Weekly East African Business News: 2013-06-02

Uganda economy growing at 5.3% - Says Museveni

Uganda leader Yoweri Museveni averred that the country’s economy has been growing at the rate of 5.3% annually and it is likely to grow to double digits now that the problem of reliable power has been tackled by the government.Museveni, who began a 3-day working visit to South Korea on Wednesday by touring a research Agricultural Institute and the headquarters of global leading electronic giant Samsung, was speaking at a dinner hosted in his honour by Korean business community.

Accompanied by a number of Cabinet Ministers, Museveni said despite some bottlenecks prevailing in the country, Uganda is very profitable and the government is addressing these bottlenecks.

Museveni urged the business community in South Korea to invest in Uganda.

In spite of power problem that has led the economy to grow through some sectors like construction and transport, investors in other sectors reap profits of between 25% and 30%, he said.

“I am assuring you that with the improvement in reliable power supply, the investors will be able to earn between 40 and 50 percent of their investments as profit. In addition, investors are free to repatriate their profits, invest in Uganda and give us jobs”, he stressed.

Museveni pointed out that the tourism sector is very attractive because of the unique climate of Uganda which is on the equator but with constant ice on its mountains.

The President explained that although Uganda has a population of 35 million people, it is also a member of the East African Community which comprises of five member countries with a total population of 139 million people.

He said that Uganda is also a member of SADC and PTA economic blocs whose total population is bigger. He added that that there is also the African market.

President Museveni thanked the South Korean business community for organizing the dinner and urged them to visit Uganda to see its potential.

Uganda: Ailments That Hurt Business - 9. Failure to Control Fraud

Even the most loyal employee may succumb to the temptation to engage in fraud. That need for 'quick cash' could be magnified to bigger and bigger amounts if left unchecked.

Fraud hurts business because it leads to unauthorized transactions which lead to losses to business, says Fabian Kasi, Centenary Bank managing director. Fraud can be in form of embezzlement, internal theft where employees steal company assets, payoffs and kickbacks and skimming where money received is not recorded in the books.

If left to persist, fraud could also lead to loss of reputation among customers, suppliers, lenders and the authorities.

The incentive, opportunity and justification to commit fraud are what auditors call the 'triangle of fraud.' Some of the ways to curb fraud include ensuring that all requisite controls are in place and enforced and complied with. For example, password control, dual control of transactions and close supervision.

It also important to hold regular employee training sessions on security systems, as well as ensuring access control to company assets and information and also carry out random spot checks to assess risks. However, even with strong controls, fraud-prone employees can still defraud a business. The best approach is to weed them out.

Key lesson: identify risky employees.

This can be done by identifying at risk employee such as those whose spouses have lost their jobs, are gamblers or drug addicts. In event of fraud, Kasi advises that a culprit should immediately be reported to the authorities for further investigations. He adds that fraud must be stopped at once. "In our case, the bank has zero tolerance to fraud," Kasi says.

Uganda: Africa Development Bank issues shilling bond on Uganda’s Capital Market

The African Development Bank (AfDB) has launched its second Uganda-shilling denominated bond on the domestic capital market.

The Shs12.5 billion bond’s subscription that ended on Monday May 27^th is the latest issuance under the Shs125 billion Medium-Term Note (MTN) Programme originally established in mid-2012.

The MTN approach was adopted to allow the Bank to regularly tap into the Ugandan capital market, issuing various tranches, rather than standalone transactions thereby minimizing costs for its clients and reducing the lead time necessary to access the market.

The AfDB return to the Uganda market reflects local demand for additional debt instruments and the need for local currency financing to push infrastructure and other development projects.

Mr Pierre Van Peteghem, the Bank Group Treasurer, heralds this issuance as just the beginning of his department’s push to avail more local currency to private sector clients.

“The Bank has recently approved an additional five African currencies including the Ghanaian Cedi and the Franc CFA for both West and Central African zones as official lending currencies of the bank. This brings the total number of African currencies in which we can on-lend to clients to ten,” he said.

He added: “This will enable us to better respond to client needs, particularly with respect to mitigating foreign exchange risk posed by hard currency loans. We believe that by directly issuing local currency bonds, we also play a key role in developing the local capital market”.

Arranged by African Alliance and executed as a tap sale on the original UGX bond issued in July 2012, this most recent note will be linked to the new two-year bond that the Government of Uganda intended to launch on May 23, but will re-price every two years at 85 percent of the weighted average yield to maturity on the latest Ugandan government bond benchmark, said Mr Olivier Eweck, Manager of African Currency Funding in the Treasury Department of AfDB.

