Saturday, December 6, 2008



By Juma Kwayera

Tanzania is content to willow among the minnows. Its vision of the future since independence is undeniably blurred by a leadership that prides in permanently preening itself amid economic and social chaos.

Endowed with a vast pool of middle level workforce, the drivers of Tanzania politics show no enthusiasm in hoisting the hoi polloi out of the current economic stagnation.

Dar es Salaam asked last month for a revision of the East African Community (EAC) treaty to curtail unrestricted movement of people, goods and services as was envisaged in the regional political and economic integration process.

Ironically, the change of heart, informed more by political paranoia than sound economic judgement, comes at a time when intra-regional trade is expanding despite the non-tariff barriers the business community blames for escalating the cost of doing business.

The reasons why East Africa’s largest country is backtracking on initial commitments made in 1999 — when the bloc acquired a much stronger and definite form — are understandable, although they offer no mitigation. The dominant theme takes the form that the country has not consolidated its economic potential to stave off competition from Kenya and Uganda extroverts.


That is partly the fear that goaded Tanzania into bolting from the Common Market for Eastern and Southern Africa (Comesa) in favour of the Southern African Development Community (Sadc). Ever since, the private sector has often called for Tanzania’s return to Comesa bloc with a population of more than 400 million. Sadc on the other hand has a market of less than 180 million people.

However, data accrued by various agencies, among them the Tanzania Investment Centre (TIC), the Tanzania National Business Council (TNBC), the Tanzania Private Sector Foundation (TPSF) and Tanzania Chamber of Commerce Industry and Agriculture (TCCIA) suggest tahat Dar’s bid for economic takeoff is undermined by a series of missteps.

TNBC and TPSF say Tanzania earns approximately $30 million per annum in trade with the Sadc bloc down from over $180 million per annum it fetched from exports to the Comesa bloc.

Last year, the TIC Executive Director Emanuel ole Naiko inadvertently reminded his countrymen Kenya was the second leading investor in Tanzania with 249 projects valued $958.21 million that had created 37,511 jobs. These figures are a significant improvement on the previous year’s, which put Kenyan investments in Tanzania at $700 million.

Since the implementation of the EAC Customs Union, intra-regional economic activity has been peaking — a development that saw Kenya overtake the US and South Africa as a leading foreign investor in Tanzania. United Kingdom investments in Tanzania climbed to $1,115 million with at least 232,030 jobs.

EAC objectives

South Africa, arguably Africa’s biggest economy, is fourth in terms of investment value and the fifth in terms of projects, according to TIC. Its total investment value is $466.58 million on 111 projects that employ 14,243 people. Kenyan investments are tourism, agriculture, manufacturing, transportation and banking.

In Uganda, Kenya has overtaken the UK and the US as its main trading partner. The symbiosis between the Kenya and Uganda economies manifests further in the arterial transport and aviation. This explains in part why Rwanda, its bloody history and territorial disadvantage notwithstanding, is investing heavily in human skills that would place at par with Kenya and Uganda. Business between the two neighbours is in the region of $2 billion, although the balance of trade is skewed in favour of the former.

In the past four years, Rwanda has shedded its linguistic affiliation to France and embraced English, which in itself is a significant statement about the direction the tiny central African nation wants to go. Rwanda was the first country in East African nation to waiver work permit requirements for nationals of any of the four EAC fellow member states. This was hardly a year after it was admitted into the bloc alongside Burundi.

During an EAC, Comesa and Sadc tripartite summit in Kampala on October 22 attended by leaders from the three blocs agreed to harmonise trade arrangements among the three regional economic communities, free movement of businesspersons and joint implementation of inter-regional infrastructure programmes, among other things. The resolutions fall within the broad objectives of the EAC treaty. Uganda President Yoweri Museveni has advised Dar to quit the bloc instead of frustrating it. Kenya, Rwanda and Burundi should summon courage and support Museveni.