Parliamentary committee on Industry, Trade and Environment for Tanzanian urged the government to provide investment opportunities that are equally attractive to both potential local and foreign investors.
The committee offered as an example the recent case where the Mtwara-based Dangote cement factory was offered access to government gas and coal at a low price while local companies doing similar business haven’t been offered such favours.
The government in March this year awarded Dangote Cement company, which is owned by Nigerian billionaire Aliko Dangote, part of the lucrative Ngaka coal field in Mbinga District, Ruvuma Region to allow it to mine its own coal and thereby provide a cheap energy source to help lower production costs at its Mtwara factory.
The factory’s management had suspended output in December last year, citing technical problems and high running costs due to having to rely on diesel generators.
It resumed operations after President John Magufuli promised them the coal field and other key concessions following talks with Dangote in Dar es Salaam.
Tabling the committee’s remarks on the Ministry of Industry, Trade and Investment’s 2017/18 budget estimates, chairperson Stanslaus Nyongo said such concessions should be extended to local investors too, some of whom are in dire need of government support.
“If the government’s ambition to have an industrial economy in place by 2025 is to be realised, then it should provide equal opportunities for all investors, foreign and local,” Nyongo asserted.
He said local investors have always complained of inequality and a perceived government preference for helping foreign investors only.The committee also questioned the wobbly state funding of many industrial projects, as well as the ministry’s failure to meet its revenue collection targets.
According to Nyongo, the ministry initially planned to collect 20 billion/- through tender document sales and fines for various regulation violations during the 2016/17 financial year. But by March this year, only 10.78bn/- (or 53.9 per cent) had been collected.
Going by this trend, the ministry won’t be able to fulfil its responsibilities, he said.
He further noted the Treasury’s constant delays in disbursing allocated funds to the ministry, with only 7,566,620,625/- out of the budgeted 40,000,000,000/- for development expenses released by March this year.
The committee also called for the establishment of a conducive environment for the mushrooming of industries that can offer big numbers of employment opportunities, such as textile factories, cashew nut and coffee processing plants.
The government should also increase the availability of reliable electricity and consider lifting its ban on the importation of coal despite the country’s incapacity to produce enough of the energy-source mineral to meet local demand, Nyongo said.
The opposition camp in parliament questioned the fifth phase government’s economic policies, saying it has embarked on doing business itself instead of giving the private sector room to thrive.
According to the shadow minister of Industry, Trade and Investment, Anthony Komu, the government is going against the principles of 1990s economic reforms that saw many state-owned enterprises privatised.
The aim at the time was to move the government away from direct involvement in industry and business, Komu said while presenting the opposition’s views on the ministry’s 2017/18 budget estimates.
For example, the recent circular that all government houses and buildings should now be built by the state-owned Tanzania Building Agency (TBA), plus the budding plans to give all road construction contracts in the country to the National Service (JKT) military division, do not bode well for the future of private contractors, he pointed out.
“Such decisions by the government are not good for the national economy since the private sector is a very important stakeholder in the economic growth of any country” Komu stated.
He said elsewhere in the world such policies have failed.
He also criticised the government’s decision to purchase two airplanes and place order for several more at a cost of over $230 million in cash, saying this is quite different from normal international practice.
The opposition camp also took issues with what it described as various statements by government leaders that do not comply with business policies, like banning or allowing some business to operate without getting the views of the business community.
Komu cited as examples President Magufuli’s orders for the revocation of a mineral exploration license for a certain foreign investor in Geita on the basis of complaints from area residents, and the banning of mineral sand exports, as well as the recent ban on alcohol packaged in sachets.