ECONOMY TICKER: All Economy, all the time

Tanzania to clinch $700m Eurobond loan

2010-01-04T06:04:00.001-08:00

Tanzania is set to receive a $700 million-plus long-term loan from the international market through Eurobond, and is only waiting to identify the right long-term credit rating firm.

The authorities say plans for the sovereign bond issue — among the few in Africa after Senegal and Gabon — are at an advanced stage.

The authorities are handling the entire process carefully to ensure they receive the right rating, which will lure private portfolio investment from aboard.

Eurobond is an attractive financing tool that gives the issuers the flexibility to choose the country in which to offer their bond, according to the country’s regulatory constraints.

The rating is crucial as it determines the amount of investment coming in. Fitch Ratings — a global rating agency that operates in 150 countries — uses long-term credit ratings on a scale from ‘AAA’ to ‘D’.

The rating was introduced in 1924 and was later adopted and licensed by Standard & Poors.

Moody’s also uses a similar scale, but names the categories differently.

Like S&P, Fitch uses intermediate modifiers for each category between AA and CCC, where the investment grade AAA is given to the “best quality” companies — those considered reliable and stable.

AA is for “quality companies,” considered slightly more risky than AAA; while A indicates that the economic situation can affect finance. BBB is given to “medium class companies” which are considered “satisfactory at the moment.”

The Bank of Tanzania expects to receive a high rating due to the country’s economic and political stability, and the economic reforms instituted over the past two decades. The bond was to have been issued earlier but the global credit crunch compelled the government to postpone the move last year.

With the global recession easing, the country has decided to seek Euros 500 million ($718 million) for infrastructure development.

Prof Benno Ndulu, Governor of the Bank of Tanzania, told The EastAfrican in Dar es Salaam in an exclusive interview that the process will not take long as the arrangements were almost complete before the cash crunch hit.

Prof Ndulu chairs the Eurobond Issuing Committee.

He said a number of rating agencies have been shortlisted and the government will appoint one firm to carry out the exercise this January.

“The risk is outweighed by the bond’s benefit. And economic growth will eliminate speculative motives,” he said.

BoT, which is the bond custodian and facilitator on behalf of the government, now needs only a go-ahead from the Ministry of Finance and Economic Affairs to pave the way for the rating.

Patience

Finance Minister Mustafa Mkulo confirmed from China last week that the bond issue is on track, adding that he did not want to comment much until the bond matures.He said all precautions have been taken to make it a success.

An economist with the Confederation of Tanzania Industries, Hussein Kamote, said sovereign bonds should be handled carefully to avoid speculation.

“Unlike foreign direct investments that create economic growth, private portfolio investments follow growth,” he said.

London is one of the centres of the Eurobond market, but Eurobonds can be traded throughout the world.

Source: EASTAFRICAN

BACK AFTER A 2 MONTH SABBATICAL

2009-11-23T06:34:00.000-08:00

Dear Readers of ET,

After a 2 month Sabbatical leave I wanted to let you know that am back and with a lot of energy and regular posting would resume with immediate effect.

Many thanks.

Regards,

Economy Ticker

Serengeti Advisers Media Report for September 2009

2009-11-23T05:27:00.000-08:00

Serengeti Advisers has just released their SAL Media Report for SEPTEMBER 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

Serengeti Advisers Media Report for August 2009

2009-10-06T06:33:00.001-07:00

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

GOD BLESS KENYA

2009-09-22T02:37:00.000-07:00

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

2009-09-22T02:19:00.000-07:00

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.

IN THE NEWS

2009-09-15T05:17:00.000-07:00

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…

While I was away I managed to pick up the following news items:

FirstRand-South Africa’s second-biggest financial-services company plans to start offering full banking services in Tanzania early next year.

Etablissements Maurel & Prom

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.

The $12 million transaction would enable Paris-based Maurel to start output in the Tanzania and study building a liquefied natural gas plant to process the fuel for distribution.

