Thursday 27 December 2012

How can Tanzania Prosper in 2013

As we approach the inevitable end of year 2012 and the fresh promise that a new year brings, we at Uhuru Blog reflect on what needs to be accomplished in 2013 so that Tanzania can embark on a path to prosperity:

1. 2013 is potentially a huge year for fans of transparency and accountability as the Tanzanian Minister for Information has promised to introduce a Freedom of Information Bill in parliament after a long 7 year wait (News story from The Citizen). This Bill will ensure citizens with a right to access public, government held information. We need our Members of Parliament to support this initiative and to hold the Ministry of Information to task if they don't deliver. Do our MPs have what it takes to put aside political pressures and do the right thing? We urge all our readers and citizens of Tanzania to follow this issue closely, and lets prove the government wrong when they said that such a bill is not needed as citizens dont demand information (News story from The Citizen).

2. Another important document that will be approved in 2013 is the Natural Gas Policy which will determine how lucrative gas contracts will be awarded and how revenue raised will be used. Uhuru Blog has published an in-depth post on how to improve transparency of this process to ensure that we don't leave any opportunity for the corrupt to take advantage!

We here, in Tanzania are at a critical turning point where the old status-quo of government not being accountable to its citizens is at an end. The ordinary citizens of Tanzania are more aware and interested in dealings of the government thanks in part to hard work of civil society organizations as well as power of the internet to disseminate ideas.

UHURU BLOG PROMISE: We at Uhuru Blog will work tirelessly in 2013 to bring you unbiased and well-researched opinion pieces on the state of Tanzania's affairs. What part are you going to play in making a better Tanzania in 2013?

Tuesday 18 December 2012

Open Government Partnership Commitment Review #5

After a long break, Uhuru Blog brings you a further review of 2 of Tanzania's OGP commitments.

Click on the commitments for a more detailed analysis:

#3.2 Develop and/or review Clients Service Charters  of Health, Education and Water sectors for both national and facility level services, and make them accessible to citizens. - PROMISE COMPROMISED

We have also reviewed our first commitment from the section on Technology and Innovation

#4.4 Study global good practice on data disclosure for establishment of www.data.go.tz website that reflects high global standards to contain a substantial number of Government held data sets. - PROMISE BROKEN

The current tally stands at:

PROMSIE KEPT - 3

PROMISE BROKEN - 7

PROMISE COMPROMISED - 2

with 13 more commitments still to be reviewed.

As always we are looking forward to hearing comments from our readers!

Saturday 8 December 2012

Recommendations for Transparency and Accountability of Tanzania's Natural Gas Policy Draft

by Alykhan

Tanzania has recently seen an impressive increase in oil and natural gas reserves both land and offshore, which has the potential to significantly boost the economy. However, to ensure that this resource is exploited in the most sustainable and beneficial manner for all stakeholders, the Ministry of Energy and Minerals has released a draft policy document (found here).

The document on the whole also contains informative policy direction on issues of environmental conservation, management of revenue and public-private partnerships in the natural gas extraction process and should be read by all stakeholders.

Given our interest in freedom of information and transparency, Uhuru Blog will review the current policy statement on Transparency and Accountability (Section 3.2.2 pg 15) and make our recommendations based on global best practices.


Objective: To ensure transparent and accountable system in the management of the natural gas industry. 

The Government shall:
(i) Promote transparency and accountability in the natural gas industry; and
(ii) Facilitate collection and dissemination of information related to natural gas industry to stakeholders.
(Tanzania Natural Gas Policy Draft October 2012)

We believe Transparency and Accountability is an important, probably the most important, pillar that will ensure natural gas contracts are awarded in the most competitive manner and that the citizens of Tanzania receive their fair share of the proceeds from this industry. Any information that will be kept secret has the potential to be exploited for corrupt practices and therefore the Natural gas Policy should promote complete access to all information regarding terms and conditions of the contracts signed as well as details of the revenue received. 

Our criticisms are as follows:
1. The policy recommendations are too broad and lack any specific measures on how the government aims to promote transparency and accountability. 
2. It is also weak in identifying key specific ways in which the government will collect and disseminate information to stakeholders. 

In the introduction, the policy paper mentions Tanzania's membership in the Extractive Industries Transparency Initiative (EITI) as a signal of the intent of the government to ensure transparency. However, we believe EITI is not sufficient as the reports released are outdated (the most recent one is from 2010, 2 years too late!) and mining companies voluntary divulge information and are not compelled to share information. Citizens need the most recent information updated atleast monthly, on the status of incoming revenue and what those funds are earmarked for to be effective. 

Here are our recommendations (some of which are derived from Transparency and Accountability Initiative's report on Opening Governments: 9. Extractive industries pg 33 found here)

Policy #1. Ensure a competitive bidding process for oil and natural gas contracts and concessions by making all rules and regulations available in a public database, with clear definitions and explanations.

Policy #2. Make public the terms of each concession and contract awarded by the state to exploit oil and natural gas. This will enable stakeholders such as ordinary citizens, civil society organizations as well as other companies bidding for the contracts to determine whether the government has accepted the best deal.

Policy #3. Publish regular and detailed reports (ideally monthly or quarterly) of revenue received from various concessions of oil and natural gas. This has to be disaggregated by revenue received by individual companies and concessions awarded. Reports should also detail how all the revenue revenue is earmarked and used for various development activities.










Our recommendations cover all stages from pre-award of concession to the transparent use of revenue received and will ensure that corruption is completely eliminated from the entire process. We hope the Ministry of Energy and Minerals take our recommendations seriously and amend the natural gas policy to make it truly transparent and accountable.

Sunday 25 November 2012

Guest Post: HUDUMABONGO 1st Round Service Provider Complaints Report

HudumaBongo is a democratic movement on social network platforms Twitter and Facebook, to gather complaints as votes on Tanzanian service providers covering major business sectors such as telecom companies, utility companies, airlines and so on. Follow them on @HudumaMbayaTz or Like their Page on Facebook.

