Serengeti Advisers has just released their SAL Media Report for AUGUST 2009. Click here to view the report.
*If you are interested in receiving the SAL Media Report you can reach them at publications@serengetiadvisers.com
Tuesday, October 6, 2009
Tuesday, September 22, 2009
GOD BLESS KENYA
Courtesy of January Makamba’s blog(TAIFA LETU)
TANZANIA TO HOST 2010 WORLD ECONOMIC FORUM ON AFRICA
-World Economic Forum on Africa 2010 will take place in Dar es Salaam, Tanzania
-The 20th meeting on Africa of the Forum will be held from 5 to 7 May 2010
Geneva, Switzerland, 18 September 2009 – The World Economic Forum announced today that Tanzania will host the 2010 World Economic Forum on Africa in Dar es Salaam from 5 to 7 May.
“The World Economic Forum on Africa is an important opportunity to take the pulse each year of the most influential of Africa’s stakeholders. We look forward to holding the meeting in Tanzania at a time when the whole East Africa region is expected to experience stronger growth,” said Andre Schneider, Managing Director, World Economic Forum.
President Jakaya M. Kikwete of Tanzania echoed his enthusiasm: “It is an honour for Tanzania to host the 2010 World Economic Forum on Africa. We are looking forward to welcoming the community, which I am confident will continue to make important contributions in our collective quest for a better world. It is heartening to see the positive impact that the World Economic Forum has on key issues of global concern. This unique gathering regularly convenes a very diverse group of friends of the continent who are united in their optimism of what Africa can, must and will achieve.”
Katherine Tweedie, Director and Head of Africa at the World Economic Forum, placed the development in its historical context: “2010 is a special year for the community. Not only will it be the 20th anniversary of the World Economic Forum on Africa, it is also the first time that the Forum’s Africa meeting will be held in East Africa.”
“The World Economic Forum on Africa has historically brought together the most respected and influential leaders in business, government, civil society, media and academia, and enabled them to contribute towards making Africa a better place and to improving the lives of all Africans. We are excited and supportive of the move to take the community to Tanzania, and we are confident that it will be a success,” added Patrice Motsepe, Executive Chairman, African Rainbow Minerals Ltd (ARM) and a member of the Forum’s International Business Council.
Motsepe is also a member of the Forum’s Africa Circle which includes leaders who have taken part in the Africa meeting for 10 or more years. Other members of the Africa Circle include former President of South Africa, Thabo Mbeki; Trevor Manuel, Minister of the National Planning Commission (NPC) of South Africa; Reuel Khoza, Chairman of the Nedbank Group; Former President of Mozambique and current Chairperson of the Africa Forum for Former African Heads of State, Joaquim Alberto Chissano; Maria Ramos, Chief Executive Officer of Absa Group; and Simba Makoni of Makonsult who is a former Minister of Finance for Zimbabwe.
The World Economic Forum on Africa takes place over three days and is renowned for its informal style that engenders frank and open conversation among the most influential leaders with a stake in the region. The 2009 gathering was hosted in Cape Town by newly elected President Jacob Zuma of South Africa.
WORLD BANK AFRICAN SUCCESSES
Tanzania has been listed (Successful reformer: Tanzania's transformation to an open market economy) by the WORLD BANK as one of the African Successes (Category I) as one of the countries that have been successful in terms of growth experiences—pace and quality of economic growth.
Tanzania’s transformation to a market economy
Over the past 15 years Tanzania dramatically improved its economic performance, as a process of comprehensive economic reforms transformed the country from a controlled economy to an open, market-based one.
Achievements
- Beginning in the mid-1990s, the macro economy stabilized, inflation declined to single digits, and economic growth improved. Growth accelerated in recent years, averaging about 7% a year in 2001-07.
- Growth has been broad-based. Although agriculture remains Tanzania’s main economic sector-- employing 80% of the work force--other sectors have posted strong performances. Following privatization, manufacturing sector output rose briskly driven by an increase in the output of a number of commodities, including sugar, beer, soft drinks, cement, and steel. Tourism has emerged as an important sector contributing to over 10% of the GDP.
