ECONOMIC AND SOCIAL RESEARCH FOUNDATION
(ESRF)
INVESTMENT FOR DEVELOPMENT (IFD) PROJECT
The Proceedings of the 2nd National Reference Group (NRG) Meeting held on November 20th 2002, At the ESRF conference Hall.
NOVEMBER 2002
4
TABLE OF CONTENTS
1.0 Introduction………………………………………………………………………….2
1.1 Opening Remarks……………………………………………………………2
1.1.1 Introductory Remarks………………………………………………..2
2.0 Presentations………………………………………………………………………...3
2.1 Background of IFD Project………………………………………………….3
2.2 Investment For Development……………………………………………….4
3.0 General Discussion………………………………………………………………….4
3.1 Suggestions………………………………………………………………… 5
4.0 Closing Remarks…………………………………………………………………….6
Appendices
A List of Participants of the 2nd NRG Meeting………………………………………….7
B Timetable of the 2nd NRG Meeting………………………………………………….10
1.0 Introduction
The Economic and Social Research Foundation (ESRF) organised the 2nd NRG meeting for the IFD Project that was held on its premises at Uporoto street. There were 40 participants. This audience was made up of members of the parliament, representatives from various institutions and organisations, renowned economists, press members and individuals involved economic research
1.1 Opening Remarks
The acting executive director of ESRF, Mr. Alex Mwinuka, called the meeting to order by welcoming the participants. He informed the participants on the purpose of the meeting which was to present the findings of a field survey conducted as part of the study. He mentioned the aims of the survey as:
(i) getting the perception of the civil society on the current and potential role of FDI in Tanzania’s development process;
(ii) getting an indication of the role of FDI in selected sectors; and
(iii) assessing the impact of foreign investment on local business ventures in the selected sectors.
He then invited Hon. Iddi Simba (MP – Ilala), the chairman of the meeting, to make introductory remarks.
1.1.1 Introductory Remarks
The chairperson began by apologising to the participants that he would not be able to chair the meeting due to some other commitments that he had and mentioned that Mr. Rogers Sezinga will chair the meeting during his absence.
Hon. Iddi Simba went on to providing remark on the aims of the survey and purpose of that particular meeting. He spoke about assessing the impact of foreign investment on local business ventures in various sectors and suggested that the assessment should be done in consideration of 3 dimensions, as listed below:
1) The History of Tanzania’s development;
2) Tanzania as a member of International community; and
3) The Singapore issues (WTO).
He noted that, the private sector is considered the engine for development in the country and that, currently there is a shift of national ownership of assets to the private sector. He also made note that the ability and rate of generating in the private sector is very low in Tanzania. Among the issues raised in this dimension was the question of whether Tanzania has an effective domestic private sector that can take over the ownership of national assets.
From this view, he suggested that research on foreign investment should consider the income generating capacity of the Tanzanian domestic sector and the handicap of its private sector in modern investment.
He also noted that Tanzania as a member of the international community has rights and obligations. As a member of the EAC, its obligations will include opening up borders for free movement of goods, formation of a customs union and a common market with other member countries. The question is however, how Tanzanians are prepared to face this situation at this stage. The outgoing chairperson cautioned that such a trend could be of value to Tanzania but also lack of competitive domestic investors would affect the progress.
Hon. Iddi Simba informed the participants that Tanzania is a signatory of the World Trade Organisation and thus, its involvement in the Singapore Issues scheduled to be discussed on and agreed upon by September 2003. He informed the participants that the Singapore Issues included negotiation on our part as a member of the WTO. He raised 3 topical issues;
(i) Negotiation of the competition policy; there is no competition policy in Tanzania and with the free market the question is how Tanzania will be able to relate with other countries that are highly advanced and with known competition policies.
(ii) Investment in trade; Tanzania has to produce quality goods and have regular supply so that it does not succumb to competition.
(iii) New Government procurement Procedures; Tanzania is on transition to a system of International tendering that may disadvantage domestic investors due to their lack of competitiveness.
All of the above issues denote the incapability of Tanzania as far as foreign investment is concerned.
Lastly, he talked about trade facilitation and stressed on the importance of determining the role of FDI in the development process in Tanzania. Also stressed was the importance of finding ways of developing domestic capital which match FDI. He concluded with a statement on the need to think of the economic empowerment of Tanzanians, with this, he handed over the chairmanship to Mr. Rogers Sezinga.
2.0 Presentations
The new chairman thanked Hon. Iddi Simba for the remarks given and proceeded to asking the participants to introduce themselves (see Appendix A for the list of participants). After the introductory session, he requested the presenters to begin with their presentations.
