Monday, June 29, 2009

Bunge & Michael Jackson:Misplaced Relevance?

I am trying to imagine what is going through the minds of close relatives of late Michael Jackson right now. I have experienced death in my own family and I know how it feels. Regardless of how each one of us felt about Michael Jackson’s “craziness”, he was human first and foremost. He was a son, a brother, an uncle, a friend, etc to someone.

Undoubtedly Michael Jackson was famous. He was gifted. He was entertaining. He had also visited Tanzania. Nevertheless, is any of the above reasons, especially his visitation to Tanzania, compelling enough for the Speaker of the National Assembly to officially recognize Michael Jackson’s death? I am trying to think of any positive impact that Michael Jackson’s visitation to Tanzania had to the overall socioeconomic progress, but I can’t find any.

I come across ordinary Americans quite often that are clueless about Tanzania. Obviously, there are Americans who know more about Tanzania and who have given their sweat to the country through volunteer work, etc. I wonder if, three weeks ago, Michael Jackson recalled anything about Tanzania.

My point is that to the majority of Americans, Tanzania is irrelevant. They could not even locate where Tanzania is on the map. As such, for Bunge to make “big events” in America, especially those that are of relevance to the internal America is equivalent to sucking up. Huko ni kujigonga.

Let’s flip the coin a bit. Didn’t Hasheem Thabeet become the first Tanzanian ever to be drafted to play in the NBA the same week?

While the death of Michael Jackson has this “global impact” connotation to it, I strongly believe it was utterly ridiculous of the Bunge to highlight Michael Jackson’s death while ignoring Hasheem Thabeet’s draft to the NBA.

The reality is this: Hasheem’s participation in the NBA is more relevant to the lives of many Tanzanians, as it will have a lasting impact on the lives of many Tanzanians than Michael Jackson’s visitation to Tanzania or his death. Ordinarily, Mr. Speaker would have been expected to know that.

I discuss Tanzanian politics and politicians on this blog, but I have never fully understood how politicians in Tanzania think. They must be a very special breed. A very weird type.

Photo credit: Michuzi

Thursday, June 18, 2009

Tweet: National Assembly Goes Gay?

Boy oh boy.

Do you see what I am seeing?

It appears that our interpretation and therefore reaction to certain things, depends on where and when you live. This would have been crazy in my current world…for the National Assembly to go gay....

Photo credit: Michuzi

Wednesday, June 17, 2009

Takrima: Prepaid Obligation?

We are in mid 2009. That means the election bug is just a couple of months away from biting the Tanzanian public. The last time I eye witnessed an election in Tanzania was 1995. I voted for an opposition candidate who went on to lose, but I don’t feel bad for not voting for Benjamin William Mkapa then, because history has come to vindicate me.

Elections are not cheap. I think the spending that candidates do is just enough to stimulate the economy – an economic stimulus package of its own, if you will. The question I have (and this is just wondering aloud from my part) is where the CCM, Chadema and CUF folks, for instance, print their t-shirts, banners and other campaign materials. If they print that in China, shame on you! Please spend that locally, to spur the local economy.

We all know that t-shirts, the helicopters and other pizzazz are public. I mean, how could you sneak in a helicopter to a public rally without being seen? So I’m sure both parties can easily account for spending on such public stuff. The “evil” part of the election spending is the infamous takrima. For that reason, spending on this front will always be a mystery. I don’t think you could vouch this stuff on CCM or CUF’s books.

Takrima is “evil” because it is technically a bribe. Furthermore, the High Court in Tanzania, thought inclusion of the takrima provision in the Tanzania Election Act of 1985, hence legalizing the practice, is unconstitutional. Regardless of the illegality or the unconstitutionality of the practice, “thanking” voters is still prevalent in Tanzania.

The obviously, the main reason candidates like to supply voters with “gifts” is to influence their voting decisions. Nonetheless, given the fact that the majority of elected members of parliament hardly do anything for their constituents, I would regard takrima as a prepaid obligation.

I had a chance to talk with one Kenyan guy who shared this story with me. He had called her sister during the last Kenyan elections. Her sister was so excited on the phone that she got “free” money from this one candidate. But truly, is there free lunch in this world?

Given the level of income and the general social influence that comes with the MP’s position, any greedy monster would make an investment in that political position. The best part, at least from the candidate’s perspective, is that a bag of sugar today releases them of any future obligations to fulfill campaign promises. If you think I am crazy, why then the cycle never ends?

The worst part for the voters is that takrima makes a fool of them. It puts them in a position of selling their future for the now. And that is not always a good trade, because the future in most cases is more valuable than the present.

I have talked about the need for the Tanzanian society to have a paradigm shift. One of those areas that require a change in outlook is the receiving of little gifts from candidates.

So this is my radical proposition. Why don’t communities in Tanzania start identifying good candidates, raise campaign funds for them? Don’t you think that would put pressure on candidates to deliver, knowing that elected officials owe their communities something?

I know someone out there is thinking, “Metty, yaani watu waanze kumchangia mgombea? Si ukichaa huo?” It might seems like I am proposing an insane idea, but the last time I checked, President Obama got campaign funding from the little guys who believed in him. Trust me, from a psychological standpoint, President Obama feel obligated to deliver.

I am not saying the Tanzanian society should be like the American society, but if it takes contributing to candidates’ campaigns for the poor folks to stop trading their future for just a kilo of sugar or a piece of meaningless CCM or CUF t-shirt, why not?
Photo credit:

Wednesday, June 10, 2009

TZ: We Are Poor Because…

I must admit that I check Issa Michuzi’s photo and what has become a “debate” blog religiously. Trust me; I “love” the John Mashaka and Dr. Shayo’s economic and development “debates”. I call them “debates” because they are not really debates. That is because it appears Michuzi has deliberately decided (for his own editorial reasons) to give John Mashaka and Dr. Shayo an upper hand.

