By Ali Twaha

Kenyan Supermarket chain Nakumatt is in urgent need of a capital injection. Anything short of that could see the regional supermarket chain falling, writes ALI TWAHA.

As recent as last year, the Oasis mall parking lot, where Nakumatt supermarket is the anchor ten- ant, used to be a beehive of activity. Finding parking space required patience and tact; trolleys dripping with items used to squeeze through cars; and the security men manning the entrance into the mall were constantly opening car boots and shutting doors.

These were the good times at Oasis mall when clients stormed the area in droves. The mall has, however, turned into a shadow of its former self as Nakumatt runs into all kinds of trouble from battles with its suppliers to financial bottlenecks it faces leading to a drop in the numbers of customers going to the mall.

A number of customers continue to complain at how thin and empty Nakumatt’s shelves have become after the supermarket stopped stocking some items because of unresolved disputes with its suppliers. Nakumatt stopped selling some major items such as Coca-Cola, sugar, Heineken and a range of other alcoholic drinks following allegations it had failed to settle its outstanding debts with suppliers.

Management issued a statement last week, explaining the precarious situation the supermarket finds itself in. The company’s managing director, Atul Shah, noted “Like any other business operating in this market, Nakumatt Holdings has faced a number of unforeseen business challenges. These challenges

range from a depressed economy, higher operating costs and extraneous factors including enhanced risk management due to prevailing security threats among others.”

It added: “As expected, these factors have impact- ed on operations on many fronts including cash flow.”

Trouble has been brewing at Nakumatt for quite some time. In April, The Observer reported about a strike at the Kenyan supermarket chain. Then, workers complanied about discrepancies in pay.

Some workers The Observer spoke to at the time said they were protesting against management’s decision to slash their salaries without a reasonable explanation. Others said management at Nakumatt was too arrogant to listen to their pleas.

By Otushabire Tibyangye

I decided to migrate from Bulemeezi in Buganda to Nyabushozi, Ankole, in 1963 so I could practise mixed farming although my background is cattle keeping.

One of the reasons why I settled here was to have enough land for both keeping cattle and growing cash crops such as coffee and tea, and other food crops such as bananas.

My target was to produce milk alongside other crops. When I came to this village, Kyejo in present-day Kazo county, I had only 10 heads of cattle. They were local breeds.

I had not gone far with education having finished the equivalent of Primary Four in 1950, but was focused on what I wanted in life.

Banana growing

I immediately established a banana plantation of two acres to feed my family and give to my neighbours who were few at that time.

I eventually acquired 200 acres of land where my farm currently is. The money was from the sale of beans and chicken. I have always grown beans, which helped me raise capital for labour.

I started with an acre of beans and kept expanding it up to 10 acres. As I planted beans, I would use the same land for bananas. At times, I harvest about 100 bags of beans a season.

Currently, there are 10 acres of bananas intercropped with paw paws where I harvest 300 bunches and earn between Shs2m-Shs3m depending on the season. I sell most of the bananas to traders, who come from Mubende, and few to locals in the village.

Later I planted two acres of eucalyptus trees to provide poles for use on my farm. This forest has not only provided poles for my farm, but have also become a source of revenue.

I have established a pole treatment plant, from which I earn up to Shs2m depending on the demand. With the demand for electricity poles, I have also planted two more acres of trees, which are about to mature.

Dairy animals

In 1973, I visited dairy farmers in Bushenyi District and found that they had introduced exotic animals. When I came back to my farm, I was determined to change my animals too.

I bought a bull from there and since then I have completely done away with the local breeds, whose number had come up to about 200. I now keep 80 cows, which are improved breeds, that produce 200 litres of milk a day.

I fenced off the land and put paddocks in place to control disease through ticks from other animals, wastage of pastures and also to reduce costs of labour.

I have also improved the pastures by planting Rhodes grass, Calliandra and Napier grass for supplementary feeding of lactating cows.

I have also introduced zero grazing for animals that give higher yields.

There are four such animals, which among them yield 60 litres of milk per day.