WEF’s Global Competitiveness Rankings

Tanzania ranks number 100in the WEF’s Global Competitiveness Rankings Table- The Global Competitiveness Report 2009-2010. The rankings are based on twelve criteria of competitiveness.

BEER WARS taken South: SABMiller Takes on Diageo, Heineken in Namibia

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.

The maker of Castle Lager and Carling Black Label has been importing beer into Namibia, where it controls about 22 percent of the market.

Namibia Breweries has a partnership with Diageo and Heineken through a company called Brandhouse Beverages Ltd. that sells into South Africa

BoT Monthly Economic Review: JULY 2009

2009-09-07T11:38:00.000-07:00

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.

Serengeti Advisers Media Report for JULY 2009

2009-08-28T08:07:00.001-07:00

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

BEER WARS: EABL issues a 12 month notice to terminate Brewering and Distribution Agreement (BDA) with TBL

2009-08-22T06:24:00.003-07:00

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....

QUICK HITS:NEWS ROUND UP

2009-08-19T06:32:00.002-07:00

DIAGEO TANZANIA TO WAIT FOR 2 YEARS

SABMiller Plc, won a U.K. court ruling that prevents rival Diageo Tanzania(read EABL) from acquiring Serengeti Breweries Limited for two years.

Justice Christopher Clarke in London ruled that a Diageo unit can’t buy Serengeti Breweries Ltd. until 2011 or the resolution of a related arbitration. (The ball seems to have been thrown to FCC-Fair Competition Commission)

SABMiller claims in the suit that the Diageo unit’s plans to buy Serengeti violates a non-compete agreement with SABMiller’s Tanzania Breweries.

Barrick North Mara Mine Sees 24% Rise in Output

Barrick Gold Corp.’s North Mara mine in north-western Tanzania is expected to increase production by as much as 24 percent this year.

“After producing 197,000 ounces at a total cash cost of $757 an ounce in 2008, the latest estimates put expected 2009 output at between 225,000 and 245,000 ounces of gold at much lower cash costs of $445 to $495 an ounce,” Barrick’s Vice President for Africa, Gareth Taylor, said in an interview in Dar es Salaam

Maurel & Prom (MAU FP)/Artumas Group

French oil and gas explorer-Etablissements Maurel & Prom (MAU FP) and Cove Energy Plc extended an option agreement to buy assets in Tanzania and Mozambique from subsidiaries of Artumas Group Inc. by a month to September 18.

The extension will allow due diligence to be completed, the companies said in a statement on the Les Echos Web site.

SAVINGS & FINANCE BANK-S & F( soon to be NIC BANK TANZANIA)

NIC BANK is set to open 2 new branches in Tanzania later this year. This was said by the NIC Bank of Kenya Managing Director James Macharia* when he was announcing the banks results in Nairobi where their first-half profit rose 14 percent as earnings from loans increased.

*James Macharia was the former Managing Director for Africa Banking Corporation(ABC) now Banc ABC here in Dar-es-Salaam

TANESCO MONOPLOY TO END

The Govt. plans to enact a law allowing private companies to provide electricity by the end of the year, halting a four decade- long monopoly held by Tanzania Electric Supply Company Ltd(TANESCO)

Tanzania will publish the Electricity Act, which enables other providers to generate power, in the government gazette by year-end, Deputy Energy Minister Adam Malima said on the sidelines of a conference in Dar-es-Salaam.

The Govt. to Spend $5 Billion on Transport Upgrade

The Tanzania Government will spend $5 billion over the next five years to upgrade its transport system, Infrastructure Development Minister Shukuru Kawambwa said.

The project is part of the government ambitious transport investment program, which will run over two five-year phases and will develop roads, ports, railways, airports and ferries, Kawambwa said at a conference in Dar es Salaam.

BEER WARS Just In:Diageo Tanzania buy frozen by SABMiller court move

2009-08-18T06:28:00.001-07:00

The London High Court on Tuesday granted brewer SABMiller Plc an injunction to freeze a move by rival Diageo Plc to take a stake in a Tanzanian brewery and end a key contract.

