Monday, August 07, 2006

Ours is a Snoozing Government, Seriously.

A certain gentleman recently forwarded a few of us a link to the goverment's economic report for the fiscal year 2005. I can attest that there are positive things within the report, but looking at the report in detail, I came to conclude that there are a whole lot left to be desired. Check out the entire report here if you will.

Tanzania has this famous slogan regarding its focus on agriculture, which is kilimo ni uti wa mgongo wa taifa. For all y'all non-Swahili speakers, this simply means that agriculture is the backbone of the nation. In essense, the country views agriculture as its main economic activity. That being established, you would expect that the government would pay more attention to agriculture, given the fact that current labor statistics indicate that the agricultural sector employs more than 75% of the country's labor force. But that ain't happening, the government has hit the snooze button on agriculture. The fellas in Ikulu are busy with selling land to foreign gold miners.

Am I just making this up? Absolutely not! The governments own report would prove that. If you go the government's economic report, particularly on page 155 of 267, you will see how cashew production has dropped over the years. For instance, cashew production in 2004 was 100,000, compared to 90,000 in 2005. Phew!

If you think that is bad, compare that to what other external organizations are saying about Tanzania's situation:

"While in the 1970s Mozambique and Tanzania were the main global producers, they have since been edged out of the top positions by India, Vietnam and Brazil, whose respective processing capacities are 750,000 tonnes, 300,000 tonnes and 300,000 tonnes. Besides Mozambique and Tanzania, other notable African producers are Ghana, Guinea Bissau, Kenya, Madagascar, Benin, Togo and Nigeria. Industry officials say whereas world cashew production has increased, Africa's share has decreased over the years. The continent's current output of 300,000 tonnes is less than half its potential of 700,000 tonnes. "
Source: http://www.technoserve.org/news/EastAfrican-cashewarticle.htm

What I am deducing from the Technoserve's report is that were not serious. It is apparent that Tanzania was on top as far as cashew production in the 1970's, but over the years has hit the snooze button. Thank you very much Baba wa Taifa ( I don't care what songs you want to sing about the late Nyerere, but my conviction is that this dude messed up the country economically, period.. And the saddest part is that we are still suffering from the residues of his thinking).

Apparently, there are no efforts from the government to help cashew farmers in Bongoland to tap into this industry, which has a potential of producing millions and millions of dollars on an annual basis. Currently, the only thing that cashew farmers in Tanzania are facing is frustrations. Think I am kidding? Read for yourself the following story: http://www.ippmedia.com/ipp/guardian/2006/08/01/71514.html.

My conviction is that the government's ignorance and lack of seriousness has been very costly. Furthermore, they have never been any serious strategic steps taken to ensure that we fully utilize every opportunity we have. Like refining of gold which is done overseas, raw cashew is currently being shipped to India for processing. The effect of that, is the loss of about 30,000 jobs to our Indian counterparts. See what Technoserve says:

"Analysts say a viable processing industry in the country could create 30,000 direct jobs and generate $40 million in incremental processing revenues annually."

In a nutshell, we are not only losing potential 30,000 jobs for our vijana, were throwing away $40 million in incremental processing revenues annually by exporting raw cashew to be processed in India! Are idiots or what? You know that means in madafu currency? That is a whopping TSh 40 billion that we throw away to India! Whether it is in USD or madafu terms, $40 million is surely enough to transform somebody's life in Bongoland, not counting tax revenues to the government's coffers.

So are you convinced about the kilimo ni uti wa mgongo wa taifa slogan or it is just a bunch of blah blah that we have heard before? Whatever the case, we are a sorry bunch, Tanzanians that is.

Kama ningekuwa na uwezo, ningetembeza bakora tangu Ikulu hadi Bungeni..siriazli.

6 comments:

Sibala's Corner said...