I have a “sick bay” where the animals are treated expecially those that fail to deliver and those that need extra attention.

This sickbay has saved four animals, which had complications during delivery. They delivered calves via Caesarean section just like how human beings can be operated on.

By Bernard Lugongo

The supply of sugar against demand is set to increase as more investors have shown interests to venture into investment in the sector, hence promising a big relief in prices of the commodity in the country in future.

In this vein, the Minister for Industry, Trade and Investment, Mr Charles Mwijage, and the Minister for Agriculture, Livestock and Fisheries, Dr Charles Tizeba, would this month depart to Mauritius in a mission to attract investors into the sugar sector.

The Permanent Secretary in the Industry, Trade and Investment Ministry, Professor Adolf Mkenda, told the ‘Daily News’ through the telephone yesterday that preparations were being made for the trip. “The talks with Mauritius have already been held and they are waiting for us to go,” Prof Mkenda said.

The good news from the government came at the time when Tanzanians are now feeling the pinch of hiked sugar prices for the past eight months. Prices for the essential commodity went up from early this year when the shortage of the product hit the market due to some of the traders ‘sabotaging’ the economy by holding big chunks of sugar in their warehouses.

The situation had forced the government to embark on a countrywide search for hidden sugar, which resulted into prices going up to over 3,000/- from about 2,000/- per kilogramme in many parts.Since then, prices have slightly gone down, largely hovering at around 2,500/- per kilogramme.

Mr Mwijage, told the ‘Daily News’ that the sugar production was good for the country as it serves as a catalyst to utilise its potential capacity of producing 2 million tonnes against the current 300,000 tonnes per year.

The minister noted that several local and foreign investors were now in different stages to set up sugar firms — mainly in Morogoro, Kigoma and Songwe regions as well as Rufiji District of Coast Region.

Last week, the National Social Security Fund (NSSF) and PPF Pension Fund announced plans to jointly establish a sugar processing factory at Mkunazini and Ngerengere in Morogoro Region. The pension funds stated that the proposed factory will be in a position to churn out 200,000 tonnes of sugar per year.

Mr Mwijage noted that in Rufiji two major foreign investors are set to establish giant sugar factories. But he was not in position to tell the timeframe within which they would start operations. He said another foreign investor was set to embark on massive sugarcane farming in Songwe, noting that currently, talks are ongoing with the relevant authorities for the company to begin production.

He further noted that the plans were also to make the existing sugar factories to raise their production capacity, saying the Morogoro sugar industry is set to produce 270,000 tonnes per year by 2020. He said Kilombero sugar and Kagera sugar factories were directed to produce more.

According to him, the ministry is now conducting talks with existing sugar producers to list down the challenges they face in efforts to increase production to enable the government to find solutions

.Meanwhile, Mr Mwijage reported that his ministry has implemented the directive by President John Magufuli to set aside 10,000 hectares of land in Bagomoyo District for Bakhresa Group of Companies to establish a sugar factory.

y Annie Njanja

American online taxi hailing company Uber has slashed its charges in Mombasa just days after Safaricom-backed rival, Little, announced its entry into the coastal city.

The new charges that took effect Thursday will see the San Francisco-based e-hailing firm charge riders Sh35 per kilometre down from Sh50.

The firm has also reduced its charges per minute by Sh2 to Sh3 and cut the pricing of short rides by Sh100 to Sh150. Base fare and cancellation fees were also cut by Sh30 to Sh50 and Sh200 to Sh150, respectively.

The new rates come three months after the firm slashed Nairobi prices by a third. The firm cut the app’s per-kilometre cost to Sh35 from Sh60, and lowered per minute transit charges by Sh1 to Sh3, but left the minimum charge intact at Sh100.

“We want to make sure that Uber is one of the most affordable ways to get around. With reduced fares, we believe Uber can now be a true alternative to people driving their own cars into the city centre, with all the hassle and cost that parking brings,” said Uber in a statement.

The new rates are set to rival Little’s which has positioned itself as a cheaper option. The firm charges passengers Sh55 per kilometre and Sh4 per minute — with no flat base charge or price surges. Uber applies price surges, where it hikes rates by a multiple, say 1.5 times, in the event of high demand.