"The High Court in London has granted SABMiller an injunction which stops (Kenya's) East African Breweries Ltd (EABL), which is 52.8 percent owned by SABMiller, under which TBL manufactures and sells EABL brands in Tanzania.

Serengeti is Tanzania's second biggest brewer after TBL and is owned by a group of private investors.

As part of a deal dating back to 2002, EABL owns a 20 percent stake in TBL and TBL owns a 20 percent stake in EABL's Kenya Breweries unit.

Source: Reuters-London

Tanzania July inflation rises to 10.9 pct y/y

2009-08-18T06:12:00.000-07:00

Tanzania's annual inflation rate rose up to 10.9 percent in July from 10.7 percent in Junethe National Bureau of Statistics (NBS) said on Saturday

Rising prices of non-food items like fuel, drinks and tobacco pushed Tanzania's annual inflation rate up to 10.9 percent in July from 10.7 percent in June
* July year-on-year inflation rises to 10.9 percent
* Food prices down 0.2 percent in July from June
* Non-food inflation rises to 1.9 percent year-on-year

Among food prices that fell were cereals, cereal products, vegetables and meat, NBS said. Food has a 55.9 percent weight in Tanzania economy's basket of goods used to measure inflation.

Among non-food items, the prices of drinks and tobacco, clothing, rent, charcoal, diesel and petrol rose.

$400 million Loan from China for Kiwira Coal Power Project

2009-08-12T03:03:00.000-07:00

Tanzania will receive a $400 million loan from China for a 200 megawatts coal power project, the government said today.

Energy and Minerals Minister William Ngeleja told reporters the funds will be invested in Kiwira coal power project that the government has taken over from private investors.

"This is a short-term project. Give it two years and it will be generating 200 megawatts," he told reporters on the sidelines of a regional energy conference.

The Government to own shares in firms extracting what it considers strategic minerals

2009-08-12T01:56:00.002-07:00

Tanzania plans to include a clause in its new mining law allowing the government to own shares in firms extracting what it considers strategic minerals, its energy and minerals minister said on Tuesday.

New law due in parliament in late 2009

The law currently allows the government to hold no less than 25 percent in companies mining gemstones like diamond, tanzanite and rubies, but is silent on other minerals.

In the new law....

*The law will also compel mining firms to buy goods and services locally when they are available.

*The government will have the authority to take shareholding even if it is 10 or 15 percent in minerals that the government deems strategic.

*The move would not apply retrospectively to existing companies; the government would decide on a case-by-case basis what mineral it considered strategic.

*The new law will introduce guidance on the amount of compensation paid to people displaced by mines.

* It also aims to increase royalties paid on minerals like gold and diamonds.

*It would guide how to equitably distribute the gains from the minerals to the country's population of 40 million people.

TANESCO 5-DAY POWER BLACKOUT IN DAR

2009-08-06T05:57:00.000-07:00

This is not funny! What is it with TANESCO! Looks like it’s an East African problem as our Kenyan neighbours are facing the same problem thanks to KPLC!

Tanzania Electricity Supply Company (TANESCO) announced yesterday that there would be a 5-day power blackout in parts of Dar starting all next week.

Click below to read the story that was carried out by The Citizen

In the News.....

2009-07-31T02:51:00.000-07:00

Kilimo Kwanza (Agriculture First)

President Jakaya Kikwete is today scheduled to launch the 'Kilimo Kwanza (Agriculture First)' programme during the Farmers'Day celebrations at the Nzuguni grounds in Dodoma Region.

The programme is the brainchild of TNBC and will be implemented in partnership with public and private sectors for the betterment of the country.

TNBC meetings of the Local Investors' Roundtable and the International Investors' Routable drew more attention on increasing investments in agriculture for the socioeconomic transformation.

