TCCIA News and Events Blog

Doubts on which countries among the five East African Community’s (EAC) member states are either going to loose or benefit form the single market arrangement still looms high in Tanzania.

Who would benefit most from the deal, which among its core features includes a free movement of labour, capital, goods and services is still the major question among majority of Tanzanians, who had been pessimistic of the EAC Common Market even before the negotiations for the protocol started and the time frame for discussions had been set.

As the EAC tried to play down such worries by maintaining that to reach to the common market stage was a process, and that it would not start instantly, many Tanzanians of all walks of life have been pondering on its impact.

And although not looking down upon Tanzanians, some analysts felt that the common market may have come at a time when majority of the population were least prepared.

Ms Jacquiline Mkindi, the executive director of the Tanzania Horticultural Association (Taha) insisted that Tanzanians must grasp the necessary business skills to enable them compete effectively with their neighbours.

She is of the opinion that compared with their counterparts in, say Kenya or Rwanda, the private sector community in Tanzania have not been aggressive enough.

Due to this, she said, there was a likelihood of Tanzania or rather its business community being outsmarted by Kenya, Rwanda and Uganda in trade and business deals.

In fact, the Taha boss’ fears have been attributed to a number of factors, chief among them being little exposure the country’s entrepreneurs have to the outside world, especially in the past. And this is not by coincidence.

For many years before the economic liberalisation that saw the country embracing market economy, many Tanzanians had been much used to government support in their day-to-day undertakings.

“It is now high time for Tanzanians to change their mindsets from the thinking that the government would do everything for them” Ms Mkindi said when addressing a gathering of youth leaders in Arusha recently.

She noted that at that time, locally produced goods in the country could not compete with those of other countries for failure to comply with the set international standards.

However, she said that not all woes facing the country’s competitiveness were to blame not only on the business people but the government as well.

“These include lack of credit facilities. For many years the business community in the country has pressed for establishment of land and agricultural banks to extend credit to the sector,” Ms Mkindi said.

Arusha regional commissioner Isidore Shirima said instead of complaining of being outs market by Kenyans and other foreigners, Tanzanians should work hard to exploit the vast natural resources the country is endowed with.

He said it was unfortunate some Tanzanians, especially in the northern regions, continue to put blame for being sidelined in business or lucrative jobs on Kenyans.

A leading advocate Ms Joaquine de Mello, who recently served as the President of the Tanganyika Law Society (TLS) shared the same view.

“It is too late for Tanzanians to start arguing about the pros and cons of EA integration as the deal has been ratified by all countries” she told reporters here recently.

She urged Tanzanians to allay fears and understand that they were operating in an increasingly competitive and globalised world.

Dr Flora Musonda, the EAC director of Trade implored on Tanzanian professionals and entrepreneurs to explore jobs and markets opportunities available in the other partner states.

She said under the EAC Common Market, there would be among other things, free movement of labour, goods, services, capital and right of establishment within the region.

“You should also venture out in other countries to seek business opportunities or jobs. You should also take advantage of self-employment,” she argued.

However, Dr Musonda cautioned Tanzanians on the need to acquire appropriate skills, expertise and education if they want to explore such opportunities

Claud Gwandu, a veteran journalist based in Arusha had also cautioned his colleague that media practitioners would face stiff competitions when the single market’s free movement of labour took effect in the region.

Source-the Citizen

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Confronted with rising wages and a shortage of labour, a supplier of car body frames to Honda Motor last month earmarked the equivalent of a half year’s profit to triple the number of robots at its three Chinese plants.

The $22 million investment by Japan-based H-One is part of a push to automate factories across China that is expected to gather pace in the wake of the recent burst of strikes and expected appreciation of the yuan.

“The automation equipment industry is growing very, very fast. Sensors, frequency converters, conveyor belts, pneumatic systems, power tools — you name it,” said Raymond Tsang, head of consultancy Bain & Co’s Greater China industrial practice.

“We’re seeing anywhere between 20 to 30 per cent growth in those sectors year over year.”

The series of high-profile strikes in recent months has affected mostly Japanese-owned auto and parts factories including Honda and Toyota Motor Co in southern China. It has shone a spotlight on growing unrest among China’s massive migrant worker population wanting a greater share of the country’s growing wealth.

Although labour remains a small portion of overall Chinese manufacturing costs, some see the labour unrest as further spurring a move to mechanisation.

With China now accounting for 15.6 per cent of the world’s manufactured goods — having last year surpassed Japan to become the second largest after the United States — the automation trend holds the promise of big profits for equipment suppliers such as Japan’s Fanuc Ltd, Germany’s Siemens and US-based Rockwell Automation.