Uber launched its services in Mombasa, Kenya’s tourism hub, in March this year. The new prices also come just in time for the Christmas holiday when the town experiences an influx of local and international travellers who are likely to use the service.

Uber is regarded as Kenya’s biggest taxi online hailing firm with more than 1,000 drivers recording about 10,000 journeys every day.

Pewin cab’s Dandia app, unveiled last month, also plans to make an entry into the coastal town. The firm expects to intensify price wars in the e-hailing space with its fixed zonal charges.

Dandia e-hailing application has set specific charges between destinations, unlike rivals Uber, Mondo Ride and Taxify which only indicate a price estimate at the beginning of a trip.

State-owned Kenya National Taxi Corporation is piloting an app in Nairobi to challenge Uber’s dominance and take a bite of the retail cab market. The e-hailing service is available in Nairobi and will by year end be unveiled in Mombasa and Kisumu.

The online taxi hailing apps have an attractive pricing model where every trip is automatically and openly costed, helping users to budget for their travel expenses unlike regular cab drivers who quote their prices based on arbitrary spot negotiations with clients.

By Peter Saramba

Mwanza — Cotton stakeholders have pointed out the absence of field extension services, poor quality seeds, shortage of pesticides and lack of markets as among the challenges hindering the development of the cotton sub-sector in the country.

Presenting his preliminary report on challenges and what needs to be done to increase cotton production, Prof Reuben Kadigi told the stakeholders from across the country, including farmers, agricultural inputs agents, buyers, exporters, processors and quality control instruments, that the only way to improve and increase cotton production was to establish small, medium and large processing factories in the country to reduce the rate at which cotton is being sold as a raw material.

According to Prof Kadigi, Tanzania currently can manage to process only 30 per cent of its cotton, while the remaining 70 per cent is being sold as raw material.

“We are not only selling raw material, but also wasting employment opportunities for our people. This must change,” urged Prof Kadigi.

For his part, the Vice Chairman of the Tanzania Cotton Growers Association (TACOGA), Mr Godfrey Mokiri, said apart from making sure farmers get seeds and other inputs in time, there is a need to have a special fund mandated to compensate farmers depending on world market prices.

“With proper advice from field extension officers on the best ways to increase production, we should also aim at introducing small industries in our areas to add value by making the spindle fibres and finally clothes instead of selling our cotton as raw material,” said Mr Mokiri

Commenting on the quality and direct benefit to cotton stakeholders, a cotton buyers, Mr Mohamed Sharif from Birchad Group, urged the government and other relevant authorities increase efforts in regulating players including farmers, buying agents, extension officers, seeds and pesticide suppliers.

ACT Managing Director Janet Bitegeko said the council reached a decision to make a preliminary study of the challenges and the best way to control and efficiently manage the value of chain in the sub-sector.

Ms Bitegeko urged cotton stakeholders to join hands and fight together for their sectoral development.

By Abdullateef Aliyu

Lagos — There was panic at the international wing of the Murtala Mohammed Airport (MMA), Lagos yesterday following a minor fire outbreak which cut off electricity supply at the airport.

The fire incident happened at Finger Main Distribution Board at the E-Finger of the Airport, it was learnt. It was reportedly triggered by electric spark.

A worker at the airport said the minor fire incident caused passengers and other airport users to scamper for safety as some people thought it was a major fire incident.

The Federal Airports Authority of Nigeria (FAAN) through a statement by its Acting General Manager, Corporate Affairs, Mrs. Henrietta Yakubu, confirmed the incident, saying power was immediately restored.

By Dicta Asiimwe

East Africa received a mixed bag of results in doing business in the latest report by World Bank; with Rwanda and Kenya leading while Burundi, South Sudan and Somalia brought up the rear.

The World Bank cited implementation of projects meant to improve trading across borders as key to the good showing while civil strife hampered those countries that did poorly.

