TANZANIA BUSINESS
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2013 ISSUE: SPECIAL EDITION, 008 www.eurocom.co.tz
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Inside REGULARS
10 Technology 12 Tech Talk 14 COVER STORY: Transforming the African Economies 18 Smart Partnership Principles and their implications for Tanzania 20 Taking Stock of Twenty Smart Partnership Dialogues in Africa BUSINESS/FEATURE
23 From development to business partnerships 32 Innovation & Smart Partnership 36 Technological upgrading for enhancing tanzania’s industrial competitiveness PERSPECTIVE
42 10% Budgetary allocation to AGRICULTURE 44 Leveraging Technology for Competitive Advantage... 54 Public-Private Partnership for National Innovation
Tanzania Business
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Global 2013 Smart Partnership Dialogue
Global 2013
Smart Partnership
Dialogue
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African Technology Innovations that are Changing Lives
Transforming the African Economies
>>Twenty Smart
Partnership Dialogues in Africa
>>Innovation & Smart Partnership
Cover Page: GLOBAL 2013: Smart partnership Dialogue
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TANZANIA BUSINESS
FOCUS
The power of the Private sector
Editorial Board Esther Mkwizu Board Director Dr. Gideon Kaunda Exec. Director Mr. Godfrey Simbeye Chairperson
Comm. Officer
Rehema Mtingwa
Editorial Consultants CEO Editor Sub-Editor
Dismas L. Masawe Michael Kagumya
Sameer Kamal
Contributors
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Africa’s burgeoning cities: Can technology level the ground?
Honest Prosper Ngowi Peter Chisawillo Sosthenes Sambua Dr. Melkiory Ngido Olubusola Ogunlolu Dr. Hilderbrand Shayo Constatine Deus Roohina Doloo Bitrina Diyamett Victor Karega Tumsifu Lema
500 MILLION USD INVESTMENT IN TANZANIA CEMENT PRODUCTION Dangote Cement Plc has invested 500 million USD in a new three million ton plant for Tanzania’s cement industry and the deal signals a new business relationship between Nigeria and Tanzania.
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Declaimer: The views expressed in this publication are not necessarily those of Tanzania Business Focus. The Publisher declares that this document has been compiled to the best of their knowledge. However, no warranty of representation is made to the accuracy of this information. The publisher assumes no responsibility for the mistakes that may arise from the use of this document.
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Microsoft sets out to transform Africa
LEVERAGING
TECHNOLOGY FOR AFRICA’S SOCIAL AND ECONOMIC
TRANSFORMATION: Getting the Policy Right
Rights: Tanzania Business Focus is the intellectual property of Tanzania Private sector Foundation TANZANIA BUSINESS FOCUS | 3
Finance
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4 | TANZANIA BUSINESS FOCUS
WORD
Godfrey Simbeye - CEO Tanzania Private Sector Foundation Dear Readers, Welcome to the Global 2013 Smart Partnership Dialogue and Welcome to Tanzania! I am honoured to extend to you the warm greetings from the Private Sector and the People of the United Republic of Tanzania. I am pleased that the Commonwealth Partnership for Technology Movement (CPTM) has agreed to hold this year’s deliberations in Dar es Salaam, Tanzania following request made by our President Hon. Dr. Jakaya M. Kikwete at the last International Smart Partnership meeting held in Putrajaya, Malaysia.
T
he theme of this year’s dialogue: “Leveraging Technology for Africa’s Socio-Economic Transformation: The Smart Partnership Way” has been received very warmly by leaders and peoples in Africa. We sincerely hope that the usual mix of tough and pertinent questions in the discussions, held in an atmosphere of affable informality, will generate insightful and stimulating discussions and reactions.
We look forward to pertinent outcomes that will help guide the continent on ways to overcome the obstacles to development and ensure prosperity for its people. Ways that will allow Africa to play its rightful role in the global political and economic arena.I would also like to commend the efforts of all those involved, under the exemplary guidance of the Honourable Chief Secretary, I am confident President’s Office, for successfully spearheading the preparations of this forum in that the forum cooperation with the staff of Ministry of Foreign Affairs and International Cooperation shall proceed and,most importantly, by involving fully key players from the private sector. At the smoothly and same time, my sincere appreciation goes to those who that have made financial and bring tangible in-kind contributions to ensure this forum is successful.
results in advancing the noble goals and spirit of the global community.
In conclusion, in Tanzania, we have a record of accomplishment for hosting various international meetings successfully. Besides the Heads of State present here, there is a very strong representation from government, business leaders, other non-business communities and academics. With the collaboration and support of all the participants, I am confident that the meeting will be a great success. We look forward to record attendance.
I heartily welcome all foreign delegates to Dar es Salaam, Tanzania’s business capital situated along the Indian Ocean coast. I also encourage my fellow Tanzanians, who did not get a chance to attend the meeting, to follow the dialogue closely through newspapers, radio and television station. I wish you all a memorable dialogue and every success in achieving your desired aims through attendance at this Global 2013 Smart Partnership Dialogue! Thank you!
TANZANIA BUSINESS FOCUS | 5
6 | TANZANIA BUSINESS FOCUS
WORD
Chairperson’s Foreword Esther P. Mkwizu
Tanzania Private Sector Foundation
T
anzania, particularly Dar es Salaam, is delighted and honoured to be chosen as host of the Global 2013 Smart Partnership Dialogue. We are immensely proud to host this prestigious event. Moreover, we extend our warmest welcome to all the participants from around the world who will gather from June 28th – July 1st 2013 in Dar es Salaam, one of the premier business destinations in Africa. As we step boldly into the second decade of the century, the 2013 Global Smart Partnership Dialogue is the perfect springboard to launch innovation and technology to greater heights and respond positively to the dynamic nature of business around the world today. One of the greatest challenges to a country’s overall development path is the inadequate access to correct and appropriate technology. Tanzania is a country endowed with abundant natural and human resources. The missing link is the technological knowhow on how to access, exploit and market these resources correctly for development.
We live and work in a time that presents great challenge along with abundant opportunity! The interdependent nature of business in the 21st century requires today’s generation to understand the political environments in their respective domains, while also maintaining their independence and objectivity.
The theme for this conference, “Leveraging Technology for Africa’s Socio-economic Transformation: The Smart Partnership Way”, is effectively re-inventing the technological roots of the dialogue. It is a call to take steps to assume even greater leadership roles in promoting and advocating for increased use of science and technology, because if we do, we shall close the information technology gap. Africa should be part of the ICT highway and leverage it for development in the world.
We live and work in a time that presents great challenge along with abundant opportunity! The interdependent nature of business in the 21st century requires today’s generation to understand the political environments in their respective domains, while also maintaining their independence and objectivity. Innovation is a key driver to enable us realize development in this new era of science and technology. We must embrace this change to be true leaders. The world economy is now regaining its balance after the global financial turmoil of late 2008. Now is an excellent time for all to pause and reflect and take positive steps to fortify knowledge, awareness, and skill sets. We will all need clearer vision to navigate the uncharted waters of a dynamically changing and sometimes perilous business environment. It is time for bold changes to make business more ethical, transparent and sustainable in the coming years. That is, being innovative! This is the flagship event of the year – we expect about 1,000 international and local participants for the 2013 Global Smart Partnership Dialogue. So, be sure to register early, either as a participant or as a sponsor, to secure an incredible opportunity for networking and professional growth.
Moreover, may I say “Karibuni Sana Tanzania” – Welcome to Tanzania! TANZANIA BUSINESS FOCUS | 7
WORD
CO’s Foreword
Rehema Mtingwa Communications Officer - TPSF Dear Delegates and Readers, We welcome you to Dar es Salaam where we expect to build on innovations set at this forum so that we tie actions with results. The Global 2013 Smart Partnership Dialogue themed, “Leveraging Technology for Africa’s Socio Economic Transformation: The Smart Partnership Way” could not come at a better time!
M
alaysia has shown the way that
Catalyzing networks that bring to bear the
abject poverty is not a curse to live
skills and equipment of the world’s all-star
with until doomsday. Let us work
researchers and entrepreneurs offers a
hard. The most important part is to use ICT
potential way forward. In the end, it is for
for development on issues like overcoming
our future to win.
shortage in education instructors.
We pledge to make every effort to ensure
With the pace of technological change
The challenges of our times are humbling, and in no way solvable by one person, one institution, or even one country. It is therefore, paramount for the world to come together to harmonise and collaborate in technology and innovation to achieve the desired and ‘smart’ socio economic transformation.
making
professional experience in Dar es Salaam.
tend to think of our age as
At the same time, we cordially invite you
the
ever.
to savor an incomparable fusion of multi-
We have smart phones and
ethnic colors, tastes, language and culture,
supercomputers,
data
which are uniquely Tanzanian. Plan to make
like.Governments,
some time in your busy schedules and after
universities and firms together
the conference to explore the beautiful land
spend a lot of money every
of ours. We guarantee you a one-of-a-kind
year on R&D, more than ever
sensory and visual experience!
most
the
spin,
all attendees enjoy a truly memorable but
we
and
heads
innovative big
before.
Through this special edition of the Tanzania
We are very pleased for
Business Focus, we have compiled more
the opportunity to produce
articles on innovation and technology for
this 8th and Special Edition
you to read and digest accordingly. We
of the Global 2013 Smart
hope they will provide you with an insight
Partnership Dialogue. To us,
to business potential in the country with
this symbolises a bridge and
a touch of harnessing business growth
not a wall, between public and private sectors; between the Tanzania and the global community for indeed, through technology and innovation the world is
through competitiveness. Welcome to Tanzania once again and ,as we say it here, Karibu Tanzania!
now a global village!
TANZANIA BUSINESS FOCUS | 9
Finance TECHNOLOGY
African Technology Innovations that are Changing Lives African technology innovations are not mere gadgets. They are life enhancing tools that contribute to a more productive economy and improvements in quality of African people. African entrepreneurs, who are leading the charge in the technological revolution, are also creating jobs and new income streams. Here are just examples of quality, life changing innovations from among the scores of African technology innovations that have been introduced in the past couple of years. They come from the important economic segments of finance, healthcare, and agriculture.
M-PEPEA—FINANCE
To offer emergency credit through mobile phones to people who don’t have access to credit cards or bank loans. M-Pepea, set up in late 2010, provides its customers with emergency funds within a few hours. It partners with Kenyan businesses, with employees then able to use M-Pepea to get immediate loans of up to 20% of their monthly salary. The money is accessed through their mobile phones, with M-Pepea sending a special pin code to be used in cash machines. Money can also be collected at branches of Safaricom, one of Kenya’s largest mobile phone operators, and then deducted from the borrower’s pay packet at the end of the month. M-Pepea charges around
KILIMO SALAMA—AGRICULTURE Kilimo Salama is an example of the marriage of two essential components of modern development in Africa – technology and partnership. This African technology innovation is a crop insurance scheme put together by UAP Insurance Company of Kenya, Safaricom Ltd. (a telecommunications company), and two crop input providers (MEA Fertilizers and seed company Syngenta Foundation for Sustainable Agriculture). Its scheme currently covers farmers who grow maize, wheat, beans, sorghum and potatoes. Here is how the Kilimo Salama pay-as-you-plant system works. A shop owner is supplied a cell phone. When a farmer buys seed or fertilizer and wishes to purchase insurance, the shop owner scans the bar code on the products, collects an additional 5 percent of the retail purchase. The seed and/or fertilizer company chips in another 5 percent. The combined payment is sent to the insurance company via the phone. Farmers do not have to file individual claims. The weather situation is monitored by 40 small weather stations that Kilimo Salama has installed throughout the country where the insurance is currently being offered. If the rains fail, or are too great, payments are automatically made to accounts that the farmers have installed on their cell phones. 10 | TANZANIA BUSINESS FOCUS
10% interest rates on the loans, which are paid in full at the end of the month. M-Pepea has currently partnered with 20 businesses and has around 300 subscribers, and is hoping to have increased this to 20,000 by the end of 2013. Its partnership with Safaricom is encouraging but the company has run into problems with businesses defaulting. “We’re still in our initial phase, but we’ve seen how positively people have responded to the service,” says David Munga, M-Pepea’s 33-year-old founder. “If, like many Kenyans, you’ve found yourself at the side of the road with a broken car, no credit card and no money in the bank, it’s a way of getting yourself that money without having to get into trouble.”
TECHNOLOGY
SICKLE CELL DISEASE RESEARCH—HEALTH Idea: To carry out scientific research on sickle cell disease (SCD) and show that large-scale, cutting-edge genomic studies are possible in Africa.
in the world. Dr Makani says that the work “provides validation that it is possible to conduct genomic research in Africa”.
Dr Julie Makani from Muhimbili University in Tanzania is working with the Wellcome Trust to conduct a genome-wide association study (GWAS) in order to better understand the genetic and environmental factors affecting SCD. The Muhimbili Welcome Programme originally aimed to follow 400 children but is now following 2,500, making it one of the largest, biomedical SCD resources
Professor Lorna Casselton from the Royal Society says: “SCD has a severe toll on Africa, and highquality research to lessen the burden is much needed. Dr Makani stands as a role model for other young African scientists wishing to make a difference.” Olivia Honigsbaum
wirelessly transfers the readings to one of the few cardiologists who is normally located in the capital city. The heart specialist then interprets the ECG and renders a diagnosis and forwards it to Marc Arthur Zang Adzaba is the the nurse or examining physician who Cameroonian entrepreneur who saw the patient. invented Cardiopad, a computer tablet that enables heart examinations Cardiopad is presently only available like electrocardiograms (ECG) to be in Cameroon, but Himore Medical conducted at remote, rural locations will soon market it in other African that have never before been able to countries. With less than a score of cardiologists in many African countries, offer such crucial diagnostic tests. this innovation will allow many heart CardioPad utilizes electrodes, fitted patients to receive a prompt diagnosis with bluetooth, that are placed on the that was a luxury that they could not patient’s chest sending a signal to receive, at any price, if they were the touch screen tablet that can then unable to travel to an urban center.
