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TANZANIA This report is part of the voluntary tripartite peer review of competition policies in the United Republic of Tanzania, Zambia and Zimbabwe. The purpose of this tripartite peer review is to assess the legal framework and enforcement experiences in each of the three jurisdictions; draw lessons and best practices from each jurisdiction; and examine the value-added of the harmonization of competition law and its enforcement in this subregion, as well as increased cooperation. The national reports review the competition policy systems in each of the above-mentioned countries, and serve as a basis for comparative assessment report that addresses pertinent issues from a subregional perspective. The report is based on extensive desk research Tanzania. The desk research covered review of, inter alia: (i) the Fair Competition Act of 2003 (FCA), the Fair Competition Commission (FCC) Procedure Rules, the Merger Guidelines, the Merchandise Marks Act of 1963, and the Merchandise Marks Regulations of 2008; (b) selected decisions of the FCC and Annual Report for 2008–2009; (c) national policies such as the Sustainable Industrial Development Policy, National Vision 2025, National Republic of Tanzania was undertaken during the period 6 – 12 November 2011, where interviews were carried out with various stakeholders. 5 1.0 GENERAL FRAMEWORK ON ECONOMIC POLICY AND DEVELOPMENT 1.1 Political Context The United Republic of Tanzania is a union of two States of Tanganyika and Zanzibar. Following the German loss in the First World War, Tanganyika came under British rule in 1919 after the Treaty of Versailles where the “partition of Africa” was discussed 6 . The country became independent in 1960 with Mwalimu Julius Nyerere as its prime minister before becoming President in 1962 under the Tanganyika African National Union (TANU) party. TANU’s Constitution called for the creation PREFACE 33 of a Socialist State in the United Republic of Tan- Chinese and Soviet political-economy concepts. TANU changed its name from 1977 to Chama Cha Mapinduzi7 (CCM), after establishing a One-party State as a conduit for more effective policy deliv- However, by the late 1980s there was irresistible system that had not delivered to people’s expectations. With the collapse of the Soviet Union, swift political change swept over most of the African continent, which necessitated the introduction of multiparty politics in the United Republic of Tanzania 8 . Multiparty elections were held in 1995 and the CCM won. Following the 1995 elections, the CCM Government saw the need to formulate a new economic and social development vision for the United Republic of Tanzania. It was evident then that the developmental policies that had been undertaken under the one-party State had good intentions but did not progress the country to a higher developmental level. The National Development Vision 2025 was formulated in 1996 through the United Republic of Tanzania’s Planning Commission. The main purpose of the Vision was to transform the United Republic of Tanzania into a middle-income country within one generation through, inter alia, a strong and resilient economy which is competi- people. In its conceptualization, the Vision 2025 holds that: “A vision for development is an articulation of a desirable future condition or situation which a nation envisages to attain and the plausible course of action to be taken for its achievement…A shared vision arouses people’s aspirations and creates the spark that lifts the nations out of its mundane”. The vision has the following three targets9 : (i) High quality livelihood (ii) Good governance and rule of law (iii) A strong and competitive economy TANZANIA
34 VOLUNTARY PEER REVIEW OF CLP: A TRIPARTITE REPORT ON THE UNITED REPUBLIC OF TANZANIA – ZAMBIA – ZIMBABWE Arising from the Vision, the United Republic of Tanzania’s developmental path has revolved around as Chama Cha Mapinduzi (CCM) Election Manifesto of 2005 whose main objective is to improve the quality of life for every Tanzanian; National Strategy for Growth and Reduction of Poverty; Sustainable Industrial Development Plan; National Trade Policy; Tanzania Mini Tiger Plan 2020; and the Millennium Development Goals. All these are meant to quicken the attainment of the country’s Vision 2025 10 . Three key issues in a political context stand out today to affect competition policy in the United Republic of Tanzania. Firstly, traditionally, the State has been an active participant in economic activity and took direct control of all the means of production for almost 20 years. This State control was eventually relinquished through the structural reform but there remains a strong regula- Government departments and Ministries on how business is conducted in the country. Successful business growth and development is still linked to favourable political support. For instance, in 2000, the Government recorded that cashew nuts were at the time the leading foreign exchange earning crop for the country. Then President Benjamin Mkapa directed Government authorities to give incentives to investors, particularly for cashew nut processing plants. Arising from this, only processed cashew nuts, and not raw seeds, were to be exported. 11 This was a commendable directive as it facilitated the creation of locally based processing plants. The only drawback was that the incentives were given to the processors, but not the farmers, thereby creating a distortion in bargaining power and wealth creation as the processors exercised greater market power in their vertical relationship with the farmers. Other industrial sectors such as coffee and tea have faced similar challenges. Secondly, there have been criticisms about the varying investment incentives and other terms that tend to favour foreign investors to local ones. While most Tanzanians are operating micro and SMEs, the blue-chip enterprises are operated by foreigners, more particularly Kenyans and South Africans stand out. 12 Where subcontracting with the big businesses are made, such contracts, if and well-connected Tanzanians. This again creates barriers to accessing big business and most probably has led to a stagnant domestic industrialization in the face of stagnant and/or perpetual SMEs. It has been noted that despite recent gains in economic development, the United Republic of Tanzania may still have a certain strong political inclination to State intervention in the economy, particularly the agricultural sector where the crop marketing boards (CMBs) have control over key cash crops. The CMBs are set up by Government action, with broad responsibilities and powers of compulsion over producers and handlers of de- cotton and tobacco. They come in the form of boards stabilizing prices by trading alongside other enterprises, export monopoly marketing boards, and domestic monopoly marketing boards as. 13 Institutional reforms have well been underway and observers are optimistic that the country will continue on this path as it is essential to the development of a strong private sector. 14 There is a large informal sector that needs to be incentivized to be innovative and graduate to the formal sector. Sanya and Gaertner (2012) study 15 shows that the United Republic of Tanzania, owing to its large informal and rural community, has the highest unbanked community in the EAC, as shown below: Formal Informal Excluded Entirely Kenya 40 per cent 27 per cent 33 per cent Rwanda 21 per cent 26 per cent 52 per cent United Republic of Tanzania 17 per cent 27 per cent 56 per cent Uganda 28 per cent 42 per cent 30 per cent South Africa 64 per cent 10 per cent 27 per cent Source: Finscope 2010 Part of the proposed solution was that bank regulations should continue to promote contestable different types of banks and the products they offer. One way of doing this was to address market segmentation due to large State and foreign bank presence by privatizing the few remaining Government-owned banks in favour of domestic participation.
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ZIMBABWE FULL REPORT ZIMBABWE
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ZIMBABWE TABLE OF CONTENTS PREFACE
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ZIMBABWE This report is part of the
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ZIMBABWE With the growing political
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ZIMBABWE of restrictive practices,
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ZIMBABWE competition authorities do
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ZIMBABWE divided according to geogr
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ZIMBABWE The Commission in 2006 whi
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ZIMBABWE to take care of themselves
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ZIMBABWE (under Section 9); basical
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ZIMBABWE Full scale investigation i
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ZIMBABWE (ii) to produce any book,
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ZIMBABWE The fact that CTC has a co
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ZIMBABWE tariat of technocrats, who
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ZIMBABWE Table 2: Number of Competi
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ZIMBABWE Regarding the handling of
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ZIMBABWE (Emphasis by the author) b
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ZIMBABWE Section 5 (1) (f) that pro
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ZIMBABWE Whilst the arguments can b
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ZIMBABWE Anti competitive agreement
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ZIMBABWE by conducting its case det
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