Similarly to the first tranche, this issuance will also be launched at sub-government levels. “We expect a high demand from local and international investors, even higher than for last year’s first tranche,” Mr Eweck said. The first re-pricing exercise will take place in August 2014.

The AfDB plans to launch two new MTN local currency programmes in Nigeria and Zambia in the coming months.

Since its first African currency loan in 1998, the bank’s local currency loan portfolio totals about $2.4 billion.

The bank is, however, keen to diversify its local currency portfolio across African regions beyond the South African Rand which now dominates the local currency loan book and is the multilateral lender’s third largest lending currency.

As part of the Local Currency Initiative established in 2006, the AfDB has received approvals to issue in the local capital markets of Tanzania, Ghana and Kenya, among other countries and hopes to enter many of these markets in the short to medium-term.

dnakaweesi@ug.nationmedia.com

Ugandan businesses to showcase in Boston Diaspora expo

Kampala

The Ugandan business community will join their counterpart in the Diaspora to showcase their products and services a course aimed at promoting and attracting investments.

This will be at the forth coming Diaspora Business Expo in Boston, USA scheduled for July 6-7. The expo is organised in partnership with the Uganda Investment Authority (UIA), Ministry of Foreign Affairs and Promote Uganda- a company that produces investment promotion materials about Uganda’s investment potential.

Speaking to the Media in Kampala on Friday, UIA Executive Director, Eng. Frank Ssebowa said Ugandans in the Diaspora have proved to be an invaluable source of investment for the country. Therefore, he said, the Expo is aimed at encouraging Diaspora-led investment at home and also to improve on the level of exchanges between the Ugandan business community and those in the Diaspora.

Eng. Ssebowa said: “We are looking to our Ugandan Diaspora to actively engage in technological skills and best practices transfer from their host countries.”

The Expo Patron, Dr. Maggie Kigozi said many times Ugandans in the Diaspora spend huge sums of money on relatives without investing at all.

“It’s high time for these people to change this culture to investing it into income generating businesses which will also create jobs,” Dr Kigozi said.

In his submission, event organiser Mr Ronnie Mayanja said “Ugandan’s in the Diaspora feel they have not been encouraged by the government to invest back home”.

He added that there is a huge information gap between the government and Ugandans abroad about investment opportunities in Uganda yet there those Ugandans who would have want to bring their money back home.

According to David Nsubuga Director- Promote Uganda, some of the leading Ugandan business entrepreneurs and brands will show case their home made products at the event.

Despite a lack of a Diaspora policy, for long Ugandan communities abroad have been deterred by a lack of support institutions in the country, divisions among themselves and the continues existence social and economic burdens.

Remittances from Ugandans working abroad have grown by about 14 percent annually in the past 10 years, according to a new report by the UN Conference on Trade and Development (UNCTAD). According to the Least Developed Countries (LDCs) Report 2012, Uganda’s percentage growth in remittances surpassed that of most countries like Mauritania, Comoros, Yemen, Malawi, and Angola.

The report shows Uganda gets most of its remittances inflows from Kenya worth US 326 million, United Kingdom US 176 million and United States US 87.4 million. The three countries provide 76 percent of Uganda’s total earnings from remittances.

editorial@ug.nationmedia.com

Uganda: Air Uganda acquires aircraft to ply Entebbe-Kilimanjaro route

Passengers alight from an Air Uganda plane in Arusha on Wednesday. PHOTO BY MARTIN SSEBUYIRA

In a bid to strengthen its footprint in the region, Air Uganda has acquired a new aircraft to ply the Entebbe-Kilimanjaro route.

The flight number U7331 on Wednesday made its maiden flight to Kilimanjaro International Airport to an impressive water salute by the airport fire service.
Recently, Air Uganda launched its operations in Somalia following signs of stability in the once war-torn country.

The new 50—seater CRJ-200 acquired on a long-term lease from GECAS USA, will be the third CRJ-200 50—seater craft to serve Air Uganda routes and the new planned routes.
This acquisition is part of the Airline’s growth plan to increase capacity and to widen its network.

“Air Uganda operated flights to Kilimanjaro in the past, which were stopped in 2008 and is re-launching into the market because the number of passengers between Entebbe and Kilimanjaro has grown significantly over the past few years with the strengthening of the East African Community,” Mr Comwell Muleya, the Air Uganda chief executive officer, said in a speech read for him by Ms Jenifer Musime, on Wednesday.

