatened to stage a national strike while if the Government refused to listen to their demands by the start of this year's scholl term.
However, Mukoba said despite the promised payments being released, the teachers are still asking the Government to pay the remaining arrears that amounted to Tshs 32 billion ($20 MILLION) by end of last year.
"The Government had already disbursed Tshs 2 billion ($1.25 million) by December last year, and if it decided to pay us at monthly pace it will take 15 months for the Government to clear our bill, this practice is unwelcomed by teachers," Mukoba insisted.

Tanzania: East Africa’s biggest democracy

Tanzania: East Africa’s biggest democracy

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FOUR PRESIDENTS IN 50 YEARS: Tanzania this week celebrates 50 years of independence from British colonial rule. The country has had a stable period since its founding father Julius Nyerere (1961 - 1985) handed power to Al Hassan Mwinyi (1985 - 1995) who handed over power to Benjamin Mkapa (1995 - 2005) who then handed over  to the incumbent Jakaya Kikwete (from 2005).FOUR  PRESIDENTS IN 50 YEARS: Tanzania this week celebrates 50 years of independence from British colonial rule. The country has had a stable period since its founding father Julius Nyerere (1961 - 1985) handed power to Al Hassan Mwinyi (1985 - 1995) who handed over power to Benjamin Mkapa (1995 - 2005) who then handed over to the incumbent Jakaya Kikwete (from 2005).                     
                                          