2.1 Background of IFD Project – Ms. Rose Aiko
The background of IFD project was presented for the benefit of those participants who did not attend the 1st NRG meeting and also to maintain the smooth flow of project/survey presentation. Among the issues discussed in this presentation were the aim of the project, rationale, objectives, project members and sponsors. Other Issues included the project duration, project activities, the role of NRG members and the outputs. Each item has been explained in report A on the Tanzania Investment Policy and Performance (See Appendix B).
2.2 Investment for Development – Ms. Lorah Madete
This was the presentation of report B for Tanzania. The survey results were presented in relation to the objectives set for the survey as outlined in section 1.1. Perceptions of the civil society on various issues were sought in relation to FDI. Various indications of the role of FDI in selected sectors were also presented. On the issues of case study sectors, the presenter acknowledged that their goals of getting data from primary sources was hampered by low response from the investors. Thus, they had to largely depend on secondary sources on issues of the overview of the sector, policy guiding investment in the sector, FDI in the sector, local investment in the sector and the impact of FDI the sector. Among the conclusions reached from the survey was that;
· There is a need to consolidate data sources on foreign investment in order to facilitate sound research and analysis
· The civil society demonstrated a satisfactory level of awareness about FDI and its role in development, and lastly;
· Secondary sources showed encouraging trends in terms of the amounts and impact of FDI.
3.0 General Discussion
The general discussion began with some of the participants identifying areas within the survey report that needed redressing or clarification and providing general comments.
· It was noted that some of the results of the civil society survey could be a result of the type of sample used. It was suggested that better results could have been obtained in some cases if those who were directly affected by the FDI activities were incorporated in the sample i.e. the grassroots
· The presenters were advised to address the micro-macro investment linkage within their survey. It was explained that there were some sectors that used imported materials for production, when there were domestic materials of the same nature that could have been purchased and hence, an increase in profit for the domestic companies.
· There is a need of identifying what FDI is appropriate for Tanzanians. In-depth research by looking at the importance of the FDI and its implications to the civil society was one approach suggested to the presenters.
· It was noted that there were low levels of availability of data and the low response in the survey. This would be addressed better by sampling some of the firms from different sectors and to do in-depth research.
· The presenters were advised that they could have done more for their report by assessing the contribution of FDI on investments in various sectors. This included an evaluation of the creation of a conducive environment for FDI.
· It was also stressed that there was a need of appreciating the grassroots in relation to the FDI. One participant also pointed out that other areas of investment i.e. education and health could also benefit from FDI.
· Investment without peoples concern was another issues raised in the course of discussion. The need for key areas of investment being put to public debate and the protection of the consumers was vital since several events have proved that private investment does not leave room for dialogue. Participatory procedures and freedom of the Tanzanians needed to be respected.
· The researchers were advised to highlight some policy suggestions at the end of their reports. There was also a need to focus on key factors that would assist in policy formulation, issues such as bureaucracy, labour factors, legislation corruption etc.
· The researchers were cautioned that perceptions are dynamic and change overtime, although, they could focus on perception factors that would assist them in making policy suggestions. They were also advised to go further in research and look for parameters for measuring intrinsic values.
· Some sections from the report were pointed out as having problems and needed re-addressing. Sections 2.3.4.1(c), 2.3.4.3 4) and 1.4.2.3 inappropriately addressed the Land Act as outdated and issue on housing investment was not clarified. The researchers were advised to revisit their sources in order to make informed judgements.
· Another shortcoming of the report was its lack of an executive summary that would have enabled the participants to be in a better position in providing criticisms. It was also noted that the report lacked a section that explained the regions sampled or problems encountered during the survey.
3.1 Suggestions
Under this section, the chairman asked the participants to provide any suggestions on what can be done in concern with the FDI issue. These suggestions are listed below;
· It was noted that the TIC, which is the investment promotion centre for all investment activities, has been centralised. The suggestion was that it has to be decentralised into growth centres nation-wide and probably go as far as district or ward level, whereby the local/grassroots levels can be tapped into the development procedure. Examples were drawn from China.
· The researchers were told to make thorough survey of the countries where FDI has a positive impact and make a comparative analysis in relation to the local firms so as to identify the gap and what can be done to rectify it. Emphasis was also made on the importance of drawing lessons from other countries such as Thailand where land was not an issue of attracting investors.
· The representative of the TACOSODE organisation invited the researchers to make use of the new and current literature and publications available at their headquarters on issues of the civil society mapping.
The chairman wound up the discussion by highlighting on some issues.
· The importance of promoting linkages in the economy on the basis of micro-macro investments whereby servicing of big companies is done by small domestic companies
· The duty of stakeholders to take advantage of the presence of foreign investors to equip themselves and make everyone have a role to play in the development of the country’s economy.
· He also made note of the differences in data disseminated by different organisations/institutions over the same issue. He described this as being a weakness of depending on secondary data.