CARDIOPAD BY HIMORE MEDICAL— HEALTH
NIGERIAN COMPUTER TABLET— TECHNOLOGY The Inye computer tablet that can connect to the internet via a dongle surmounts the price and infrastructure barriers in one go. Co-founders Saheed Adepoju and Anibe Agamah, aimed to plug a gap in affordable mobile devices with the Inye tablet in Nigeria. They say its strongest selling point is its price – currently around £200. Run on Android systems, it can be connected to the internet via widely used dongles rather than wirelessly. IT provider Encipher also offers add-on bundles from games to specifically tailored apps. Local developers are designing apps that address issues such as HIV, water and sanitation and education. The group is now retailing its Inye 2 model to popular demand. Long-term, there are plans to expand beyond Africa’s most populous country.
TANZANIA BUSINESS FOCUS | 11
COVER STORY FEEDBACK
TRANSFORMING THE AFRICAN ECONOMIES
COVER STORY
What does it take?
COVER STORY FEEDBACK
THE AFRICAN ECONOMIES HONEST PROSPER NGOWI pngowi2002@yahoo.com Cell: +255 754 653 740
There are extremely huge developmental potentials embedded in various sectors of the African economy. These sectors include agriculture, mining, industry, tourism, transport and many more. For African economies to be able to meaningfully and sustainably address the key challenges of widespread poverty, hunger, deceases, dependency and insecurity, huge transformations in these sectors are among the prerequisites. Some of the key requirements for successful transformation of African economies are outlined in what follows. SPECIALIZATION Countries should make bold decisions on their areas of competitive advantage so that they can specialize in producing goods and services in which they have competitive edges. Among the strategies would include transforming various sectors of the economy from low to high value- added goods and services. If African countries choose to strategically specialise in areas of their core competencies, they stand to be integrated in a more meaningful way into global markets. This will help them in benefiting from international trade.
STRATEGIC POLICY CHOICES For African economies to see meaningful transformation, proper and strategic policy choices are very important. Appropriate sectoral and cross-cutting policies that are aligned with national development visions, programmes, projects and plans are vital in the transformation and development process across sectors in the economy. Strategic policy choices should be made in such a way that they promote domestic and global competitiveness, increased productivity as well as adaption 14 | TANZANIA BUSINESS FOCUS
of appropriate innovations.
technologies
and
SECTORAL COMPETITIVENESS Production and distribution of goods and services in various sectors of the economy should be competitive if African economies are to be transformed. Competitiveness includes having sectoral economic undertakings that are domestically and internationally competitive in as far as price, quality, quantity, customer service and delivery time are concerned.
VIBRANT PRIVATE SECTOR The role of private sector - formal and informal, foreign and local as well as big and small – in transformation and development of African economies cannot be overemphasized. This is, especially so, after the mid-1980s, when the hither-to socialist oriented-economies embraced the private sector-led economic growth thinking. The role of the private sector in transforming African economies lies in the sector’s role as the engine of economic growth. The sector is endowed with relatively huge dynamics, vibrancy, resilience, innovations, speed and
less bureaucracy compared to the public sector. For the private sector to unleash its multifaceted potentials for transforming the African economies, the policy, legal and regulatory frameworks, in which it works, need to be very friendly, conducive and attractive. It is only when and if all these are in place that the potentials of the private sector to transform African economies can be realized.
ADDRESS BINDING CONSTRAINTS Potentials for transforming African economies are huge. However, the continent largely remains a sleeping giant. This is because the potentials remain locked by a myriad of constraints. It is by unlocking these constraints that the potentials embedded within virtually all sectors can contribute to meaningful and sustainable transformation of African economies. Among the constraints include inefficient, unsuccessful and bad government policies and interventions; poor governance in general and corruption in particular; overvalued exchange rates; inadequate transparency; poor investment climate as well as poor public service delivery.
COVER STORY
Smart Partnership Principles and their implications for Tanzania HONEST PROSPER NGOWI, pngowi2002@yahoo.com, Cell: +255 754 653 740
16 | TANZANIA BUSINESS FOCUS
The 21st brand of the Smart Partnership Dialogue in Tanzania (June 28th to July 1st) focuses on Technology for Socio-Economic Development. Smart Partnership Dialogue is seen by the author of this article as a game. Being a game, there are rules that are important if all parties in the partnership are to emerge as winners. Some pertinent partnership principles and implications, for a country like Tanzania as seen by the author of this article, are outlined in what follows.
COVER STORY
Equality Partners in smart dialogues should sincerely see and treat each other as equals. There is no big and small brother in the partnership. This is supposed to hold even if one partner has more political, military, economic, technological or whatever kind of power. No partner should feel inferior and, therefore, suffer inferiority complex. The opposite applies in the context of one feeling superior. Based on this, therefore, one expects horizontal as opposed to vertical and ranked relationships. In the same spirit, one expects roundtable discussions in smart partnership dialogues.
Transparency, trust and respect Smooth dialogues should be based on transparency. Information asymmetry, in which one party has more information than another, is not good for smart partnership dialogue. However, this does not imply that some partners can just seat and wait for information to be served to them on a silver plate; each partner must strive to find information that should be in the public space. Along with transparency, trust and respect between and within partners are very important. Smart partnership dialogues may be flustered if there are mistrust and perceive or real lack of respect of one partner by the other.
Diversity of views Smart partnership dialogues should be based on diverse views as well as differing and opposing opinions between and within partners. If there is one thing that can go wrong in smart partnerships, then that is for all partners to agree on each and everything. Opposing, critical and controversial but constructive views outside the mainstream line of thinking should be encouraged. Such unorthodox voices should be seen as enriching dialogues even if uncomfortable to some. Diversity of opinion should be seen as strength.
Win-win The smart partnership dialogues should aim at a win-win situation amongst partners. This entails a give-and-take situation as opposed to winner-takes- it all situations. This implies high negotiation techniques and skills from the partners. It calls for well-informed negotiations, and not guesswork bargaining. By extension, partners have to know what it in is for them.
Dialogue, not monologue Smart partnership dialogues should be exactly what the word means. It should be about dialogues between partners. It should not be a monologue of one partner to another. Smart partnership dialogues should avoid a situation where one partner (perceiving himself to be a big
brother) is lecturing or preaching to the other (perceived to be a small brother). Successful dialogues call for good discussions and negotiation skills and techniques. It calls for articulate, calm, sober and very well-composed great minds. These may be in-born or learnt attributes or a combination of the two.
Implications The above principles have various implications if smart partnership dialogues, now and in the future, are to be beneficial for partners in general and Tanzania, in the context of this article, in particular. Among the immediate implications for a country with no track record in participating as a host in such dialogues, is capacity-building. Dialogue is an art. It can be inborn, but it needs to be perfected through various kinds of capacity-building. Capacity-building includes training, re-training, confidencebuilding, speech and presentation techniques, and negotiation, as well as discussion and articulation skills. Ideally, these can be delivered following a scientific capacity-needs assessment. For some, it may be too late for the 21st Smart Partnership Dialogue, but, hopefully, there will be a second time since it is the third ones that are unheard of.
The smart partnership dialogues should aim at a win-win situation amongst partners. This entails a giveand-take situation as opposed to winnertakes- it all situations. This implies high negotiation techniques and skills from the partners.
TANZANIA BUSINESS FOCUS | 17
COVER STORY
AFRICA
Taking Stock of Twenty Smart Partnership Dialogues in Africa
The June 28th to July 1st 2013 Smart Partnership Dialogue in Tanzania is the 21st such dialogue in the world since it first saw the light of the day in the early 1990s in Malaysia. Since the first Dialogue and before the 21st one, there have been a total of 20 such discussions of global topical issues under the Smart Partnership Dialogues umbrella. Twenty smart dialogues is quite a milestone. There is a need of taking stock by way of self- evaluation and constructive criticism. The aim should be to identify achievements in form of positive impacts to, especially, the African continent. 18 | TANZANIA BUSINESS FOCUS | Sep 2012
COVER STORY
HONEST PROSPER NGOWI pngowi2002@yahoo.com Cell: +255 754 653 740 A thorough evaluation in such a limited space provided for this article is impossible. However, the author interrogates the impacts made by the earlier 20 Smart Partnership Dialogues by outlining some issues in some selected themes of the past 20 Dialogues. The key issue is on whether the globe has become a smarter place to live in after the 20 smart dialogues Socio - Economic Transformation
There is a need to objectively and critically measure the extent to which there has been an improvement in socio-economic transformation in Africa as a result of the Dialogue. If, and where, the dialogue has resulted into improved socio-economic transformation, we will have positive lessons learnt. These can be applied in similar environment with necessary modifications. Where the dialogue has not resulted into improved socioeconomic transformation, there is a need to know why and avoid the mistakes [in future].
Regional integration
The 2009 dialogue focused on the above theme. It is important to ask ourselves the extent to which regional integration spirit has been bigger after the dialogue. It is also important to question the extent to which regional trading blocs have
provided for more policy, legal and regulatory frameworks for greater people-centered integrations. Where this has been the case, the next question would be the extent to which there have been meaningful socio-economic transformations in the continent due to the dialogue. Inter alia, one would want to know the extent to which tariffs and non-tariff barriers (NTBs) to trade have been reduced and, even better, removed on the ground across partner states in regional trading blocs (RTBs).
Economic Development and Diversity, 2008
The 2008 dialogue dwelt on the above theme with a focus on new perspectives on transforming communities through National Visions. We have seen several visions in Africa. One may question the extent to which these visions are African. However, the more pressing issue is the extent to which the visions have contributed to economic development in respective countries.
Poverty Eradication
Firstly, one would wish to measure the extent of poverty in Africa in general and in specific countries prior to the dialogue and after it. Poverty was to be eradicated through human capital development and capacity building. It is important to quantify and qualify how many new human capitals have been developed in Africa as a result of the dialogue. More importantly, it is very important to assess the extent to which these human capitals have contributed to poverty eradication. Where this has not been the case, reasons have to be found if we are to become a learning society.
Resourcing for Growth
While the 2005 focused on the key issue of economic growth, one needs to investigate the quantity and quality of new growth, thanks to the dialogue. Where there has been growth, important questions would be whether such growths have been inclusive, poverty-reducing and green. Where the dialogue did not lead to better posting of growth figures, reasons have to be found and corrective measures taken appropriately.
The 2007 dialogue was on poverty eradication through human capital development and capacity-building. TANZANIA BUSINESS FOCUS | 19
COVER STORY
Enhancing the Climate for Foreign Direct Investment (FDI) Africa’s FDI share has been relatively low compared to the Triad of America, Europe and Japan. Recently, the emerging markets of Asia led by the dragon workshop of the world – China – and the Asian Tiger – India – have arguably attracted substantial share of FDI flows. Africa, partly, has not attracted substantial FDIs, thanks to its less attractive investment climate. It would be important to make an assessment of the extent to which Africa’s investment climate has improved as a result of the Smart Partnership Dialogue on climate for FDI.
Wealth Generation in Southern Africa
There have been about three Smart Partnership Dialogues on wealth creation. Wealth creation debates seem to be another way of discussing
the poverty question in a more positive way. One needs to probe the amount and quality of wealth that has been created as a result of the Smart Partnership Dialogues. More importantly, inquisitive minds will want to know the number of the poor who were lifted out of poverty by the wealth that was created. Genderminded critics will request for genderaggregated data on the above.
Other themes
Other themes that have been discussed in the Smart Partnership Dialogue since 1995 include Global security; Enhancing Identity and Progress for Development; Grenada ICT Strategy; Global Trends in Emerging Economies; Managing Economic Recovery For Shared Prosperity; Smart Partnership for Global Co-operative Prosperity and
the Inaugural International Dialogue on Smart Partnership. Similar to the elaborated themes above, one would wish to know whether the globe has become smarter due to the past 20 Smart Partnership Dialogues or not. If the answer is not in the affirmative, there are reasons to worry that the objectives of the Dialogues are not being achieved. In that case, Tanzania should make sure that the Dialogue heId in its soil is not becoming just any other dialogue. If the answers are positive, Tanzania should make sure that the dialogue held in its soil is not becoming a negative outlier in that positive trend.
COVER STORY
FROM DEVELOPMENT TO BUSINESS PARTNERSHIPS:
Implications to governments and businesses DEVELOPMENT:
HONEST PROSPER NGOWI, pngowi2002@yahoo.com, Cell: +255 754 653 740 For various reasons, including economic, the world is experiencing a changing landscape in international cooperation and partnership. International cooperation and partnership between the more developed and less developed world has gone through various phases. We have seen cooperation based on, inter alia, humanitarian assistance and, in more recent times, on aid. The unfolding developments in this area are the ones in which the hither-to donors and development partners are increasingly exiting the aid gate and entering the business cooperation gate. This change has many and far-reaching implications for governments and the world of business. In this article, the author outlines some of these implications for African governments and the businesses in the private sector.