According to the World Bank’s Doing Business 2017 report, Rwanda — ranked 56 from last year’s 59 — remains the easiest place to start a business in the region. Rwanda is also the second easiest country within which to do business in sub-Saharan Africa after Mauritius, which is ranked 49th.

Kenya — the bloc’s biggest economy — though at second place, was the most improved, moving 21 places up the ranking from 113 last year to 92. Uganda is ranked at 115 from last year’s 122, while Tanzania moved to position 132 from 144.

Troubled by civil strife, Burundi is ranked at 157. South Sudan, another East African country dogged by incessant conflict, was ranked at 186, four places short of being the worst performing country in the world. At 190, Somalia which also suffers the debilitating effects of war, terrorism and a fledgling government is ranked as the worst country to start a business in the world.

Rwanda saw its biggest improvement in its trading across borders measure, having moved 44 places from last year’s position of 131 to position 87 now. Uganda moved up five places in the trading across borders measure, while Kenya moved up two places.

Tanzania, which was hailed for improvements at Dar es Salaam Port, remained in the same position of 180 in the trading across borders measure due to the country’s high border compliance costs for importers and exporters.

Access to credit

But, Tanzania improved its overall ranking because of its rating in improving access to credit where the country moved up 108 places from last year’s 152 to 44 this year.

The country’s credit bureau system, which had by January 2016 registered 6.5 per cent of the adult population, is expected to ease the cost of borrowing money.

According to the World Bank doing business manager Rita Ramalho, 10 measures were used to come up with the ranking.

They are: Starting a business; dealing with construction permits; getting electricity; registering property; getting credit; protecting minority investors; paying taxes; resolving insolvency; enforcing contracts and trading across borders.

According to the World Bank’s Doing Business 2017 report, the East African Community did well in the trading across borders measure on account of several investments that have mostly been financed by TradeMark East Africa. These include investments in improvement of infrastructure at the region’s different entry points.

World Bank officials highlighted improvements at the Dar es Salaam Port, the construction of one-stop border posts in the region and the improvement of tax payment systems.

Ms Ramalho said measures such as resolving insolvency, protecting minorities and providing electricity remain a challenge in sub-Saharan Africa.

“More political momentum is necessary for these reforms as they are difficult to implement,” she said.

However, Kenya managed to implement reforms in resolving insolvency, protecting minorities and providing electricity, which are considered.

Kenya uses a geographic information system to connect electricity, which eliminates the need to conduct a site visit and saves on time.

Reformers

In the area of protecting minorities, the government introduced greater requirements for disclosure of related-party transactions to the board of directors.

“Kenya made it easier to sue directors in cases of prejudicial related-party transactions and allowed the rescission of related-party transactions,” said Ms Ramalho.

The country was among the 10 best reformers in the world. The other nine are Bahrain, United Arab Emirates, Georgia, Pakistan, Serbia, Indonesia, Kazakhstan, Belarus and Brunei Darussalam.

In Uganda, Private Sector Foundation executive director Gideon Badagawa said a combination of factors, including failure to follow up on plans and policies both in government and the private sector, are to blame for the country’s failure to improve its ranking. “We are in the same environment as Rwanda, but they are ranked 56 while we are still at 115,” he observed.

Mr Badagawa blames the difference between the two countries’ ranking on poor attitude towards work in Uganda, and a lack of efficiency in sectors where money has been invested.

The latest loan given to Uganda’s competitiveness and enterprise development project by the World Bank was meant to ease land and property registration and improve the business licensing regime. But the results are slow in coming.

The challenge of slow progress is also being experienced in Tanzania, where the World Bank has invested in the competitiveness project over the past ten years, which involves improving land and property registration procedures, as well as easing the business licensing regime. But officials from both Uganda and Tanzania are hopeful that the the World Bank’s competitiveness loan will start having an impact soon.

COLUMNBy Karl Lyimo

Exactly 30 years to the day today is like so much water under the proverbial bridge, counting from when the British Government suddenly deregulated its financial markets on October 27, 1986. The event was to become known as the ‘Big Bang!’