DAR ES SALAAM - Tanzanians across this vast territory, have everything to celebrate the 50th anniversary of their independence on  December 9, 1961 when they received their freedom from the United Kingdom.
The country was then called Tanganyika until it united with Zanzibar in 1964 to form the United Republic of Tanzania.
The history of the people of Tanzania, which is inhabited by over 120 tribes - mostly different in their cultures and languages- can be traced centuries back. However, from the slave traders and Indian Ocean markets emerged the Kiswahili language which to date unites the people of Tanzania and indeed East African.
In 4th century AD the Bantu-speaking people began to migrate into Tanganyika. They brought along iron tools and weapons. People on the east coast of Africa had contact with the Mediterranean civilizations through foreign traders who plied the Indian Ocean coast in search of wealth. The Persians and later the Romans sailed as far as Tanganyika.
Later, in the 8th century, Arab merchants sailed to this part of the African continent bringing with them the Islam religion and ever since many Tanzanians have been converted Muslims. Many Arabs settled along the coast and eventually traders came from as far away as India and China.
In the 11th century AD the ancestors of the Maasai began to migrate to Tanzania from southern Sudan. Most of them arrived between the 15th century and the 18th century. The first European to reach Tanzania was a Portuguese explorer named Vasco Da Gama who arrived in 1498.
However, the Portuguese rule did not extend inland. At first the Portuguese were peaceful, but not for long. In 1503 a ship commanded by Rui Lorenco Ravasco came to Unguja Island of Zanzibar. The Portuguese captured 20 Arab dhows and killed about 35 people. The ruler of Zanzibar, the Mwinyi Mkuu was forced to submit, who grant the Portuguese access to Zanzibar islands as a port of call for  Portuguese ships seeking food and fresh water. He also had to pay tribute to Portugal. In 1505 the Portuguese captured Mombassa port in Kenya and in 1056 they captured Pemba Island of Zanzibar. In 1510 the people of Unguja Island and Pemba Island rebelled, but they were crushed by the Portuguese.
During the 16th century the Portuguese took control of the coast and they built forts. In 1560 they founded Zanzibar town. However, the Portuguese also introduced two plants from Brazil - cassava and cashew nuts. The Portuguese only controlled the coast of Tanganyika till the 17th century when they were driven out by Arabs from Oman. The Arabs captured Unguja in 1652. The last Portuguese were expelled from Pemba island in 1695.
In the 18th century and 19th century Arab slave traders took huge numbers of slaves from Tanganyika and exported them to the Gulf states where they were resold to Arabs or to European colonies in the Indian Ocean. In 1812 a man named Saleh bin Haramil introduced cloves to Zanzibar which soon became a major export. Clove plantations were worked by African slaves.
In the 19th century Europeans began to explore inland Tanzania. In the 1840s two Germans, Johann Ludwig Krapf and Johannes Rebmann reached Mount Kilimanjaro. In 1857 two Britons - Richard Burton and John Speke reached Lake Tanganyika. Then in 1885 the Germans began taking over the region led by Karl Peters. He formed a company, the German East Africa Company (Deutsch-Ostafrikanische Gesellschaft).
Karl Peters persuaded African chiefs to make treaties with his company. Legally Peters acted independently of the German Government. Nevertheless his government approved his actions.
Meanwhile, the British took control of the island of Zanzibar, but in 1890 Britain and Germany signed a treaty dividing the area between them. Britain took Zanzibar and Germany took Tanganyika. Then in January 1891 the German Government took direct control of the new territory.
From the start Germans faced resistance. The first uprising was the Abushiri revolt of 1888. The people on the coastal areas resented German interference and they rose in revolt led by Abushiri bin Salim al-Harth, but was crushed by Germans.
From 1891 to 1898 the Germans fought the Hehe people of southern highlands.  The Hehe were defeated and their leader, Mkwawa, who committed suicide instead of being taken prisoner. In 1905-07 came the Maji Maji rebellion in rebellion against forced labour on cotton plantations and that lead to the whole of southern Tanganyika to rise in rebellion.
The rebellion was crushed after the Germans adopted a 'scorched earth' policy. At least 100,000 people died both as a result of the fighting and as a result of starvation. Between 1909 and 1913, some 250 tonnes of dinosaur bones were discovered at Tendaguru, north of Lindi and shipped to a museum in Berlin.
During the 1914 First World War a small German force, led by Colonel Paul von Lettow-Vorbeck, was defeated. When a British force landed at Tanga in November 1914 it was defeated and fled leaving many weapons in German hands. The British invaded again in 1916, but they were unable to defeat the Germans.
However, by 1917 the Germans in Tanganyika were running out of food and ammunition so they turned to guerrilla warfare. They continued to fight until Germany itself surrendered in November 1918.
After the war Tanganyika was handed over to the British as a protectorate under the League of Nation - now the UN. In 1925 Sir Donald Cameron became the first Governor.
In 1929 Africans began to mobilize by forming the Tanganyika African Association in Dar es Salaam disguised as a social club although it had political aims until the 1950s when emerged as political force of sorts.
Thus in 1953 Julius Nyerere was elected president of the Tanganyika African Association. In 1954 it was renamed the Tanzania African National Union (TANU). It campaigned for independence with the slogan Freedom and Unity (Uhuru na Umoja). TANU having been a protectorate, Mwalimu Nyerere demanded for freedom from the 'protectors' from the UN which made things easier that countries that were colonies such as Kenya, Rhodesia - now Zimbabwe and Zambia. The UN was accommodating to the independence idea and the British agreed to let go the real estate. TANU participated in elections for the legislative council in 1958 and 1959 in an environment that obliged two-thirds of the seats to be reserved for non-Africans.
In 1960 that restriction was removed, and TANU won almost all the seats. The move to independence was now unstoppable and Tanzania became independent on 9 December 1961 with Julius Kambarage Nyerere Nyerere, - a teacher by profession, as first prime minister. A year later on 9th December 1962 Tanganyika became a republic and Mwalimu Nyerere became its first president.
Modern day Tanzania
The armed revolt in 1964 in Zanzibar against the Sultanate regime, led by Abeid Amani Karume - speeded up Nyerere's dream to unite Africa. That was an era of Pan-Africanism. In 1967 Nyerere adopted a policy of socialism popularly known as 'Ujamaa' under the Arusha Declaration which was a blue print of the social development patterned on the Russian socialism, but this ujamaa was restricted to the Tanganyika side as Zanzibar pursued capitalistic policies.
Nyerere planned to create huge communes where people would be  encouraged/forced to move into to produce food and live in brotherhood.
It also entailed nationalization of properties such as plantations of tea, coffee, sisal, buildings  and banks, among others. The policy proved disastrous for Tanzania's economy because it did not receive honest support from leaders and the people alike. Agricultural production slumped and the Tanzanian economy was wrecked. Furthermore by 1973 only about 20% of the population had moved to Ujamaa villages. So Mwalimu Nyerere virtually forced people to move from their ancestral homes to communes, and by 1977 about 80% of the population had been resettled.
The war against forces of Idi Amin of Uganda in October 1978 after a invasion of Kagera region destabilized Tanzania's economy. The country sank into heavy external debt. International donors demanded reform in return for help, but Mwalimu Nyerere was unwilling to change his policies. So in 1985 he resigned handing over power to Ali Hassan Mwinyi who spent the next 10 years dismantling the Ujamaa policy.
Mwinyi privatized state-owned enterprises to cut the mounting subsidy burden, and encouraged foreign investments. It has since steadily attracted many investors in the tourism sector, mining especially for gold, and road transport, among others In 1995, Mkapa succeeded President Ali Hassan Mwinyi (1985-1995) - a Zanzibari who served two terms.
In 2005 Jakaya Kikwete was elected president.
Last Updated ( Sunday, 04 December 2011 14:27 )

