1998 SOUTHERN AFRICA ECONOMIC ... - National Treasury

TA N Z A N I A
exchange rate, the shilling ap p reciated from TZS 631.2 per USD
in Ju ly 1997, to TZS 617.7 per USD by November 1997 befo re
d e p reciating to TZS 631.3 per USD by December 1997. T h e
d e p reciation has been on account of tight supplies of fo re i g n
exchange in the marke t ,fo l l owing reduced export earnings.
The external debt at 31st December 1997 was USD 7,931.2 m.
Out of the total debt, disbursed outstanding debt was USD
6,522.9 m, or 82.2 perc e n t , and committed undisbursed debt
was USD 1,408.3 m, or 17.8 perc e n t .
During the second quarter of 1997/98, the trade account
re c o rded a deficit of USD 151.8 m.The poor performance was
l a r g e ly attributed to a big drop in export earnings. E x p o rt
receipts decreased by 19.9 percent to USD 202.6 m, w h e re a s
the import bill increased slightly to USD 354.4 m.
Financial In s t i t u t i o n s
Ta n z a n i a ’s central bank, the Bank of Ta n z a n i a ,was established in
1 9 6 6 .The primary objective of the bank, as outlined in the Bank
of Tanzania Act of 1995, is “..to fo r mulate and implement
m o n e t a ry policy directed to the economic objective of
maintaining price stability, c o n d u c i ve to a balanced and
sustainable growth of the national economy of Ta n z a n i a .”
In 1991, the financial services sector was opened to private and
fo reign cap i t a l . A l ready sixteen fo reign banks and nine non-bank
financial institutions have been licensed to do business in
Ta n z a n i a . M o re than 80 bureaux de change are curre n t ly in
o p e r a t i o n .
B e fo re the deregulation of the financial sector,Ta n z a n i a ’s stateowned
National Bank of Commerce dominated the banking
s e c t o r, cornering 70 percent of the marke t . The National Bank
of Commerce is due for privatisation soon;the bank will be split
into three separate entities - a regional bank, a trade bank and a
m i c ro finance bank. C u rre n t ly, the focus is mainly on the
corporate sector rather than in the retail marke t .F u rt h e r m o re,
t h e re is a need for more finance for micro enterprises.
Liberalisation of the financial services sector and the
establishment of open markets in fo reign exchange and
government paper have extended the scope for the
implementation of an active monetary policy. I n t e rest rates have
been liberalised and are now determined fre e ly by the marke t .
Since the launching of regular Tre a s u ry Bill auctions in A u g u s t
1 9 9 3 ,it has been possible for the central bank to set its discount
rate on the weighted average yield of all maturities.
Dar es Salaam Stock Exchange
The Dar es Salaam Stock Exchange is fo r m a l ly scheduled to
begin operations on 15 April 1998. The Capital Markets and
Securities Authority was tasked with developing the rules and
re g u l a t i o n s ,and with launching the stock exchange marke t .
When it opens for business, the stock exchange will have one
quoted company, n a m e ly Tanzania Oxygen. It is expected that
Tanzania Breweries and Agip will list on the exchange in 1998.
The exchange operates on a three-tier system, the first tier
being listed shares that meet international listings re q u i re m e n t s ,
the second tier having less stringent re q u i rements and the third
being an ove r-the-counter tier, for those which fail to meet the
conditions for the first two segments. F i ve stockbro kers we re
licensed in June 1997.
Fo reign Tr a d e
Main export goods are agricultural commodities such as coffe e,
t e a ,t o b a c c o, c o t t o n ,and cashew nu t s . E x p o rts of manu f a c t u re s
h ave been growing steadily during the 1990s, and accounted fo r
16 percent of total exports in 1995. I m p o rted products are
m a c h i n e ry, textiles and ap p a re l ,fuel and transport equipment.
Ta n z a n i a ’s main export markets are Germany, the UK, t h e
N e t h e r l a n d s ,China and the USA. I m p o rts are sourced from the
U K ,G e r m a ny, J ap a n ,I t a ly and France.
Tanzania now has a compre h e n s i ve liberalised trade re g i m e.
Restrictions on imports have been re m oved (except for those
items on which control is necessary for health or security
re a s o n s ) ,e x p o rt and import pro c e d u res have been simplified
and single channel export of traditional crops has ended. Fo r
statistical purposes, all imports still need to be declared on an
i m p o rt fo r m .
Tanzania is a member of SADC and COMESA.
Fo reign Di rect Inve s t m e n t
Fo reign direct investment into Tanzania has incre a s e d
s u b s t a n t i a l ly over the past two ye a r s .Most of the fo reign dire c t
i nvestment into Tanzania flows into the mining and exploration
sector - during 1997,Tanzania re c e i ved investments to the value
of USD300m in mining and exploration.The companies invo l ve d
h ave included Sutton Resources (Buly a n h u l u ) ,Pangea Goldfields
of Canada and Randgold of South Africa (Golden Ridge in
S u k u m a l a n d ) ,and Resolute of Australia and Samax Resources of
Britain (Golden Pride on Lake V i c t o r i a ) .
Other major investments in 1997 included a USD50m
i nvestment by South African Breweries in a new brewe ry, a
USD55m investment by R.J. R eynolds in the Tanzania Cigare t t e
C o m p a ny. Substantial opportunities for investment have also
been created by Ta n z a n i a ’s privatisation programme (see below ) .
P r i v a t i s a t i o n
The Parastatal Sector Reform Commission manages the
d i ve s t i t u re of non-performing government parastatals. By the
end of 1997, ap p rox i m a t e ly 150 companies had been privatised.
The first sugar firm to be privatised in Tanzania is Kilombero
S u g a r.The company was bought by Illovo Sugar Limited of South
Africa and F Man Ground from the UK in March 1998. Due fo r
privatisation soon is the National Bank of Commerc e.
Fo reign investors participating in Ta n z a n i a ’s privatisation programme so far have included the fo l l ow i n g :
International Company
I nve s t m e n t
R . J .R eynolds (Switzerland)
Tanzania Cigarette Company
Tadema (Switzerland) 77 percent stake in New Africa Hotel in 1993
W i l c roft (South Africa)
75 percent of Williamson Diamonds Ltd
Asea Brown Boveri (Switzerland) 70 percent of TA N E L E C
Holderbank (Switzerland)
60 percent of Tanga Cement
S CANCEM (Scandinavia)
60 percent of Tanzania Po rtland Cement
Carnaud Metal Box (UK)
CMB Ta n z a n i a
Dae Sung (South Ko rea)
Tanzania Cables
Kabool (South Ko rea)
M o ro go ro Po lye s t e r
Modern Trading Agencies (Saudi Arabia) National Engineering Company
A commitment has been made by the government to privatise Tanzaniaís major public utilities, including water, s ewe r a g e,
t e l e c o m munications and electricity.
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