TANESCO emerges 1st Round Winner

By HudumaBongo

The utility company Tanzania Electric Supply Company (TANESCO) has emerged the winner of the 1st round of customer annoyance survey conducted on Facebook and Twitter by HudumaBongo, a citizen initiative in Tanzania. Second and third place were filled by the telecommunication companies Tigo and Vodacom respectively.

In the first round 29 companies were vying to be the best worst service providers as voted by Tanzanians themselves. A total of 119 individual votes were received through both social network sites. Here are the winners in other categories:

AIR TRAVEL: PRECISION AIR (8 votes)

BUS TRAVEL: HAPPY NATION (2 votes)

MEDIA: STAR TIMES (4 votes)

PARKING: MAGOGONI FERRY (2 votes)

TELECOMS: TIGO (28 votes)

UTILITIES: TANESCO (33 votes)

We on behalf of the citizen's of Tanzania call upon the leaders of these companies to take effective measures to ensure their customers get the best services. The 2nd Round of vote collection has commenced, and all complaints can be registered on Twitter with @HudumaMbayaTZ or on HudumaBongo page on Facebook. Let your voice be heard!

Understanding Oil Contracts - Special Guest Post


Uhuru Blog is pleased to bring you a special guest post by Zara Rahman, a research associate at OpenOil, an energy consultancy and publishing house based in Berlin founded on the values that creative, practical and socially progressive policy making in the oil and gas industry is vital to our collective future. They have published a freely available book compiled together with leading oil experts and professional, available here. As Tanzania emerges as an important future source of oil and gas, understanding contracts signed with the government becomes increasingly crucial.

Oil contracts – why so important? 

By Zara Rahman

The problem

Think of the oil industry, and you think of secrecy, corruption, spills and environmental problems. But transparency, even in this secretive industry, is increasing. Hard to believe perhaps given the industry's poor record in this area, but the tide is turning, and more and more data is being put online. There are many initiatives doing great work on making machine-readable data accessible and allowing people to really understand it, but until now, there has been one data stream which has remained incredibly elitist.

Oil contracts. There is an emerging norm of governments publishing, or putting online, the contracts that they sign with international oil companies, and this is a great success for the transparency movement globally. No longer will there be secretive, closed door negotiating sessions which leave citizens (and even many in the government) wondering what exactly was agreed to, how much money their government is getting, what the oil company should or should not be doing, and whether or not they got a 'good deal'. There are now 7 jurisdictions around the world who publish their oil contracts, and there are more to come, with transparency of oil contracts being written into constitutions and emerging as a best practice globally.

Publishing the contracts is the first step towards allowing citizens to know what is happening, but there is one key problem. An oil contract is typically over 100 pages long and written in complicated legal jargon. It is not the kind of document that someone without a law degree, or years of specialisation in the topic, can pick up and really understand.

Tools to help people understand these contracts have, until now, been overwhelmingly aimed at industry employees or those with elite levels of education– private courses costing £2,000 per person for two days, held in London or Abu Dhabi, or expensive law text books aimed at the postgraduate law student. Clearly, neither of these is going to help a civil society activist in the Niger Delta make sense of the contracts governing their oil industry.

The solution – bringing open thinking to the oil industry

At the beginning of November 2012, OpenOil convened a group of 10 world-renowned experts to come together for a week and collaboratively write a book on how to read and understand oil contracts, in what is known as a 'booksprint.' The method was developed in the open source technology world, and has been developed by Adam Hyde of http://booksprints.net and involves no pre-production, and very little post-production.

To many, the idea of writing a book on a topic as complex and involved as oil contracts seemed crazy, especially considering the fact that no preparation was done beforehand; no planning chapter titles, or organising who was going to write what. All work began at 9am on the Monday, and involved having a lot of faith in the facilitator of the method, who has now used the booksprint method to produce over 50 books.

The result was “Oil Contracts – How to Read and Understand them”, released under the Creative Commons license, free for download from http://openoil.net/contracts-booksprint

How does a guidebook help?

The terms decided in contracts can have long reaching effects, and be valid for anything up to 20 or even 30 years. The environmental standards that companies have to abide by, clauses relating to the affect of the project upon the local economy, and most importantly for many, the amount of money that the government is going to get, are all decided upon in the contract.

Unfortunately however, there is no one fixed number that we can read and then know for sure how much money the government is getting. Profit or production splits are complicated calculations, typically outlined in a number of different clauses (and there are many more variants depending upon the type of contract used). This means that in order to have a real understanding of governance of the industry in a particular country, it is essential to have a real handle on all of the issues outlined in the contract.

The book runs through all of the salient issues addressed in contracts, and uses actual excerpts from contracts around the world to compare ways of dealing with certain issues. 8 different public domain contracts are referred to and quoted extensively throughout. Half of the 'family' of contracts are actual signed contracts, and half are 'model' contracts, which have been released by their respective governments. Contract excerpts, though a little intimidating to begin with, are explained in detail to allow the reader to get a handle on the language used in the contracts, so that after reading they can pick up a contract and, firstly, feel some sense of familiarity in the contract terms used, as well as know where to look to answer their particular question.

What now?

OpenOil are now looking for partners to work with on evolution of the book, and already there has been strong interest in translating the book into various languages to increase its accessibility across the world. A training curriculum will be developed out of the book, and training courses – the low cost equivalent to the expensive courses mentioned above – will be organised for civil society, parliamentarians, media, and interested members of the parliament.

These courses will take place in locations where these issues really matter – Kampala, Nairobi, Dar-es-Salaam, to name just a few. For now though, the book has been downloaded hundreds of times and, it is  hoped, is already a crucial tool to those wanting to know how to understand their oil industry. 

Wednesday 10 October 2012

Using the Internet to correct Politics

I came across an interesting piece of data analysis done by the communications consultancy firm Portland, where they tracked the number of geo-tagged tweets originating in Africa over a 3 month period (view the pdf file here). The top 5 countries in terms of volume of tweets were South Africa, Kenya. Nigeria, Egypt and Morocco.

