Experts warn on Mobile money tax

Tuesday, 23 October 2012 08:54 Kenan Kalagho,EAST AFRICAN BUSINESS WEEK

DAR ES SALAAM, TANZANIA - Following the recent proposal tax on Kenya mobile money transfer by the Kenyan Finance Minister, Tanzania economists have warned that such a step in the country would mean more mobile companies losing customers and dwindling mobile money transfer in the country.

Speaking to the East African Business Week, renowned economist Dr Prosper Ngowi, a Senior Lecture at Mzumbe University Business College when asked on the implications these tax introductions could bring to the country, he said that although Tanzania needs a lot of new sources of funds, recommending tax on mobile companies would mean transferring such costs to the users and therefore reducing the rate of communication in the country.

He said that the transfer of mobile money in telecommunication companies was being done in relatively small amounts and this benefitted a lot the senders and recipients from these transactions.Taxing mobile companies and or customers meant that users will end up suffering more.

"People are moving away from companies that charge for receiving money to those that are not charging, even if it is Tsh.1,000" Ngowi said adding that the government should make sure that such taxes be introduced on telecommunication companies expenses."

He noted that besides the size of the market,  tax was also one of the many factors that both foreign and local investors look out for as far as investment was concerned and that conducive taxes was an avenue to attract investment.

Tanzania’s Deputy Minister for Communication, Science and Technology could not be reached for comment on whether government was also considering it as a step of sourcing for areas of increasing government revenues in order to prepare the country to become independent as far as the budget is concerned.

Dar es Salaam starts waste management system

Sunday, 14 October 2012 14:12 Kenan Kalagho, EAST AFRICAN BUSINESS WEEK

DAR ES SALAAM, TANZANIA - With a daily increase in population in cities around Africa, concerns about how to manage waste products becomes even more.
This encouraged Ilala Municipality Council in Dar es Salaam to come up with the best ways of waste management aiming at creating more jobs to school dropouts. Mr. Jerry Silaa, the Ilala Municipality Council Mayor told East African Business Week in Dar es Salaam the municipality has opted to manage its waste in order to generate income.

 (A well managed roundabout in Dar es salaam, Ilala municipal has come up with best ways of managing waste, Photo By Kenan Kalagho)
According to Silaa, Ilala municipality council alone produces about 1,088 tons of waste products on daily basis while only 450 to 550 waste products are collected daily.
The newly introduced system if applied to other municipalities of Temeke and Kinondoni he says would be able to create more jobs and improve family incomes.
The mayor pointed out the system of waste management goes along with city beautification which he says needs to be cost effective and is already in progress by targeting all the open space areas in Dar es Salaam and city roundabouts.
He said Ilala municipality council alone uses $1.27m (Tsh.2bn) every year in waste collections and says there was need for the stakeholders to finance the city cleaning in the city in order to attract more tourists.
Mr. Silaa says currently the city beautification is being undertaken by his municipality in collaboration with stakeholder which aims at attracting more tourists, saying there is need to have places which could attract tourists and Dar residents in at large.
"If you go to Europe and many other places in Africa, their cities have beautiful places where tourists are attracted to take photographs adding that Dar es Salaam has been lacking such places and the municipality has already started the beautification in different localities of the city" says the Mayor.
According to Mr. Samuel Bubegwa, the Municipality Waste Management Officer, the municipality in collaboration with  Arthi University are running a cost effective waste management project at Buguruni to the West of Dar es salaam.
Bubegwa says the municipality opted for a profit way of managing waste product in the city in order to allow the municipality to generate income while at the same time help the community in job creation to Ilala municipality dwellers with a population of about 634,924 according to 2002 Tanzania's population census where around 40.5% of its residents are jobless.
He says this pilot project has been first launched in highly populated unplanned areas of Buguruni in Dar es Salaam city where they have been able to employ many city dwellers in the production of compost manure while at the same time help the city dwellers to best collect bottles for recycling.
"This system is being practiced at community level where quality control is being implemented in collaboration with experts from Arthi University of Dar es salaam where we have been able to produce composts manure which is generating $800 on monthly basis to the jobless residents, Bubegwa says and adds that there is need to have compost standard so as to compare the quality of the recycled compost at Buguruni with other compost manure."
He says that after the waste is collected, it is crushed by sieve and then shredders before being transferred to windrows after which compost manure is obtained in four days.

