September 2007


Tanzania plans to increase access to electricity from the current 10% of the population (current population is 39 million) to 25% within 6 years . According to Minister of Energy and Minerals, Nazir Karamagi, the goal of 25% electrification has been pushed forward from 2010 to “2012 or 2013” due to “some delays”.

 Currently, the country generates 744 megawatts (MW) (561 from hydropower, 183 from natural gas), with additional 200 MW expected by end of year 2008.  Annual electricity demand is expected to rise to more than 1,100 MW by 2010.

Recently, the government also announced plans to liberalize the task of distributing electricity in the country by lifting the monopoly enjoyed by TANESCO, the State power utility. https://tzcommoncents.wordpress.com/2007/09/19/govt-ends-tanescos-monopoly-mramba/

Read the news article at the following link.

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According to National Bureau of Statistics, this last August the monthly inflation stood at 7.8%, representing a 1.2% drop since July. At that time, the rate had shot up to a staggering 9.0%. The drop is certainly a welcome development and should improve the current business environment.

 According to Bank of Tanzania, by comparison, the inflation was at 5.5% in August of last year. Generally there has been an upswing in monthly inflation figures since January of 2006 due to rise in global oil prices, drought and the energy crisis that befelled the country at the time. However, many pundits have attributed this July’s rise in inflation as due to new budgetary measures, particularly the introduction of excise duty on fuel. The levy paid by road users was increased from 8 USD cents to 16 USD cents per litre of petrol and diesel. It has been reported that industrialist and transporters have since passed on this cost to consumers, fuelling the inflation. When Zakhia Meghji, Minister of Finance, announced the fuel levy in her last budget speech, she downplayed any inflationary effects it may cause, saying the economy was resilient and pleaded with unscrupulous industrialists not to artificially raise prices.

 Annually, this year’s inflation is also projected to fall below last year’s 6.2% figure to 5.2% (according to Ministry of Finance and JP Morgan emerging market research, June 8, 2007). Next year, the annual inflation is expected to fall further to 4.5%, which is close to the annual levels experienced in 2005 (4.4%) and 2004 (4.1%).

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United States Millennium Challenge Corporation (Washington, DC)
PRESS RELEASE
18 September 2007
Posted to the web 18 September 2007
Washington, D.C.
The Millennium Challenge Corporation’s Board of Directors approved a five-year, $698 million Millennium Challenge Compact with the United Republic of Tanzania that seeks to reduce poverty, stimulate economic growth, and increase household incomes through targeted infrastructure investments in transport, energy, and water.

“This agreement is a testament to Tanzanians’ commitment to building a better life for themselves and their children,” said MCC CEO Ambassador John Danilovich. “MCC congratulates the people of Tanzania for developing a comprehensive program designed to address Tanzania’s key constraints to economic growth—an inadequate transportation network, insufficient and unreliable supply of energy, and a shortage of clean and safe   water.   Chosen by Tanzanians, the investments to improve the transport, energy, and water sectors will provide a catalyst to reduce poverty and spur economic growth.” (more…)

New York

September 18th, 2007

Minister of Trade, Industry and Marketing, Hon. Basil Mramba, today made what he termed as “the first official public announcement” that the Tanzanian Government will now allow private energy companies to distibute power in the country.

Speaking at the 2nd annual Tanzania Investment Forum in New York, Minister Mramba said that the move will effectively end TANESCO’s long held monopoly in power distribution. “From now on, any qualified company will be able to apply for licence to generate and sell electricity to the market”. Minister Mramba added that what remains is the official passage of the law which is currenty being prepared. The added that the amendment is expected to be tabled in the Bunge sometime this year in November at the earliest or by April of 2008.

Since early 1990’s, private power companies in the country have been generating their own electricity using gas and diesel fired turbines but were required by law to sell only to TANESCO, the Government owned power utility company. In recent years, few exemptions where given to mining and gas companies to generate and distribute power for their own use to support local operations. Today’s announcement, however, will open the field to more players from inside and outside the country to add power to the National grid and supplement TANESCO’s role of distributing electricity to urban and rural consumers. In recent years, due to various reasons such as economic and population growth as well as structural problems, TANESCO had been unable to cope with the rising demand for electricity in the market. For this reason, the liberalization of power distribution had been lobbied for a long time by the businesses and consumers alike as one of the panaceas to the power crisis in the country.

In other major news today, the board of directors of Millenium Challenge Corporation have approved a $698 million Millennium Challenge Compact to Tanzania to reduce poverty, stimulate economic growth, and increase household incomes through targeted infrastructure investments in transport, energy, and water.

THE historical Hotel 77 in Arusha has been sold to the Kempinski Hotels, the Minister for Tourism and Natural Resources, Prof Jumanne Maghembe, told the ‘Daily News’ yesterday.

Prof Maghembe said the government has sold the hotel and all its assets through the Presidential Parastatal Sector Reform Commission (PSRC). He, however, did not say it was sold what price.

“The main aim to sell it is for the investor to build a high standard hotel for the city,” he said.

The minister said that Kempinski Hotels would upgrade the hotel to a five-star status and will have over 300 rooms. The village-style hotel was built specifically for the Group of Seventy Seven Nations meeting held in Arusha in 1979. (more…)

July 26, 2007, Dar es Salaam, Tanzania — The Tanzania Chamber of Commerce, Industry & Agriculture in partnership with the Tanzania Investment Center, Tanzania National Business Council and Tanzania Private Sector Foundation will lead a senior level business delegation to New York City and convene the 2nd Annual Tanzania Investment Forum, September 16 – 22, 2007.

The Mission will focus on assisting Tanzanian companies that want to enter the U.S. market for the first time as well as assist U.S. companies wishing to enter the Tanzanian market.

The Mission will help participating firms gain market information, make business and government contacts, solidify business strategies, and advance specific projects, all geared towards the goal of increasing trade and investment between Tanzania and the U.S. (more…)

CRDB Bank’s shareholders have unanimously endorsed the bank’s proposal to be listed in the Dar es Salaam Stock Exchange.

CRDB Bank Managing Director Dr charles Kimei assured delegates the bank, which is the first among local banks in assets and deposits, was ready for the challenge.

He said shareholders have been sensitized enough on the benefits of listing on the stock exchange after attending a sensitisation seminar capital and securities markets.

Dr Kimei told the meeting, attended by about 76 shareholders, that DSE enlistment would enable the bank and shareholders to buy and sell their shares through the open financial market.

CRDB Bank, which is ranked second in profits among local banks, may become the second bank to be listed on the stock exchange. NMB Bank recently announced it would be listed on DSE very soon. Currently, the bank has 39 branches across the country.
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