26 July 2017

Tanzania: JPM - Privatisation Was Wrong

Photo: Daily News
President John Magufuli

PRESIDENT John Magufuli has faulted the privatization policy adopted by Tanzania, saying it had failed the nation completely.

Addressing Itigi residents in Manyoni District, Singida Region yesterday on his last day of a marathon working tour of Kagera, Kigoma, Tabora and Singida regions, Dr Magufuli said by privatizing its own firms, the government had effectively entered into agreements with what he described as overseas conmen.

He was speaking just a few minutes before he inaugurated the 89.3km Manyoni-Itigi- Chaya tarmac road at a function that was attended by ministers, Members of Parliament, clerics and senior government officials, among others.

"I cannot blame those who privatized our firms ... but I can equally not keep quiet," he told the cheering crowd during his speech that was beamed live by Tanzania Broadcasting Corporation (TBC).

He added: "I want those who privatized our factories and other state-owned entities to remember that they committed sins and know that there's someone revealing their sins". According to the Head of State, over 197 factories that were privatized were currently not operating.

Dr Magufuli said Europeans lied to the former leaders that privatization policy was good when they were not doing the same in their own countries.

"We need to have our own local industries ... where we can produce products like clothes, then wear them and later sell them to Europeans as second-hand clothes instead of importing used clothes from Europe," he stated.

He accused some investors within the country of having utterly failed to develop the privatized firms, saying some didn't even have any investment plans - and were changing the use of those plants with out permission, vandalizing some in the process while some owners have not even paid for those properties.

This is not the first time the president is expressing his disappointment over the privatized firms; they reflect similar sentiments expressed during his 2015 campaign trail when he pledged to revisit the privatization plan --if elected -- as part of his plan to revive the country's ailing industrial sector and boost employment creation.

He also said that, on election, his administration would not hesitate to repossess failed ventures and return them to public ownership or give them out to new and serious investors ready to develop them. Above all, quick industrial development was a key element of the 2015-2020 CCM manifesto.

Most of the former state farms, ranches or factories were sold on a needto- develop basis during former president Benjamin Mkapa's tenure in office from 1995 to 2005 but the process began in 1993 when Mr Ali Hassan Mwinyi was president.

But on retirement, Mr Mkapa is said to have expressed his regret over the country's privatization policy. The failed ventures have since returned to haunt the government, with privatization often blamed on corruption and influence peddling as whole communities lost jobs and income from the once thriving manufacturing sub-sector.

Official statistics show that some 274 state firms had been privatized by 2012.

Among these, 95 were in the agricultural sector, 94 in industry; 23 in infrastructure, 34 in Natural Resources and Tourism, 15 in the Energy and Minerals sector and 13 in other sectors. According to Dr Magufuli, in Germany for example railway is state-owned but in Tanzania, Europeans wanted the Tanzania Railways Limited (TRL) to be privatized.

A report by the now defunct Consolidated Holding Corporation (CHC) before it was disbanded in 2014 indicated that 40 state-owned firms had been lined up for privatization.

Among them were the New Africa Hotel and National Bank of Commerce, National Insurance Corporation (NIC), Air Tanzania Company Ltd (ATCL), TRL, the Tanzania Telecommunication Company Ltd (TTCL), Tanzania Postal Corporation (TPC) and the Kiwira Coal Mine.

Yesterday, Dr Magufuli said he does not want it done in his country and that it was time Tanzania rejected everything that was subjecting this country to (economic) dangers.

The president added that if the country had earlier rejected the privatization policy, nobody could now have to struggle to revamp the industrial sector in the ongoing drive to transform the country into an industrial economy.

"If there are any mistakes that were made ... it's about time I personally rectify them because you elected me to become your president and I'm not sure if my successor will be able to do this," he noted.

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