Reduced funds for governments
The implications of the shift from aid to business cooperation imply reduced external sources of funds for donor-dependent governments. This means a more troubled fiscal space for governments that factor-in donor money substantially in their public expenditure. If such governments are to continue funding at least the current levels of public goods and services, they have to substantially increase their efforts to collect revenues from other sources. These sources include internal taxes and none-tax revenues as well as external revenues including concessional borrowing. The reduced revenue will also make it more necessary for governments to increase their fiscal discipline, especially in years just before elections when temptations to increase spending are very high for gaining political mileage.
Reform diplomatic missions?
The emerging new terrain and tone in the donor community from aid to business cooperation implies changes in the real situation on the ground. Since no situation should be permanent but change, those who will remain cast in stone will be bypassed by the new realities on the ground. Among the areas that will need to change very quickly is that of the nature of diplomatic missions. Developing countries like Tanzania will need to staff its diplomatic missions abroad with less diplomats and more business-minded folks. Needed in these missions in the new cooperation landscape are men and women who are aware of business and investment opportunities as well as procedures that would-be trade partners and investors need to follow back home.
Privatize’ foreign representations?
Needed in the countries’ representations abroad are more people with great network with, and understanding of the private sector and mentalities of captains and titans of the industry in the foreign country and back home. Fewer diplomats and more people with huge understanding of complex business and investment situations will be needed in the new scenario. Foreign representations will need people with high understanding of business acumen, as well as business match-making skills. Radicals would call for private sector folks in the shapes of captains and titans of the industry to occupy some spaces in foreign representations. Given what diplomacy is and given what entrepreneurship is, there is a need to optimally mix diplomacy with entrepreneurship. TANZANIA BUSINESS FOCUS | 21
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The key issues in business match-making include understanding what works and what does not work when a foreign investor partners with a local one. We are also likely to see more state-funded investors establishing themselves in developing countries. One needs to interrogate the extent to which parties in the developing countries are aware of as well as capable and willing to support the private sectors to cope with this new reality. Whereas governments need to provide policy leadership, the academia needs to provide intellectual leadership while the media educates on the new norms.
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State-supported investors The new era under discussion is one in which the focus of donors is more on supporting their private sector to establish themselves abroad. Some development partners are known to – and correctly so – have funded their private sector actors to find partners in the developing world and even support their establishments. Others have sent fact-finding missions by way of studies on business-match making potentials. The author of this article has taken part in some of these businessmatching studies.
More opportunities to businesses The change from aid to business cooperation implies unfolding opportunities to the world of business. One is likely to see more developed countries- facilitated jointventures, as well as more business and investment collaborations. The point should be the extent to which the local private
sector, especially the small and medium sized enterprises (SMEs) in general, and those in the informal sector in particular, are strategically positioned to benefit from the unfolding new reality.
Partnership issues The changing terrain in international cooperation points to the need for improved partnership. Developing countries should call for better and more meaningful partnerships. Before the unfolding type of cooperation, the existing partnership was, arguably, not one of equality between partners. There has been a partnership punctuated by the dependency of developed countries to the developed ones. It has been a partnership where the big brother dictates terms. In the new era, this needs to be changed. Parties to meaningful partnerships need, among other things, huge negotiation skills •
PERSPECTIVE
CONTEMPORARY SINO-AFRICA ECONOMIC PARTNERSHIPS: Issues for discussion HONEST PROSPER NGOWI, pngowi2002@yahoo.com, Cell: +255 754 653 740 The visit to Africa, in general and to Tanzania in particular, by China's new president in March 2013 has been among the key current economic and business issues in the first quarter of 2013. This provides an opportunity to look into the contemporary Sino-Africa economic relationship. In the relative recent past, Chairman Mao's China and some African countries, such as Tanzania and Zambia, had relationships that were arguably built around the axis of politics, in general and some variants of socialism, in particular. The contemporary Sino-Africa relationship is, arguably, built more on the axis of economics and business than on the axis of politics. Given the current and forecasted position of China in the global economy on one hand, and the economic situation in Africa on the other, this article outlines some key discourse issues as part of efforts to make the Sino-Africa economic deals (more) meaningful for Africa.
Characteristics of Chinese economy It is important to understand the kind of partner that African countries are dealing with. From the economic point of view, China is an emerging market and a very rapidly upcoming dynamic global economic power house. It is endowed with huge population that offers unmatched labour force and market. It is an economy that is considered to be the workshop of the world in that it produces a substantial amount of goods consumed across the world. This ‘Dragon of Asia’ has a relatively weak and, arguably, artificially fixed currency, the Yuan. This makes Chinese exports relatively very competitive when denominated in such major and vehicle currencies as the US Dollar and Sterling Pound. It is an economy that, prior to the 2008 global financial and economic crisis, had unmatched and overheating growth of double digits. This is an economic powerhouse that is very resourcesthirsty and hungry. As the workshop of the world, it needs minerals of all kinds and colours as it
It is an economy that is considered to be the workshop of the world in that it produces a substantial amount of goods consumed across the world. This ‘Dragon of Asia’ has a relatively weak and, arguably, artificially fixed currency, the Yuan. This makes Chinese exports relatively very competitive when denominated in such major and vehicle currencies as the US Dollar and Sterling Pound.
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COVER STORY Finance
needs unlimited amount of timber, oil, gas, land and other natural resources whose litany is too long to be recited here.
China's demand from Africa Going by the description of China above, it is clear that contemporary China, as opposed to Chairman Mao’s China, has strictly economic and business motives in its relationship with Africa. China needs colossal amounts and types of natural resources that Africa is endowed with. It needs Sudanese oil and gas as it needs Mozambican oil, gas and timber. It needs Zambian copper as it needs Tanzania’s oil, gas and agricultural land. China is also looking for markets for its products. As a workshop of the world, it needs consumers over and above its colossal population offers. The country’s multinationals – some of which are said to be state-owned, funded and supported – need to re-locate in Africa for various reasons. These reasons include seeking resources, seeking efficiency and seeking markets. Many huge construction sites in Africa are decorated with Chinese flags. This is the case for various kinds of infrastructure such as roads and real estates, both for public and private ownership.
Southern engine of growth? China and India are among the emerging economies that have been considered to be ‘Southern Engines of Global Growth’. As a global south economy, we need to gauge whether China is really a growth engine of southern economies. If so, one would demand that this type of growth becomes pro-poor and povertyreducing growth. There is a need to probe and demand that the growth due to China becomes inclusive and has inter-sectoral linkages with the local economy. There
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should be meaningful, tangible and sustainable trickle-down effects to the local economies. For Sino-Africa relationship to be more meaningful, there should be technology transfers to the locals, and growth brought about by China should be green growth. What is being humbly and gently demanded here are good Foreign Direct Investments (FDIs) not only from China, but also from other FDI source countries.
Unasked questions There are many questions that remain unasked and, therefore, unanswered in the contexts of investments that flow to Africa, whether from China or elsewhere including from within the continent. There is a need to question whether investments do adhere to labour standards, including health, safety and human rights, as well as other components of decent work standards. Where answers to any of the above, including on whether they
are good FDIs, is not in the affirmative, then, follow-up questions are why and what can and should be done so that we get affirmative responses.
Kissing goodbye the West? The emergence of China as an economic powerhouse tempts one to wonder whether Africa should now kiss goodbye and let go the ties with the West or not. Almost obviously, the answer is not. The African romance with the Dragon of Asia does not, in any way, justify it to kiss goodbye and let go the ties with the West. Economically, it is important for Africa to be at the middle of the ever-increasing bi-polar as opposed to the hither-to mono-polar world. The tough question that needs answers is on whether Africa can strategically make use of this central position for its benefits in as many spheres as possible or not. The burden is on all lovers of the continent to make sure the Sino-Africa ties work for a better Africa.
TECHNOLOGY
TECHNOLOGY TRANSFER VIA FOREIGN DIRECT INVESTMENTS: Selected areas for improvement in Tanzania
The importance of Foreign Direct Investments (FDIs), as among sources of technology, has grown over time due to the scarcity of other sources of technology. FDIs continue to dominate the creation of technology. With rising costs and risks of innovations that are important for technological development, the importance of FDIs, as a conduit for technology transfer, has risen. This is because, FDIs are presumed to be important channels through which international diffusion of knowledge and technology takes place.
FDI FDI is, especially, thought to be the easiest way to build local technological capabilities for underdeveloped countries. Multinational enterprises (MNEs) that undertake FDIs have the potential to transfer technological, organizational and managerial practices to developing countries like those in Africa. It is much easier for African countries to attract segments of FDI activities and build up on this, rather than to develop local capabilities independently. African countries that are strategically positioned stand to gain from technologies embedded in the MNEs undertaking FDIs in virtually all the sectors of the economy and geographical locations.
FDIs Tech-Transfer routes
Technology Transfer Issues in FDIs can transfer technology in Tanzania Investment Act 1997 various ways. These include, but are not limited to, tech-transfer through: vertical linkages with buyers and suppliers; technical assistance, purchasing, demonstrations and competition, labour migration. For the theoretical potential transfer of technology through FDIs in Tanzania to be realized, there are number of areas that need to be improved. These are outlined below:
Issues pertaining to technology transfer by FDIs are covered in part III of the Tanzania Investment Act 1977, in general and the provisions relating to investments, in particular. These are discussed below. Section 26.-(l) states that: “A person who has established an enterprise may enter into such technology transfer agreement as he considers TANZANIA BUSINESS FOCUS | 25
COVER STORY Finance
appropriate for his enterprise...” For meaningful technology transfer to take place through FDIs, section 26(1) of the Investment Act needs to be strengthened. Such word as ‘may’ should be changed to ‘must’ if Tanzania is to benefit from the technology transfer potentials that are embedded in FDIs that are distributed in virtually all sectors of the economy and geographical locations. Also, the phrase “…as he considers appropriate for his enterprise…” does not necessarily encourage and imply technology transfer practices that puts the country’s benefits and development first and foremost. Technology transfer should aim at benefiting both the local economy and MNEs undertaking FDIs. The emphasis, therefore, should be at a win-win situation between the two parties. There is a need, therefore, to recast the phrase from “...as he considers appropriate for his enterprise...” so that it reads “…that are at least beneficial for the local economy.…” Section 26 (2) reads “Every agreement for the transfer of foreign technology or expertise shall be registered with the Tanzania Investment Centre (TIC) by the beneficiary of that transfer as soon as it is made and it shall not be effected unless it has been registered”. For transfer of technology by FDIs to be mandatory and of benefit to Tanzania, it should be the investors who should register the technology they intend to transfer instead of this to be done by beneficiaries of such technology transfer. The latter approach will oblige investors – mainly MNEs undertaking FDIs, to justify their investments in as far as technology transfer aspect is concerned.
Certificate of Incentives is Not Tied to Technology Transfer The Certificate of Incentives issued by the TIC to investors does not have technology transfer, as among the 26 | TANZANIA BUSINESS FOCUS
conditions for investors’ eligibility for incentives. This is partly seen in section 25 (3) which states that “A person who applies for a Certificate which involves an agreement for the transfer of foreign technology or expertise, shall not be required to make a separate application under this Act if he provides the relevant information relating to the regulation of agreements for the transfer of technology or expertise required under this Part.” Section 26 (4) states that “The Executive Director (of TIC) shall maintain a register in which shall be recorded all agreements for the transfer of foreign technology or expertise which is included in the certificate (of incentives). Therefore, the whole section that provides for transfer of technology by investors in the Investment Act 1997 does not explicitly require investors in general and FDIs in particular in the context of this policy brief to transfer technology to local firms. These are among the areas in the Act that need
improvements. Given that the Act is from 1997, it is old and needs to be reviewed so as to capture the new developments that have emerged since it was enacted.
Anti-technology Transfer Incentives Other areas that need to be improved if FDIs are to transfer meaningful technology to local firms are those dealing with provision of investment incentives in general and in specific contexts in particular. Some incentives given to FDIs in general and investors in the Export Processing Zones (EPZs), in particular, are anti-technology transfer. For example, investors in EPZs do get exemption for the first 10 years from corporate tax, withholding tax on rent, dividends and interest and all taxes and levies imposed by Local Government Authorities. In a country with no adequate financial resources for building technological capabilities, through inter alia
PERSPECTIVE
training, re-training and research and development (R&D), the exempted revenue, if collected, could be used to improve technology in local firms. Investors in EPZs also do get import duty exemptions on raw materials and capital goods imported for manufacturing goods. This kind of exemption is a blow to potential local firms that could supply such raw materials and capital good. Due to the exemptions on imports, local firms become less price-competitive and loose opportunity of building and/or strengthening their capabilities via the route of supplying factor inputs to firms in EPZs.
The emphasis, therefore, should be at a win-win situation between the two parties. There is a need, therefore, to recast the phrase from “... as he considers appropriate for his enterprise...so that it reads that are at least beneficial for the local economy.…”
Local Content is Important for Technology Transfer Another area that needs improvement is that of local content demand. Tanzania is a signatory to not demanding local contents (except some 5 initial experts). This is part of Tanzania’s bid to lure, attract and retain more FDIs-friendly. The implication is that, MNEs are not obliged to source their factor inputs locally. This reduces the potential of technology transfer through MNEs building of local suppliers capacities.