On this note the chairman requested the presenters to react on the issues raised by the participants of the meeting. The researchers acknowledged a number of difficulties they faced in the field that forced them to use secondary data in some occasions. They also mentioned that they faced a problem in the proper definition of a civil society and its composition. They proceeded to thank the participants for their comments and promised to deal with them accordingly.
Some remarks on the way forward were given by Hon. Ali Juma Shamuhuna (Representative- Isles) on how the taxes and tariffs affect investment in Tanzania and eventually may decrease FDI which would also affect the Tanzanian Economy. He noted that the level of bureaucracy involved in inviting investors is very high that it might make investors look for other alternatives. It was important that Tanzanians understand that the current period is an era of competition where survival is for the efficient. He also cautioned on corruption as a hindrance to good investment in Tanzania.
4.0 Closing Remarks
The chairman, Mr. Rogers Sezinga who on behalf of ESRF, thanked the participants for their active participation in the meeting and their constructive comments, made the closing remarks. He expressed hope that the researchers will work on the comments and produce an impeccable report. The meeting closed at 13.00 hrs as shown in the timetable (See Appendix D).
APPENDIX A
Names of the Participants of the 2nd National Reference Group Meeting held on November 20th 2002 at the ESRF Conference Hall
S/N
/Name
/Institution
/Contacts
1 / Victoria Mwanyato / FAWETA / Box 11522 DSM022-2125348/0744-274259
2 / Obadiah N. Msaki / RAAWU / Box 8218 DSM
022-2152705/0744296176
3 / Rose Acen Upor / UDSM / Box 35040 DSM
2410749/0744-397373
4 / Magdalene Mkocha / TCCIA / Box 9713 DSM
0741-611286
5 / Hon. Iddi Simba (MP) / Trinity Consultants / Box 7125 DSM
022-2137106/0742-777885
6 / Hon. Amina S. Ali (MP) / House of Representatives / Box 1042 Z’Bar
0747-412630/0748-355795
7 / Lucas Katera / REPOA / Box 33223 DSM
2700083
8 / Rogers Sezinga / Tandiscoveries / Box 13759 DSM
2170569
9 / P. Uwoya / Ministry of Energy and Minerals / Box 2000 DSM
0744-291289
10 / James Mpinga / JET / Box 15674 DSM
2180005
11 / Gideon O. Mhagama / MUCOBA / Box 147 DSM
026-2772165
12 / Hon. Ali Juma Shamuhuna (MP) / House of Representatives / Box 2690 DSM
0747-416463
13 / Ernest E. Mnzava / National Development Corporation / Box 2669 DSm
022-2111461
14 / Marko Temu / Ministry of Finance / Box 9111 DSM
0744-684243
15 / Samwel Lyimo / TUICO / Box 5680 DSM
2866910/2866960
16 / Makwaya Mussa Pingu / TAMICO / Box 72136 DSM
0741-616732
17 / Joseph G. Kakunda / Ministry of Water and Livestock Development / Box 9153 DSM
2451479
18 / Flora Kessy / ESRF / Box 31226 DSM
0744-476536
19 / Mary M. Machuche / AMGM / Box 71579 DSM
0744-272300
20 / Gaudensia Mnguru / NIPASHE / Box 31042 DSM
0741-437545
21 / Kidaru Magwila / The Guardian / Box 31042 DSM
0744-855649
22 / S. Mrutu / Bank of Tanzania / Box 2939 DSM
2121437
23 / Paddy Hoon / Regent Tanzania / Box 10311 DSM
0741-329360
24 / Mchafu Chakoma / Tanzania Seamens Union / Box 75304 DSM
0741-278364
25 / Vedasto Rwechungura / World Bank / Box 2054 DSM
0741-223076
26 / Mohammed H. Khalfan / ZIPA / Box 2286 Z’Bar
0747-414187
27 / Bitrina Diyamentt / COSTECH / Box 4302 DSM
0741-247094
28 / Peter Maginga / CRDB Bank / Box 268 DSM
0741-623879
29 / Freddie N. K. Bhalijuye / TAWGLU / 0741-268438
30 / Afraim M. Hayuma / Ministry of Lands / 2113165
31 / Deus Mhagale / Mwananchi / 0741-242134
32 / Maulid Ahmed / Mwananchi / 0741-296549
33 / Pendo Mashulano / Habari Corporation / 0744-434361
34 / Rajab Kondo / TACOSODE / Box 63196 DSM
0744-303906/2760166
2760170
35 / Maggie Chambiri / DTV / Box 21122 DSM
0744-276191
36 / Khamis Suleiman / DTV / Box 21122 DSM
0744-276005
37 / Peter Shadrack / CTN / Box 21122 DSM
0741-761005
38 / Lorah Madete / ESRF / 2760260
39 / Rose Aiko / ESRF / 2760260
40 / Alex Mwinuka / ESRF / 2760260
APPENDIX B