The airline boss noted that they want to make Entebbe a regional hub looking at the growing number of passengers with Air Uganda to about 3,000 passengers every month.
He said that they formerly operated a 99 seater plane, which was quite expensive compared to the new CRJ-200 seater.

Mr Muleya said Arusha remains a big tourist destination with many natural attractions including Mount Kilimanjaro, Meru and as the gateway to the largest national park in the region Serengeti.

Ms Christine Mwakatobe, the Kilimanjaro Airports development manager said they embarked on an extensive marketing campaign of the airport that has paid off well. “We have international airlines flying directly from their hub to KIA.

Last year, we welcomed Kenya Airways, Qatar Airways and Turkish Airways,” he said.
mssebuyira@ug.nationmedia.com

Uganda: Uganda-Italy Ready for Business, Not Aid Says Ambassador

INTERVIEW

The Italian ambassador to Uganda Stefano Dejak has been in the country for 18 months. He is very optimistic about the future of cooperation between the two states. In this interview with New Vision's David Mugabe, he talks about the journey of the cooperation as Italy celebrates its Republic Day

QWhat is the Italian National Day?

The Italian National Day is the celebration of the day Italy became a Republic. Infact, it is called the Republic day. The outcome of the referendum held on June 2, 1946 which abolished the monarchy and made Italy become a republic.

How significant is it for Italy to become a Republic?

A Republic is a form of state where no one has an advantage just because of their blood or that he belongs to an aristocratic line. All citizens are absolutely equal and differences can emerge because of the hard work and capacity of individuals. There is no difference from birth.

And how has becoming a Republic since the National day changed Italy?

This was right at the end of world War two (WW II) and Italy was not very different from what Uganda is today. There was a lot of energy but also a lot of poverty especially in the south. But the existence of basic skills and infrastructure created conditions for the economic boom in the 1960s where Italy became one of the wealthiest and most industrialised countries in the whole world.

When you became Italian ambassador to Uganda in November 2011, what was your main focus?

The ambassador has many roles, but crucially the embassy is the house of the people it represents. It is an expression of the Italian public administration paid for by all Italian tax payers.

A key focus was to get in touch with the Italian community here and I published a book that talks about the long history Italians have in this country. It also explains why Ugandans have an idea of who Italians are. Now the Italian community is organised and the Italians want to be a positive part of Ugandan life. There are six hospitals in the north managed by Italians including St Joseph hospital in Kitgum district founded in 1915 and there is Bujagali built by Salini.

What is special about the history of Italy?

There are two aspects, one is cooperation for development which is not easy to quantify. This includes the missionaries, volunteers and non-governmental Organisations. Then you have businessmen. Uganda has reached a level where it needs more of business than aid. Not many young Ugandans are waiting to have a sack of rice from the UN, they want jobs and skills. The prime minister of Uganda visited Italy in December to promote investments that is an example.

How much trade is Uganda doing with Italy in exports and imports?

In my view, it is too low, there are patterns of growth and growing interest on both sides. In 2011 Italian imports into Uganda were $44m while Uganda exports were $31m. In 2011, it was $58m. They will be growing now that we are jointly doing so much to increase our economic relationship.

What are the opportunities for increasing investments and business between the two states?

There is an enormous potential because the goodwill already exists which can be a fundamental multiplier. These are two states at different stages of development-Uganda wants to enter the category of mid-income. The Italians in the 1960s and 1970s built the economic miracle.There is a perfect scope for transformation and best ways to develop going forward..

Q Is the Italian Trade Agency already in Uganda?

The Italian Trade Commission is not in Uganda.

What activities are you involved in?

From our office in Johannesburg we assist Italian Companies interested in Uganda in collaboration with the Italian Embassy in Kampala.

Any specific plans for deepening your presence here?

We actively participated at last Uganda Investment Forum in Kampala and we had very interesting contacts whose follow up we foresee on next months. We are also aware of great activity from Italy with Italian Companies coming to Uganda on behalf of Italian Promoting Organisations in Milano. The most active has been Promos.

What opportunities exist for Ugandan entrepreneurs?

There are very interesting opportunities of collaboration for both Uganda and Italian Companies in many areas, but mainly in agro-industry and food transformation and packaging.

What are you doing to widen these opportunities?

