Chinese in $20m for Tanzanian units

News 

Sunday, April 27, 2014 

BY KENAN KALAGHO, 

EAST AFRICAN BUSINESS WEEK, KAMPALA, UGANDA

DAR ES SALAAM, Tanzania – A Chinese firm has heightened competition in the local real estate market by announcing plans to spend $20 million in new housing projects.
Dong Xiang has already acquired a 7,930 square metre piece of land along the Msasani beach suburb in Dar es Salaam.
This is for construction of 98 residential apartments for both upper and middle-class income earners.
The Deputy Director for Dong Xiang Liu Yupeng said last week, the residential project being undertaken by his firm was focusing on providing accommodation for Tanzanians.
Xiang said his project would be able to generate tax for the government, creating employment to Tanzanians as well as providing Tanzanians public with descent homes.
According to the recent published online survey on the cost of living calculator, expatistan.com, Tanzania is said to be offering the highest rents.
In affluent areas house rentals can be as much as $2,711 (Tsh 4.3 million) a month.
The survey Tanzania experienced a growth of 5.3% in the real estate sector between July and September 2013 resulting from the increase in demand of accommodation and business services.
Xiang however said, his firm was making sure that they enter into partnerships with local real estate firms and Tanzanians with land for a win-win situation.
He said this would enable most citizens to own affordable homes.
“Land is very necessary for our projects and in the near future we would encourage Tanzanians landlord to come forward for joint venture projects,”  Xiang said.
Currently Tanzania major firms involved in the real estate includes the state firm National Housing Corporation (NHC), the National Social Security Fund (NSSF) and other social security firms.

Tanzania to open up farming land

Agri-Business 

Tuesday, April 22, 2014 

EAST AFRICAN BUSINESS WEEK, KAMPALA, UGANDA

BY KENAN KALAGHO,

THE HOE: Some 70% of the population is involved with agriculture, but mostly use traditional and inefficient methods of farming.

DAR ES SALAAM, Tanzania - The government has said it will start identifying and surveying potential arable land for large scale food crop farming. 
Officials say this will boost agricultural production and later translate to faster economic growth.
In spite of Tanzania having 94.3 million hectares of surface land, just under half or 44 million hectares is arable and only 25 % is being presently used.
Speaking in Dar es Salaam during the Agrictech 2014 workshop with the theme ‘Leverage technology in agriculture transformation’, the Minister for Livestock and Fisheries Development Dr. Titus Kamani said there is a huge untapped potential.
“Only 450,392 hectares are currently under irrigation out of the 29.4 million hectares suitable for irrigation in the country,” Dr. Kamani said.
The vent brought together different participants from more than 10 countries from around the world.
He said the government wants to see that the available 29.4 million hectares is irrigated in order to boost agriculture production.
Dr. Kamani said there is also need to ensure that more youth and women are encouraged to participate in the agricultural sector as they form the largest percentage of the population.
Some 70% of the population is involved with agriculture, but mostly using traditional and inefficient methods of farming.
He insisted the government is transforming agriculture in order to allow it generate income to a wider number of rural Tanzanians.
Currently the Tanzania agriculture sector contributes 26.8 % to the nations GDP employing around 75.5 % of the population and the production is low mainly because it is determined by rainfall with very few irrigated areas.
The country’s wide sector approach of ASDP programs including the Southern Agricultural Growth Corridor of Tanzania (SAGCOT) and the Green Revolution has of recent accelerated agriculture sectors’ development in rural areas leading to boosting its production.
The former Chairman of the Confederation Tanzania of Industries, Felix Mosha said the future of Africa’s development depended much on the future of agriculture development.
However, he said there has been an encouraging signs of young people participating in agriculture in Tanzania.