One may ask "So what?" Can social media such as Twitter and Facebook bring about any meaningful change? Or is it just another outlet for spreading funny cat videos and empowering celebrities? This issue was thrust into the limelight with the recent uprisings in the Middle East and North Africa, starting with Iran but quickly followed by Tunisia, Egypt and the Arab uprisings. The use of Twitter and Facebook to organize and spread the protests has been well documented from the use of Twitter to ignite the protests in Iran to Wael Ghonim's Facebook group calling for mass protests in Egypt. Public intellectuals, however, have argued over whether social media has played a central role in these uprisings or not. Malcolm Gladwell, the well-known writer for The New Yorker, penned an interesting piece down-playing the social media effect. He cites among other things, the many revolutions which have succesfully taken place before the introduction of Twitter and Facebook. Many others have placed a varying importance on social media and the internet in kickstarting revolutions (Read this piece for a summary of positions).

I argue that the internet and social media play a far greater role in bringing about regime change then people like Gladwell give it credit for. The internet, without a doubt, has revolutionized the way we share information. The speed with which we can send messages, share photos and watch videos has increased tremendously (when is the last time you sent a "snail mail" at the Post Office?). This immediate exchange of ideas and information makes it very easy for campaigns to synchronize their message and to reach out to the disaffected masses who also feel the same way about the political situations. The fact that 30 years of Hosni Mubarak's rule was brought down in a matter of months is testament to the ability of the internet to channel and coordinate people's frustration.


To prove this I did some data analysis of my own. I compared two variables, political freedom in different countries which I derived from an annual report called Freedom In the World published by Freedom House which assesses political rights in 195 countries, assigning to each country a score ranging from 0-40 (where 40 indicates that citizens enjoy all their political rights, a country such as Norway or 0 in the case of North Korea, where the people have no say). I compared this to internet connectivity obtained from World Bank's figures on Number of internet users per 100 people. This gives us an indication of whether there is any correlation between internet connectivity, political repression/freedom to the likelihood of protests and political uprising.




We turn our focus to the countries within the box above, which have political scores below 20 (a state of mild political repression to total dictatorship) but an internet connectivity of greater than 20% (that is over 20 people have internet connectivity out of a 100). The people in these countries have the most incentive for action as political freedom goes hand in hand with other basic human rights. At the same time, they also have  internet as a tool with which to connect with other citizens to bring about the desired changes in political institutions.

Syria  Nigeria Tunisia Nigeria Jordan Oman
Vietnam Kenya Belarus Kenya Armenia United Arab Emirates
China Russia Egypt  Russia Malaysia Kuwait
Saudi Arabia Morocco Kazakhstan Morocco Singapore Azerbaijan
Brunei Bahrain Thailand Bahrain Qatar Malaysia
Georgia


This list contains notable countries such as Egypt, Tunisia, Syria and Russia, all of which have been in the media recently for protests, some having successfully replaced a dictator. Other countries such as Azerbaijan  and Georgia also have a largely disaffected population who are demanding more political freedom.
This analysis therefore may prove to be a powerful indicator of what countries are capable of pulling off well planned and well coordinated protests that are ultimately successful in achieving their desired goals which in most cases is regime change. Based on our predictions the countries listed above may all be host to considerable protests over the next year or two. The internet may literally be a revolution waiting to happen!

Saturday 29 September 2012

Mourning Right to Information Day

28th September every year is marked as the Right to Information Day. Celebrated globally to raise awareness on citizen's right to access government held information, it was inagurated in 2003 with this being the 10th installement.

I spent the day mourning.

The freedom of expression advocate, Article19.org released a map to show the state of Right to Information laws and regulations in countries around the world:



An observation from this map is that most countries in the world are covered by either a law or regulation governing Right to Information. However, the most obvious lack of such a right is in Africa. The continent is awash with countries in white denoting no law or regulation exists in those countries which gives their citizens the fundamental right to demand information from their governments. The only other such region which lacks Right to Info laws are the dictatorial regimes of the Middle East and Asia such as Saudi Arabia, Syria, Oman and Turkmenistan. How can we accept that such a large number of supposedly democratic countries do not grant their citizen's the right to access information?

In an age where information is power, countries without Right to Access Information Laws are nothing but dictatorships in disguise.

Wednesday 15 August 2012

OGP Update #4

A long overdue post but slowly and surely we are going through the OGP commitments. Here is our 4th installment of the Uhuru Project where we review commitments made by the Tanzanian government in a bid to join the Open Government Partnership. We review the following two, click on the link to get a more detailed analysis and or verdict in each case. And as always, thank you for your comments and support!

#1.2 Posting orders and receipts of medical supplies from the Medical Stores Department (MSD) online and on notice boards.

#2.3 Establish an open forum  in collaboration with civil society to review quality, integrity, depth and pace of progress against OGP commitments.

Wednesday 11 July 2012

Why the OGP should not admit Tanzania.

By Alykhan

If you are a fan of transparency and accountability then it must have come to your attention that Tanzania has submitted its intent to join the Open Government Partnership, a voluntary coalition of member states who are committed to be more open to its citizens. According to my opinion, Tanzania should not be admitted to the OGP. Here is why: Tanzania does not have Freedom of Information Legislation.

The OGP should set as their first and mandatory condition that any country admitted to this coalition should have a Freedom of Information Act legislated or at least in discussion in Parliament. This is an important ideological standpoint, as any country admitted to OGP legitimizes its commitment to transparency and potentially opens up access to more aid (we dont know if this has been set as a pre-condition for more aid). This is similar to joining the United Nations to legitimize a country and joining the EITI (Extractive Industries Transparency Initiative) to legitimize mineral earnings.

OGP country members and hopefuls already have a good track record when it comes to FOI legislation. Out of the 55 countries, only 4 lack any FOI legislation or a bill in discussion in parliament (http://uhuruyamawazo.blogspot.com/2012/05/freedom-of-information-legislation-in.html) and Tanzania is one of them. 





Why is Freedom of Information Important?