This was in reference to the ‘Big Bang Theory’ in Astronomy – as opposed to the ‘Steady State Theory.’ The former is speculates that the Univesre originated billions of years ago from the explosion of a single mass of material – and that the ‘pieces’ therefrom are still flying apart today…’ Sheesh!

Back to the British Financial Big Bang… Britain deregulated its financial markets, leading to restructuring of the way those markets operate!

Perhaps as the Sisters of Fate would’ve it, a little more than a decade down the Financial Road, an economic minicrash took place (also) on an Oct. 27 (but, in 1997), when stock markets around the world crashed – largely from fears of a global economic meltdown.

In the event, for example, the legendary Dow Jones Industrial Average plummetted 554.26 points, falling to 7,161.15! The ‘Dow Jones Industrial Average’ is, of course, a measure of stock market prices based on 30 leading companies listed on the New York Stock Exchane (NYSE) in the US.

But, that’s another story…

As already noted, Britain’s financial markets deregulation a generation ago was followed a decade later – Oct. 27, 1997 – by the global economic minicrash that played havoc with national economies on Planet Earth this side of Heaven.

Even Tanzania was dragged into that financial Black Hole, forcing the Govt. to undertake various measures especially in the Financial Markets stakes.

For instance, President Ally Hassan Mwinyi of the Second Phase Government (1985-95) was cornered by force of circumstances into embarking upon economic liberalisation, beginning in the late 1980s. Some of the milestones in the country’s financial markets included the Foreign Exchange Act, enacted in March 1992. The Act liberalized external trade, and created an enabling environment for market-determined exchange rates.

In January 1994, the Mwinyi Govt. enacted the Capital Markets & Securities Act – followed in June that year by the Interbank Foreign Exchange Market (IFEM). IFEM is a wholesale market which facilitates determination of the exchange rate, replacing the weekly foreign exchange auction system.

Fast-Forward to May 2003, when the Third Phase Govt. of President Benjamin Mkapa (1995-2005) opened up for business the Dar es Salaam Stock Exchange to foreign investors. (DSE was statutory provided for in Sept. 1996). Also, several regulations were published in 2003 to guide foreign investors dealings in the Stock Exchange, and establish regulatory safeguards for orderly, stable market activities…

Oh, it’s a long, interesting story… But, exactly what are financial markets, a colleague at the next work-station asks!

Well, very briefly, the term describes a platform that facilitates prospective sellers and buyers of assets such as equities, bonds, currencies and derivatives. Generally, financial markets are regulated as to their trading activities, complete with transparent pricing (or so we’re told!) – with market forces determining prices of the securities that’re traded! Really…?

There seemingly are a bazillion financial markets in national Economies worldwide: Capital markets; Stock markets; Bond markets, Money markets, Derivatives markets, Cash or Spot markets; Forex and Interbank markets; Primary markets; Secondary markets; Over-the-Counter (OTC) markets; Third and Fourth Markets, etc, etc…

Suffice it here to say that financial markets play crucial roles, each in its own way, in a nation’s economic daily life. For that, they must be regulated in one form or another – and to one degree or another…

Britain had its Financial Markets Big Bang on today’s date in 1986 when, among other things, the Govt. of Premier Margaret ‘Iron Lady’ Thatcher dramatically deregulated that economic sub-sector.

Could it be said in the same breath that Tanzania also had its Big Bang in 1994 when it introduced the Capital Markets & Securities Act, the Interbank Foreign Exchange Market, etc?

What do you say to that? Cheers!

By Sylivester Domasa

The European Union (EU) has maintained its position as Tanzania’s largest trading partner, with two billion US dollar (over 4trn/-) trade volume last year, a new report has revealed.

According to the “European Investment in Tanzania: How European investment contributes to industrialisation and development in Tanzania 2016,” report, the European companies also account for 68 per cent of the total Foreign Direct Investments in Tanzania.

Launching the report in Dar es Salaam yesterday, EU Head of Delegation to Tanzania and EAC, Ambassador Roeland van de Geer, noted that the EU companies were also the largest taxpayers, paying 1.1 billion US dollars (over 2tri/-) in domestic tax in 2014, about 25 per cent of the total taxes paid by large taxpayers in the country.