Tanzania: Oil Firms Asked to Protect Nature

East African Business Week (Kampala)

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By Kenan Kalagho, 15 October 2012

Dar es Salaam, Tanzania — Following the discovery of oil and gas, the National Environment Management Council (NEMC) says it is important to ensure that the natural resources are managed well without causing negative impacts to the economy.

 (Constantine Shayo Speaking with Journalists in Dar es salaam recently, Photo By Kenan Kalagho)
Speaking during the workshop that was organized by oil and gas stakeholders in Dar es Salaam, Dr Constatine Shayo the Principal Management Research Officer with NEMC) said there is need for more stakeholders to come together and see how they will manage negative impacts that come along with oil and gas.
"We need to gather information to stakeholders about the concerns of the exploration by conducting an environmental impacts assessment as other countries so that oil and gas can be managed successfully and bring about the development needed in the country," Dr Shayo said.
Dr Shayo explained after the discoveries of 9 trillion cubic feet of natural gas around Zafarini-1 and Lavani in Kilwa to the southern part of Tanzania by Norwegian based company Statoil and Exxon/Mobil, NEMC saw the importance of convening a stakeholders meeting on the ways of reducing the negative impacts that comes along with natural gas.
Dr Shayo also underscored that while the country will benefit more with the discoveries of oil and gas in terms of employment opportunities, infrastructure and health facilities construction among others, it was important for the public to note that there were severe impacts that resulted from poor mismanagement of these natural gas and oil.
According to him these negative impacts included air quality degrading, generation of toxic and hazardous materials as well as safety hazards adding that these activities affects the quality of peoples' life and their livelihood and therefore needed to be properly mitigated.
Tanzania has in total discovered about 33 trillion cubic feet of natural gas experts still questions on how prepared the government policies are in managing these resources without causing severe impacts to environment.

Tanzania: Firms Asked to Support Infrastructure in the Region

East African Business Week (Kampala)

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By Kenan Kalagho, 15 October 2012

Dar es Salaam, Tanzania — In a bid to improve infrastructure logistics in the East African region, experts have requested for Multi-national corporations in the region to focus much on supporting infrastructure construction instead of Corporate Social Responsibility (CSR) which brings little effect to the society.
The African logistics experts' conference that convened in Dar es Salaam last week to discuss infrastructure developments in the region said it has become a fashion in Africa where multinational corporations are focusing their support on CSR instead of taking some of their gained profit percentage to help the region logistic sector.

 (Prof. Anthony Beresford exchanging words with Transport Minister Dr Harrison Mwakyembe)
Speaking in an exclusives interview with EA Business Week in Dar es Salaam last week, Prof. Anthony Beresford of Cardiff University who was one amongst the key speakers during the conference said that it was important for multi-national corporations operating in the region with billions in operational capital to give a hand in infrastructure for their own benefits.
"These multi-national corporations need to show the percentage of their turn over to the world by supporting in the areas which does not relate to their business like electricity, transport, water and other new fields" Prof. Beresford said.
He said that for any investment in rail infrastructure which is relatively cheap as compared to other means of transport to take place, the respective countries in the region need first to understand "what goes where" in terms of goods in order to build a picture of flow.
"We need to study the tracking flow of business in the respected areas we focus to start rail infrastructure if we are to operate on profit" Prof. Beresford insisted.
According to the Minister of Transport Dr. Harrison Mwakyembe, transport system was a key element in globalization and economic growth of any country.
"Wining clients in every business depends with the availability of goods at the market, the minister said and added that business cannot sustain if goods do not reach the market."
Dr Mwakyembe said there were a lot of peasants in the region who are willing to grow more agricultural produce but lacked transportation on harvest saying it was important for the workshop to focus on enhancing logistic services.