From this point of view I suggest you look to the programme of the International Conference that we are organising in Kigali next month dedicated to food technology (Sustainable packaging for Competitiveness and Development of SMEs in EAC Region", in partnership with East African Community and UNIDO).

Have you made any concrete deals or collaborations in Uganda since you came here?

Yes we have. So far in 2013 we have concluded one deal and are in the process of concluding a second. In the first case we have supported a local manufacturing company in purchasing hi-tech machinery from Italy.

As you can imagine, modern machinery reduces the costs of a company, it improves its productivity and it increases the quality of its products. You can easily understand the benefits of having healthy companies both from a financial and employment perspective.

What opportunities do you see in Uganda?

I personally see important opportunities in Uganda. The stable political environment has made Uganda an attractive investment site and the growing middle class and overall economic empowerment of its population makes its economy vibrant and interesting. Specifically I believe that the main areas of opportunities rely upon infrastructures and power generation.

Uganda is a land locked country that can and should, however, take advantage of its geographical position by becoming a hub for trade between, for example, the DRC, South Sudan, Rwanda and the ports of Mombasa and/or Dar es Salaam.

This, however, cannot happen because modern infrastructure (such as highways, railways and airports) are not in place. This is a common problem throughout East Africa but I believe that Uganda can tackle it better and quicker compared to its neighbouring countries.

On the other hand power generation is a key element to insure the economic growth of the country. Uganda has been blessed with water ways that can guarantee the production of clean, cost efficient power plants and thus become an exporter of electricity throughout the region. However, we must stress the fact that investors will risk their resources only if the rule of law is guaranteed by an independent, competent and corruption free judicial system.

What can Ugandan businesses learn/gain from the agency?

The most important positive effect for any local company is the fact that they can purchase Italian hi-tech good and services and pay for them with a deferred payment. By doing so the machine is purchased and is able to pay itself off through the benefits stated in the answer of question two above. The overall interest rates and financial costs applied to the transaction are very competitive compared to the interest rates applied by local banks.

Uganda

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Tanzania: Chinese to help build new port

Chinese to help build new port

Tanzania had signed a framework agreement with China Merchants Holdings (International) for the construction of a new port, special economic zone and railway network that could involve more than $10 billion (R100bn), the government said last week. A senior official said talks were under way with the Chinese government on funding of the project, located 75km north of Dar es Salaam. The government has said a new port in Bagamoyo would relieve pressure on the Dar es Salaam port, the largest in east Africa after Kenya’s Mombasa. Deputy Transport Minister Charles Tizeba said: “The entire cost for the construction of a new port, economic processing zone, railway network and other infrastructure at Bagamoyo is $10bn.” – Reuters

Tanzania: Brazil's Petrobras Sells Stake in Tanzania Block to Statoil

Brazilian state-run energy giant Petroleo Brasileiro (PBR, PETR4.BR), or Petrobras, said Friday it agreed to sell a stake in an oil and natural gas exploration block off the coast of Tanzania to Norway's Statoil (STO).

Petrobras will continue to operate the block with a 38% stake, while Anglo-Dutch major Royal Dutch Shell (RDSA.LN) will retain a 50% share and Statoil 12%. The deal is subject to approval by Tanzanian regulators. No financial details were provided.

The deal is part of $9.9 billion in divestments planned by Petrobras as the company focuses on developing offshore fields in Brazil. Petrobras plans to invest $237 billion through 2017, with much of the cash used to produce oil from the ultra-deepwater reservoirs discovered trapped beneath a thick layer of salt. The region, known as the pre-salt, is estimated to hold as much as 100 billion barrels of crude.

Petrobras has made a series of similar deals, called farm-outs, and outright sales of other exploration concessions over the past 18 months, primarily in the company's international holdings. The company recently sold off stakes in six exploration blocks in the U.S. Gulf of Mexico for $110 million.

Chief Executive Maria das Gracas Foster said this week that the company was in talks with several groups to sell assets in Argentina, but no decision had yet been made by Petrobras's board on the potential sale.

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Tanzania: Vodacom Pays Sh36.5 Billion in Taxes in 2012

A LEADING cellular phone firm Vodacom Tanzania paid a total of 36.5bn/- in corporate tax in the 2012/2013 financial year.

The Managing Director of Vodacom Tanzania, Rene Meza said in a statement issued in Dar es Salaam that the company paid a total of 36,509,063,334/- , an increase of more than twenty times what the company paid over the last three financial years.