Conclusions Based on the discussions above, it is concluded that FDIs undertaken by MNEs in a country like Tanzania, have huge potentials to transfer technology to local firms. However, such technology transfer will not occur automatically. Necessary policy, legal and regulatory frameworks have to be in place in order to facilitate technology transfer. Among other things, the MNEs should be obliged to transfer technology to local firms and the local firms should
be strategically positioned absorb such technologies.
to
Recommendations For FDIs to contribute optimally to technology transfer in Tanzania, it is important for policy and decision makers to address the key issues outlined in this policy brief. Firstly, the Investment Act 1997 is very old and needs to be reviewed to include, among other things, the observations made on technology transfer. There is also the need to re-think Tanzania’s position on local content demand in the context of increasing the chances for local firms to acquire more technology by becoming contractors, subcontractors and suppliers of MNEs undertaking FDIs in Tanzania. For this to happen, however, there is a need to build the capacity of local firms to be competitive contractors, sub-contractors and suppliers in MNEs’ undertakings. Generally, therefore, there is a need to have policy, legal and regulatory frameworks, including fiscal and none-fiscal incentives that will make transfer of technology by FDIs to local firms more automatic. There is also a need to attract more FDIs that are more likely to transfer technology than those that are not. For example, marketseeking FDIs generally purchase more locally than do exportoriented FDIs, because of lower quality requirements and technical specifications. Therefore, FDIs are more likely to be integrated backward in the host country when they source relatively simple inputs.
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INVESTMENT
Tanzania's Economic Transformation
Selected Investment Opportunities for Economic Transformation in Tanzania Tanzania offers unparalleled investment and trade opportunities. After the major and far-reaching reforms in the management of its economy from the mid-1980s, there has been notable improvements in the policy, legal and regulatory frameworks relating to investments and trade in Tanzania. The reforms, inter alia, make it possible for investors and business community both foreign and local to benefit from the many investment opportunities in the country. If the opportunities are adequately utilized using appropriate technologies, the country can experience very rapid economic transformation. Indeed, it can experience an escape from poverty in a tremendous speed. In what follows, an outline of the investment opportunities in Tanzania is provided.
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INVESTMENT
HONEST PROSPER NGOWI The author is a senior lecturer, researcher and consultant in Economics at Mzumbe University, Tanzania. Email: pngowi2002@yahoo.com Cell: +255 754 653 740
INVESTMENTS Investment Opportunities in Agriculture
Investment Opportunities in Tourism
anzania’s climatic conditions and its arable land can accommodate production of a wide variety of agricultural products. Opportunities in large commercial farming exist in various cash crops, such as coffee, cotton, tobacco, sisal, cashew nuts, sugar and pyrethrum. Opportunities also exist in large commercial farming in food crops production such as cereals, oil seed and legumes. The tropical-totemperate climate is ideal for largescale export-oriented investments in areas such as horticulture and floriculture activities where export opportunities exist, e.g., cut flowers, fresh beans, pineapples, mushrooms, mangoes, passion fruits, oranges, to mention a few. Other opportunities exist in the production of horticultural products, including provision of cold chain facilities and air cargo transport to foreign markets. Also, agricultural land in Tanzania is suitable for grazing activities, which make livestock development appropriate for commercial ranching.
The development of Tanzania as a multi-centre tourism destination offers considerable potential growth prospects and provides ideal opportunities for investment. New accommodation facilities and hotels are needed with international standards and entertainment facilities, camping, lodges and guest houses. Opportunities exist in ecotourism, in the tour operators and agencies business activities, manmade tourist attractions like theme parks and gambling resorts. There is a considerable potentiality for investment in national parks, hotels development and/or campsites. Other opportunities are abundant in beach tourism, historical sites, developing amusement parks, deepsea fishing, trophy hunting and sea and lake cruising.
T
Investment Opportunities in Mining Tanzania is endowed with vast mineral deposits. These include, but are not limited to gold: Nickel, cobalt, copper, tin, tungsten; gemstones; carbonates; iron ore; coal; industrial minerals such as kaolin, mica, phosphate, magnetite, beach sands and diatomite.
Investment Opportunities in Infrastructure Following the 2010 Pubic Private Partnership (PPP) policy and 2011 PPP Act, there are huge investment potentials through PPP arrangements in the infrastructure sector. These include construction of roads, bridges, ports, airports and other infrastructure.
Investment Opportunities in Transport and Communication Tanzania offers huge investment opportunities in the transport and communication sectors. Transport investments opportunities include lake, sea, air, railway and road
transport. In the telecom sector, investment opportunities exist in modern technology provision and supporting services to the industry players, establishment of call-centres and other voice operations, pre-press activities, imaging activities and high-value added data processing and data capture. There are also opportunities for mobile cellular operators, public data communication operators, closed user-group data communication providers, radio paging service providers and Internet service businesses.
Investment Opportunities in Other Sectors Other broad investment opportunities include, but are not limited to opportunities in banking and insurance services; energy sector; chemical industry; textiles and leather products; fishing; forestry; construction and real estate development; management consultancy; education and training; human resource development including hospitals, health centres and educational facilities; radio and television broadcasting; export oriented projects in Export Processing Zones (EPZs) and water supply for domestic and industrial use.
Unlocking the opportunities The above is just a summary of many investment opportunities in Tanzania. These, with other opportunities have very huge potential to transform the economy if properly unlocked. Among the prerequisites for sustainable exploitation of these opportunities include, but are not limited to, the use of appropriate technology— both local and foreign.
ECONOMY
Innovation & Smart Partnership By: Peter Chisawillo and Sosthenes Sambua
It is widely acknowledged that innovation contributes to productivity which in turn determines the competitiveness of enterprises and nations. As the world moves more and more towards knowledge based economies, the application of science, technology and innovation are increasingly taking centre stage in social economic development agenda.
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ECONOMY
What is innovation? Innovation is the creation of better or more effective products, processes, services, technologies, or ideas that are accepted by markets, governments and society. Innovation differs from invention, in that innovation refers to the use of a new idea or method, whereas invention refers more directly to the creation of the idea or method itself. Innovation sometimes also refers to the result of the process and even the attributes of this result. Innovation must have something of novelty (newness), some utility (solve a problem or better something) and something of success (profit, comfort, convenience, efficiency).
Innovation and smart partnership In business and economics, innovation is the catalyst to growth. With the current rapid global advancements in transportation, information and technology, the old world concepts of resource based and comparative advantage which focused on an area’s unique inputs are outmoded for today’s competitive global economy. Now, as the world’s renowned economist Michael Porter points out competitive advantage, or the productive use of any inputs, which requires continual innovation is paramount for any firm and nation to succeed The competitiveness of a nation, therefore, is greatly influenced by how a nation configures itself to fully exploit its internal innovation capacity. This involves several factors: 1) The capacity to generate and utilise useful knowledge to address the challenges in society requiring solutions in the form of products and services, 2) How the various actors integrate in the diffusion of this knowledge in society to enhance the performance of the singular units of economic activity at enterprise level, 3) The overall configuration of
the social system towards national competitiveness based on innovation (the nations vision of prosperity and the mechanisms to realise the vision)
The above factors usually constitute what can be referred to as the National System of Innovation (NSI). In many countries the components comprising the NSI may be in place but the various components are not coordinated to function as a system. In this respect centres for knowledge generation, research and development act independently of business and production sectors which in turn have very mild and sometimes hostile relations with the public sector (government). This lack of collaboration between key actors in the economic sphere undermines their effort enroute to competitiveness. There is therefore a need for Triple helix (business, government and academia) collaboration in order to establish innovation systems (or
platforms) and culture at the nodes of economic activity in any specific economic area: be it district, ward or village level. We refer to concentration of enterprises focusing on or related to a specific product or service in a specific geographic location as a “cluster”. We also refer to the organised effort to get actors in the triple helix at that level of economic activity to collaborate for their mutual benefit as a “cluster initiative”. The key actors being government, academia and business. In these circumstances, the Triple Helix collaboration is in itself an innovation. Partnerships at that local level enable the local communities to determine their vision of prosperity. It also enables them to appreciate their position in the “national” vision and act in a manner that ensures subscription to the higher national objective but with the local situation and realities in focus. By
expanding
the
triple
helix
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ECONOMY
collaboration to include users of products and services (customers) from the cluster we complete what we refer to as “innovation ecosystem”. In the past customers were treated as objects of market research and product development. Businesses tried to understand what customer wanted and made products to satisfy those needs.
Results of partnership for innovation
Recently, Threadless (www. threadless.com), a group of young entrepreneurs brought something new. They launched a competition to their t-shirt customers to design a t-shirt that if it ended up winning and getting printed, they would buy it. The submission and voting is done online by a community of artists around the globe. The winner get paid US$ 2000 and of course his/her design in printed for sell. Within a few months 800 designs were submitted and t-shirts got printed. The innovative idea has now become the business
model and spiralling innovation. 800 new designs are submitted every week, 4 new products weekly making a total of 50,000 to 65,000 units produced weekly. Sales have increased drastically and profit up by 35% with lots of fun, growing market with less than 20 employees. The winner got their price but the company got new designs, loyalty and publicity all thanks to a smart innovation collaboration model. This case demonstrates all aspects of innovation, novelty, utility, success and the power of ecosystem. This is what innovation ecosystem can do to your business, to your organisation, to your business and to your country. In Tanzania, three institutions (College of Engineering and Technology – CoET, Commission of Science and Technology – COSTECH, and Tanzania Private Sector Foundation- TPSF) have promoted cluster development as a strategy to build competitiveness of local economies. At the moment TPSF
Smart Partnership
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and COSTECH are at the fore front of cluster development in the country. The initiative is starting to take root as reflected in Rukwa where the Regional Commissioner has adopted cluster approach for meat and maize sub-sectors. In Ileje district the District Commissioner has initiated smart collaboration for oilseed processing cluster. Overall, there are over 40 cluster initiatives across the country where the local governments are partnering with businesses and knowledge institutions to create common vision and platforms for collaboration to encourage innovation and competitiveness. Members of Engineering cluster initiative in Morogoro have increased productivity and selling products across the country and across borders. Women farming seaweed in Zanzibar used to sell raw seaweed to traders but are now making seaweed products thanks to the triple helix collaboration including The Institute of Marine Sciences and government agencies responsible for the sector. This is what smart partnerships has done, continues to do and must be supported across the country. Collaborative universities, research agencies, knowledge centres and technology centres must move from their traditional role to doing research by identifying knowledge gaps to aligning their research and teaching agenda to finding solutions to business challenges in the regions. Collaborative governments (national, regional and local) adopt clustering in their economic policies and strategies, fund clustering initiatives and common facilities. Collaborative businesses engage in joint cluster projects, shares experiences and challenges with academia and government and jointly craft a common vision and action plans. Triple helix collaboration will create an innovation ecosystem within the country where businesses will increasingly become innovative, competitive and prosperous. Let each partner think and act collaboratively.
PERSPECTIVES
Technology Upgrade
Technological upgrading for enhancing tanzania’s industrial competitiveness Technology and innovation are essential components of industrialization, economic growth and sustainable human development. The ability to compete in liberalized markets depends increasingly on the incorporation of new technologies into manufacturing and services sectors. Moreover, since technology-intensive activities are growing faster than other activities, raising the long-term rate of growth requires a structural shift into more advanced technologies. Tanzania is lagging behind in terms of technological content in its manufacturing activity. The structure of manufacturing sector is dominated by low-level processing of natural resources and the manufacture of simple consumer goods aimed at domestic markets. Productivity growth is poor and capacity utilization has fallen below its peak for many years ago; a significant part of recent growth comes from utilizing existing capacity, rather than building new capacity. Technological efficiency is relatively low, with little sign of technological dynamism or innovation. 34 | TANZANIA BUSINESS FOCUS | Sep 2012
PERSPECTIVES
Tumsifu Lema Policy Analyst, TPSF
As a result of this slow pace of technological progress, the country is stranded on a stagnant base of low skills and low value activities. Our share of manufactured goods has averaged around 20% of the total exports, while for high technology exports (2%) and primary exports (78%). Developed countries export of manufactured goods has averaged around 60%-70% of the total exports. This reveals that the economy still remains heavily dependent on agriculture and other natural resources, without the structural transformation that long-term development requires. One of the critical challenges facing Tanzanian policy makers, now that they have opened the economy to global market forces, is to jumpstart technological upgrading in industry.
S
ince independence, Tanzania has had no deliberate strategies or plans for appropriate selection, acquisition and transfer of technology or for effective integration of imported technologies with local capacity for research and development. However, it enacted the first National Science and Technology policy in 1985, which was subsequently revised in 1995. The major thrust of this policy was to establish relative priorities and programs to generate new knowledge and to determine strategies for science and technology development in Tanzania. It also established the Tanzania Commission for Science and Technology (COSTECH) in 1986 and the Centre for the Development and Transfer of Technology (CDTT) in 1994, in an effort to institute workable mechanisms for coordinating capacity building efforts, adopting new technologies, strengthening research and development, and facilitating information exchange and extension services. None of the objectives mentioned above seems to have been realized. The policy remains largely on paper, while technological activity languishes. There is very little dynamism in private industry, and technology support institutions are passive and largely de-linked from productive activity. Total research and development is 0.2% of GDP, instead of 1% recommended by the science and technology policy. The main institution in charge of science and technology policymaking, COSTECH, is weak
and unable to influence the government agencies that conduct R&D. The Tanzania Bureau of Standards Bureau (TBS) seems well-staffed and motivated, but is severely underfunded and lags in technological competence. The Tanzania Industrial Research and Development Organization (TIRDO) does not produce any significant technological benefits for industry, and does not have programme for reaching out to private firms. The Small Industries Development Organization (SIDO) is even weaker. These infrastructures do not provide support to a technologicallychallenged industrial sector that is faced with growing international competition. Sustainable growth and development benefits cannot be achieved without improving our competitiveness. Insofar as manufacturing is expected to play an important role in structural transformation, it is vital to invest in upgrading industrial technology. Only then can the country compete in the activities in which Tanzania currently has a comparative advantage, and over time move into the more advanced activities that hold the best prospects for growth and learning spillovers. Technological upgrading is needed not so much to help Tanzania to innovate or pick winners in hightechnology activities, but to help the country use its existing resources more efficiently and exploit its competitive advantages in line with changing technologies and possibly rising wages. Technology development should thus first focus
on strengthening existing activities, such as processing local resources and making simple consumer goods and metal products. These products should be made as internationally competitive as possible, using FDI where appropriate to overcome technology, skill and marketing gaps. As a competitive base is established in simple activities, the Government should re-orient institutions to meet more advanced technology needs. If the Parliament will do its work on the national debt properly, it will ensure that domestic borrowing is not crowding out of the private sector. The private sector can be crowded out of the credit.
