Saturday, May 8, 2010


By Jehovaness Zacharia- LLB (Hon) UDSM -TCAS Program Officer

Past years till 1980s, Tanzanians communicated through letters and messengers, almost every office had a messenger who was there to be sent from one office to another, staff collogues could communicate through short written messages known as memos. From memo we developed and start using desktop phones. Thanks to globalization which brought us development including cellular phones which has became the cheapest mean of communication that is easier and faster.

This has well developed business sectors whereby one can easily make communications wherever he is and move on the business. It has even go further to roaming service whereupon cross boarders businessmen who can move from Tanzania to other countries with the same chip card and recharge with the local vouchers.

Increase on the number of service providers in this sector has necessitated intensive competition amongst players resulting to decrease on tariff charges. But…there is a say that, there is no free lunch, that is to say when one gives you something freely, it is not free indeed, there must be the other way s/he is going to get back whatever he has spent on you. Practice shows that what s/he gets back is in most cases greater than what he had spent on you.

In capitalism and trade liberalization, “predatory pricing” is not a new phenomenon. And it has always been the duty of the government-Competition Commission, Service providers and Civil Societies to ensure that there are healthy checks and balances and fair competition not to amount to malpractices. The enactment of Fair Competition Act 2003 (FCA) which put in place Fair Competition Commission (FCC) put in place the checks and balances for Tanzania.

Currently, all telecommunication companies struggle to conquer the market share, we have witness amazing lower prices never experience before. It started from 30Tshs to 10Tshs, 6Tsh per sec to 3Tsh to 1Tsh per sec few days ago we heard 0.50Tsh per second, and now enjoying below 25cents per second.

We may all be happy with the astounding offers and forget to think of our future as consumers of these important services which might be at stake. One may view this in form of predatory pricing or cartel which is a form of anti-competitive arrangement that occurs when a group of firms or companies agree to fix prices, shape geographic markets between themselves or jointly determine other market experience.

But due to lack of experience in combating predatory and cartel activities in most of developing countries Tanzania being among them, most of predatory and cartel activities go un-noticed. Under these practices, one or few service providers may sacrifice to go below company’s overhead costs for a certain period whereby, during this time, the dominant firm will keep surviving while others will not and therefore withdraw themselves out of the market as they cannot sustain the predatory pricing war.

Similar situation was experienced by Namibians who in couple of years back were celebrating the lowest cement price in history. The cement market dominancy were between Holcim, a South African company and Cheetah a Brazilian which imported cement from Brazil with the intention of building cement industry in near future.

When Cheetah got into market the price of 50kg cement bag was US8$, soon it went down to US4.5$per 50kg bag, in 2006, it went down to US3.5$per 50kg bag. At the end of the same year Cheetah could not sustain its activities in Namibia and ended its operation whereas Holcim become the sole cement provider whereby they later made an extraordinary change of price from USD 3.5 to US9.5$ per 50kg bag. Therefore Tanzania Consumers and all other key stakeholders including TCRA and FCC need to be on alert as this shouldn’t be the case on telecommunication industry, since not all what glitters is gold.

With the ongoing so called “promotions” by some of the telecommunication companies in Tanzania, a thorough immediate check on is required to ensure that they do not amount to go below recovering their overhead cost or ending up with anti-competitive practices. TCAS therefore calls upon professionals, academicians and relevant government organs to check on this and ensure service provider survival and consumer protection guaranteed.

Tanzania Consumer Advocacy Society (TCAS) wouldn’t wish to see incumbent operators with dominant market position are pushing other mobile phone companies out of the market and later the hunter (consumer) turns to be the hunted. The more the players in the market the better as it gives consumers a wide range of choices.

World Economic Forum for Africa : any real, long-term gains for Africa, Tanzania?

Friday, 07 May 2010 08:46
TODAY, May 7, 2010, one of the more important events in Tanzania's post-Independence history comes to a close in the nation's de facto capital and commercial metropolis Dar es Salaam. For three days beginning May 5, Tanzania was the cynosure of world attention as the capital bustled with activity generated by the 20th World Economic Forum for Africa (WEF-Africa), the first to be staged in the region.

Most of the past 19 events were staged in the Republic of South Africa. This latest event brought together about 1,000 participants from 85 different countries of the world to the scenic Mlimani City Business Complex on the outskirts of sprawling Dar es Salaam where they deliberated upon, and rethought, Africa's social and economic growth strategy.

The Forum was graced by a myriad dignitaries who included a goodly dozen Heads of State and/or Government, as well as scores of public officials and world business leaders of considerable renown.

The event was organised by WEF, a task in which it was ably partnered by – among others – ABB, CITI, ArcelorMittal, CISCO, Dow's, KPMG, Ernst & Young, Microsoft, HP and UNILEVER.

It is still very much early days yet to know with much certitude what impact the Forum will have upon Africa and its nearly-one-billion people – or upon Tanzania and its 44 million population...

But, activists are already saying that the country will not particularly benefit from this Forum – or, indeed any other for a in the foreseeable future, citing a number of reasons for that gloomy view.

