South African Businesses Accused of ‘Colonising’ Tanzania

By Ongeri John, African Eye News Service (South Africa), 26 June 2000

Dar Es Salaam (Tanzania) - Tanzania's opposition parties this week added their voice to growing public concern about South African companies colonising the East African country.

Opposition leaders told Parliament South African investors were taking over strategic companies in the state's privatisation exercise and this would lead to a monopoly.

Tanzania has no problem with South Africa, but it is dangerous to let them take over all our strategic businesses and industries, said the shadow minister of finance, John Cheyo.

I am sure the government is capable of attracting investors from other countries so that our economy will not depend on South Africa.

South African investors have interests in breweries, mining, hotels and the financial sector.

The Johannesburg Chamber of Commerce recently ranked Tanzania as the most promising market in East Africa.

Tanzania was the leading recipient of capital flows from Southern Africa in 1998, with direct investments topping $443 million in 1998.

But negative attitudes towards the southern investors increased after Absa got involved in the privatisation of the Tanzanian National Bank of Commerce in 1997.

Absa demanded various changes in the memorandum of understanding for the sale of the bank, leading to the sale becoming a drawn-out process.

In February this year various firms from South Africa visited Tanzania to investigate setting up outlets for information technology products, consumer goods, construction equipment and pharmaceuticals.

An MTN delegation was in Dar es Salaam in April, exploring the possibility of acquiring 35 percent of the Tanzania Telecommunications Company Limited.

Southern Sun Hotels is extending its investments in Tanzania by launching a Holiday Inn in the capital. The project will cost $13 million US dollars and the hotel is expected to employ about 200 full-time workers.

The colonisation concerns come at a time when the East African country is about to embark on the privatisation of various state utilities.

The utilities earmarked for privatisation later this year include the Dar es Salaam Water and Sewerage Authority, the Harbours Authority, the Electricity Supply Company, the Railways Authority and the Tanzania Telecommunications Company.