Such a lopsided representation ain’t truly a debate, but a lecture room with a few hands given an opportunity to ask questions and respond to John Mashaka and Dr. Shayo’s “lectures”.

An example of such lectures from John Mashaka is this one…

I previously said I “love” Mashaka and Dr. Shayo’s “debates” because they just reflect the fact that someone can write a bunch of words and never bring a new discovery to light. Maybe it is just me, but I don’t like reading an article that states the obviously. For instance, who doesn’t know that part if the challenge in Tanzania, or in Africa for that matter, is poor leadership? If you are in Tanzania, do you really need some “wunderkind” in America to tell you that?

It is for that reason, I think, I tend to look for profound ideas in unlikely places.

I the above referenced “lecture” from John Mashaka, what caught my attention wasn’t the main article itself, but a comment dropped by one Mchumi wa Texas. I will just quote part of his or her brief comment:

We are poor because we don't know why were poor. That was the answer kutoka kwa JK alipokuwa Scandinavia, and that is my answer as an economist

Not to spoil Mchumi wa Texas’ moment, I would just like say that I don’t know about Kikwete saying that in Scandinavia, but I know he made that crazy remark during his interview with Financial Times. You can go here…

I would also like to remind you that Mwalimu Nyerere, before his departure, went on record wondering why Tanzania is still poor. Likewise, the Tanzania’s ex-PM, Mr. Sumaye, also went on record as saying that he “discovered” the gravity of Tanzania’s poverty after attending Harvard. [I don't know about you, but comments like that made want to slap Sumaye so bad. That comment was beyond stupid].

Just to support what Mchumi said, we can never solve a problem that is not well defined. I believe poor leadership is a reflection of a bigger issue, because leaders don’t sprout from space. They are part and parcel of the society they lead. As a matter of fact, some of my fellow human beings have contended that people get the leaders they deserve. If that is true, then we shouldn’t wag our fingers at our Tanzanian leaders. We should take a hard look at our own selves.

So go on fellow Bongolanders, join John Mashaka and Dr. Shayo in the development “debates”, but I tell you what? Ufisadi, Wakoloni, Wawekezaji, etc, which are Bongolanders typical excuses, are probably not our biggest enemies. Our biggest enemy is the inability to diagnose our problems properly. And that will cost the country for ages.

If you don’t trust me, visit this blog in 20 years. I will be aged, but Tanzania will still be the same.

Thursday, June 04, 2009

Interest Rates: Let’s Stop the Stupidity…

Some American folks are regarding their federal government’s part ownership of General Motors as an outright act of embarking on socialist policies. For someone like me who experienced socialism, I could understand the phobia. Tanzania abandoned socialist policies for a reason – and that governments are bad at running businesses. I worked for a state government, so I know how crippling bureaucracy could be.

As a matter of fact, the mayor of New Orleans, Ray Nagin, once admitted on a TV interview that governments are not built for speed. You were right brother.

Lack of efficiency and effectiveness, I believe, is a universal phenomenon that plaques most governments across the universe. Despite all that, it is amazing how some folks in Tanzania are still looking for government’s intervention in every aspect of life. One that I thought was crazy, is the call for the government to curb high interest rates charged by banks.

See for yourself right here.

Shoot me if you like, but I think the majority of Tanzanians are not aware of how things work. I think it is ridiculous to cry for lending ceilings, interest caps, etc, without knowing what drives the interest rate in the first place. So let me help. I might be wrong, so anyone with additional information chip in.

My understanding is that the risk profile of a borrower would drive the interest rate charged. Since banks are not there to dance mdundiko, they have to get a return based on the risk they are assuming. The problem is this – for ages, there was no mechanism in Tanzania to track each individual’s risk profile. Hopefully, this company would change that.

Given lack of a solid historical credit profile (including scoring) in Tanzania, the majority of Tanzanians poses a high risk to lenders. Your good intensions regarding the return of borrowed money must be backed by a clean history of doing so. It is that simple. So if Bongolanders want banks to go under (which will eventually affect their ability to lend even more), then keep on asking for lower interest rates that don’t match risk profiles of borrowers.

I must be dreaming or something, but I think it is stupid to suggest that the Tanzanian government force banks to set aside a portion of their capital for lending. Hello? How do you think banks typically make money? Let’s see what the National Microfinance Bank’s financial statements say. In 2008, the bank’s assets in loans, advances and overdrafts stood at TShs 570.6 million compared to TShs. 436.7 million in government securities. Check that out for yourself here .

The truth of the matter is that other than treasuries and stocks listed at the infant Dar-es-Salaam Stock Exchange; the list of possible investment options in Tanzania is very short. That in itself is a motivating factor, without government’s pressure, for banks to make money through lending. One must be very crazy to even propose a lending ceiling to National Microfinance Bank, given that they are doing more lending already.

Another factor that drives high interests in Tanzania is the volatility in the value of the shilling. If a shilling today does not have the same value tomorrow, prudent banks must set interest rates that preserves the value of their investment, including factoring the anticipated inflation levels in the interest rate. I think I don’t have to say more on that, because we can all see that most banks offer higher interest rates on saving accounts pegged in shillings compared to US dollars. The same is true when it comes to borrowing.

See an example of the Exim’s Bank right here .

I love my Tanzania. Nonetheless, I just hate some stupid things my fellow Tanzanians say.
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