IN ORDER TO QUICKEN THE PACE OF TECHNOLOGICAL UPGRADING IN TANZANIA THE FOLLOWING STEPS SHOULD BE TAKEN:1. Technology strategy formulation: COSTECH has a vital task in masterminding science and technology policies within the Ministry of Communications, Science and Technology. However, it lacks the necessary resources to do so effectively. Its capabilities should be enhanced and its ability to implement strategy greatly strengthened. Furthermore, the technology policy must give a prominent role to the private industrial sector. Private industry must be aware of the need for technology upgrading and must participate fully in policies that affect technology. 2. Improving human capital and skills: The human capital base in Tanzania is small, and it is also lagging behind, relative to regional industrial powers such as Kenya, TANZANIA BUSINESS FOCUS | 35
PERSPECTIVES
in technological adaptation and innovation. Most firms use imported technology rather passively; often well below international best-practice levels. In newly industrializing economies, government provides tax incentives to R&D enterprises that import new technology. It is recommended that the Government of Tanzania accept enterprise R&D as a tax-deductible expense and consider granting a subsidy of 125 per cent. Simultaneously, the Government of Tanzania should consider setting up a Technology Fund to co-finance enterprise R&D. The Technology Fund should provide resources as a conditional loan, to be repaid by successful ventures and otherwise written off. Similar funds have been used with considerable success in Turkey and India, within the context of World Bank–financed Industrial Technology Development Projects.
Zimbabwe. Enterprises in Tanzania invest little in employee training and many are not even aware of their skill deficiencies or needs. Several kinds of skill development are relevant to technology upgrading in the industry and need to be improved. Of these, the ones that need most immediate attention are training in specific industrial skills such garment making, textiles, wood working, food processing, and metal working e.t.c. The Government ,as a matter of priority ,should launch a new skills strategy, aimed at creating competitive skills for industry.
3. Stimulating and improving technology imports: Tanzania imports little new technology, an indication of poor adjustment to a new liberal environment where there are no policy impediments to technology import. The main focus of technology transfer policy has to be on provision of information to enterprises
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particularly SMEs, regarding sources, cost and appropriateness of foreign technologies, backed by the provision of technical extension and financial support to help enterprises absorb new technologies. It is further recommended that Tanzania should set up productivity centres, starting with major industries like food processing and metalworking. These productivity centres should have the capacity not only to undertake detailed productivity analysis but also to help finance remedial measures and undertake effective marketing. They should adopt a proactive approach, with qualified teams visiting enterprises, offering free diagnoses and putting together packages of technology, training and financing. Initially, these services should be offered at low cost to enterprises, with movement over time towards full cost.
4. Stimulating technological activity by enterprises: Within the industrial sector, there seems to be little interest
5. Strengthening the technology infrastructure and institutions: Government should seriously consider making investment to capacitate TBS, since efficient, modern and internationally accepted standards are essential for technology development. The capabilities of other technology institutions such as SIDO and TIRDO should be strengthened so as to facilitate technology import, upgrading and capacity building. 6. Attracting foreign direct investment: While Tanzania has greatly improved its FDI regime and the Tanzania Investment Center has become a dynamic institution, several remaining bureaucratic impediments drive investors elsewhere. There are still regulations and procedures which significantly increase the cost of conducting business, and problems with corruption and conflicting and confusing regulations that negatively affect investors’ assessment of the country as an investment destination. FDI promotion will not be effective without government action to address these problems•
DEVELOPMENT
HONEST PROSPER NGOWI The author is a senior lecturer, researcher and consultant in Economics at Mzumbe University, Tanzania. Email: pngowi2002@yahoo.com, Cell: +255 754 653 740
Financing Post 2015 Development Agenda: Which Way is Tanzania? Debates on the post-2015 global development agenda are taking shape in some circles across the world in general and Tanzania in particular. A number of issues are being discussed on the matter. Among issues that need very careful discussion include, but are not limited, to ways in which the post- 2015 development agenda – whatever the shape it will take – will be financed. This article is a humble attempt to provoke debates on possible sources of resources to finance post 2015 development agenda in Tanzanian context. A discussion of the amount of resources is out of scope of this article. This is, partly, because it would need quantification and costing of various cost drivers of the contents of the 2015 agenda. Now that the litany of 2015 development priorities is yet to take shape, the said quantification and monetization cannot be done in this article. Public Financing Public financing of post 2015 development agenda will be necessary for public goods and services. The key sources of financing will be various orthodox and unorthodox sources of government revenue. Some of such sources in Tanzanian context are outlined in what follows.
Central government sources of finance Among the general sources of central government revenues include tax revenues. These include, but are not limited to, taxes on international
trade (VAT and excise duty on imports, import duty, fuel levy); taxes on income, profits and capital gains (PAYE, corporate tax, withholding tax, capital gains tax); payroll and Skills Development Levy (SDL); taxes on goods and services; motor vehicle taxes/fees. The other major category of central governments revenues is non-tax revenues. These include, but are not limited to, government shares in companies; sales of public assets; royalties; fines; fees; levies; domestic borrowing; foreign borrowing; foreign aid; and rent from natural resources.
Local government sources of finance At the level of local government authorities (LGAs), the most common sources of revenue are mainly local taxes and local non-tax sources. All these sources of revenues constitute financial resources that are available to fund various expenditures on public goods and services.
Private financing Given the nature of possible post 2015 development agenda, it will be necessary to finance some of the agenda through private sources. These sources include but are not limited, to the business community; TANZANIA BUSINESS FOCUS | 37
DEVELOPMENT
communities’ own resources as well as households and individuals’ resources. Some of the above possible sources of funding post 2015 development agenda are outlined below.
Financing through business community The business community, by way of the private sector, can be among the sources of direct financing of post 2015 development agenda. This can be done in various ways, including Public Private Partnerships (PPPs) arrangements in delivery of public goods and services through the private sector. Among the outstanding CSRs in the Tanzanian context include the Africa Barrick Gold’s Maendeleo Fund. The Fund’s annual budget is to the tunes of US$ 10 million (about Tshs 1,600,000,000). Among the community projects that were funded in the period 2011 – 2012 include health, education, water, infrastructure and economic empowerment.
Financing through communities’ own resources Another possible source of funding some of the post-2015 development agenda is by using community resources. This can be done in cash and in-kind. Communities can contribute cash or in-kind resources, such as labour power, and resources such, as land and construction materials – all depending on the nature of development project that a community aims at accomplishing. In the Tanzanian context, such models have been used by the Tanzania Social Action Fund (TASAF) phase one and two in some communities.
Community-Based Organizations and beyond Some development projects can be funded by Community Based Organizations (CBOs) and 38 | TANZANIA BUSINESS FOCUS
various area-specific development organizations such as Bumbuli Development Corporation (BDC) and Kibosho Development Fund (KIDEFU). These funding mechanisms can be boosted, streamlined and be made part of vehicles of funding selected post2015 development agenda at local levels.
Financing through households and individuals
Ways forward It is clear that whatever shape the post-2015 development agenda will take huge sums of resources will be needed to meet what is likely to be ambitious post-2015 development goals. In order to, at least, meet the likely very huge expectations in Tanzania, the need to clearly identify and mobilize external and internal, as well as public and private, resources to deliver the post-2015 development goals cannot be overemphasized.
Selected post-2015 development agenda can be financed by households and individuals. At individual level, for example, huge amount of funds can be mobilized through private philanthropies. These are private initiatives for public goods. At global level, among the most known private philanthropies, include the Bill and Melinda Gates Foundation. In the Tanzanian context, there is a need of promoting the role of private philanthropies in funding public goods and services, such as those envisaged in post-2015 development agenda. It is very Another direct way in which unfortunate that it seems the private sector can finance to be easier to contribute millions at lavish one- post-2015 development day ceremonies than agenda is through Corporate contributing relatively Social Responsibilities (CSRs). small amount of money for such long term Contested on their size relative investment for social and to what is reaped from local economic infrastructure.
communities though, CSRs have, generally, taken the form of financing of such social services as health, education and water infrastructure and facilities by the corporate world. It has also taken the form of financing some development projects such as roads.
AGRICULTURE
ATTAINING 10% Budgetary allocation to
AGRICULTURE:
Where is the money? TANZANIA BUSINESS FOCUS | 39
AGRICULTURE
10% Budgetary allocation to AGRICULTURE HONEST PROSPER NGOWI
The author is a senior lecturer, researcher and consultant in Economics at Mzumbe University, Tanzania. Email: pngowi2002@yahoo.com, Cell: +255 754 653 740
Among the major issues of discussion in the proposed 2013/14 budget for the Ministry responsible for agriculture was the relatively small amount of budgetary allocations to the sector. Complaints are based on a number of arguments. These include, but are not limited to, the noble role of agriculture in the national economy.
It produces food, raw materials and employs the majority of Tanzanians. However, its growth, at about 4 percent per annum, is very small compared to other sectors. Also, in the times such as these when there is huge push for agrarian reforms in the context of ‘Kilimo Kwanza,’ in general and its pillar on financing agriculture in particular, it is only fair to demand more pecuniary (monetary) allocations to agriculture. In this article, however, the focus is on attaining the percent of national budget allocation to agriculture. Basis for the 10 percent allocation
The 10% budgetary allocation to agriculture as per Maputo agreement has not been achieved in Tanzania. The highest allocation was in 2010/11, in which about 7% of the national budget was allocated to agriculture.
40 | TANZANIA BUSINESS FOCUS
In 2003, the African Union (AU) Heads of States, under their Maputo Declaration on Agriculture and Food Security, agreed to commit at least 10% of their national budget to finance agriculture. The assumption is that this amount would contribute to food security, povertyreduction and 6% agricultural sector growth. This would result from increased agricultural productivity as a result of the interventions funded by 10% of the budget. The 10% budgetary allocation to agriculture is of relevance to the delivering on the first Millennium Development Goal (MDG): to halve extreme poverty and hunger by 2015. Global efforts to meet the MDGs show that little has been done to tackle poverty in general and food poverty in particular.
Situation in Tanzania The 10% budgetary allocation to agriculture as per Maputo agreement has not been achieved in Tanzania. The highest allocation was in 2010/11, in which about 7% of the national budget was allocated to agriculture. It is to be noted that just allocating 10% of national budget to agriculture may not be enough. Allocations within the sector should be
such that they facilitate attaining the goals of achieving food security and sovereignty. Therefore, it is important to have a pro-poor agricultural budget that focuses on smallholder farmers – especially women - who produce about 70% of food in Tanzania. Among the arguments for the failure to attain the 10% target, is that there are no extra financial resources. There is, therefore, a need to solve the “Where is the Money” puzzle in attempting to facilitate the 10% allocation to the agricultural sector.
General sources of funds for the government There are several traditional and nontraditional (innovative) sources through which the government can finance its expenditure on public goods and services. The traditional sources include tax revenues, non-tax revenues, domestic borrowing, foreign borrowing and foreign aid. Non-traditional sources of public finance include sovereign borrowing, special infrastructure facility, regional economic arrangements and South-South Cooperation, sovereign wealth funds and pension funds, taxation of financial transactions, carbon trading and carbon tax, Debt to Health Innovations, voluntary-based initiatives and super-profit tax on minerals.
AGRICULTURE
Where is money for 10% allocation to agriculture? There are a number of sources of new money that if collected to the government coffers can substantially increase the size of resources envelope that can be used to increase agricultural sector budget. Some of these possible sources of new money are outlined in what follows.
Foregone revenues There is a colossal amount of foregone revenues in Tanzania. These include revenues foregone through tax exemptions, incentives, tax avoidance, tax evasion, none-taxation of the informal sector, not capturing the tax net of about 13.5 million potential tax payers, taxes that are uncollected via the about 5% tax gap and much more.
Collect more by charging less Lower rates of tax and other sources of revenues may bring more to the government coffers than higher rates. The example of the personalized new vehicles plate number registration is
used to drive the point home. The current rate is 5,000,000 Tshs in 3 years. It is argued using the economic principles of elasticity of demand that if this rate is substantially reduced to, say, 100,000 Tshs per year for vehicles as well as introducing 50,000 Tshs for bajajis and Tshs 30,000 Tshs for motorbikes, total collections may be more than the current practice of charging Tshs 5,000,000 for vehicles only per three years period.
Improve government revenues collection and expenditure More money for the agricultural sector may be available if adequate collection of government revenues is done. This has to be accompanied by more prudent public expenditure. These can be achieved through various interventions including continuous reforms in the tax systems authorities and policies; making Tanzanians happy-tax payers through better customer service, one-stop centre, easiness to pay revenues, low and
affordable rates, good taxation principles and better use of tax revenues. More money for the budget, and by extension for agriculture, can be collected by ensuring tax justice, in which the system is more pro-poor and inclusive; super-rich taxation through adding a band for the super-rich and avoiding potential loss of international trade tax revenues such as exercise/ customs duty connected to quarter free, duty-free trade liberalization moves.