- Mining is growing in impact and importance. Although its contribution to GDP is still small, at around 3%, the sector is one of the most important foreign exchange earners. Annual gold output increased from five to 50 tons between 1999 and 2007, making Tanzania the fourth largest African gold producer.
- Liberalization of trade and exchange regimes boosted non-traditional exports and reversed large external imbalances.
- Tanzania has been successful in attracting FDI. A large share of FDI is directed to the mining sector, but manufacturing, tourism, and financial sectors have also attracted FDI.
- Establishment of a competitive banking system has facilitated increased availability of credit for productive activities.
- There has been remarkable progress in enrolment in primary and secondary schools.
Key success factors/drivers of success:
- Tanzania’s reform process began gradually in 1986 and intensified beginning in 1996. The first phase saw a partial liberalization of the economy. The second phase saw far-reaching structural reforms. The reforms, which were a response to the dismal economic performance of the country in 1970-85, transformed the country to market economy.
- The major reforms since 1996 include the following: sound fiscal and monetary policies to control inflation; fiscal consolidation and stronger public financial management; privatization and reform of state-owned enterprises; reduction in the level of state intervention in the economy—trade reform, liberalization of the financial sector, and creation of market-oriented regulatory framework.
- Macroeconomic stabilization and structural reforms were instrumental in attracting FDI, which was a key factor in fostering higher growth in the nonagricultural sectors. Fiscal incentives to foreign investors—especially in the mining sector—such as generous depreciation allowances, indefinite loss carry forward, exemptions from import duties and the value-added tax, and some income tax holidays were instrumental as well in attracting FDI.
- Donors supported the government’s reform efforts through large inflows of official donor assistance.
References:
Chandra, Vandana, Pooja Kacker, and Ying Li. 2005. Tanzania: Growth Exports, and Employment in the Manufacturing Sector. World Bank, Washington, DC.
Mahamba, Robert, and Jorgen Levin. 2005. Economic Growth, Sectoral Linkages, and Poverty Reduction in Tanzania. World Bank, Washington, DC.
Nord, R., Y. Sobolev, D. Dunn, A. Hajdenberg, N. Hobdari, S. Maziad, and S. Roudet. 2009. “Tanzania: The Story of an African Transition.” IMF.
Simonsen, Marianne, and Louise Fox. 2005. A Profile of Poverty in Tanzania, World Bank, Washington, DC.
Treichel, Volker. 2005. “Tanzania’s Growth Process and Success in Reducing Poverty.” IMF Working Paper WP/05/35.
Utz, Robert. 2008. Sustaining and sharing growth in Tanzania. The World Bank. Washington, DC.
World Bank. 2009. Tanzania Country Brief.
Tuesday, September 15, 2009
IN THE NEWS
Happy to be back:) I have been on the road on assignment in different regions of our beautiful country Tanzania hence I have had little or no time to post stories/articles to keep you informed on the going ons…
Etablissements Maurel & Prom, is nearing a decision to buy natural-gas reserves in Tanzania from Artumas Group Inc. after extending a purchase option to carry out due diligence.
Under the asset-purchase agreement, Maurel would assume operatorship of Artumas’s Mnazi Bay gas permit, whose reserves may be combined with any found at the Mafia Deep ST well and another known as MOH-1, which are undergoing tests,according to the CEO.
Tanzania ranks number 100 in the WEF’s Global Competitiveness Rankings Table- The Global Competitiveness Report 2009-2010. The rankings are based on twelve criteria of competitiveness.
SABMiller Plc won a license to open a brewery in Namibia, taking the fight for control of southern Africa’s beer market to the home of competitor Namibia Breweries Ltd.
Monday, September 7, 2009
BoT Monthly Economic Review: JULY 2009
Tanzania's current account deficit widened 10 percent to $2.55 billion in the year to June due to increased buying of capital and consumer goods, the central bank said on Friday.
Imports of goods and services jumped 6 percent to $7.6 billion in the period, the Bank of Tanzania (BOT) said in its latest monthly economic review.
"The value of goods imports rose ... following the increase in importation of capital and consumer goods," the bank said.
Tanzania’s goods and services exports rose by 5.2 percent to $4.45 billion compared with the year ended June 2008, due to increased sales of manufactured goods.