“This goes to show that the over 1,000 European companies and individuals from large multinational corporations to small individual tourism ventures play a significant part in the development of the Tanzanian economy,” he said.

“This publication discusses the competitive edge that Tanzania has in trade, investment and production and the challenges that are currently faced. It also contains clear recommendations on the way forward. EU is committed to continue working with Tanzania and strengthening ties between our regions.

” The European companies have invested in energy, tourism, transport, banking, oil and gas, agriculture, mining, retail and trade, ICT, manufacturing and construction sectors. The envoy said the European private sector is well represented in almost all sectors of the Tanzania’s economy, with crucial impact on revenue collection and job creation.

“These are the best long term solutions for poverty reduction,” he said. EU Business Group Chairman, Mr Morten Juul, noted at the launching ceremony that Tanzania offers peaceful and stable environment, abundant natural resources and favourable geographical location.

“There are ample opportunities for European investors to work alongside local investors to create an active and successful private sector and continue to build the economy,” he said.

“We hope that through continued dialogue we can build an environment that further supports the EU investments in the country and we are willing to share our skills and experiences to address the current business impedi- Continues on Page 3 ments,” said Mr Juul.

Innocent Ruwende — South African President Mr Jacob Zuma is expected here next Thursday to attend the inaugural session of the Bi-National Commission where Zimbabwe and South Africa are set to discuss trade, investment, energy, tourism, water, health, regional and global developments. The Bi-National Commission would be jointly chaired by President Mugabe and Mr Zuma. President Zuma leads a delegation of eight Cabinet ministers and a number of agreements are expected to be signed at the conclusion of the meeting. The BNC was established on April 8 last year following the signing of an agreement by ministers of Foreign Affairs of the two countries during a State visit to South Africa by President Mugabe.

During the visit, three landmark agreements and two memoranda of understanding, which are expected to steer bilateral relations and development of the two neighbours to greater heights, were penned.

The BNC is a successor to the Joint Commission for Cooperation signed by Zimbabwe and South Africa on March 2, 1995 and it seeks ways and means of promoting and enhancing cooperation in the various sectors of Government and to coordinate initiatives in this regard as well as to facilitate contact between the public and private sectors of the two countries.

In a statement yesterday, the Ministry of Foreign Affairs said the session to be held in Harare on November 3, would be preceded by a ministerial meeting on November 2 and a senior officials meeting from October 31 to November 1 this year.

“It is also expected that a number of agreements will be signed at the conclusion of the meeting. On October 21, 2016 the Political and Diplomacy Committee of the Zimbabwe – South Africa Bi-National Commission met in Harare.

“The committee emphasised the importance of political and diplomatic consultations as a forum to enhance bilateral cooperation and an effective mechanism to track progress on the implementation of decisions taken at the BNC and other consultations,” reads the statement.

During President Mugabe’s visit to South Africa last year the key agreement signed was on the establishment of the BNC, which Zimbabwe Foreign Affairs Minister Simbarashe Mumbengegwi and South Africa International Relations and Co-operation Minister Maite Nkoana-Mashabane signed off.

The two ministers also signed a memorandum of understanding on Diplomatic Consultations; while Finance ministers Patrick Chinamasa and Nhlanhla Nene signed the agreement on Mutual Assistance Between Customs Administrations.

The agreement on Co-operation on Water Resources Management and establishment and functioning of the Joint Water pact were signed by the then Environment, Water and Climate Minister Saviour Kasukuwere and his South African counterpart. Industry and Trade Minister Mike Bimha and South Africa’s Rob Davies, signed an MoU on Economic and Trade Co-operation.

Presidents Mugabe and Zuma both hailed the agreements, MoUs and talks as notable milestones in the development of the two countries’ relations, expressing their desire to see these reflected in greater regional and continental integration for the betterment of citizens’ lives. President Mugabe said there was much the two countries could learn from each other. South Africa is Zimbabwe’s biggest trading partner in Africa.