Ways forward There are many potential sources of government revenues that have not been adequately tapped to raise budgetary funds. There is an urgent need to adequately collect these revenues so as to substantially increase the budgetary funds available for the government in general, and for attaining the 10% allocation to the agriculture sector in particular. TANZANIA BUSINESS FOCUS | 41
BUDGET SPECIAL
HONEST PROSPER NGOWI
Is a senior lecturer, researcher and consultant in Economics at Mzumbe University, Tanzania. Email: pngowi2002@yahoo.com, Cell: +255 754 653 740 The 2013/14 national budget for Tanzania was read by the Finance Minister and Economic Affairs on Thursday 13th June 2013. There are a number of issues for discussion in the budget. In this article, some issues on the basis of the budget, which is the Medium Term Expenditure Framework (MTEF), are discussed. The main aim is to give inputs that will guide successful implementation of the budget. This is because a national budget document is nothing other than a statement of government revenues and expenditure. What matters most is the implementation of that statement on the ground by way of delivering public goods and services.
Selected comments on the basis for 2013/14 national budget THE NEW BUDGET CYCLE The 2013/14 budget is different from the past budgets in terms of its timing. Earlier, national budgets were tabled and discussed around August of each year. The changes that have made it possible for the budget parliament to be convened from around April to June will enable approval of the Government plan and budget by the Parliament before the end of each financial year. This is a very good move. It potentially allows for early release of funds at the start of the financial year. This, in turn, is supposed to be good in implementation of government plans to be financed by the budget. It also, potentially, increases absorption capacity for Ministries, Departments and Agencies (MDAs), as well as Regional Secretariats (RS) and Local Government Authorities (LGA). This is because, at least, money for the first quarter can be expected to be 42 | TANZANIA BUSINESS FOCUS
available in the same quarter, thereby reducing stressed expenditures in the last quarter.
REVENUE ISSUES According to the MTEF and resources envelope that guide the 2013/14 budget, out of the total revenue to be collected by the government, tax revenue is about 57.1% of the total budget. This implies that the government will have to raise revenues from other sources to cover the about 42.9% gap. Given that tax revenues are supposed to be among the most reliable sources of government revenues, one would wish that the 57.1% tax share of budget funds was higher. This could be achieved through improved tax revenue collection. This, in turn, is a function of a number of variables, including increased efficiency and effectiveness in collection, widening the tax base, netting the informal sector within the tax system, reducing
unnecessary tax exemptions, as well as reducing tax evasions and avoidance. Important in increasing tax payers’ incentives to pay tax is proper expenditure of public funds. If all of the above are properly done in years to come, tax revenues contribution to the total budget will go up.
FINANCE FROM DEVELOPMENT PARTNERS The MTEF states that Development Partners will continue to contribute to Government Budget. This will be done in form of grants and concessional loans, whereby a total of Tanzania shillings 2,632.1 billion is expected from this source. For the 2013/14 and coming budget, it is important to note that Development Partners seem to be increasingly moving away from aid in general and budget support in particular. The new trend seems to be more programme and project supports as
BUDGET SPECIAL
well as direct support to businesses. The perceived increased donor support to the business community seems to be a move away from development through aid to development through trade and investments. The paradigm shift to the latter is welcome as is more sustainable. Developing Partners seem to be increasingly supporting their private sectors to take opportunities in developing countries either alone or in joint ventures with private sector in the developing countries like Tanzania. The author of this article has been involved as a researcher and consultant in some studies where some development partners were looking for what it takes to establish business match-making between their home countries’ business community and that of Tanzania. As if the perceived move away from budget support was not enough to discourage donor dependency in budgets, it is important to add a voice on the donors’ fiscal space. Although the global economy has, doubtfully, stopped from bleeding as a result of the 2008 economic crisis, it is yet to come out of the woods. The Euro-zone, for example, is still struggling with the sovereign debt crisis. This implies reduced ability and willingness of donors to give more in aid for countries like Tanzania. Among the newest development in the sovereign debt crisis is Greece’s cost-reduction, by way of closing its national broadcasting station in June 2013.
GOVERNMENT BORROWING According to the MTEF, the government plans to borrow in the 2013/14 fiscal year to the tunes of Tshs 3,349.5 billion from both domestic and external sources. As noted several times, borrowing is not bad, but we should make sure that the debt is sustainable and used in development rather than recurrent expenditure. We also need to be cognizant of the fact that the national debt has been swelling at almost alarming rates. The monetary and non-monetary costs of borrowing and debtservicing needs to be considered critically, and objectively.
LOCALLY FUNDED PROJECTS The government plans to implement a number of projects in the 2013/14 fiscal year. Now that the Public Private Partnership (PPP) policy and Act are in place, more emphasis should be put on using PPP arrangements in implementing government projects, especially those in infrastructure. PPP arrangements have huge potentials that are unmatched in the pure public sector delivery of nonecore public goods and services. Intergovernmental Fiscal Transfer For the approved budget to make sense in people’s lives, it is essential to ensure that MDAs, RS and LGAs get all approved funds and on time.
For LGAs, there is an urgent and extra need for revenue collection capacity- building so as to make LGAs more financially autonomous within the Decentralization by Devolution (D by D) framework.
MTEF’S EXCHANGE RATE Section 5.6 of the MTEF that guides the 2013/14 national budget gives an official exchange rate for the sake of uniformity in the budget estimates presentation. All MDAs, RSs and LGAs were required to use the indicative exchange rate of USD 1 to Tshs. 1,572.68 for costing their budget estimates in areas that involve foreign exchange component. This rate will, surely, disturb and frustrate budget implementation. This is because exchange rate is very volatile and, recently, has shown some rapid upward trend. Around April 2013, one greenback was equivalent to about 1612. On 12th June 2013, which was just one day before the budget release, a dollar was bought at 1630 Tshs and sold at 1647 Ths. This indicates that the Shilling is losing ground against the greenback. In issuing indicative exchange rates, it is important to be conservative and consider exchange rate volatility realities. Short of that, budget implementation will be frustrated.
TANZANIA BUSINESS FOCUS | 43
EDUCATION
Leveraging Technology for Competitive Advantage... Technology has and continues to play a pivotal role in enabling the Human Resource function in organizations to move from personnel management to business execution. In this day and time, the use of technology is a way to gain competitive edge in the market. For the Human Resource professional, leveraging on technology greatly enhances processes from recruitment to retirement and everything in between. 44 | TANZANIA BUSINESS FOCUS | Sep 2012
EDUCATION
Olubusola Ogunlolu LLB, ACIPM buslolu@yahoo.com
HR technology covers many spectrums of the organization's operations. While no one can predict the future for certain, one thing is sure… Human Resource executives will continue to play a vital role in helping companies compete. Human Resource executives will increasingly be asked to look ahead and project what processes and things will need to be in place to enable their organisations compete effectively. Human Resource practitioners will be making practical suggestions regarding recruiting and retention strategies, compensation planning, training programs and a host of other strategies and programs in an attempt to beat competition. To enable them to perform effectively in the future, it is critical that information regarding current trends be immediately available for analysis and forecasting. Hence the case for technology.
H
R technology has been quite instrumental in transforming the field of HR and changes on the horizon have the potential for an even greater impact in the future. In most organisations, the use of IT has greatly increased productivity through maximizing the company’s most valuable assets…its people. The reality is that companies vary in terms of their information needs, their existing technology, and their commitment to technology. They are also very different in terms of their ability to afford technology, the value they place on HR information, the size and culture of the organization and the human resources available to devote to a technology upgrade. But all companies can agree that the key reasons for adoption of HR technology include:
What then is HR technology? HR technology can be defined as any technology that is used to attract, hire, retain, and maintain human resources, support Human Resource administration, and optimize Human Resource Management. This technology can used by various stakeholders such as employers, managers, employees and HR professionals. This technology can be accessed in different ways.
1. Cost savings, 2. Faster processing of information, and 3. Provide relevant, timely information to help the organization achieve its goals and beat competition. This being the case, therefore, HR technology is increasingly being used by small, medium, and large employers to meet the needs of its stakeholders..
The choice of technology to adopt can be decided by two key considerations: How much customization does the organization want and What type of system does the organization prefer and need?
Organizations can decide if they want to purchase a system that brings “best practice” or alternatively purchase a system and customize the software to fit their existing processes. Regarding the type of system, organizations may want a stand-alone system or an enterprisewide system that stores all company data together on a single platform.
TANZANIA BUSINESS FOCUS | 45
BUSINESS & FINANCE
There is no doubt that technology has made it easier and faster to gather, collate, deliver information and communicate with employees. More importantly, HR technology has greatly reduced the administrative burden on the HR department so it is better able to focus on more meaningful Human Resource activities including providing managers with the expertise they need to make more effective HR related decisions.
Research has indicated that companies who effectively use technology to manage their HR functions will have a significant advantage over companies which do not. However, not all companies have the latest and greatest technology, nor do all companies need the most advanced technology. However, all companies do have HR-related information needs. In this present time, many companies have started to embrace HR technology. The benefits of automation are becoming widely known to HR and other areas of the business. The focus has shifted to automating as many transactions as possible to achieve effectiveness and efficiencies. The handling of routine data transactions and other administrative or regular 46 | TANZANIA BUSINESS FOCUS
functions can result in a loss of efficiency and corporate cohesion. Improving service to employees and managers, eliminating process steps, approvals and forms, and reducing administrative costs is the target of most 21st Century organisations. Effective management of a firm’s human resources is a key source of competitive advantage for organizations. Increasingly, the delivery, support and management of HR all depend on technology. Research shows that implementing HR technology can enhance a company’s long-term productivity and profitability. What sets highperforming organizations apart from others is how they use technology to deliver HR services. A recent study by the Hackett Group, (a business process advisory firm) found that high-performing organizations spend 25 percent less than their peers on Human Resource because they use technology effectively. We, therefore, see that HR technology is not only increasing efficiency, but also transforming the HR function. Prior to 1990, the Human Resource function in most organizations were almost entirely focused on personnel administration. This was due, in part, to the sheer amount of time required to manage administrative HR processes before the widespread implementation of HR automation technology. In fact, prior to 1990 many HR organizations were not even called “Human Resources.”
Instead, they had titles such as Personnel Department or Personnel Administration. In the 1990’s two things happened that led to personnel management being redefined as “human resources.”
First, implementation of ERP (Enterprise Resource Planning) technology significantly reduced the time needed to perform administrative HR tasks. This freed up the HR practitioners in the organizations and created opportunities for them to focus more on business execution topics. This led to significant advances in Human Resources. Many of the talent management techniques we now take for granted were largely developed in the 90s (e.g. action learning, competency modeling, structured interviewing, goal setting etc). Second, the widespread adoption of personal computers made it possible for HR departments in organizations to utilize more sophisticated talent management techniques to support key talent decisions. Throughout the 90s the focus of HR steadily shifted beyond personnel management to include processes designed to improve the quality of workforce decisions.
BUSINESS & FINANCE At the turn of the century, (2000 to 2010) widespread adoption of internet systems allowed the HR function to more efficiently share data across what had previously been independent HR processes. Greater access to data enabled HR to shift from focusing on specific employee decisions to aligning talent management processes. No longer was HR limited to being a series of isolated silos focusing on staffing, training, compensation and succession, now HR could function as a set of integrated talent management processes designed to ensure a steady supply of high performing talent in critical job roles. In this present dispensation, as companies increasingly adopt HR technology, organizations are spending less time maintaining inhouse talent management tools and more time on how to most effectively use these tools to increase workforce productivity. This allows HR professionals to shift their energy from managing processes to actively supporting business execution. HR is focusing less on simply keeping track of who employees are and more on ensuring these employees are being used effectively to support the company’s short and long-term business strategies while also fulfilling their own personal goals. Today’s business trend is to empower stakeholders with direct access to data at the enterprise level, through self-service media such as the Internet. The trend is becoming an essential element of an organization’s ability to compete. Today’s HR technology is moving rapidly to web based systems to deliver data and services such as employee selfservice (ESS), web-based training, online applicant testing, online recruiting, video interviews and online benefits management. Needless to say, the impact of technology has fundamentally changed the HR role. It has enabled HR to decrease its involvement in transactional activities, increase its focus on the customer and increase its delivery of strategic services. As a result, several core competencies have emerged that are critical to the development of the HR professional.
Wayne Brockbank and David Ulrich both of Ross School of Business, University of Michigan have identified five core competencies of HR as follows:
1. Mastery of HR technology 2. Strategic Contribution 3. Business Knowledge 4. Personal Credibility 5. HR Delivery The HR function, with its newly developed strategic focus,is expected to demonstrate a measurable impact on business results. The expectation is that HR is transforming data into insights and the ability to provide quality data that will transcend the need for information and focus key decision makers on relevant information that is meaningful to the business. Today’s HR professionals must be technically savvy and be able to speak the language of business. They must understand the business environment and the major drivers relating to workforce productivity as determined by management. Such
techniques as benchmarking and the use of balanced scorecards will become increasingly important for HR. These tools will provide HR with feedback as to whether they are truly listening to the organization and providing customer cantered services.
Finally, it is important to note that how HR utilizes technology to evaluate its own effectiveness and how it decides to leverage emerging technologies to drive productivity and the management of human capital will make the difference between a mediocre HR department and one that is truly a business partner.