For starters, they glumly note that, more than 40 years after the 'Mother WEF' was launched in Davos, Switzerland – and 20 years after the African Edition of the event was introduced – Tanzania is yet to make its mark upon the WEF Map!

Not a single company from Tanzania is among the 300 or so leading companies from over 50 countries which have been formally admitted into the WEF fold as 'family' of the first water!

The selection criteria for WEF membership are yet to be attained by any company in Tanzania. For instance, to be eligible for consideration, a company must register – and be seen to register – an “annual growth rate exceeding industry-and-regional average by 15 per cent; minimum turnover of between US$100 million and US$5 billion (depending on the industry); demonstrated growth potential, capacity and intent to build a global business; as well as exemplary executive leadership.”

WEF membership 'earns' a company the right to enjoy the following opportunities and benefits... “New business opportunities across industries and regions from weak and dependent economies such as Tanzania; networking with the world’s leading business and policy experts; peer-to-peer collaboration and experience exchange, as well as industry-specific and cross-industry knowledge sharing.”

Commenting on the matter, the chairman of the Tanzania Consumer Advocacy Society (TCAS), Daimon Mwakyembe, wondered “how many Tanzanian firms can be classified into the above criteria – especially with regard to turnover?

“How well-prepared are Tanzanian companies to use the world market potentials that are available...? Or, how vulnerable is Tanzania to being used by other global industries with maximum quest to expand? How prepared are Tanzanians, and Tanzanian firms, in this? Are there any deliberate efforts to empower them?”

Mwakyembe said “there must be deliberate efforts in ten-twenty years to come to have self-made Tanzanian billionaires in US dollars, so as to enable them enter into joint ventures in Tanzania and all over the world... This is what WEF is all about!”

Noting that “deliberate moves must be made to have a stable middle class with a lifestyle, education levels and social etiquette with strong ethical consumerism in mind,” Mwakyembe said “this culture – if it can adopted – could improve the quality of our people, build our brand and have our billionaires in USD who can drive the world economy as per 'World Economic Forum' visionary principals... But, as of now, Tanzania is here only to provide new business opportunities for the existing WEF members!”

But, this is not for lack of natural endowments, the Chairman stated...

“Tanzania has quite a unique number of strong assets to be taken as comparative advantage vis-a-vis other countries in Africa and the world,” Mwakyembe says.

“Tanzania is said to have peace and stability; abundant natural resources; stable macroeconomic performance; a good fiscal regime – and, lately, improved infrastructure facilities connecting all parts of Tanzania...

“The three major ports of Dar es Salaam, Tanga and Mtwara function as hubs for traffic emanating from, and destined to, the landlocked neighbouring countries of Uganda, Burundi, Rwanda, Zambia, Malawi and the Democratic Republic of Congo (DRC),” he said.

Moreover, “Tanzania is not a unique investment destination without its own resources... How best can these resources be tapped and used for the benefit of Tanzanians – and investors in general?

“This is purely a policy issue. I do advise our Government to make a provision for investors to partner with Tanzanians – both individuals and companies – in joint ventures. The Government and private sector companies need to mobilize their own internal resources to stimulate short- and long-term development of our resources,” he stressed.

For his part, the executive director of the Consumer Society (TCAS), Bernard Kihiyo, said “Tanzania beyond WEF should be changing its mindset regarding the responsibility and ownership of our own development.

“The situation we have adopted for now will not get us anywhere. Lack of self-confidence is apparently one of the greatest problems facing Tanzanians today. A survey conducted upon one thousand students from five Tanzanian Universities sought to establish their most difficult personal problem.

“Eighty five per cent listed 'lack of confidence' as the greatest stumbling block for them. It can safely be assumed that the case is the same for an equally large proportion of the general population,” Kihiyo stated.

“Everywhere you go, you encounter people – be they politicians, workers, farmers, men and women – who are inwardly afraid; who shrink from life; who suffer from a deep sense of inadequacy and insecurity; who doubt their own powers and capacity. Deep within themselves, they mistrust their ability to meet responsibilities – or to grasp opportunities!”

An economist by profession, Kihiyo said “Tanzanians are always beset by the vague and sinister fear that something is not going to be quite right. They don’t believe they have it in them to be what they what to be – and, so, they try to make themselves content with something less than that of which they are capable... And in most cases, such frustration of powerlessness is unnecessary.”

According to Kihiyo, “Tanzania’s entire education system, as well as Government institutions, civil societies and politicians, should work toward building confidence in Tanzanians. The Government should stop preaching the 'dependence approach' so as to remove the growing dependency attitude, overcome the inadequacy attitude, avoid superficial solutions, and work on speed and quantitative expansion while ignoring quality!

“To that end, the government will have to work with strategic partners such as WEF – but only for stronger reasons i.e. technology transfer, cross-industry knowledge sharing and the like.

“We have to seriously work on promoting intellectual engagement and innovation, to catalyze links between industry and universities which intend to help expand industry through creative innovation, to support all self-groomed talents and innovation...

“This is so as to provide a soul of the nation’s advancement and the everlasting driving power of national prosperity. We don’t have this for now; it might sound childish... But it is very important for Tanzania in order to be competitive,” he concluded