Hallo Metty thanks again for your interesting post.
You know what, Kilimo ni uti wa mgongo – is just a slogan, it’s never been taken seriously. The govt talks blah blah but there are no real strategies aimed at impvoving agriculture. If the govt were serious there should be at least one bank that caters for peasants – for your information there is none. Even CRDB (Co-operative and Rural Development Bank) doesn’t give loans or credits to peasants! NMB doesn’t either. The excuse they give is that peasants do not have collaterals – so all the money is loaned to businessmen in towns. So how are we going to revolutionize agriculture if no support whatsoever is given to the peasants? The govt could act as a guarantor for the peasants or devise mechanisms to facilitate easy access to credits – don’t tell me it is not possible. We have agriculture extension workers in thousands who could provide their expertise on modern farming methods, use of fertilizers, small irrigation schemes, use of high yield seeds etc. But how do you do that if peasants lack money and other resources? The funny thing is the govt lacks funds to revolutionize agriculture but has enough dough to build a multi-billion Bunge house, spend billions on cars unnecessarily, pay for billions on allowances and useless workshops etc etc.

It seems to me that the rural community in Tanzania has been neglected and very few, if any at all, cares about their fate. You know NGOs are currently en vogue in Bongoland but very few of them work together with peasants. Most of them are stationed in towns and provide loans to urban dwellers for micro-businesses. Maybe it would have been more logical to use these NGOs as engines to bring about changes in the rural areas. But again the govt is lacking a well drawn-plan on how to revolutionize agriculture. Or may be our politicians do not want to pay attention to experts’ opinions. We have SUA and other agricultural centers full of learned people, a good number of them. Don’t tell me they don’t advise the govt on what to do.
As you mentioned if we can not add value to our farm produces we lose both jobs and extra revenues. It is disgusting to see most of the malls in Dar full of canned fruit juices or sauces imported from South Africa! We can do it ourselves, can’t we? The govt should see to it that local agricultural produce processing industry is revamped, but please this time they should not repeat the same mistake as they did with our ‘Sangaras’!

You know Metty, what worries me even more is the current state of our industrial production. These days we are importing almost everything! Globalization has opened up state borders to the global market and killed most of our local industries simply because most of the products could not compete on the international scene. Maybe we should strive to add value, at least to our few products that can still compete in the international market (cashew, minerals, sangara etc). If that doesn’t happen Tanzania is and will not be exception to the harsh realities of the world in which we live today, that globalization brings with it winners and losers: for the winners it is positive, for the losers it is negative. You know it’s survival of the fittest and the winner takes it all !

Sibala

ned said...

Waungwana,
It is wrong to assume that the Indian, Vietnamise or Brazilian governement is doing "the stuff" as for doing the actual production. Those countries produce more not because their government produce, rather because there are individuals in those countries that are ready to grab the bull by the horn and make it happen!
YOu look around the world...; anywhere meaningful development has been achieved..... it is about the people rather than the government! We have places where governments are literally crap..., and yet they are enjoying more productivity that we do! Development is brought about by the people... not the government! Mainly it is about the private sector rather than the government that drive the economy. The governmen't job is to govern (not to produce!)... and more important to govern in such a way that those who would like to producing whatever, will be guaranteed a fair and equitable return!
Government inapojiingiza kwenye production, ndio utaona mambo kama Tanzania ya miaka ya 70 & 80's na Zimbabwe ya leo!
Similarly, banks are there to make profits; banks are not charitable organizations - especially when they are publicily owned. To make sure they make as much profit as they can make (for their stockholders) they will restrict investments in areas where they can expect maximum return! You say "kilimo ni uti wa mgongo" well and good... but my investments goes where I can get the most bang out of my back! Hay amengine ni siasa tu!
Tatizo ni kuwa waTZ bado tuna akili ya miaka ya 60 thru 80's. Kila kitu serikali ifanye. Sina pesa... tatizo serikali! Ndio maana huko bongo kuna wanaokula upepo... wakati wengine bado wanasubiri serikali iwafayie kitu.
The bottom line...where you see a big problem... another person sees the greatest opportunitty of their lives.. na wenye moyo go ahead and seize those opportunities.
You want to find the witch? We (the wabongo) are the witches!

Laiti tungeamka kidogo na kuanza kutafuta "namna"! Laiti tungeamka na ku "smell the coffee" - that is s'one is already up and is in my own kitchen brewing coffee!
Folks, I TRULLY believe barcking at the government ni kujisumbua! We are barking at a wrong tree!
Nasubiri madongo:)
Ned

Sibala's Corner said...