Tanzania, Malawi dispute for global court

Monday, 08 October 2012 08:11 Kenan Kalagho, EAST AFRICAN BUSINESS WEEK

DAR ES SALAAM,-TANZANIA - It is now clear that the lake border disputes between Malawi and Tanzania will move to the International Court of Justice (ICJ) in the Netherlands.
According to Tanzania president Mr. Jakaya Kikwete the country is making final preparations to present its case at the International court of Justice in The Hague, Netherlands if the two countries fail to reach a consensus regarding the boundary issue.

(Dr. Selassie Mayunga the Ministry's Director of Services and Mapping presenting the official map of Tanzania that shows the boundary at the middle of Lake Nyasa)
In his monthly address to the nation the president explained the talks between the two countries over the boundary have been stalled following Malawi's pullout to what its president referred to as resulting from "Tanzania launching a new map showing the boundary on the middle of the Lake".
"Tanzania and Malawi have been holding talks since the wrangle over the Lake boundary disputes but the talks stalled following Tanzania's Ministry of Lands, Housing and Human Resettlement issuing a new Map showing the boundary demarcations at the middle of the lake."
It was reported that Malawi president had pulled out of the border dispute talks following the publishing of the new map by Tanzania which coincided with a five day meeting in Lilongwe.
It is said that Malawi president had already presented the issue to the Secretary General Ban Ki-moon in order for the Secretary General to refer the issue to the International Court of Justice.
Local newspapers in Malawi have quoted Malawi president Joyce Banda while addressing the nation after a UN meeting in New York that Tanzania were harassing Malawian fishermen and threatening to blow up their boats which she said was unacceptable because according to her the lake belonged to Malawi. 
Tanzania's responsible ministry issued the official map early last week claiming there has been misappropriate representation of the countries border that officials said stands at risk if unofficial maps stand to be used in different advertorials in the country.
Dr. Selassie Mayunga the Ministry's Director of Services and Mapping said it is the responsibility of the ministry to make sure that the correct map of Tanzania is used in all the publications and advertisement in the country.
"No one is allowed to publish, distribute and or use the map of Tanzania in his advertisements without the official approval of the said map at the ministry" the director said
Dr Selassie noted plans are under way to make sure that all illegal maps are revoked and that legal map distributions of the new map that shows all the Tanzania regions, districts and its clearly demarcated boundaries will be sourced at the ministry.
It should be noted that recently in July this year's Tanzania and Malawi exchanged hard words over what Tanzania claimed that it had the right to use the lake that borders it at its southern part with Malawi refuting the claims by saying the lake was wholly owned by the country.
This wrangle between the two countries started after Malawi issued exploration rights of gas and oil to a UK based firm Surestream petroleum on the lake shores to which Tanzania claims it had the right to be included in the tender exercise for the exploration because according to them the exploration was taken place on the Tanzania side.Malawi's late president, Bingu wa Mutharika, awarded an exploration contract to UK company Surestream Petroleum during mounting tension over entitlement to the lake last October. Surestream was one of seven companies to bid for hydrocarbon exploration licenses in the Lake Malawi basin.
The fresh-water lake has been a frequent source of strained relations between the two countries. Until now, the consensus has not yet been given ownership of the lake to Malawi as the President of Malawi claimed he has already presented the issue to the UN Secretary General Ban Ki-moon in order to resolve it at the International Court of Justice in Rome.The lake known to Tanzania as Lake Nyasa also borders Mozambique where a number of its citizen is positioned along the shores enjoying both the income through fishing and irrigation from this third largest fresh water lake in Africa.
Scientists that have studied the geology of the lake for the last 30 years are optimistic that the condition of the lake is ideal for harbouring hydrocarbons which could result into a turning point for Malawian's economy.
Economist says that there is enough geological evidence suggesting the existence of thick sedimentary rock sequences and structures capable of trapping oil under Lake Malawi.
Speaking on a special television program the former Prime Minister of the first phase government Mr. John Malecel said the issue of the Lake and Ruvuma regions, Mtwara once belonged to what was called the great Nyasaland Empire which was demarcated by the then governors of the British colony.
Mr. Malecela however noted that as time passed on the two governors of both the two countries of Nyasaland and Tanganyika had to agree on the terms of sharing the lake.
He said according to the international law and treaties made with several countries having the similar situations countries are said to share the lakes and or rivers that bounds them noting that Tanzania was sharing Lake Gipe with Kenya where as Congo was sharing Lake Albert with Uganda.