Investors have taken notice. Shares of Fanuc, the world’s top maker of equipment that numerically controls machine tools, have jumped 16 per cent over the past month as the strikes began getting wide media coverage. Sensor maker Omron Corp has shot up 13 per cent.

But analysts argue the growth potential of this trend is far from factored into share prices. The prospect for rapid automation is likely as wages rise and manufacturers look to move up the value chain and produce higher quality goods.

According to Nomura Securities, the ratio of machine tools in China that use numerical controls, a good measure of the level of automation, climbed to 27 per cent in the quarter to May, up from 22 per cent in 2009 and 19 per cent in 2008.

This brings China to the level of Japan in the 1980s when it was in still in a phase of strong economic growth. Japan’s numerical control ratio has since risen to a world-leading 82 per cent, offering a glimpse of where China may be headed as its economy develops.

Yaskawa Electric says China demand helped it log record orders overseas for its industrial robots in May, and it reckons the prospect for further growth is strong with the ratio of China plants using robots at just one-fourth the level of Japan.

“The pace of automation in Chinese factories is faster than Japan in 1980s,” said Wenjie Ge, an analyst at Nomura Securities, which forecasts wages to double in China in five years.

“Rising labour costs would not only lead to an automation of Chinese factories but also increase personal incomes, which is spurring the spread of cars and electronics, and this is again favourable for machinery demand.”

The surge in wages and impending revaluation of the yuan will undoubtedly prompt some companies to move factories to countries with lower labour costs such as Vietnam.

One example is the retail industry. Nitori, which owns a chain of interior goods stores in Japan and imports about 60 per cent of its products from Chinese factories, said last week it would consider shifting some production outside China.

Bain’s Tsang says not all production will go the way of automation given that wages, while rising, are still in most cases a fraction of what they are in the West. It also makes little sense to automate when a manufacturer’s business model is based on being flexible to deliver volumes based on demand.

“Further automating their factories is something that most of them are thinking about doing. But they may not do it in same way as we see in Germany or in the US where production lines are 100 per cent automated with robotics,” Tsang said.

But the overall momentum behind automation is strong and there is little chance that manufactures will ditch China as a production base. Among other things, producing in China keeps a maker close to the massive and fast-growing market there.

Shin-Etsu Chemical, which had been reluctant to place a factory in China due to the difficulty of procuring a stable supply of raw materials, said on Monday it would build a silicon plant in Jiangsu Province in response to rising demand.

The Japanese chemical firm plans to invest about $95 million, its first major investment in China, to boost its annual silicon output by about 30 per cent.

Electronics parts maker TDK Corp is also planning to add new machinery at its Chinese factories.

THK Co Ltd, which makes linear motion guides for machine tools, received orders of 274 million yuan ($40.35 million) in the quarter to March in China, a record high for a second straight quarter.

Fanuc, which is also a top maker of industrial robots, plans to lift its monthly output of robots to a record high by this fall to meet surging demand in China and India.

“Japanese automation-related makers such as Fanuc have been in a better position than European rivals to benefit from the trend as their products are generally cheaper,” said Mitsushige Akino of Ichiyoshi Investment Management.

“But the recent weak euro is supporting European makers such as Siemens to gain momentum. Japanese and European makers are even in their product quality, and thus the real game is going to start now.”
Reuters.

Source – The Citizen

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Gold ticked higher on today, trading less than $10 shy of last week’s record high, underpinned by worries about the global economy after the G20 summit and US comments that Iran has fissile material for two atomic bombs.

Gold saw support from fears about the durability and pace
of the global economic recovery, unallayed after the weekend’s
G20 summit in Canada, and comments from the head of the CIA
that Iran may have enough fissile material to make two atomic
weapons, and could build the first in two years.

“The underlying safe haven concerns that have supported
prices — the economic environment, Europe’s fiscal outlook and
the longer term prospects for inflation, remain,” said David
Moore, commodities strategist at Commonwealth Bank of
Australia.

“The G20 hasn’t had a significant impact on markets, and
while concerns about Iran’s nuclear capacity are nothing new,
there seems to be additional clarity.”

Spot gold rose $1.80 to $1,255.20 an ounce by 0628 GMT
after a steady performance last week during which bullion
struck a record high just below above $1,265.

Gold could rise further to surpass the June 21 record at
$1,264.90 per ounce to touch $1,270, as bullish momentum is
strong, according to Reuters technical analyst Wang Tao.

He noted the bulls were taking control with prices in an
ascending channel from a $1,224.30 low struck last Wednesday
and sharp rises and mild falls.