This is the foundation of a truly transparent and accountable government when an ordinary citizen can request any public information from the government and take action on it. We cannot completely rely or trust government officials to reveal damaging information. Just as we need the police to maintain security in our country so we need an FOI legislation to ensure corrupt officials cannot get away. 

Saturday 30 June 2012

The Time to ACT is NOW: Small Interventions with a Big Impact

By Alykhan

I have penned a number of articles for Uhuru Blog over the last month covering a number of issues, all with the overarching theme of how we can improve Tanzania. What surprised me while researching for these articles is how little of what is accepted globally as good practices are actually implemented in Tanzania. Our government continues its outdated policies year after year as if in suspended animation while the rest of the world speeds by, only bowing to pressure from donor countries from time to time to enact policies which mostly turn out to be detrimental.

What is required is for the government to get its act together, reform a number of key policies on its own doing (without any "technical assistance" from donor countries, by which I mean policies that favour the donors) and truly get our country on the path to sustainable development. Development, not only in terms of increase in GDP every year, but rather increase in the quality of life and dignity of all citizens. Don't let anyone lie to you that we need months to study global best practices and adapt different approaches to suit Tanzania. These are all delay tactics as the best approaches to different problems and how to apply them to unique conditions in developing countries are all known, but what is lacking is the political will to implement them. So I say to you, my fellow countrymen, let us not get left behind the time to ACT is NOW!


If you decide to stop reading this blog post now, I would like you to take one thing from this. The Tanzanian government, for years now, has been slacking, taking short term measures to push the country along slowly  while relying too heavily on foreign aid. What it should do is to adopt brave long-term policies that are forward thinking and that will take this country into the 21st century. If we do not keep pace with technological innovation we may end up being left very far behind to struggle for decades to come.


I am going to list FOUR interventions that the government can implement very easily, by enacting laws and changing procedures which may have a huge impact in boosting the country's growth and respectability.


1) Enact a Freedom of Information Law (Right to Access Information)


Citizens have a right to access government and public information. There is no debate about that and there is no debate about what criteria such a law must abide by. By giving citizens the right to demand information from the government, it puts accountability in the hands of the people, thus giving them the incentive to follow national issues and the ability to pursue those issues that are important to them. Currently, citizens only exercise their democratic powers every 5 years during election time however with this law they can monitor the government continuously and expose malpractices when they happen. Now, some people who are already in government will be nervous by such a law and this may be the reason why its taking so long, but in the end governments are responsible to the people and they must act that way.

2) Increase spending on Information and Communication Technology (ICT):


The internet has revolutionized every sphere of our lives from education, communication, entertainment, governance and so on. It has become so central to our lives (those who have access it) that there are calls to classify Access to internet as a basic human right. And it should be a basic right as those without access to it will have a huge disadvantage, an insurmountable barrier compared to those use it growing up. Tanzania has very low internet penetration rate at about 11% compared to Kenya with 25.9%, Uganda -12.5% Rwanda - 13% (2010 figures - World Bank) and an overwhelming majority have never used the internet, let alone seen a computer before. Here is where the government can step in.

1. By making investments in improving the country's fibre optic backbone (which it has started)
2. Itroducing widespread computer literacy programs in public schools and local training centers
3. Modernizing government operations such as paying taxes, keeping of records, filling out forms by taking them online.

By implementing these measures the Tanzanian government can set the country on the path to prosperity and global competitiveness. So far, ICT spending has been pathetic. According to the 2011/12 budget the amount set aside for ICT was 27 billion shs which is roughly 0.002% of the total budget, and with the government's record of underspending in developmental expenditure, this figure is likely much lower. Compare this to the 130 billion that Kenyan government is going to spend in 2012/13 and it is easy to see why we will be left behind in the global technological race. To bridge the technological gap and ensure that the coming generation does not lose out, the government will have to spend upwards of atleast Tshs 100 billion (and all of it!) yearly on ICT infrastructure and training.

3) Reform Business regulations to stimulate Entrepreneurship.


Business is best done by locals. We have been desperately trying to woo foreign investors while ignoring our own latent talent and potential. There are 2 main problems with relying too much on investments from foreign companies. The first is that foreign companies bring technical expertise from their own countries denying local skilled people key managerial positions. Secondly, in order to entice the multinationals to Tanzania, the government gives them huge incentives, mostly in the form of tax exemptions resulting in lower public revenue and eventually capital flight as the foreign companies all have shareholders living abroad.

Therefore it is essential for government to stimulate entrepreneurship among its own citizens by lowering the barriers to starting a business. According to the Doing Business Report, Tanzania was ranked 127th out of 183 nations globally mainly because of complicated, overpriced business regulations particularly in getting Construction permits, registering property and paying taxes. These regulations need to be overhauled completely, making it easier for people to start businesses and paying taxes. One of the ways this can be achieved is by moving to an online system where forms can be submitted to different departments and processed instantly. We also need to integrate different departments so that all forms and licences can be obtained in one place.

4) Bringing innovation to the Agriculture sector

Agriculture remains the backbone of the economy in Tanzania and whether formal or informal, it still provides  a means of living for majority of the country. Even though the government should push for a diversification of economic activity, any sustainable growth solution will involve reforming the Agriculture sector. Some estimates put agricultural exports at 30% of our total exports and employing 80% of the population making it the one of the most important economic activities in the country.

First of all, the government needs to make a push for increased production from agricultural land. Estimates from 2010 put average productivity for cereals at around 1.3 tons per hectare where as with good management 3.5-4 tons per hectare can easily be produced (For comparison Malawi - 2.2t Kenya - 1.6t, Uganda- 1.6t South Africa - 4.2t Rwanda - 1.9t). Not surprisingly we still import food crops to the tune of 10% of our total merchandise import per year  We need to increase agricultural output to sustain our ever growing population, reduce reliance on food imports and increase the export of our crops. However, it should also put into place policies to ensure that this is done in an organic and sustainable manner to prevent destruction to the environment. Farmers need to trained on using modern organic farming techniques such as crop rotation, growing a variety of compatible crops, effective water management, integrated pest management and so on.