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TECHNOLOGY Finance FEATURE
LEVERAGING TECHNOLOGY FOR AFRICA’S SOCIAL AND ECONOMIC TRANSFORMATION: Getting the Policy Right Dr. Bitrina Diyamett bitrina.diyamett@stipro.or.tz www.stipro.or.tz Technological innovation represents a way for developing world nations to foster economic development, eradicate poverty and avoid marginalization in an increasingly globalized world. This is an accepted fact, and what remains is how to get technological innovation right in the context of these countries. There are many issues around this, but policy is of paramount importance.
The Concept of STI The use of concepts in policy making is normally the things we take for granted; but if used inappropriately, can course serious flaws in policies. For science, technology and innovation (STI), the twining of S&T and more recently the triplet STI, have brought a lot of confusion in the policy process, especially its use as one thing. One hears of the STI education, STI funding etc. We here attempt to resolve the confusion by disentangling these concepts and explain the relationships between the individual components. The objective is to pave way to a more appropriate policy making.
Policies are important to foster technological innovation any where in the world, but for poor countries such as those in Africa, it is an indispensable tool because of pervasive market failures in allocating resources to innovative activities. I believe, while the developed countries can afford to leave innovation to the play of the markets – with exception of some social and environmental concerns – poor countries cannot afford to do so even for pure economic purposes, largely because of poor demand conditions and capabilities for innovation. This article is devoted to getting the policy for development of technology in the context of poor developing countries right. It discusses two most fundamental things: getting the concepts right and use of evidence in the policy process 48 | TANZANIA BUSINESS FOCUS
TECHNOLOGY FEATURE
Science According to Webster’s dictionary, science is knowledge covering general truths about the natural world, especially as obtained and tested through scientific method. As it is, it has no relationship with social and economic development. In fact, in the early days, then known as natural philosophy, science was pursued for other reasons than social and economic development.
The interrelationships between the concepts of STI
Technology Technology is one of the means by which mankind reproduces and expands its living conditions. It is the making, usage, and knowledge of tools, machines, techniques, crafts, systems or methods of organization in order to solve a problem or perform a specific function. Note here that technology is not only about ICTs such as computers and mobile phones. If anything, these are the tools that enhance technological development, a concept related to innovation – to be described next. A computer or a mobile phone given to an inherently non innovative company or individual is as good as a toy when we talk of social and economic
Having defined the three triplets, we can now discuss the interrelationships and how they together influence social and economic development.
development. Emphasis on the use of ICT’s should therefore go hand in hand with emphasis on innovation.
Innovation This represents change in technology as brought about by humans. Innovation is a very broad concept, used both in social and economic spheres. One can talk of innovation
in school curriculum, constitution etc. We will here focus on innovation in regard to economic use, specifically technological innovation, because our subject is on leveraging technology.
The relationships between technology and innovation are clear from the definition of technological innovation above. Innovation is about improvement in technology over time. It is innovation that has brought remarkable social and economic development, and not a static technology. A hand hoe is a technology, but mechanization that came much later is what brought unprecedented productivity increase in agriculture. The debatable issue is however on the relationship between the science and the technological innovation. How does technological innovation happen? Do we always need science for technological innovation?
TANZANIA BUSINESS FOCUS | 49
TECHNOLOGY Finance FEATURE
The relationship between science and technological innovation has been controversial. There has been, and there still is a popular belief that science is used to make and improve technology. That science predated technology, and technology being simply conceived as application of science. However history tells us that technology antedated science by far. It has been written many times that it is technology that gave birth to early scientific investigation: It was the working of steam engine as a technology that led to the new field of thermodynamics in science. In chemistry, the science of polymer that emerged in the twentieth
century, in large part resulted from research performed inside industrial laboratories to develop materials that could better fulfill the changing requirement of industry. The rise of scientific understanding supporting aircraft design reflects a similar story - a primitive version of the aircraft (technology) came first and the science discipline of aerodynamics followed. However, as technology continued to develop the relationship between science and technology is intensified, and science is increasingly used in the development of technology (innovation). On the extreme end there is now an overlap between science and
technology. That is, it is sometimes not easy to distinguish between scientific activities and technological activities. Good examples are nanotechnology, biotechnology, information and communication technologies. The biotechnology revolution, for instance, has brought about an unprecedented convergence of science and technology. This history tells us that we do not always need science to innovate. Innovation can happen, and in most cases do happen, through human experience and ingenuity, with no or little use of scientific discoveries.
The Role of Research
Policy Implication of the above The above imply that there are two major ways to influence technical change (Innovation): Experience based, or learning by doing, and use of science. Experience based innovation happens in low tech sectors, while science is used in relatively high tech sectors. Most economies are made up of the two modes of innovation, and strategies for influencing and financing the two are different. We therefore need different sets of policy objectives. Blanket use of STI, where innovation is assumed to come only from science in trying to support innovation is misleading, and can lead to flawed policies, especially for poor developing countries where much of the investments are still in the low tech sectors. 50 | TANZANIA BUSINESS FOCUS
Policy research is a crucial part of any policy process; but policy research to inform the innovation process is uniquely important for the following three major reasons. First, Innovation is a complex multi actor field; No entrepreneur can innovate alone. He or she needs other actors in very complex relationships. Uncovering these complexities require in depth research. Secondly, innovation is dynamic. The mix in the two modes of innovation is dynamically changing depending on the changes in social and economic conditions. There is need to follow up on these changes in terms of research for policy learning. This is precisely the reason the EU countries, since 1992, have what is called the Community Innovation Surveys (CIS) after every 3 years. Thirdly and most important for poor developing countries, innovation is context specific, and have largely been studies in the context of developed countries; and is where the established best practices and indicators are coming from. However, because of difference in social and economic environments, these indicators and best practices give very little room for policy learning for poor countries. There is therefore a need to carry out studies in the very context of Africa to inform policies. For instance we need to know what is currently happening in the experienced based innovation, and what are challenges facing firms and farms. How can science better be leveraged to complement experience based innovation.
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PERSPECTIVE
MELKIORY NGIDO (PhD, FCCA) Like other governments worldwide, African countries are under increasing pressure to reduce spending but expected to meet the increasing demand for better public services and tackling of global issues like climate change.
Public-Private Partnership for National Innovation
The pressure on public spending and delivery merits our governments to turn to technology and innovation as the main instrument to guarantee increasing efficiency and effectiveness in public services. In other words, governments are called to address innovations and technology as a means of attaining the required public and global demands. State it differently; African countries require adequate access to correct and appropriate technology to achieve the aspired socio-economic transformation. This can be demonstrated, for instance, by deployment of innovations such as enterprise resourceplanning systems in back-office functions to the more radical use of web technologies to transform citizen engagement via the internet. Despite steady dialogues and obvious benefit of technology for public services, as hinted in the precedent para, little is known about technology and innovation for public services in african countries. The missing link in the technological know-how and development goals continue to persist without any tangible focus to spearhead the process of technological transformation, which is important to support the public sector to meet its goals efficiently and more effectively. The center of this weakness is the missing process of how to access, exploit and distribute the innovations that can change the public service to the next level. Attributable to the barrier to innovation in public sector and why governments fail to embrace innovations has been mentioned to include low capacity of public-sector organizations, willingness to involve private sector, resistance to change, risk aversion, and bureaucratic organizational structures. The characteristics common to public sector suggest that a combination of institutional logics with private sector presents the most effective model for African countries to stimulate technological development and innovations. Involvement of private sector for public mission and country goals will open up new business and profits to 52 | TANZANIA BUSINESS FOCUS
the private sector partner and will thus be the immediate answer to effective, cost efficient and impactful innovative solution for public services. In an economic generating public-private collaboration the private sector can respond creatively and quickly to innovation to make more money while acknowledging the reason for their existence to be the public mission and government goal. It is easy to understand this concept when a country sets specific targets on gas emission. Here, unless the government convenes energy efficiency professionals and entrepreneurs from the private sector, it cannot claim to reach the original target reduction in greenhouse gas emissions. The public - and private-sector- can come together as a one-stop shop laboratory or a government can encourage private sector competitors to invent energy efficient technology. Similar logic can be applied in other public challenges that need innovations, such as public service delivery and cost reduction measures. This, therefore, explains why conscious efforts to focus on developing the network of institutions and activities in the public- and private sectors are crucial for a greater innovation and change. By bringing private-sector logics into public sector organization governments will be able
PERSPECTIVE
to initiate, import, modify and diffuse new technologies that is required for public service. Such network and interactions, for instance, will help us see logics of the public, market and academic science accelerating medical discovery, and market and charity combine to approach poverty alleviation through microfinance organizations. Thus more than just a business venture which is funded and operated by public and private organization, public-private partnership presents a critical concept that African governments can knowingly adopt to develop expertise and technological solutions. In the partnership the public sector partners need only to have favorable policies and provide private sector partner with rights to specific assets, such as data or government real estate or other facilities, to benefit with the private generated technological innovation. Combination of public and private logics also presents a serious organizational consequence on the site of service innovation, new practices and institutional behavior. Public-private partnership, therefore, is more than just a contractual arrangement, where private party provides a public service or project on behalf of the government. It is an important machine that can transform the delivery of public service. Participating public sector will get access to novel combinations of capital, tacit knowledge, and regimes of justification and hence bring about a totally
The public - and privatesector can come together as a one-stop shop laboratory or a government can encourage private sector competitors to invent energy efficient technology.
different experience in public service, which is in line with private sector. Australia and New Zealand are some of those countries where introductions of public-private partnerships enabled governments to bring about the main advantages of private sector, such as reduced cost, increased efficiency, and income generation without changing public ownership. Therefore, particularly when problems seem to dwarf the ability of public organizations, this discussion highlight the importance involving private sector as a constructive approach to public service innovation, provided that the collaborations between public- and private-sector can generate economic value to the private-sector partner. Economic value from public assets is likely to motivate private sector actors to inject new skills, fresh ideas and diffuse innovations across government organizations. This will act a catalyst to help public organizations overcome resistance to change and risk aversion, which is key for public sector organization to adopt innovations. So where the public sector is willing to engage private sector, and where private-sector partners are willing to engage with a variety of stakeholders and open to sharing the skills and expertise, then, tangible benefits, innovations and improvements for citizens and government goals can be realized.
Finance
54 | TANZANIA BUSINESS FOCUS
TANZANIA BUSINESS FOCUS | 55
SPECIAL FEATURE
Africa’s burgeoning cities: Can technology level the ground? Technology is helping traffic-choked cities to get moving. For example, IBM ramped up its presence on the continent to service a client, India’s Bharti Airtel, when it bought telecom operations in 17 African countries a few years ago.
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SPECIAL FEATURE and Cape Town. “People rely on private vehicles because public transport isn’t predictable, but we believe IT can help public transport work better,” says Tony Mwai, IBM’s country general manager for East Africa.
Kenya
Transport inefficiencies in Nairobi cost an estimated $517,000 (€417,000) a day in lost productivity, fuel consumption and pollution. In Dar es Salaam, the problem is so serious that about US$ 3 million loss is incurred every day from traffic jams in Dar es Salaam, which amounts to an estimated over US$ 900m annually, which is about a sixth of the current budget of the government.
It can take three stressful hours to jostle, bumper to bumper, from Lagos’s airport in Ikeja to a hotel in the centre of town. Angola's capital Luanda, where a room weighs in at $400 a night, sits alongside Tokyo as the most expensive city in the world. Travel to any African city and diversity and excitement aside, unpredictable infrastructure, poor services and planning and sprawling slums eventually blight the journey. As investors turn their gaze on Africa, its cities will be a determining factor in attracting investment. And the pressure is on to mold them for the future as rural populations arrive en masse. Few will see as rapid an expansion as Ouagadougou, the capital of Burkina Faso, which the United Nations agency UN Habitat predicts will grow by 81% in the next 10 years to 3.4 million in 2020; or Lagos, which will soon overtake Cairo as Africa’s biggest city. With no time to waste, few resources to spare and tough environmental challenges, African cities have to come up with ways to nurture inward investment and build capacity for the future. This is prompting some startling innovation. Technology is helping traffic-choked cities to get moving. For example, IBM ramped up its presence on the continent to service a client, India’s Bharti Airtel, when it bought telecom operations in 17 African countries a few years ago.
