8 August 2018

Tanzania: Boost Negotiators' Skills, Tanzania Urged

Dar es Salaam — Tanzanian lawyers are well educated but lack negotiating skills needed in major investment deals, according to a global law firm.

DLA Piper Association called for urgent capacity building among Tanzanian lawyers.

The head of the firm's oil and gas team in London, Mr Kevin McGrory, said Tanzania was doing a good job in attracting FDIs, adding that the country should ensure that negotiating teams had the requisite skills.

"Tanzania is stable politically and with great potential, but that is not enough in attracting investment because competition is high from the other countries with high potential," he said.

Mr McGrory made the remarks at a seminar on international business transactions, negotiations and drafting in Dar es Salaam.

East African Development Bank (EADB) director general Vivienne Yeda said East African lawyers in the public sector should avoid undue influence and consider the public interest when negotiating contracts with investors in the natural resources sector.

She said the discovery and ongoing exploration of various minerals in the region had raised the expectation of host communities and governments that resource extraction would result in wealth creation, reduced budget deficit and improved lives among local populations.

"It is critical that host countries are able to derive tangible benefits from the exploitation of their natural resources. The benefits should accrue to the local communities in the form of appropriate royalties, taxes, dividends, business opportunities, professional jobs and employment," Ms Yeda said.

She further noted that there should be clear benefits to the country which should be proportional to the amount of resources exploited.

In order to achieve this, Ms Yeda added, taxes and other fiscal rates and environmental and social management in Africa should be comparable to those in advanced economies and should comprise best practices, such as stabilisation clauses, which may be used in specific and clearly defined circumstances for a limited duration.

"Africa should adopt dynamic and creative fiscal regimes that can be adapted to changing economic and social circumstances. It is a continuing puzzle and challenge that there is a negligible number of African owned companies in the natural resources sector more than 100 years after resources such as gold and diamonds were discovered."

A law lecturer at St Augustine University of Tanzania, Mr Telesphory Magogo, said Tanzania needed to invest in human resources in trade.

He said when governments enter into contracts with multinational companies, the agreements should adhere to international customary principles.

"Our negotiation people are normally put on the spot because the negotiations are normally done overseas, and the country sends one or two people who meet a team of experts. They are required to discuss almost everything in just a short time," he said. DLA Piper cooperate transaction partner Jay Gary Finkelstein said that in the last ten years Tanzania was at a disadvantage in negotiations, but there had been a dramatic change, with the government forming teams of experts in legal, financial and environmental matters as well as other relevant sectors.

The seminar, which will take place throughout the week, has brought together senior public sector lawyers and judges from Tanzania, Kenya and Uganda.

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