Credit reference system to curb defaulters

Monday, 08 October 2012 07:50 Kenan Kalagho,EAST AFRICAN BUSINESS WEEK

DAR ES SALAAM, TANZANIA - The Bank of Tanzania (BOT) has introduced a credit reference system that would create accurate data for borrowers.
This will encourage a culture and responsible credit taking behavior in the financial sector in Tanzania. It synchronizes information on clients allowing financial institutions to access prospective clients' credit history. It reduces incidences of institutions lending to habitual defaulters.
"BOT is certain that the newly introduced system will increase access to credit in the economy and this will lead to reduction in lending rates and lower the rate of non-performing loans," Mr. Juma Reli, Bank of Tanzania Deputy Governor of Administration and Internal Controls (AIC) said.
Reli said t the CRS aims at promoting a sound and stable financial system to build a culture of paying debts.
"This would in turn, improve credit risks management in the economy and increase international and local investors confidence in the country's financial systems," Reli said, adding that lack of CRS  has been one of the major factors limiting citizen access to credit in the banking and financial sectors..
Many small firms and individuals try to borrow from banks and other financial institutions but due to inadequate information about borrowers, lenders have termed it as a high level lending risk..
"There is usually disparity of knowledge (information asymmetry) between the lender and the borrower about the past repayment behavior and the current level of debt and therefore making banks fail to make informed decisions on their lending operation," he said.
He insisted the aim of introducing the credit reference systems in Tanzania is to encourage a culture and responsible credit behavior in the financial system.
The central bank issued regulations for the operation of databank and private credit bureau in may 2012 followed with an engagement of CreditInfo International in assisting setting up a credit reference databank in the country in October 2011.
About 26 banks have embraced the CRS that started in June this year. Nine of them are already upgrading their systems.
BOT's Director of Banking and Supervision, Mr. Agipiti Kobelo said the expansion of credit in the economy is good at making the availability of credit information on commercial, personal or micro-loans indispensable for financial institutions in order to make informed credit decisions.

Kenya in VAT hike
Kenyans could be headed to more tumultuous economic times as the government mull over a proposal to raise Valued Added Tax (VAT) collection from the current 16 per cent to 20 per cent.
This would automatically translate to a rise in the cost of living for the already overstretched Kenyan spender.  Treasury officials last week gave the strongest indication that the government will be lobbying MPs to pass this as part of the controversial VAT Bill.
Globally, most countries are moving toward the 20 per cent figure which has been declared as the official best practice.
Most affected by the bill will be essential commodities such as food, agricultural inputs, and sanitary towels among others.

Kenya inflation down
Kenya's inflation levels have dropped to a record 5.32 per cent from a high of 19 per cent just six months ago.
This drop has been mostly aided by a general drop in the cost of food items which are billed as the main drivers of inflationary pressure.
The opposite is however true with fuel prices which shot up in the middle of this month following the latest review by the Energy Regulatory Commission (ERC).
Pressure is now piling on commercial banks in the country to cut their lending rate to reflect the general drop in inflation and the Central Bank Rate. Players are however reluctant to effect these changes despite pressure from consumer bodies in the country.