Secondly and perhaps the biggest impediment to the agriculture is the lack of infrastructure and credit facilities for rural population. The government needs to make significant investments such as large scale irrigation systems, providing machinery such as tractors, harvesters, cold storage facilities (for fisheries), seed banks for storage of extra seed in case of droughts, and provide a ready access to markets for farmers as an incentive for growing food crops. Another significant intervention (which is currently being undertaken) is to provide access to credit facilities so that farmers have the capital to purchase machinery and fertilizers resulting in increased yields. We need our farmers to change their mindset from one of subsistence farming to farming for profit

Sunday 24 June 2012

Doing Business in Tanzania

By Alykhan

Any discussion about reviving an economy in the end always comes down to boosting local businesses and job creation. This is the surest way of achieving robust economical growth that is distributed evenly among all  classes of society. Other sources of income such as exploitation of natural resources comes with its own drawbacks most notably the natural resource curse. Tanzania is a land of opportunity, characterized recently by robust economic growth and, thankfully, peace and stability in a region that is notorious for political unrest and civil war. This makes it an ideal place for attracting foreign investment but more importantly it should, at least in theory, be fertile ground for fostering local entrepreneurs that cater for Tanzanian consumers and hopefully even export their goods and services to other countries. In this article we want to examine some of the barriers to starting a business in Tanzania and how the government can rectify this situation to ensure our entrepreneurial culture is a thriving one.

So how easy is it to start a business in Tanzania? This is a difficult question to answer. A seasoned Tanzanian would answer "It depends on who you know". Therefore, the odds are already stacked up against someone who has a brilliant idea but lacks the contacts to get their business of the ground. But lets put this hard-to-objectively measure problem aside for now and focus on the legitimate way to start a business in Tanzania. How does it compare to other countries in Sub-Saharan Africa and indeed globally. Fortunately, there is a report published by a World bank funded project aptly named the Ease of Doing Business Report. This report covers all aspects of conducting a business, from starting one to buying/selling properties as well as dealing with bankruptcies. It contains a detailed analysis of 183 countries ranked on 11 criteria, all which are objectively measured and standardized to make it comparable. The report (which can be found online here) goes further to list important information which the authors have used to conclude their ranking (such as number of procedures and hours required to file a typical tax return)


Source: Doing Business: Doing Business in a more Transparent World Report 2012

According to the report, Tanzania is not faring so well when it comes to Ease of Doing business and is firmly in the bottom half of global rankings. In the East African region, Tanzania is ranked 4th out of the 5 countries, beating only Burundi but lagging far behind Rwanda, who have reformed their business sector considerably in recent years. (Report focus on Tanzania here)


Summary of procedural problems in conducting business in Tanzania and proposed reforms:


In order to improve efficency of the business environment in Tanzania, we need to focus on the main areas where Tanzania is lagging considerably. Here is our analysis (in decreasing order of severity):

1. Getting Construction Permits (Rank: 176 out of 183)
This is by far Tanzania's worse ranking and possibly a major stumbling block for those business requiring construction (factories, warehouses, office buildings). 

Officially, it requires a total of 19 procedures which takes on average 303 days to complete and the fees cost a whooping 1190% of an average Tanzanian's annual earnings. Compare this to Kenya where it takes 8 procedures, 125 days and 160% of annual income per capita and you can see Tanzania needs a major overhaul of construction permits. 

This long waiting time may also be a breeding ground for corruption as officials will seek bribes to speed up the process.

2. Registering Property (Rank: 158 out of 183)
Property acquisition and selling are common practices either as a business by itself (real estate) or for expanding an existing business.

 In Tanzania, property transfers require 9 procedures, take on average 76 days to complete and cost 4.4% of the property value. In Sub-Saharan Africa, Botswana has the highest rank (50) when it comes to Registering property. It requires 5 procedures, takes 16 days and costs 5% of the property value. This is about 5 times as fast as in Tanzania and requires half the number of procedures to complete.

3. Paying Taxes (Rank 129 out of 183):
Businesses pay taxes to the government for the privilege of benefiting from the resources of Tanzania. Countries are ranked on the number of tax payments made per year and the relative time required to fill out all the necessary documents. 

For Tanzania, an average company is required to make 48 payments to the government per year which requires 172 man hours to complete. Rwanda emerges the leader in Sub-Saharan Africa for ease of paying taxes. It requires 18 payments and 148 hours to complete on average. 

Also another factor to consider is the percentage of net profits that a business typically pays to the government as taxes. In Tanzania this amounts to 45% (Rwanda-31.3%) which places a huge strain particularly on small and medium sized businesses (SME), the majority of whom dont qualify for tax exemptions from the government where as the large corporations get away with paying much less in taxes (for a good example consider the mobile phone operators who despite making huge profits dont appear in the list of top tax payers). Changing the tax code to favor SME or atleast ensure all businesses pay their fair share of taxes will stimulate grassroot level entrepreneurship and create stable well paying jobs for the country.

4. Starting a business (Rank 123 out of 183):
Here the report evaluates the effort required to legally start a new business, by determining the number of procedures, time taken and the costs associated with formally registering the new business entity. 

In Tanzania, starting a new business requires 12 procedures, takes 29 days and costs 29% of the annual per capita income. It is important to minimize the effort and cost of this crucial first step which may discourage many potential entrepreneurs from starting a business. Again compare this to Rwanda (Rank 8) who are really committed to reducing barriers for new businesses. It requires 2 procedures, takes 3 days and costs 4% of annual income to start a business. Amazing!

Therefore we can clearly see that Tanzania has a lot of unnecessary bureaucratic blocks when it comes to conducting business in the country. We desperately  need to change this and we have many examples both globally and regionally like Rwanda of how this can be done to ensure Tanzania is not left behind in the global revolution to foster local businesses and attract more foreign investment.