TCRA raised over 64.3bn/- through licensing, penalty

A RECORD of over 64.3bn/- was raised by Tanzania Communications Regulatory Authority through licensing fees, penalty and other charges relating to its activities between 2005-08.

Minister for Communications, Science and Technology, Prof Peter Msola told Parliament while responding to Ole Member of Parliament, Bakari Shamsi Faki (CUF), who wanted to know what TCRA had achieved since its establishment over three years ago. He said that the Authority had made successes.

Prof Msola said 21 projects worth over 53.1bn/- were also undertaken over the same period. The projects which were mostly information communications and technology in nature, had greatly assisted to boost TCRA’s funding.

The Minister said TCRA whose jurisdiction covers the Union area, was established through Act No 12 of 2003 and has overall regulatory role of the communications sector. “Functions of the Authority include issuing licences for companies and supervising them, allocate and monitor frequencies for the nation,” he said.

Social Security to Go Private

The Government is set to liberalize the social security sector and will in October, this year, appoint director general of the newly-formed Social Security Regulatory Authority. Among other things, the director general will spearhead expansion of the private pension and social fund services nationwide.

According to the Minister for Labour, Employment and Youth Development, Prof Juma Kapuya, the government is still keen and committed to the sector’s liberalisation, to ensure that the funds reached all the people.

He said this in an interview with the Daily News.

The funds currently operating in the country include:

*National Social Security Fund (NSSF)

*Parastatal Pension Fund (PPF)

*Government Employees Pension Fund (GEPF)

*Public Sector Pension Fund (PSPF) &

*Local Authority Pension Fund (LAPF).

Tanzanians to pay token fee to acquire national IDs

TANZANIAN nationals will have to pay a token amount to get a National Identity Card when the government starts issuing them in future. The Deputy Minister for Home Affairs, Ambassador Khamis Kagasheki, told Parliament yesterday that the exact fee to be paid will be determined later before the project starts issuing the IDs.

Serengeti Advisers Media Report for JULY 2009

2009-07-29T05:04:00.005-07:00

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

Air Tanzania Company Limited(ATCL) struggling to improve fleet for a return to the skies

2009-07-29T04:03:00.006-07:00

By Njonanje Samwel

This is an article I picked from the Guardian Newspaper of today….five months on..new CEO.. TZS 2.5bn(US$2.2million) cash bailout nothing has changed at ATCL they are now flying one plane Dar-Mwanza route!

Air Tanzania Company Limited, which was recently given a government cash bailout amounting to 2.5bn/-, is working on measures to stabilise its presence in the skies.

In an interview with ‘The Guardian’, newly appointed ATCL managing director and chief executive officer William Hajji said a leased Airbus 320 aircraft would resume operations in the coming three weeks after undergoing a mandatory technical check in France.

The 150-seater aircraft was sent to France one month ago where it is undergoing a mandatory check done after every twelve years of a plane's operations.

“If everything goes well the aircraft will resume its operations in the next three to four weeks,” said the ATCL boss. Hajji was responding to a question from this reporter who wanted to know the aftermath of the leased aircraft.

“One month before expiry of the 12-year period, the aircraft was just back from Mauritius where it had gone a general technical check-up called ‘C’ check. We thought it better to send it to France to complete the mandatory check before it resumes operations,”

Last December 8, ATCL planes were banned from flying after TCAA revoked its air operating licence (AOL) for failure in documentation. The airline subsequently grounded its aircraft until December 30 when it fulfilled TCAA's requirements.

TCAA grounded the ATCL aircraft after officials from the International Civil Aviation Organization (ICAO), who were then in the country auditing the civil aviation watchdog, threatened to rate the country as not airworthy.

However, the airline failed to resume operations after the TCAA clearance due to financial problems.

However, in February, this year, ATCL planes started flying again after the government agreed to give the cash-troubled airline an additional 2.5bn/- on top of a previous cash bailout of 2bn/-.

SOURCE:THE GUARDIAN