US gold futures for August delivery rose 10 cents to at
$1,256.30 an ounce.

The world’s largest gold-backed exchange-traded fund, SPDR
Gold Trust said its holdings remained unchanged at an all-time
high at 1,316.177 tonnes.

US lawmakers hammered out a historic overhaul of
financial regulations, handing President Barack Obama a major
domestic policy victory.

“The US regulations are pretty worrying. That’s something
that we will need to look at more closely,” a commodities
trading source in Singapore said.

“So far, people are taking a wait-and-see attitude and it’s
hard to assess the impact on prices.”

Dozens of House Democrats had threatened to vote against a
ban on swaps trading on grounds the trade would move overseas.
Instead a compromise solution allows banks to stay involved
in foreign-exchange and interest-rate swaps dealing, which form
the bulk of the $615 trillion over-the-counter derivatives
market.

They also could participate in gold and silver swaps, but
they would need to spin off dealing operations that handle
agricultural, energy and metal swaps.

Platinum rose 0.9 per cent to $1,581.00 as worries about
output in the world’s biggest producer, South Africa , continued
to underpin prices.

Analysts had worried the soccer World Cup could overtax
South Africa’s electricity network, cutting power to mines, and
at the same time, workers at state power generator Eskom are in
the midst of pay talks, adding to the threat of supply disruptions.
Reuters

Source- The Citizen

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Gold ticked higher on today, trading less than $10 shy of last week’s record high, underpinned by worries about the global economy after the G20 summit and US comments that Iran has fissile material for two atomic bombs.

Gold saw support from fears about the durability and pace
of the global economic recovery, unallayed after the weekend’s
G20 summit in Canada, and comments from the head of the CIA
that Iran may have enough fissile material to make two atomic
weapons, and could build the first in two years.

“The underlying safe haven concerns that have supported
prices — the economic environment, Europe’s fiscal outlook and
the longer term prospects for inflation, remain,” said David
Moore, commodities strategist at Commonwealth Bank of
Australia.

“The G20 hasn’t had a significant impact on markets, and
while concerns about Iran’s nuclear capacity are nothing new,
there seems to be additional clarity.”

Spot gold rose $1.80 to $1,255.20 an ounce by 0628 GMT
after a steady performance last week during which bullion
struck a record high just below above $1,265.

Gold could rise further to surpass the June 21 record at
$1,264.90 per ounce to touch $1,270, as bullish momentum is
strong, according to Reuters technical analyst Wang Tao.

He noted the bulls were taking control with prices in an
ascending channel from a $1,224.30 low struck last Wednesday
and sharp rises and mild falls.

US gold futures for August delivery rose 10 cents to at
$1,256.30 an ounce.

The world’s largest gold-backed exchange-traded fund, SPDR
Gold Trust said its holdings remained unchanged at an all-time
high at 1,316.177 tonnes.

US lawmakers hammered out a historic overhaul of
financial regulations, handing President Barack Obama a major
domestic policy victory.

“The US regulations are pretty worrying. That’s something
that we will need to look at more closely,” a commodities
trading source in Singapore said.

“So far, people are taking a wait-and-see attitude and it’s
hard to assess the impact on prices.”

Dozens of House Democrats had threatened to vote against a
ban on swaps trading on grounds the trade would move overseas.
Instead a compromise solution allows banks to stay involved
in foreign-exchange and interest-rate swaps dealing, which form
the bulk of the $615 trillion over-the-counter derivatives
market.

They also could participate in gold and silver swaps, but
they would need to spin off dealing operations that handle
agricultural, energy and metal swaps.

Platinum rose 0.9 per cent to $1,581.00 as worries about
output in the world’s biggest producer, South Africa , continued
to underpin prices.

Analysts had worried the soccer World Cup could overtax
South Africa’s electricity network, cutting power to mines, and
at the same time, workers at state power generator Eskom are in
the midst of pay talks, adding to the threat of supply disruptions.
Reuters

Source – the citizen

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The government has clarified that the issuance of mineral prospecting or mining licenses near villages or farms owned legally by village governments or individuals, respectively, do not affect the original ownership of the land in question.

Deputy minister for Energy and Minerals, Mr Adam Malima, made the clarification while responding to a basic question by Mr Herbert Mntangi (Muheza-CCM). He said the issuance of the licenses do not bar economic activities like farming by people from continuing.

Mr Malima said according to Section 95 of the Mining Act as amended in 2006, any company issued with either prospecting or mining licenses is required by law to seek written consent from the village government or individuals owning the respective land before starting any operation.