Wednesday 20 June 2012

Critiquing the proposed Tax increase in Alternative Shadow Budget

By Alykhan

I gladly welcomed the Alternative Budget 2012/13 proposed by Shadow Finance Minister Hon. Zitto Kabwe which amongst other things aims to increase development spending, reduce recurrent expenditure and drastically increase government revenue (from 8.7 trillion to 11.9 tril) a whopping 36% more! This is going to be achieved by a combination of cutting tax exemptions to sectors such as mining and telecommunications and raising the Pay As You Earn (PAYE) income tax. I support his brave attempt at changing our long held attitudes regarding our country's budget, that we are destined to accumulate debt and rely heavily on foreign donor support. The government should strive towards raising its own funds to finance the growth of Tanzania, and with the GDP growing at a rate of close to 7%, it should be able to raise significantly more revenues.

The new proposed rates are as follows



Source: zittokabwe.wordpress.com

That being said, I still have a number of reservations about exploiting PAYE as a revenue stream. The proposed PAYE tax hike includes a top rate of 42% for those earning 10 million and 38% for those earning more than 3.2 million. This undoubtedly will affect a very small percentage of Tanzanians who are lucky to earn this much. This will include top surgeons, CEOs of companies, people with PhDs, engineers and other professionals. My worry is that these professionals are highly mobile, and unlike say business owners, can easily move to a different country where their skills are in demand. In this globalized age, it has become very easy for people to migrate to a different country, one that perhaps has better social services than Tanzania. Furthermore, young professionals deciding to move to Tanzania may be discouraged by such a high taxation rate. Other countries  (with their top bracket tax rates in brackets) such as Canada (30%), New Zealand (33%), South Africa (40%) and even our neighbours Kenya (30%) who are by the way recruiting qualified people in a big way, have lower income taxes and yet provide more social services. That's why I feel that imposing a 42% tax rate may cause people to leave our shores for greener pastures while Tanzania suffers from the brain drain.

Secondly, as laid out by the Shadow minister above, the rate at which different earning brackets are charged for PAYE may cause unfairness for certain people. For example take someone earning 3,000,000 under the above scheme. They will take home 2,149,500. However, if they got a raise of 200,000 shs and are now in the next tax bracket (earning 3,200,000) they will take home 2,067,600! That raise of 200,000shs actually becomes a loss of 100,000shs! Now you may think this is a mathematical trick but its not. Its the way in which the PAYE system and the base tax amount (the amount added to the % calculated) is structured. We propose an alternative which will remove this irregularity (for a more dramatic example calculate the tax rate for 9,999,999 and a raise of 1shs to 10,000,000. You pay about 360,000shs less in taxes after you get your 1shs raise!)

Here's our alternative:


Using this method, we get the following:






As you can see, using our method we get a more realistic calculation of taxes which are still higher than current PAYE rates for salaries above 3,200,000 shs making it more progressive and fair compared to that suggested in the Alternative Budget. With these small changes suggested by Uhuru Blog, Mr Kabwe can strengthen his proposal of increasing PAYE as means of cutting the budget deficit. However, we still maintain that proper studies be done before adopting this increase in PAYE to make sure we dont have talented and educated professionals leaving our country.


Comments are welcome, working together and debating we can find a solution to our debt crises!

Sunday 17 June 2012

Campaign to enact Freedom of Information Act - UPDATE

48 hours after embarking on a campaign to engage Tanzanian MPs who are active on Twiiter, to take up the issue of Freedom of Information Bill and identify the cause of its delay we got our first reply. Dr Faustine Ndugulile, MP for Kigamboni,has agreed check with the relevant parliamentary committee under whose jurisdiction this falls (not sure which one it will be, maybe the Constitutional, Legal and Public Administration committtee?). We hope this cause will also be taken up by other MPs and that a question will be put to the Ministry in an upcoming Parliament session.


Two questions I would ask the Minister of Information:
1. At what stage is the Freedom of Information Bill currently at? And why is it delayed?
2. Give us an exact time for when we can expect the draft bill to be submitted to Parliament for debate (preferably before the end of 2012).

Uhuru Blog will keep you all posted and we also commend Dr Ndugulile for his prompt reply and action on this matter. Could this be a new era of highly responsive government? We can only hope.

Saturday 16 June 2012

What happened to the Freedom of Information Bill?

By Alykhan V.

Since this website first came online in May 2012, we have followed issues of transparency in Tanzania. The backbone of transparency, at least in terms of legislation, is the Freedom of Information Act (FOI Act) which gives citizens the right to access publicly held information and any other such information deemed to be in the public interest. In recent years, with the proliferation of the internet and mobile technology, information can be transmitted at incredible speeds and being able to keep information secret has great advantages. Lack of access leads to what is known as information asymmetry, where one party knows more than the other by virtue of having privileged access and using this privilege to their advantage. Therefore the Right to Access Information is central to reducing this information asymmetry, giving ordinary citizens access to government held information and hence another way of keeping check on government corruption.

The Freedom of Information legislation has a had a turbulent history in Tanzania (read our coverage here). As part of its commitments while joining the Open Government Partnership in 2011, the government promised to conduct global best practices for the FOI Act. But hold on! A bill was submitted in 2006 for public discussion but this was promptly rejected by media stakeholders who returned with recommendations of their own in 2007. So after 5 years of sitting with this information, the Ministry of Information is still working on a global best practices model?? Apart from that, many international organizations dealing with FOI legislation have done extensive reviews and come up with a draft model bill with provisions that truly provide the citizens with the right to access information. One such organization, Article19 has also provided the Ministry with expertise during the inital review process in 2007.

So, the logical conclusion one reaches from this is that there is a deliberate attempt to delay giving citizens the Right to Access information. Even though us citizens do not have the right to demand information from government officials (YET!), our elected Members of Parliament (MPs) do. Therefore we need our MPs to really question the Ministry of Information, Youth and Sports as to what progress is made on the FOI Bill and more importantly to give a definite TIME as to when they will submit such a Bill to parliament.

To gather support for this motion, Uhuru Blog will ask this question every day to MPs who are active on Twitter until we get a response (starting from Friday 15th June 2012). If you agree with our campaign, follow us on Twitter and retweet this question everytime you see it! Together we can all Change Tanzania for the better!

are any of you following up on Freedom of Info. Bill?