"We have been making steady investment in the business over the last few years and are now reaping the results of the investment hence our increased ability to make a bigger contribution to government revenue," the Managing Director is quoted in the statement.

Other taxes that the company collected in 2012 amount to 190,754,776,956/-, the statement further said. He said a total of 4,565,183,461/- were paid as withholding tax, a total of 92,322,077,623/- as VAT.

Vodacom also paid a total of 51,337,344,600/- as Excise Duty and a total of 4,530,171,272/- in Regulatory Fees.

The company paid 2,576,227,649/- as the Universal Communications Services Access Fund Levy for 2012, he said.

Meza says other taxes and levies totally 34 bn/- that his company paid in its' just ended financial year include: Numbering Fees, Customs and Excise, Income Tax, Service Levy and Spectrum Fees.

On how much Vodacom had invested in the country in 2012, Meza says his company invested over Tshs 200 billion/- in the 2012/13 financial year and that this had allowed his company to double the size of its network as at the end of March 2013.

Vodacom has invested in excess over Tshs 1.3 trillion/- in the country since its launch in 2000.

He goes on to says that Vodacom fully supports government efforts to ensure that as many Tanzanians as possible have improved access to telecommunications services.

Vodacom's continued investment in its 3G networks and connection to the National Information Communication Technology Broadband Backbone (NICTBB) is a clear illustration of its commitment to this initiative, he says.

Vodacom invested Tshs 800bn/- in the NICTBB project last year when it connected its northern optic fibre ring i.e. Dar-Arusha- Dodoma to the NICTBB . "Connection to the NICTBB coupled with our investment in 3G allows our customers to enjoy faster data speeds compared to what they had in the past.

This is a great achievement in the telecommunications sector as we all work towards the provision of broadband access to all Tanzanians. For, increased access to mobile broadband services will in turn play a major role in the social and economic growth of the country," says Meza.

He goes on to say that," ..we are currently working on connecting our Western region (Mwanza, Mara, Kagera, Shinyanga, Tabora, Singida, Kigoma, Makambako) and Southern region (Morogoro, Coast, Iringa, Ruvuma, Mtwara, Lindi and Dar es Salaam) to the NICT backbone.

In addition to investing in 3G technology last year, Vodacom successfully launched an LTE trial network on Msasani Peninsular in Dar es salaam. This state of the art technology also known as 4G technology allows users to access the fastest possible data speeds in the country today.

Meza further says that Vodacom Tanzania prides itself on the work that it continues to do in the CSR arena. In 2012, the company through its corporate giving arm - the Vodacom Foundation - spent 9.6 bn/- on health, education and economic empowerment initiatives in the country.

The Vodacom Foundation has supported over 120 projects to date, ranging from fundraising for the awareness and eradication of fistula in Tanzania, the provision of teaching facilities to schools, the economic empowerment of women in rural areas to the provision of water to communities in semi-arid areas.

Vodacom Tanzania is a subsidiary company of Vodacom Group (Pty) Limited, South Africa, which is also a subsidiary of Vodafone Group UK.

Tanzania: First Evidence of Leopard Predating on Chimpanzee Found in Tanzania

For the first time, scientists have found evidence of a leopard eating a chimpanzee in the African nation of Tanzania.

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University of Zurich

Chimpanzee attack

Rarely, people have witnessed chimpanzees and leopards coming in contact in the jungles of Africa. On these occasions, the chimpanzees - which travel in groups, have been found to be aggressive and send loud calls warning their enemies. Earlier studies have also shown chimpanzees of being capable to defend themselves against the leopards.

In some cases, chimpanzees have been documented killing leopard cubs. In one case, a group of about 33 chimpanzees have been observed to surround a leopard den with a mother and a cub. The chimps reportedly dragged the cub and killed it. This was the first report of chimpanzees or any other primate species killing their potential predator's cub.

However, it seems chimpanzees do not win every time. In a first, scientists have found evidence of a leopard eating a chimpanzee in Tanzania's Mahale Mountains National Park. The wildlife park is one of the few places where the range of leopards and chimpanzees overlap with each other.

For the study, the research team collected faeces of African leopards from June to August 2012. In one of the droppings of a feline, researchers noticed kneecaps and toe bones. Using a DNA analysis, the team found that the bones belonged to a female adult chimp. However, researchers are yet to confirm if the leopard killed the chimpanzee and ate it, reported LiveScience. Based on these findings, researchers will re-examine three deep wounds sustained by three chimps over the past few years, the report said.