“Some areas licensed areas may cover villages or farms owned by individuals or institutions. It is against the law for the license holders to ignore the consent of the village government or individuals owning land where they plan carry their operations,” said the deputy minister.

He assured the House that issuance of mining and prospecting licenses does not affect ownership of villages or farms.

The Muheza legislator had expressed concern that some licenses covered villages or farms belonging to individuals.

Mr Malima explained that under the amended legislation, there are two types of licenses issued by the government namely prospecting licenses with reconnaissance period (PLR) and prospecting license (PL).

The PLR can be issued for an area covering not more than 5,000 square kilometres, while PL is issued for an area covering not more than 200 square kilometres, said Mr Malima.

He was quick to add that under the amended law, PLR license has been scrapped altogether.

Source – The Citizen

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The Tanzania Coffee Board (TCB) would from this crop season set indicative prices for coffee at par with prices at the Moshi coffee auction and the world market, the government has said.

Industry, Trade and Marketing deputy minister, Mr Cyril Chami, disclosed this while answering a basic question by Karagwe MP Gosbert Blandes (CCM), who had sought to know why coffee farmers in Karagwe were paid less for the crop than their counterparts across the boarder in Uganda.

Mr Chami noted that indicative prices allows local farmers to demand better prices like their counterparts in Uganda.

In addition, he said TCB would continue to market Tanzania’s coffee at international fairs such as the one organised by the Specialty Coffee Association of Japan (SCAJ), Eastern Africa Fine Coffee Association (EAFCA) and the Specialty Coffee Association of America in a bid to expand markets for the crop.

Earlier, the deputy minister had admitted that Robusta coffee prices paid to farmers in Uganda were higher compared to those paid to Tanzanian farmers.

Between June and December 2009, a kilogramme of coffee was fetching between Sh750 and Sh1,200 in Tanzania, while the same fetched between Sh874 and Sh1,888 in Uganda.

He added that the coffee board would continue to issue licenses coffee exporters to foreign markets where the crop fetches good prices, noting that the system was also in use in Uganda.

He urged local farmers to tap the opportunity by forming cooperative societies.

Source – The Ctizen

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Cocoa producers in Mbeya Region will start selling their produce directly to markets in the US starting this crop season instead of doing that through middlemen, the minister for Natural Resources and Tourism, Ms Shamsa Mwangunga has said.

This positive development is the result of efforts by Tanzania’s goodwill ambassador to the US, Mr Douglas Pitt, to link local farmers to US factories.

Mr Pitt, a young brother of American actor Brad Pitt, was appointed goodwill ambassador by President Jakaya Kikwete last April.

Ms Mwangunga told reporters during a press conference, also attended by Mr Pitt in Dar es Salaam at the weekend, that the goodwill ambassador has arranged with some chocolate factories in the US to buy cocoa directly from farmers in Mbeya.

“Mr Pitt has been a tourism stakeholder for a long time….we hope his appointment will benefit the country in promoting Tanzania’s tourism and investments potentials in the US,” she said.

She noted that Mr Pitt’s work in developing a collection of photos taken during his several visits to Tanzania has been valuable in the promotion of tourism, trade and investments.

Mr Pitt said he felt honoured by the Tanzanian government’s decision to appoint him to a honorary position and he will not disappoint President Jakaya Kikwete and his government.

“Visiting this country I have observed several business opportunities that can attract American investors. I have also see ways that we can link Tanzanian entrepreneurs with their US counterparts,” He said.

He pointed out that he has convinced many US traders to buy cocoa from Mbeya instead of letting middlemen to profit from the farmers’ sweat.
Mr Pitt runs a family computer business in the US.

Source – The Citizen

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The government will continue to create a conducive environment to strengthen domestic investment, a senior government official has said.

Addressing a group of local entrepreneurs at a seminar in Dar es Salaam yesterday, Mr Emmanuel Ole Naiko, the executive director of the Tanzania Investment Centre (TIC), said it is only by improving the business climate that local investments will be able to grow.

“We are fighting tooth and nail to make sure domestic investments thrive,” Mr Naiko stressed.

He said there is no way that the country will achieve true development without strong domestic investment and assured entrepreneurs of the government’s full support and cooperation to make their dreams come true.

“We will support you day and night,” he said.

On that score, Mr Naiko urged entrepreneurs in the country to have confidence, believe in themselves, and employ professionalism so that they can meet global standards in their activities and penetrate international markets.

A successful entrepreneur in the country, Mr Joseph Mfugale, echoed the same sentiments saying everything is possible in business only if there is a will, confidence and self discipline in finance.

Mr Mfugale is the owner and managing director of Peacock Hotel chain in Tanzania and he is one of successful entrepreneurs in the country.