Tuesday 5 June 2012

1st UPDATE: OGP Commitment tracker

By Alykhan V.

Tanzania recently signed up to a global initiative called the Open Government Partnership, which is aimed at increasing accountability and transparency within governments. In order to gain membership into the OGP Tanzania has pledged 25 commitments which are to be phased in gradually over the course of the year. We at Uhuru Blog want to hold them accountable, in the spirit of the OGP, to make sure that their promises dont remain promises but are put into action. We have started the Uhuru Project where we track individual commitments and give them a grading of Promise Kept, Broken or Compromised. We will not be satisfied until all 25 commitments are fulfilled. Here, we review three critical promises that on the surface are easy to implement and some of them have already been in the pipeline for many years. Take a look, and keep an eye on the graph on the right of the screen for a quick tally of of our OGP grading.


Debt is not the Devil... Mismanagement of debt is.

By Alykhan V (Uhuru Blog)

As we await the arrival of the very late but much anticipated Tanzanian budget for the year 2012/13, let us focus on a recent trend that is grabbing all the headlines. The DEBT CRISIS! Tanzania's fiscal debt has been increasing at an alarming rate recently, doubling in 3 years from 2007 where it stood at $3.4 billion dollars to June 2010 the debt increased to $6.5 billion. The debt then took only 2 years to double again to June 2012 where it is expected to above $14 billion dollars! What this means is that the debt-to-GDP ratio of 50% has now been breached and although it may still be premature to panic, the ever widening budget deficit is a cause for concern.

So is debt bad all the time? Why is the central government borrowing money to finance its operations? Lets probe this matter more objectively before jumping to conclusions. Debt and borrowing is an important driver of growth and expansion not only for governments but also for corporations, small businesses and individuals. A housing loan is a good example of how borrowing may help in overcoming a shortage of capital. Someone who wants to buy a house but doesn't have millions lying around, can take a loan from a bank to purchase the house. Then, instead of paying rent to some landlord, he/she can re-pay the loan plus interest in monthly installments after which the house becomes his/hers. Corporations do the same when buying other smaller companies or investing in fixed assets. The whole point of taking on debt is to ensure that you get a return on investment that is sufficient to cover the debt plus whatever interest is charged. That is why taking on a loan to buy clothes, to pay salaries of workers or paying for a holiday is unsustainable. 

So it seems the matter is simple? The central government can take on more debt. But only if it invests the money wisely, and on projects that will boost income a few years down the line. That is why, taking on debt for infrastructure is the norm because this will ultimately boost the country's economy by attracting more investors etc. Once the government's income rises, it will be able to pay off its debt without worrying about default. Here is where Tanzania diverts from the debt model. On the graph below (click graph to zoom in), we can see that the increase in government borrowing is far greater than the increase in development expenditure (includes infrastructure spending etc) which is almost stagnant. Most of that debt increase has been used to finance recurrent expenditure and, just as a person using his credit card to buy more clothes while unsure of how he will pay for it, this is a dangerous game to play. Other payments such as interest on accumulated debt accounts for the remainder of the increase in government debt.


Source: CAG reports (2008/09-2011/12)
At this rate, financing government debt will become unsustainable and we must come up with a solution now to avoid a debt default. A debt default will come with its own host of problems such as reduced investor confidence in Tanzania and a further pull out of foreign direct investment as well as increase in inflation as the central bank tries to increase currency flows in the country. According to current estimates, public debt will be around $14 billion by June 2012, which means we will have crossed the Debt/GDP ratio of 50%. Research by Harvard economist Ken Rogoff has shown that above levels of 60% for developing economies, growth rate is slashed on average by 2%. We need a radical change in the way government raises funds for financing its operations or else we may be headed for a debt crises of our own.


Wednesday 30 May 2012

How to fix the Freedom of Information Bill.. with 9 easy Principles

After reviewing the history of the FOI Bill in Tanzania, we can that there has been an obvious inaction on the part of the government on this issue. However that is only half the problem, the other half concerns us, the ordinary citizens who stand to benefit most from information being made public. We also share the blame for inaction that is causing this whole process to move at a snail’s pace.

In the second part of this series, we will use a barometer of 9 principles designed by the transparency advocate NGO Article19 as a yardstick to measure the constitutionality of the FOI Bill of 2006 and how we can improve it.

Before we begin, however it must be pointed out that the initial FOI bill that was published in 2006 had merged the Freedom of Information (or Right to Access of Information) with the Media Services Bill. This incited a lot of the criticism by the stakeholders and they recommended, as we do too, to introduce these two bills separately because despite being related, they do not address the same issue. For the section below we will discuss only the Right of Access to Information which is commonly referred to as the Freedom of Information (FOI) Bill.


Summary of Uhuru Blog's Proposed Changes to FOI Bill 2006
  1. Submit the Right to Information/Freedom of Information Bill as a separate bill and not together with the Media Services Bill
  2. Remove any exemption to the right of access from public bodies such as Commission of Enquiries [Section 2] especially after the investigation is complete and findings have been submitted.
  3. Set a maximum limit for costs of providing information (i.e could be per page, per CD/DVD etc).
  4. FOI Bill must explicitly state that its principles of disclosure must take precedence over any other Act including National Security Act 1970, Newspapers Act 1976, Civil Service Act 1989 and any other Act which may be used to block requests for information [Ref: Section 56].
  5. The Bill should not exempt public information that is submitted to/by the Cabinet. If the information is sensitive at the time of deliberation, a strict timeframe (for example 6 months) should be set out after which it can be accessed. [Section 27].
  6. Appointment of an Information Commissioner (neutral, respected member of society and must ratified by two-thirds majority in parliament) who is responsible for oversight of the Right to Information Act. The draft FOI Bill calls for a Privacy Commissioner (Part IX) who is tasked more with protecting privacy of information rather than promoting its free access. This may hamper the attitudes that citizens and public officials will have towards this bill. An Information Commissioner should be more focused on promoting transparency as other rights (such as privacy) as adequately covered in this bill and the constitution of Tanzania
The Bill must be praised for its strict adherence to the public interest defence and that any exemption may be overruled in the interest of the public. Also it must be praised for extending the Right to access information from corporation and individuals if sufficient proof can be produced that it is in the public's interest. [Section 2]

From our analysis, it is clear that not a lot of changes are required to make the FOI Bill a truly acceptable bill , one which shows the government's commitment to openness and transparency. Therefore we at Uhuru Blog strongly urge the government to consider changes suggested by the Tanzania's Right to Information Coalition of Media stakeholders as well as urge all concerned Tanzanian's to put pressure on the government  so as a new bill is prepared and passed into law as soon as possible. 