While the new study has given the first evidence of a leopard predating on a chimp, this is not the first case of a feline killing the primates. A study carried out in 1993 found evidence showing lions killing four chimpanzees at the Mahale Mountains National Park. Four samples of lion faeces showed the presence of chimpanzee remains, including hairs, bones, and a tooth.

The details of the findings are published online in the Journal of Human Evolution.

Below is a video showing a group of chimpanzees attacking an artificial leopard.

Tanzania to Host Major Freight Forwarders Meet

TANZANIA businesses are set to benefit from vast opportunities by hosting the Region Africa and Middle East meeting (RAME) which will bring together over 300 participants in freight forwarding industry.

The international conference will be attended by senior clearing agents, freight forwarders, business delegates in addition to government officials, ambassadors and trade representatives from Africa and Middle East and beyond.

"The meeting is an opportunity for any organisation with an interest in freight forwarding to network and make business connections," according to President of Tanzania Freight Forwarders Association (TAFFA), Mr Stephen Ngatunga.

"Having a high profile event such as RAME will go a long way towards improving and marketing businesses further. We want to show the world that Tanzania is an ideal gateway for regional trade," Mr Ngatunga told a news conference in Dar es Salaam yesterday.

With a theme; "Towards more sustainable regional freight forwarding partnerships," the forum comes at a time when Tanzania is embarking on an expansion and modernisation of ports and railway lines.

"There are vast opportunities for business growth to be unlocked in Tanzania in terms of clearing and freight forwarding if neighbouring landlocked countries use Dar es Salaam port through the central corridor as transportation hub," the TAFFA boss observed.

Tanzania: NMB Forms Business Club in Tarime District

Mara — THE National Microfinance Bank (NMB) has formed a business club in the north part of Tarime District in Mara Region. Tarime District Commissioner, Mr John Henjewele presided over the club's formation during a long-day function held here on Monday.

The function was attended by nearly 100 business people operating in the gold- rich district whose economy is seen as growing very fast .

Several NMB officials, including those based in the Mwanza zonal office and from the bank's head office in Dar es Salaam were also present. Mr Emmanuel Mwihechi was elected the first chairman of the Tarime NMB business club, which aims at speeding up business development in the area, while Mr Modekae Moseti was elected secretary.

The club's leadership included three other members, two of them being businesswomen in Tarime town. "We have excluded the post of treasurer; however, NMB will be meeting the running cost of the business club when it comes to things like meeting costs to discuss business plans," a senior NMB official said.

Highly-placed sources said NMB was soon scheduled to open a new branch in the small town of Nyamongo, which hosts North Mara Gold Mine in a bid to expand its services in the district. If the plan bears fruits Tarime will be the first district in Mara Region to have two NMB branches.

Tanzania: Unleash Business Opportunities, TNBC Tells TCCIA

TANZANIA Chamber of Commerce, Industry and Agriculture (TCCIA) has been challenged to unleash business opportunities and exploit them for the country's economic growth and development.

Speaking at the opening of the TCCA Annual General Meeting (AGM) in Dar es Salaam over the weekend, the Executive Secretary of Tanzania National Business Council (TNBC), Mr Raymond Mbilinyi said the chamber had all potentials to tap the existing opportunities.

"You (TCCIA) have to recognize that the private sector has a great role to contribute to the national economic growth," Mbilinyi said. He said TCCIA had a countrywide network which if used properly, could help businesses to grow.

"We are now finalising the preparations of National Smart Partnership Dialogue that will pave the way to vision of National Development 2025," he said, adding TNBC has been tasked to co-ordinate the dialogue. According to the business council boss, TNBC will be meeting TCCIA to chart out strategies that would help to make development headway.

He said the government recognizes the contribution of private sector in economic growth, but much has to be done. "It my belief that TCCIA is here to empower small and medium entrepreneurs (SMEs) so that they can do business with big investors," he said.

Earlier, the TCCIA president, Mr. Aloyce Mwamanga, said the association had tried to supervise regional chambers to perform. "We as leaders our major role is to ensure our members work and look at their business environment if you can allow them to grow," he said.

Tanzania: Barcode Attracts 400 Business Firms

GSI TZ National Limited's barcode technology is steadily revolutionising the business environment for the Small and Medium Enterprises (SMEs) in particular.

Besides playing a key role in identifying bottlenecks and inefficiencies in the supply chain, the barcode system has proved to be instrumental in promoting competitiveness of the domestically manufactured goods.