He started as a mere carpenter in 1960’s.

“Do not fear anything, the sky is the limit,” Mr Mfugale stressed.

He added that Tanzanian business community can compete in the East African common market, stressing discipline, commitment and a sense of love to whatever they are doing.

Mr Kiiza Eriab, a trainer from Enterprise Uganda, trainings to entrepreneurs have done wonders in Uganda since they started in 2001. More than 60 training sessions have been conducted in that country.

But in Tanzania this is only the second training that seeks to building capacity for entrepreneurs in Tanzania. The first one was conducted in December last year.

According to the TIC boss, the follow up on the outcome of the first training showed positive results in that the recipients of the training were now collaborating among themselves, access credits, and were able to adhere to the requirements of business contracts they secured.

The training was organised by Tanzania Investment Centre in collaboration with the United Nations Conference on Trade and Development (UNACTAD).

Similar trainings are being conducted in 28 countries world-wide, UNACTAD being the lead implementer.

Source – The Citizen

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he Dar es Salaam Stock Exchange [DSE] has been asked to provide information and educate the public on the benefits of investing in the stock market.

Source – The Citizen

CRDB bank shareholders said in Arusha yesterday that activity at the DSE was low because many people were not aware that investing in stocks could increase their incomes, among other benefits.

They were speaking at a seminar organised by the CRDB Bank.

“Trading at the DSE would only benefit Dar es Salaam city residents. People from the rest of the country seem completely unaware of the significance of participating at the DSE,” noted a shareholder who could not be immediately identified.

About 11 companies, including CRDB, have listed at the DSE. Four more companies have been cross-listed from the Nairobi Stock Market.
The DSE chief executive officer, Mr Gabriel Kitua, agreed that there is a need for DSE to provide monthly information to attract more people to invest in the bourse.

He outlined direct benefits investing in the stock market as dividends, selling and trading stocks and using shares as collateral to access bank loans.

“This is a long-term investment that shareholders should focus their attention to for their own economic benefits,” he said.

He pointed out that currently the stock exchange has 173,000 shareholders, adding that they plan to list more people to reach 200,000 soon.

Opening the shareholders seminar, CRDB managing director, Dr Charles Kimei, said the aim of the workshop was to enable shareholders continue to invest in the bank’s shares.

He called on the bank’s clients and the general public the bank’s shares for their benefits.

CRDB bank has sold 57.3 million shares since it listed on the stock market. The shares were purchased for Sh9.1 billion.
The current share price at DSE is Sh120 per share down from Sh200 per share in June last year. The banker said the price is low than expected.

The bank’s dividend has increased to Sh7 per share, adding that the dividend policy has changed in order to pay 35 per cent of the profit that the bank would pay annually, the banker said.

Mo re than 200 CRDB shareholders attended the seminar.

Source – The Citizen

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he Dar es Salaam Stock Exchange [DSE] has been asked to provide information and educate the public on the benefits of investing in the stock market.

CRDB bank shareholders said in Arusha yesterday that activity at the DSE was low because many people were not aware that investing in stocks could increase their incomes, among other benefits.

They were speaking at a seminar organised by the CRDB Bank.

“Trading at the DSE would only benefit Dar es Salaam city residents. People from the rest of the country seem completely unaware of the significance of participating at the DSE,” noted a shareholder who could not be immediately identified.

About 11 companies, including CRDB, have listed at the DSE. Four more companies have been cross-listed from the Nairobi Stock Market.
The DSE chief executive officer, Mr Gabriel Kitua, agreed that there is a need for DSE to provide monthly information to attract more people to invest in the bourse.

He outlined direct benefits investing in the stock market as dividends, selling and trading stocks and using shares as collateral to access bank loans.

“This is a long-term investment that shareholders should focus their attention to for their own economic benefits,” he said.

He pointed out that currently the stock exchange has 173,000 shareholders, adding that they plan to list more people to reach 200,000 soon.

Opening the shareholders seminar, CRDB managing director, Dr Charles Kimei, said the aim of the workshop was to enable shareholders continue to invest in the bank’s shares.

He called on the bank’s clients and the general public the bank’s shares for their benefits.

CRDB bank has sold 57.3 million shares since it listed on the stock market. The shares were purchased for Sh9.1 billion.
The current share price at DSE is Sh120 per share down from Sh200 per share in June last year. The banker said the price is low than expected.

The bank’s dividend has increased to Sh7 per share, adding that the dividend policy has changed in order to pay 35 per cent of the profit that the bank would pay annually, the banker said.

Mo re than 200 CRDB shareholders attended the seminar.

Source – The Citizen

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