$245m delays Tanzania projects

News 

Tuesday, April 22, 2014 

EAST AFRICAN BUSINESS WEEK, KAMPALA, UGANDA

BY KENAN KALAGHO

DAR ES SALAAM, Tanzania – Contractors in Tanzania say delays in completion of contracts is due to the government not paying them their money which has accumulated to $245 million.
Speaking in Dar es Salaam last week, the Contractors Association of Tanzania (CATA) Vice Chairman Lawrence Mwakyambiki said the government needed to settle the outstanding bills of Tsh400billion ($245million) for the financial year 2012/13 it owes CATA in order to ensure the smooth implementation of the projects.
Mwakyambiki said such a delay was creating misunderstandings between the banks and contractors who had to apply for loans for the implementation of many projects.
“We usually get loans from the bank and repay after the government issues the funds for the projects but there have been delays from the government in issuing such funds and thereby making contractors to incur penalties from banks resulting from the delays in paying the loans,” Mwakyambiki said.
He pointed out that the delays from the government in paying them have also caused delays in paying their workers which later create a negative impact to both the workers and contractors including the implementation of such projects.
He also pointed out for the need to use of qualified consultants in order to ensure that their projects attain the required standards.
He said: “The government needs to ensure that consultants are used in all its infrastructure projects that are be implemented in order to ensure that these roads and other projects have the required durability thereby reducing unnecessary maintenance expenses”
The governments has recently been implementing different infrastructure projects aimed at connecting the whole regions in the country to tarmac roads that is seen a major tool in speeding up the country’s economic development.

Tanzania cancels 174 mining licenses

Resources 

Monday, April 07, 2014 

BY KENAN KALAGHO, EAST AFRICAN BUSINESS WEEK, KAMPALA, UGANDA

DAR ES SALAAM, TANZANIA - Tanzania government has cancelled a total of 174 licenses issued to small, medium and large scale miners in the country citing failure of the said companies to abide by the country’s Mining Act of 2010.
According to the information that was availed to East African Business Week last week, the Commissioner of Minerals at the Ministry of Energy and Minerals, Engineer Mr. Paul Masanja said companies licensed to undertake mineral exploration and extraction in the country have been evading paying fees, taxes as well as royalty to the government on time.
Eng. Masanja said despite the fact that the country has around 40,060 licensed large scale miners, most of them were not adhering to the laws of the land and the majority of them ended up occupying large areas for themselves.
He said such a trend by large scale miners of neglecting their very work of exploration and or extraction of minerals in such areas of their occupancy, was halting the development and growth of mineral sector in the country.
“The government is losing a lot in tax resulting from few unfaithful mineral exploration companies holding onto their license without doing the exploration and or extraction of minerals as per the requirements of their license,” Mr. Masanja explained.
He also noted that the government is intending to ensure that all speculators stop their operation in all the areas they occupy and allow new mineral investors to take over.
The Minister of Energy and Minerals Prof. Sospeter Muhongo warned the owners of minerals license in his 2013/14 financial budget to ensure that they honor the laws guiding minerals in the country to avoid them being revoked of their license.
So far Tanzania government has found different faults and given notice to some 289 companies licensed to conduct mineral exploration in the country between 2013 and2014 of which 211 license were for large scale mineral exploration whereas 78 were for medium scale extraction and one was for the large scale iron ore extraction.

By Kenan Kalagho, Monday, April 07th, 2014

Ophir oil sells blocks to rival Pavillion

Resources 

Monday, March 31, 2014

BY KENAN KALAGHO, EAST AFRICAN BUSINESS WEEK, KAMPALA, UGANDA

DAR ES SALAAM, Tanzania - Ophir Energy and Pavillion are undergoing oil and gas exploration in Tanzania have finally concluded a deal worth millions of dollars that will see Pavilion acquiring a 20% stake in Ophir energy.
The completion of the sale of Ophir’s energy Tanzania’s offshore blocks, 1, 3 and 4 worth more than $1,255 million signifies another new era of Pavillion investment in the country meaning the two giant firms retains a 20% stake each with BG Group, remaining with its 60 shares.
A statement that was availed to East African Business Week last week said the transaction that was reported on 14th November 2013 to sell a 20% interest in Blocks 1, 3 and 4, Tanzania to Pavilion Energy has now been completed.
The CEO of Ophir Energy Mr. Nick Cooper said his firm was “delighted to welcome Pavilion Energy into Tanzania Liquefied Natural Gas (LNG) development across blocks 1, 3, and 4.”
Mr. Cooper said that the partial monetization of their interests is in keeping with Ophir’s strategy of minimizing exposure to development capex and realizing the value created from exploration success at the appropriate time.
The company has received a cash injection of $1,255 million and a completion adjustment of $5 million to reflect interest and working capital movements since the effective date of the transaction of 1 January 2014.
He said a further $38 million is payable following the final investment decision in respect of the development of Blocks 1, 3 and 4, currently expected in 2016.
According to him, the proceeds from this transaction will support Ophir forward plans which include investing in a number of new opportunities that are under consideration by the listed company.
He also noted that a tax liability will be incurred on the transaction in Tanzania and that the timing of the payment will be finalized after discussion with the relevant tax authorities.
“Net proceeds after tax from the transaction are expected to be $1.0bn based on Management estimates,” Cooper said.
The Permanent Secretary in the Ministry of Energy and Minerals Eliakim Mawsi told East African Business Week that the government welcomes the sale of the shares provided the proper procedure is followed so that the essential government tax is paid up in terms of capital gains.
Meanwhile the company also said that Tanzania’s first planned liquefied natural gas export terminal could be expanded after the project partners – BG Group, Exxon Mobile and Statoil - discovered more gas than expected.
The terminal is expected to start shipping gas by 2020, with a final investment decision expected in 2016.
Ophir Energy plc is African focused, upstream oil and gas Exploration Company listed on the London Stock Exchange and has an extensive deep water acreage position in West and East Africa acquired since its foundation in 2004.