Dar commodity prices soar on Christmas holiday

Dar commodity prices soar on Christmas holiday

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DAR ES SALAAM, TANZANIA - Christmas and New Year seasons have been a hard holiday period with biting costs on food commodities due to inflation to meet the people's demands of family presents, food and new clothes.
(A dar es es salaam resident weighing his option at a market recently, prices have soured in Dar es salaam due to oncoming christmas and New year festivals Photo by Kenan Kalagho)
 A random survey by the East African Business Week in Dar es Salaam at Kariakoo, the city's biggest market last week, revealed a sharp increase of food prices as Christmas drew near and the preparation for the New Year.
A kilogramme of the best quality rice, that previously sold at Tshs 1,800 (US$1.05), just two weeks ago now goes for Tshs 2,100 ($1.35) a kg whereas the low grade rice that sold at Tshs 1,600 ($1.03) a kg, is at Tshs 1,900 ($1.22).
The survey also showed an increase in prices of other commodities such as meat, soya beans, spices and other essentials with traders attributed to fluctuations to increased cost of transporting the food from upcountry.
The prices of beef at many Dar es Salaam city butcheries also shot up from  Tshs 4,500 ($2.90) a kg at the end of November to Tshs 6,000 ($3.87) per kg of mixed cut beef.
There has been also a noted increase in the price of chicken from between Tshs 13,000 ($8.40) and Tshs 15,000 ($9.68) per live chicken to between $8.68 and  Tshs 20,000 ($12.90).
The Secretary General of the Kariakoo main market, Mr Mnyau Hamis Mnyau said prices of various commodities had risen as a result of the festive season and high cost of living.
"All these food commodities you see here at the Kariakoo main market are brought in from upcountry regions of Iringa, Mbeya, Arusha and other regions where traders incur very high costs of transportation," Mnyau said.
A trader at Kariakoo Jumanne Salum said  each year during the festive season city customers experience high costs in food items due to the excitement. He also blamed the high prices this season to transportation. "The high transportation cost is attributed to increases in the fuel prices," warning that "Customers shouldn't expect the prices to go down because that would mean traders would incur loses," Mnyau  said.
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Dar es Salaam commuters irked by ferry fares

Dar es Salaam commuters irked by ferry fares

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DAR ES SALAAM, TANZANIA - An estimated 50,000 Dar es Salaam city residents who commute daily by ferry between Magogoni and Kigamboni have been irked by the Government's move to hike fares by 100 per cent.
(Residents of Dar es salaam cros the ferry to Kigamboni as they experience one of the ferry on breakdown. The cost of ferry between magogoni and Kigamboni has increased from the prevoious Tsh 100 to Tsh 200 per passenger. Photo by Kenan Kalagho)
Residents board MV Magogoni in Dar es salaamThe ire of the residents of Kigamboni, area east of Dar port, has turned into a political affairs instead of financial following protests by the residents supported by their Members of Parliament.
They are reacting against the announcement by Works, John Pombe Magufuli's announcement of fares hike from Tshs 100 (US$0.06) to Tshs 200 ($0.12). In his adamant refusal to reconsider fares the hike, Minister Magufuli, told those not ready to pay the new fares they could 'dive to cross the 200-metre water stretch,' which otherwise takes five minutes to cross.
Also gone up are charges for cars from Tshs 800 ($0.50) to Tshs 1,500 ($1.0) for cars, pick-up vans up from Tshs 1,000 ($0.63) to Tshs 2,000($1.3)  and 3.5 tonne vehicles up from Tshs 5000 ($3.12) to 7,500 ($4.70).
ross to work places.
The loud and angry complaints brought in MPs who appealed to Prime Minister Peter Mizengo Pinda to intervene to stop the fare hike.
Speaking in Dar es Salaam last week Minister Magufuli said that the increase of the fares was necessary to raise to meet increased running costs of the two ferries which have been generating daily revenue of $5,000, but collections after the fares hikes it shot up to $9,000, although thefts are still tormenting the collection. It is claimed thefts through fake tickets sales, up almost twice. The Government has yet to find a solution to the fraud.
Dr Magufuli said ferries fares have remained unchanged in the last 14 years since it was last set in 1997.
Kigamboni residents face numerous shortages to such basic social and financial services such as banking - even ATMs and food markets.
Several residents interviewed by the East African Business Week in Dar es Salaam last week, were of the view that the 100 percent fares increase was just "too high" considering that Kigamboni ward was a hardship area of the City residents.
The Surface and Marine Transport Regulatory Authority (Sumatra), a government agency mandated with regulate transport fares among others, was also asked to intervene the best way it can.
One resident Ms Mariam Omary said: "We don't have the money due to the economic hardship of the country and our lives are worse than before due to inflation and high food prices, now the hiked fare in ferries."
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