Gold exports fell 18 percent to $809.3 million, from the sale of 27.9 tonnes, compared with 35.1 tonnes worth $983.5 million a year before. However, the drop in gold sales was cushioned by higher world prices, the bank said.
Gold made up 32 percent of exports, while manufactured goods made up 25 percent, the bank said.
Tourism – (Travel) -- fetched $1.25 billion, up from $1.23 billion a year before. The industry is Tanzania's leading source of foreign exchange. The BOT sees a drop of up to 20 percent in the sector in 2009 due to the global slump.
Traditional exports -- tea, coffee, cashew nuts and tobacco, among others -- earned $488 million, up 45 percent over the previous year, while horticulture fetched $36.5 million, a 55 percent rise from the year before.
Tanzania's economy is largely driven by mining, farming and tourism. But sectors such as manufacturing, telecommunications and financial services have been growing in recent years and contributing more.
BOT said credit to the private sector from banks rose by 33 percent to 4.71 trillion shillings.
The bank said in the year ending June, the country's official foreign exchange reserves stood at $2.92 billion -- or 4.6 months of import cover -- from $2.66 billion a year before.
"The Bank's gross international reserves went up ... following receipt of funds from IMF under the Exogenous Shock Facility," BOT said.
The International Monetary Fund approved a $336 million 12-month loan to Tanzania in late May to help it cope with the global economic crisis and disbursed $244 million by end-June.
BOT's monetary policy aims for the country to have no less than five months of import cover in 2009/10.
Friday, August 28, 2009
Serengeti Advisers Media Report for JULY 2009
Serengeti Advisers has just released their SAL Media Report for JULY 2009. Click here to view the report.
*If you are interested in receiving the SAL Media Report you can reach them at publications@serengetiadvisers.com
Saturday, August 22, 2009
BEER WARS: EABL issues a 12 month notice to terminate Brewering and Distribution Agreement (BDA) with TBL
East African Breweries Limited (EABL), a subsidiary of Diageo, has issued a 12- month notice to terminate its Brewering and Distribution Agreement (BDA) with Tanzania Breweries Limited (TBL), a subsidiary of SABMiller.
In a statement, the EABL Corporate Affairs Manager, Ken Kariuki, said that the notice was as a separate matter to another notice of terminating the agreement reached in 2002
The initial term of the BDA and SPA agreement with TBL was for five years. It expired in 2007. Since then the contract has continued to roll forward in accordance with its terms and despite a long series of discussions with SABM to renew, "we have been unable to agree the terms of a permanent renewal," he said.
The 2002 deal stopped competition in Tanzania and Kenya which had stagnated beer prices for close to five years. Essentially, it restricted SAB to Tanzania and EABL to Kenya - where it brews and markets for SAB.
The EABL's notice has come a few days after Judge Christopher Clarke of the UK commercial court has temporarily suspended a move by the EABL to acquire Serengeti Breweries Ltd (SBL) until arbitration between Diageo and SABMiller is concluded. Mr Clarke made the ruling on Tuesday following a suit by SABMiller that such acquisition violates a non-compete agreement between EABL and TBL.
Mr Kariuki said that the ruling maintains the status quo and that the arbitration would determine the resolution of the case. "This hearing was essentially an interim hearing to determine how the parties should proceed, pending resolution of the substantive issue, which will be resolved at arbitration," he said.
He said that the status quo meant that TBL and EABL should continue implementing the Brewing and Distribution Agreement (BDA) as normal.
"We are keen to start the arbitration process quickly so as to resolve this as soon as possible We have also given notice to terminate the BDA in 12 months' time as a separate matter," Kariuki said. He added: "The assertion that there can be a 'status quo' with the current BDA is unrealistic.
"We have clearly laid out that our future lies with Serengeti Breweries Limited(SBL). This is not only good for us and our brands, but also to promote competition within Tanzania and a higher profile for SBLs own Tanzanian brands like Serengeti.
" Diageo and SAB have free competition in Uganda where they own majority stakes in Uganda Breweries and NileBreweries respectively.
**Brace yourself for a very interesting show down in the next coming months....my take is that this beer war is going to turn ugly before they agree on a deal....
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