The introduction of the barcode is among the government moves to support SMEs to tap the opportunities available under different markets - the East African Community (EAC), the Southern African Development Community (SADC), the European Union (EU) and the US's duty and tariff free African Growth and Opportunity Act (AGOA).

The barcode system facilitates traceability - the automatic identification and data capture on the products - providing information to consumers through identifying the product, its manufacturer and country of origin as well as date of manufacture, expiry date, inventory number and compliance with national and international standards.

The barcode technology has 18 months since it was introduced in Tanzania, but it has so far received an exceptional acceptance by SMEs, with about 8,000 products having issued with the barcode already and GSI (TZ) National Limited registering over 400 companies.

GS1 (TZ) Chief Executive Officer Fatma Kange says there is positive response to the technology and rising awareness on the use of barcodes in the domestically manufactured goods. The barcode, argues Ms Kange, communicates the safety and quality of the product to the end user, boosting the consumer's confidence on the purchased goods.

The barcode technology compels manufacturers to adhere to quality standards of the products, a necessary component in the competitive market. "The use of barcode technology has boosted sales of domestic products in super markets, leading to increased production to meet the expansive demand," Ms Kange told the 'Business Standard' in an interview in Dar es Salaam over the weekend.

Through provision of information on suppliers or customers involved in potential food safety issues, for instance, traceability can enable recalls or withdrawals of targeted products from the market. Ms Kange says publishers have recently started acquiring and branding their products with the barcode, leading to penetration of published materials to modern shops - supermarkets within and outside the country.

So far, says the CEO, a total of 15 publishers have acquired the barcodes that have opened the door for the local publishers to the digital world where they can sell their published materials electronically. Tanzania's publishing industry remains one of the least developed in the world, publishing merely 400 books annually.

The industry trails that of Kenya and Uganda, offering peanut in terms of revenue generation and job creation. The UN Educational, Scientific and Cultural Organisation (UNESCO) describes Tanzania's publishing industry as nascent, with little contribution to the government coffers.

Tanzania is ranked the 98th in the world printing index while Kenya and Uganda occupy the 87th and 90th positions, respectively. The industry sources say branding the published materials with the barcode would widen the market and increase revenues to the publishers and the government through payable levies and duties.

GS1 (TZ), through partnership with Tanzania Food and Drugs Authority (TFDA), has ventured into the health sector. The barcode will help to trace the entire treatment process of the patient particularly when visiting different hospitals. "The system will definitely help the medical doctors to trace the patient's treatment history and ensure patient safety," assures Ms Kange.

Launching the GS1 Five-Year Strategic Plan recently, Prime Minister Mizengo Pinda said the use of barcodes aims at facilitating the industrial sector growth to 15 per cent for the country to achieve its 2025 vision of becoming semi-industrialised.

It is high time the business community in the country embraced the use barcodes for economic prosperity of the country. Tanzania is a member of GS1, an internationally established organisation responsible for the provision of bar codes, traceability services, e-commerce and other trade related issues in the world.

Tanzania: Dar, Tokyo Sign Lucrative Power Deal

TANZANIA and Japan's Sumitomo Corporation have sealed a 675bn/- deal that will see the latter constructing a 240 Megawatts power generating plant at Kinyerezi in Dar es Salaam.

A statement released in Dar es Salaam by the Directorate of Presidential Communications said the project would be undertaken under the Public Private Partnership (PPP).

The signing ceremony was held yesterday in Tokyo and was witnessed by President Jakaya Kikwete who is currently visiting the Far East country. The Deputy Permanent Secretary in the Ministry of Finance and Economic Affairs, Dr Servacius Likwelile signed on behalf of the Tanzanian government, while the Sumitomo Chief Executive Officer Msayuki Hyodo did the same for the Japanese company.

President Kikwete hailed the Japenese Company for showing its trust to invest in Tanzania's economy and helping save lives in Africa by investing in Arusha based A-Z factory, which produces mosquito nets, with 30 million of them having been distributed all over the country to date.

Mr KiKwete also witnessed the signing of a cooperation agreement between Sumitomo Corporation and a local company, Quality Garage Limited, whose chairman and Chief Executive Officer, Yusuf Manji put pen to paper for his company, while Mr Takachiyo Tanaka signed for the Japanese company.