Hallo Ned, yes I agree with you that the idea should not be to let the govt do the actual production, we know they tried and it didn’t work.
You know the development of agro-processing industries faces key problems such as the perishable nature of some commodities, large capital requirements for agro-processing, and high quality standards to meet retail and food safety regulations in the international market. Large investments are thus required to create appropriate infrastructure, develop an enabling environment for private sector participation, and build institutional capacity capable of meeting these new quality and food safety standards. Alleviating these constraints will not be easy unless the public and private sectors work together towards these goals.
Therefore, in my opinion, an integrated approach to agricultural investment emphasizing greater public-private partnership is key to agricultural development.
This could be done, for example, by establishment of Agro Export Processing Zones for small and medium scale agro and food processing industries. The govt can make sure that special tax, administrative, and infrastructure conditions are applied in these zones in order to encourage private (foreign?) companies to set up export-oriented agro-processing facilities. These industries could cater for both export and local markets.
But this requires participation of the govt to develop the requisite infrastructure like feeder roads, power distribution system, drainage system, water distribution system, etc. The govt, in addition, could provide incentives such as tax-free imports of inputs, reduced taxes of finished exports and the like.

The private sector, on the other hand, should be mainly responsible for investments in the agro-industry and should do the actual production. But occasionally the public sector - the govt- should jump in to provide direct financing (credit schemes ) for some private-sector activities, for example, to help farmers adopt new technologies, or to help impoverished rural families to buy critical inputs for the farm. The main problem is that our peasants are lacking capital inputs to production. So the bottom line here is without a well-drawn strategy for scaling up investments in the sector, realization of the envisioned agricultural transformation will remain a dream.

Jaduong Metty said...

Ned,

I couldn't agree more with Sibala. The private sector is responsible for making it happen, but the government has alot to do with it. As Sibala pointed out, if the government's policies and strategies are not in line with private sector's goals, you know what will happen - Nothing.

Case in point, even in the US, SBA - which is a governmental branch, offers loans and technical assistance to small business owners as much as the US is all private. State of Ohio, for instance, has set up an "economic" embassy in South Africa, China etc, That is because the State is looking to help private enterprise in Ohio to grow. Those are the things we are talking about, not necessarily the govt running farms or factories.

Businesses are struggling in Tanzania, for instance, because the government pulled out of SADC(or one of those trading blocks)despite the private sector's outcry. That proves that the government policies plays a major role in the private sector's boom or doom.

Check out how developed countries offer subsidies to their farmers. American government does not produce beef, but surely they will put up a fight with Japan for Japan to open up their market for the American beef, produced by th private sector. Those are the things were talking about, government paving the way for the private sector to succeed.

If the Tanzanian government is serious about job creation, then why throw 30,000 jobs to India? Why buy expensive SUV's to ministers instead of making sure first that we have steady power supply in the country to entice industrial production?

ned said...

Metty & Sibala,
I think we are getting somewhere with this discussion :)

You will notice in my comment above the fact that WE CANNOT let the government loose as if they have nothing to do with this.
You see the way I see it (and your comments agrees - so we are together in this); without a "conducive environment... nothing will happen.
My whole point was... I believe we do have the environment that CAN allow for a reasonable participation from us - indigenous wabongo.
Not only, we are starting to see some evidences of this... but one can simply look at the fact that wakuja comes and making it... right from our noses. 2006 report on world economic forum ranked Tanzania 6th out of 117 countries in what we are talking - conducive macroeconomic environment (http://allafrica.com/stories/200608071447.html)

Now, I will not sit here and say our government has done everything that can be done, for there is still a lot that can be done. BUT we must face the hard reality that... we (wabongo - and I would start with us washomile) we are not there yet! With our current state of perceptions on how things work and our attitude (which I would argue - totally squeezes the air out of any level of meaningful entrepreneurship)... I doubt if things can change much.
Ok... I do agree waswahili tuna tatizo sugu la kuwababaikia wazungu, and that that conducive environment is mainly for wazungus... But, what about some waswahili who have made it?
You say... they do have money and we don't! That my friend is a can of worms that we will have to open it one of these days...
For now, I am of the opinion that while money has a lot to do with this whole equation... IT IS NOT everything!
Our attitude and thus our perceptions have a lot to do with our situation - that is whether we like it or not.

Now, we must ask ourselves as to who has the responsibility to "change" our perceptions and attitude towards our lives. - B'cause that is a VERY valid (and probably the most important) question one can ask!
Ned

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