Dodoma — Eagerly awaited commodity market is scheduled to begin operations next July after completion of necessary preparations.
Finance and Planning Minister Dr Phillip Mpango told the National Assembly here yesterday that the Tanzania Mercantile Exchange (TME) will start operations in the 2017/2018 fiscal year after conclusion of preparations of the structure of the platform, rules and regulations.
Tabling the ministry's 2017/18 budget estimates, Dr Mpango said the commodity exchange rules and regulations have already been prepared and the TME has secured the operating licence from regulatory authorities.
After many years in pipeline, it's hoped that the commodity exchange will play a critical role in encouraging vital domestic and foreign investment into the country, as well as being in the vanguard of the latest generation of commodity trading venues in Africa.
The exchange, the brainchild of former President Jakaya Kikwete, was licensed by the Capital Market and Securities Authority (CMSA) and incorporated in August 2014, with the law to provide legal framework of its operations approved by Parliament in 2015, following the passing of the Commodities Exchanges Act, 2015. Dr Kikwete hatched the exchange idea in Tanzania to emulate the model of the Ethiopia Commodity Exchange.
In the initial phases, the exchange envisages trading in cashewnuts and sesame which are currently traded under the warehouse receipt system. Dr Mpango mentioned strong economic growth, increased tax collections and stability of the shilling as among the major achievements in the 2016/2017 financial year.
He said economic growth was estimated at seven per cent in 2016 despite the growth softening in the second half of the year, but appreciated increased tax revenue collections, which helped the government finance various development projects.
The minister asked the House to approve 11.752tri/- for the ministry in the 2017/2018 fiscal year. He said tax revenues picked up in the previous year, reaching 15.105tri/-, about 22 per cent above the previous year's collections.
The shilling value remained stable in 2016, following considerable volatility in 2015, said the minister, adding that the government managed to contain inflation within a single digit.
He said the government made initial payment for construction of the first phase of the standard gauge railway from Dar es Salaam to Morogoro, purchased two bombardier aircraft for the national carrier, Air Tanzania Company Limited (ATCL) as well as making initial payment for the purchase of four more aircraft.
Tanzania is constructing a 2,561km standard- gauge railway which will eventually link the Indian Ocean port of Dar es Salaam with Mwanza on Lake Victoria and Kigoma on Lake Tanganyika, as well as neighbouring Rwanda and Burundi.
The state funds the construction of the first phase of the mega infrastructure's 207-kilometre stretch from Dar es Salaam to Morogoro using internal resources. The government is also revamping ATCL through procurement of new planes as part of plans to boost tourism and transport sectors.
Two Q400 turboprop airliners were bought last year for domestic flights and has made initial payment for the purchase of new Boeing Dreamliner 787 which will be used for direct flights between Tanzania and Asian and European markets to boost the country's tourism sector.
Tourism is one of top foreign exchange earners but lack of direct flights from European and Asian markets impedes tourists from landing in the country directly, compelling visitors to connect flights through countries that compete with Tanzania in the market.
Dr Mpango said the government has also managed to reduce outstanding payments to civil servants, contractors and tenders. The shadow minister for Finance, Godbless Lema (Arusha Urban, Chadema) said the government was to blame on deteriorating business environment in the country due to bullying behaviour and unpredictable tax regime.
He referred to remarks by IMF Deputy Managing Director, Tao Zhang who said at a public lecture recently in Dar es Salaam that it was crucial to mobilise more private and public resources within Tanzania, especially by strengthening tax collection under a fair and predictable tax regime.
Mr Lema decried the tendency by regional and district commissioners to threaten traders, claiming they were acting on the directives from the top level that he did not mention.