Article19.org has a model freedom of information bill based on global best practices which can be used as a template to make it easier for policymakers. http://www.article19.org/resources.php/resource/1796/en/model-freedom-of-information-law

*Relevant sections in the Freedom of Information Bill 2006 (found here) are shown in brackets [ ].

Sources:
1. Article19.org Public's Right to Know: Principles of Freedom of Information http://www.article19.org/data/files/pdfs/standards/righttoknow.pdf
3. TOWARDS A STATE OF THE ART MEDIA AND INFORMATION LEGAL REGIME IN TANZANIA: IDEAS ON HOW TO GO BEYOND THE BILLS! By Deus M. Kibamba 










Monday 28 May 2012

History of Freedom of Information legislation in Tanzania





Freedom of information and the right to access this information is enshrined in almost all constitutions of democratically elected countries. It grants citizens broad access to any information that may impact their lives, including state-held information. Section 18 of the Constitution of the United Republic of Tanzania explicitly spells out these freedoms; 

Section 18 (b) has out right to seek, receive and, or disseminate information regardless of national boundaries; (d) has a right to be informed at all times of various important events of life and activities of the people and also of issues of importance to the society. 

United Nations and African Union have also issued strong statements regarding disclosure of public information such as the following excerpt from the 2004 UN Joint Declaration:

"The right to access information held by public authorities is a fundamental human right which should be given effect at the national level through comprehensive legislation (for example Freedom of Information Acts) based on the principle of maximum disclosure, establishing a presumption that all information is accessible subject only to a narrow system of exceptions."

However, in Tanzania as in many other democracies, such constitutional rights are not backed by specific legislation which mandates the government to release all state-held information to its people on a regular basis or when requested to. These laws collectively are called the Freedom of Information Act (also known by other names such as Promotion of Access to Information) and according to the NGO Article19 over 90 countries globally have enacted such laws to date and many others have these laws in various stages of the parliamentary pipeline.

So how has Tanzania fared when it comes to Freedom of Information laws? An effort was made in 2006 with the introduction of a Freedom of Information Bill (2006) which packaged together Right to Access of Information and Media Services Bill. After consultation with different stakeholders brought together by the Media Council of Tanzania (MCT) and the Media Institute for Southern Africa Tanzania Chapter (MISA-TAN), this bill was rejected due to a number of inconsistencies pointed out by various experts. Following this, the stakeholders produced an alternative FOI bill, containing a number of changes which was submitted to government for deliberation in 2007. No concrete submissions (draft bills, recommendations etc) regarding FOI Bill have been made since, and the government have yet to respond to changes made by the various stakeholders including MCT, MISA-TAN and the Tanzania Media Women's Association.

Some comments have been made by various government officials under whose mandate the FOI falls. In 2010 when asked in a parliamentary session to clarify the procedures for accessing information (for MPs in this case), then Minister of State in the Prime Minster's Office Phillip Marmo had this to say:

“The conditions include the ones I enlisted as part of my supplemantary answer, but let it be reminded here that there are huge demands and worldwide, where there is a huge public demand including parliamentarians to access information from government offices there have been some processes including laws providing greater details. Such, is normally called, Freedom of Information Act. In our country, for all this time, we have not received any such demand for such a Law from the general public, parliamentarians or even from the media. This is why we have continued to use the current practice”.


Former Minister of Information and Culture Dr Emmanuel Nchimbi has made a number of comments over the years regarding the Freedom of Information Bill. In January of 2011 he said to a meeting of media stakeholders; 


“The government will do everything possible to make sure that the bill is enacted and implemented accordingly”. 


As recently as March 2012, the Minister again informed media personalities during an award ceremony that the writing of the new freedom of information bill is at an advanced stage. Media stakeholders and CSOs are becoming increasingly concerned about such blatant disregard for and delays in submission of an FOI Bill by the Government. It has been almost 5 years since any significant progress was made and we are no way near to enacting a freedom of information law. As concerned citizens, we at Uhuru Blog strongly urge fellow citizens to follow this issue closely as the potential gain from such an important piece of legislation is immense.

In the next part of this series we will analyse the FOI Bill of 2006 in more detail and propose our own solutions based on global best practices.


Sources:
1. Commonwealth Human Rights Initiative http://www.humanrightsinitiative.org/index.php?option=com_content&view=article&id=59&Itemid=80
2. MISA-TAN press release on rejection of FOI Bill http://www.humanrightsinitiative.org/programs/ai/rti/international/laws_papers/tanzania/stakeholders_reject_draft_foi_bill.pdf
3. Africa Freedom of Information center http://www.africafoicentre.org/index.php?option=com_content&view=category&layout=blog&id=293&Itemid=561
4. IPP Media article Stakeholders: Enact freedom of information law http://www.ippmedia.com/frontend/index.php?l=25257
5. MISA TAN article on Efforts in search of a FOI Bill Tanzania http://www.tz.misa.org/index.php?option=com_content&view=article&id=66:efforts-in-search-for-right-to-information-must-not-be-neglected-by-the-government-of-tanzania
6. Tanzanian Constitution 1977 (with amendment in 2005)
7. Freedom of Information Draft bill published in 2006 http://www.humanrightsinitiative.org/programs/ai/rti/international/laws_papers/tanzania/draft_foi_bill_2006.pdf