Meanwhile, Masato Masato reports from Yokohama that Yokohama-based Inter-Continental Hotel, the venue of the fifth Tokyo International Conference on African Development (TICAD V), is as busy as a beehive as delegates from over 40 African nations and international organisations register for the meeting that starts this morning.

President Jakaya Kikwete arrived here on Wednesday evening, leading a high-powered Tanzanian delegation to the Japanese government co-hosted three-day conference. Tokyo is using the five-yearly event to cement its relationship with the resource endowed African continent.

Reports here have it that the Japanese government is likely to pledge billions of US dollars in aid to Africa for the next five years while corporate investments, Japan's public and private sectors look set to invest about 30 billion US dollars into Africa by 2018.

Despite relatively long-standing connections, Japan's weight on Africa is gradually waning away in favour of China, which has acquired five times the trading volume and eight times the direct investment, thanks to its aggressiveness.

At the forum, Japanese officials will stress the need for the world's third largest economy to boost trade and investment with Africa and transform their relationship from the traditional aid to business-led partnership. Japan is striving to fortify relations with Africa and plead for African countries' support to its bid for a permanent seat on the UN Security Council.

Tokyo is convinced that support from African countries, which account for a quarter of the UN membership, is inevitable to succeed in its bid. President Kikwete, briefing the Tanzanian delegation here on Wednesday, declared Dar's support to Tokyo's bid to the prestigious and powerful seat.

While Japan uses the conference as an opportunity to maintain its diplomatic clout with Africa, Tanzania is positioning itself strategically to attract Japanese investors to Dar es Salaam. "We have to be very strategic in taping the optimal benefits out of this conference," President Kikwete said during the briefing, ordering that potential investors be identified for one-to-one discussions.

According to Tanzanian Ambassador to Japan, Salome Sijaona, the relation between Tanzania and Japan has remained good and always growing, with Japanese investors developing keen interest on Tanzania.

"Japanese, after long years of confining themselves within their country, are now going out... we are getting a lot of inquiries from Japanese companies about the investment opportunities in Tanzania," said Ms Sijaona.

Africa and Tanzania in particular, remains a potential business partner with Japan - offering markets for Japanese products and supplying raw materials to Tokyo's manufacturers. African countries, most of which sit on huge reserves of minerals and oil as well as other natural resources, are also emerging as last frontier for financial investors.

Tanzania 2020 dollar bond joins JP Morgan index

Johannesburg - Tanzania's debut $600 million international bond has joined JP Morgan's influential emerging markets bond index, the bank said on Tuesday.

The 7-year bond, issued through a private placement in March, has a weighting of 0.11 percent in the EMBI Global Index, JP Morgan said.

The bank said in May it was likely to add the bond to its index.

Tanzania, east Africa's second biggest economy, which does not have a credit rating, has also announced plans to issue a Eurobond. - Reuters

Rwanda: Air transport ‘a key driver for economic growth in Rwanda

International Air Transport Association CEO and director-general Tony Tyler. Picture: TREVOR SAMSON

EMERGING African airlines will have to be extremely cost conscious even though air travel is important for economic growth, RwandAir CEO John Mirenge says.

Speaking at a press briefing during an International Air Transport Association (Iata) general meeting on Monday, Mr Mirenge said Rwanda, a landlocked country that is one of the continent’s smallest, had identified air transport as a key driver of its economic growth.

"We (RwandAir) only started three years ago and we are slowly moving into a definite market of the short and regional flights before looking at long-haul destinations," he said.

Mr Mirenge said Rwanda was rebuilding its international airport in Kigali with the aim of making it a hub for regional African flights.

"We are in the heart of Africa and almost every other African country is between three and four hours’ flight time from Kigali," he said.

This, Mr Mirenge said, dictated the purchase of smaller, narrow-bodied aircraft that could operate efficiently, taking between 50 and 120 passengers a trip.

RwandAir operates seven aircraft, all various models of Canadian manufacturer Bombardier Aerospace — the third-largest manufacturer of passenger aircraft after Boeing in the US and Airbus in Europe.

Bombardier Aerospace vice-president for Africa and Middle East sales Raphael Haddad said his company expected Africa to be a market for about 1,000 commercial aircraft in the next 20 years.

"We are seeing great growth and there is a definite opportunity for expansion within Africa as trade among African countries grows," he said.

Mr Haddad said many African passengers still had to connect to neighbouring countries by flying long-haul flights to connect via Europe rather than direct flights that would be cheaper.

"So there is a definite need and market for a number of regional jet and turboprop aircraft," he said.