Pilots in Tanzania decry unemployment

Travel 

Monday, March 31, 2014 

BY KENAN KALAGHO, EAST AFRICAN BUSINESS WEEK, KAMPALA, UGANDA

Pilots, flight operators and flight engineers may not be able to take on domestic flight in the country

DAR ES SALAAM, Tanzania - The government of Tanzania has said it will do all it can to ensure local pilots, flight operators as well as flight engineers are given the priority over job opportunities for domestic flight in the country.
This will ensure that local pilots get the required expertise and experience for the good of the nation and the future of aviation industry in the country.
Speaking recently during the meeting with the Professional Association of Tanzanian Pilots (PATP) in Dar es Salaam, the Minister of Transport Dr. Harrison Mwakyembe said there were more young foreign pilots employed in the country’s domestic flights and this needed to be reversed.
“We have few older pilots aged 50yrs and above in the country while the majority of young domestic pilots between the ages of 20 to 49 are foreigners, this is a problem for the country,” Mwakyembe said.
He said the country needed to change this system in order to train more Tanzanians to become future captains in both local and regional flights, while insisting for the association to be more aggressive in fighting for their rights.
According to the Secretary General of PATP Capt. Khalil Iqbal Tanzania local pilots were being segregated with regards to job opportunities and his association is also being sidelined in all issues regarding aviation regulations in the country.
Iqbal said foreign pilots are being favored by issuing them with temporary Visas which are then used to secure flight jobs intended for Tanzania local pilots.
He wondered whether the country has law enforcers to ensure that these illegal foreign pilots have no access to jobs in the country just like it is with other countries like Kenya, and South Africa where it is hard for a foreign pilot to secure jobs.
“We have had experiences where South Africans and Canadians pilots have used the 90 days being given by the Civil Aviation Authority upon their arrival with a flight in the country as an opportunity to make money by flying domestic flights in the country and upon reporting this to relevant authorities we only saw corruption elements and nothing has been done so far,” Iqbar said.
Iqbar said around 40 young local pilots in the country do not have jobs while local airlines are giving temporary passes to foreign pilots from Kenyans, South Africans and Canada to fly domestic flights.
He said local pilots who have been trained oversee in South Africa, Canada and the USA are now back in the country to fly their domestic flights but are being frustrated by TCAA.
He said: “Local pilots are required to do a test in order to be approved of their expertise and experience but TCAA tests take time to be released and they do fail students deliberately. The 70% pass multiple choice test may take more than 3 weeks to be released while in other countries it is a single day exercise.”
He said local pilot students are being failed deliberately without being told which subjects they have failed and they sometimes are not given even the chance to see such tests results.
“We have a lot of local pilots, flight operators and flight engineers with very good qualifications in the country who are without jobs while a lot of foreigners have been employed taking the space of these local youngsters who have spent a lot of money in their studies” Iqbar said.
According to the Chairman of the PATP Capt. Aziz Abdhallah, almost $50,000 is used to train each pilot and leaving them without a job is a sad experience.
Abdhallah said Tanzania flight operators need to change their mindset and start employing local pilots, flight operators and engineers that will allow the country to have both experienced and expertise flight operators.
He said the international law on flights requires that every flight with nine passengers and with a scheduled flight should have circular pilots (2 pilots) but this is not being done in Tanzania.
“If we could allow this to happen as per the international law requirements a lot more young Tanzania pilots and flight operators will secure jobs and we will manage to train more future captain of this nation,” he said.
He said experience shows that a lot of Tanzania flight accidents were as a result of having only one pilot on the flight which is dangerous if the pilot gets sick abruptly and fails to manage the flight.
However, according to Mr. Elias Moshi from Tanzania Air Operators Association, local pilots in Tanzania lacked the required qualifications in order to secure jobs with both local and regional flights.
He said local pilots have Commercial Pilots License (CPL) which is an initial certificate with less experience as opposed to Airline Transport Pilot License (ATPL) which is required in order to prove that they are more experienced with more flight hours.