Now, through its Smarter Cities initiative, IBM is advising authorities in Accra, Nairobi and Johannesburg on how to tackle congestion. Mobile data is being used to build traffic databases to better predict bottlenecks, site relief roads and forewarn haulers carting their wares into city centres of traffic levels. Sensors and CCTV will help enforce rules and capture data for the bus rapid transit (BRT) systems some cities—like Dar es Salaam in Tanzania— are introducing. Bereft of funds to build underground networks, these dedicated bus lanes – with subway-like stations where passengers pay for tickets before they board – are a green, affordable solution to congestion, proven in China and Latin America and coming to Dar es Salaam, Nairobi, Lagos
New city infrastructure such as BRT systems, fibre-optic cables and modern technology mean African cities harbour an advantage despite the challenges. Developed countries’ cities struggle to maintain dated and crumbling infrastructure and have to take out the old before they can usher in the new – indeed; New York spent millions pulling out old copper wiring before it could lay modern cables. “Africa has a once-in-a-generation opportunity,” argues Zemedeneh Negatu, East African managing partner for Ernst & Young, who talks about a “wall of money” coming Africa’s way and most recently advised drinks group Diageo on its $225m purchase of Ethiopian stateowned brewer Meta Abo. “Because it is the least urbanised continent on Earth, Africa has a blank sheet of paper when it comes to building its cities. Africa can learn lessons in how not to urbanise and get it right.” It’s a central theme at UN Habitat in Nairobi, which argues cities in developed economies grew at a time when oil was cheap and cars ubiquitous, but that this model is out of date today. “Copying the European and American car-dependent urban models isn’t the desirable direction or a feasible, long-term option,” argues Dr Joan Clos, its executive director. TANZANIA BUSINESS FOCUS | 57
SPECIAL FEATURE
“Re-imagining urbanism is the key term here, whereby we have to draw attention to different urban options for environmentally sound and better-organised cities in Africa.” Gordon Pirie, deputy director of the African Centre for Cities at the University of Cape Town, thinks local efforts are key to making Africa’s cities environmentally and socially sustainable. He says modernisers are too quick to duplicate cities in developed economies and that the solution to Africa’s urban development and better service delivery lies in indigenous, small-scale initiatives. He highlights society and communitybased schemes like Cape Town’s Violence Prevention through Urban Upgrading initiative. This group has come up with ways to reduce violence and crime in the township of Khayelitsha by changing the design of neighbourhoods, improving the lighting and landscaping. In another initiative, Kenyan entrepreneur and architect David Kuria has built a business around the provision of public toilet and shower facilities. Staff man and clean the units, which are sited amid the hustle and bustle of newspaper stands, shoeshine 58 | TANZANIA BUSINESS FOCUS
stalls or money-transfer booths in what he calls a “toilet mall”. The idea is to try to change social norms and encourage more people to use public toilets, he says. So far Nairobi has 34 pay-per-use eco Ikotoilets across poor communities, with more in the offing. In fact, most of the small-scale, local innovations that Pirie believes will change Africa’s cities are environmental. Cape Town plans to derive 10% of its power from renewables by 2020. Its bid to cut emissions includes schemes such as installing 300,000 solar water heaters over the next four years. In Lagos the government has introduced a wasteto-wealth programme that converts about 10% of the city’s waste to other uses. Around 40 tonnes of paper, plastic and nylon are recycled daily and the state government hopes to triple this to 35% by 2015. Accra in Ghana was praised for its robust environmental policies in the African Green City Index, a research project backed by German conglomerate Siemens, ploughing into Africa and winning contracts through its Infrastructure and Cities division. The research, which aims to give
governments an insight into pressing environmental challenges, found that local assemblies work successfully with the national government to implement green policies and that Accra has introduced environmental monitoring that gauges air quality and sanitation, unprecedented in Africa. Some 74% of the city’s power supply is derived from hydropower and ambitious projects such as One Airport Square have set a high bar for all new and aspiring green developments. The building, which houses business and retail units, consumes 40% less energy than comparable buildings, recycles rainwater and has concrete overhangs to provide shade.
Ghana
Residents in Accra’s informal settlements are also more likely to have land tenure, meaning they have better access to services and are more likely to upgrade facilities themselves. In another trend, new cities and satellite towns are springing up. Soon it’ll be hard to believe that Tatu City, being hewn out of a 1,000 hectare site 15km north of Nairobi, was ever a lush coffee plantation. The developers behind Kenya’s first
SPECIAL FEATURE
purpose-built city believe it will reflect the zeitgeist of a modern, urban nation – the kind of place where people have their own front door, car parking, electricity and easy access to schools, work and shopping. Construction has begun on phase one with basic infrastructure going in to serve a commercial and business hub. A residential area will follow, housing 62,000 people along with hospitals, police stations and green parks; developers are now trying to persuade Kenya’s Stock Exchange to move here. “We believe that cities will unlock the future of Africa,” says Arnold Meyer, head of the Russian banking group Renaissance Capital’s real-estate arm, backers of the project but with sights set continentwide. The bank has bought up land around major cities including Luanda, Accra and
Zimbabwe
Harare in Zimbabwe and is currently working on a master plan for a new city outside Lubumbashi in the DRC. It also has a stake in Roma Park, a 104-hectare site in the Lusaka suburbs, Zambia’s first mixed-use complex that will combine residential, industrial and retail developments when it opens. “We will put in the infrastructure, lay the foundations, and then let cities grow naturally,” says Meyer. But building new cities isn’t straightforward in a continent where infrastructure developments can be bogged down by corruption, bureaucracy and landrights issues. “It’s not in the nature of local people in Africa to sell their land,” says Peter Welborn, head of residential and commercial property at estate agent Knight Frank’s Africa division. It’s a challenge Lagos has navigated by building a city based on land reclaimed from the sea. A new island called Eko Atlantic is already being hailed as ‘Africa’s Hong Kong’. This four-square-mile business and residential development will accommodate 250,000 commuters a day and have 250,000 homes, plus office space, marinas, giant malls, trams, its own power station and skyscrapers. “It will be a masterpiece of urban planning with its wide
boulevards, tree-lined avenues and views over the marina waterfront,” gushes the company behind its development, South Energyx Nigeria. A so-called Great Wall of Lagos will protect the city from the pounding Atlantic and give more shelter to Lagos, which has retreated 1km since the 60s because of coastal erosion. The theory goes that more cities will reduce the primacy of giant capitals and spread prosperity and wealth around nations. “Concentrating almost all national human, economic and other resources in a geographically concentrated area is one of Africa’s key problems,” says Clos. “It generates huge cities that become dysfunctional because of pollution, congestion and crowding.” New cities will also encourage the relocation of large organisations. The rejuvenation
of Nigeria’s oil city Port Harcourt, for example, should lure back big oil and gas groups that relocated their staff to Lagos during the militancy. Nigeria LNG has already announced plans to move its HQ to purpose-built offices and once the big oil companies go back, support services will follow. There is no need for all government ministries to be located in a country’s capital city, argues Clos. “Why not put fisheries ministries near the coast?” he asks. But not all new cities have gone down a storm – indeed, satellite towns excite fierce debate. Critics say they lure high-income groups, with house prices out of reach of the masses. It’s argued that they foster property bubbles and pockets of exclusion – or, alternatively, will become the ghettos of tomorrow, put up fast and cut off from their environment. Nova TANZANIA BUSINESS FOCUS | 59
Finance FEATURE SPECIAL
Cidade de Kilamba outside Luanda is a case in point. This mixed residential development – with its 750 eight-storey apartment buildings, schools and more than 100 retail units – has sprung up in the past three years and stands empty. Built by the state-owned China International Trust and Investment Corporation for an estimated $3.5bn, most of the apartments are still uninhabited because the majority of Angolans can’t afford them. Nor, critics say, will new cities ever capture the best and most unique aspects of Africa’s existing cities, like thriving SME cultures. New cities won’t have the backyard jumble of tiny shops where entrepreneurs congregate and share ideas on pavements. These informal business incubators spin out entrepreneurs who have honed a makeshift inventiveness in electronics, telephone banking, energy-saving devices and the arts.
Ethiopia
Alternative solutions to housing could be more low-cost homes within a city’s own confines. In Addis Ababa, Ethiopia, Jemo Condominium Site in the suburbs of Lideta and Gulelle houses 10,000 condos, with another 100,000 in the pipeline for lowincome families. Satellite towns may not be the solution but they are a sign of progress nonetheless. “Every 60 | TANZANIA BUSINESS FOCUS
journey starts with the first step and the renewed African attention to urban planning and management of its cities is a major breakthrough,” says Clos. “It shows that Africa’s general perception of the importance of cities and the human habitat of the future is changing.” By better organising cities and developing mixed-use land, city dwellers don’t have to travel so far between home and work and cities function more efficiently. UN Habitat estimates a city’s poorest inhabitants spend up to 30% of their income on transport getting to work. Africa’s cities are doing more to improve their revenue collection too. Initiatives are focused on building a culture of payment but also developing new ways to generate revenue and collection. IT is being used by city authorities to make government services more transparent and improve the tax take. “IT systems take the human element out of it,” says IBM’s Mwai. In Lagos tax revenues have increased from $3.7m a month in 1999 to nearly $92m. Governor Babatunde Fashola says tax rates have not increased but enforcement has. In a groundbreaking scheme at Tatu City, the developers have wrested control of essential services off Kenyan utility companies and in the first project of its kind the city’s own, privately run council will collect taxes and provide
services. In this way the Tatu council will act as a retailer of electricity and water, buying in services in bulk and selling them on in what Meyer heralds as the “future for African cities”. He adds: “Governments should put in place the regulatory framework and let the work be done by private institutions.” Despite the tough business climate, foreign investors flock to Africa’s cities by the day. Burberry has just opened its first boutique in Johannesburg; Gucci and Prada are in Casablanca. In Dar es Salaam, Honda has teamed up with a Tanzanian company and is preparing to build a plant to sell cars locally. South African supermarket chain Massmart, now majority owned by US giant Walmart, is expanding into Nairobi. Ghanaian company Gadco, the largest commercial rice farmer in the country, is planning an assault on Accra. It’s developing an integrated value chain encompassing farms, processing plants and distribution networks to feed the city, and others, in a process its founder, Nigerian entrepreneur Toks Abimbola, calls “turning African agriculture on its head to point at Africa, not the West”. As investors pile in, now is the chance for cities such as Lagos, Nairobi and Johannesburg to realise their ambitions and become truly world cities. Efforts to overhaul infrastructure, transport, housing and planning have a new urgency.
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Finance
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INDUSTRY
INDUSTRY Dr. Antipas Massawe massaweantipas@hotmail.com
John Mashaka
mashaka.john@yahoo.com DAR ES SALAAM
Why African countries need to collaborate Africa has the greatest manufacturing, and growth potential among the countries sharing the Indian, Atlantic, and Mediterranean Oceans and their coastlines in North and South America, Middle East and Asia. If their exploitation is well organized and managed, the continent could become a global manufacturing hub.
64 | TANZANIA BUSINESS FOCUS
INDUSTRY
Africa is strategically located on the interface of the world’s leading marine trade exchange between markets within and around the Atlantic, Indian and Mediterranean Oceans. Africa’s climate, abundance of mineral resources, fertile land, and freshwater bodies places it on a higher position to lead the world as the next manufacturing hub of the world. With its population of 1 billion people, and its growth rate of 3 % and the expanding middle class, Africa is becoming a big market within itself.
D
espite being blessed with all what is required to become a global player in manufacturing and processing, Africa is still one of the least industrialized and a net exporter of cheap raw materials and an importer of costly manufactured goods Africa’s present share of global manufacturing is 1% and that is shrinking, as its labour-intensive manufacturing goes on, in conditions of limited financing, and unreliable and costly power supply and transportation of raw materials. This becomes anti-competitive infront of the highly efficient and cost -effective, modern technologies in advanced nations, where financing, reliable energy and huge markets are available Africa has failed to secure its deserved share of global manufacturing,because the individual countries on the continent are in the exploitation of their natural resources; it is not earning them their deserved revenues for investing in the development of the enabling infrastructures and their domestic markets are also too small and uncoordinated. Policies and legislation governing exploitation of natural resources like minerals in African countries are not harmonized and, as the African countries compete among themselves for Foreign Direct Investment (FDI), they are unable to dictate own terms for winwin relationships, favour foreign explorers at the expense of the African Continent. Also, policies, legislation and priorities governing investing of government revenues in the development of enabling
Power generating windmills - Kenya infrastructure and manufacturing in the African countries are also not harmonized and, therefore, not delivering the network of well interconnected and interdependent infrastructures--something that could have enabled optimal development of manufacturing potentials and markets throughout the African continent. Having all African manufacturing and marketing potentials well-covered with reliable and cost-effective networks of materials transport and power generation and transmission is essential in the minimization of cost in African manufacturing and movement of materials throughout its fast growing population of more than 1 billion and enable it to realize its natural competitiveness for Global investing in manufacturing. Lack of foundational infrastructure
required for the African Continent to realize its natural competitiveness in the global manufacturing, is what forced some countries on the Continent to remain net exporters of unprocessed raw materials, and importers of costly manufactured goods. This is economically unproductive because earnings are a fraction of the natural wealth inherent in its exports of unprocessed raw materials. Nonetheless, as it imports costly manufactured goods, the continent continues to plunge deep into poverty due to the expanding balance of payment in respective countries. As a net exporter of raw materials and a huge importer of manufactured goods, the continent slides backwards in manufacturing technology, hence remaining more unproductive and poorer. On the other hand, energy shortage caused TANZANIA BUSINESS FOCUS | 65
INDUSTRY
by poor hydropower generation in places like Grand Inga, the Stigler’s Dam in Congo and Tanzania respectively, for instance, causes the continent to waste much of its development potential. Even though, Africa is still rescueable due to its untapped natural wealth, such as non-renewable and renewable resources, the continents potential is a lot more than required to finance development of the integrated foundation of infrastructures which is required to enable the continent to realize its natural competitiveness in the global manufacturing. Rescue of Africa requires African governments to decide and pass resolution that their individual development policies, legislation and programs, which are involved,should be reviewed and harmonized to effect common strategies and African collaboration in the exploitation of the wealth inherent in natural resources, like nonrenewable mineral resources and power-generation potentials within individual African countries.
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This is to ensure African countries earn their deserved share of the wealth generated and invest it wisely in the developments within the Integrated foundation of infrastructures like transport and power generation to enable Africa realize its natural competitiveness in manufacturing, and reverse the trend in which Africa imports costly foreign manufactured goods. African idea should be to engage the power of collective responsibility in the enabling of African countries on the African agenda in place of the colonial era agenda they have been operating on. This is enabling them to overcome their chronic dependence on developed nations (especially the former colonial masters) for aid, which is often tied up with condition that, individual African countries adopt policies and legislation, discouraging collaboration among themselves in favour of collaboration with the developed donor nations in the management and exploitation of their natural resources. Chronic dependence on aid is also one of the main causes behind the negligible
African contribution of the scientific and technological advances governing competitiveness in all modern processes of global wealth creation.
In that regard, African countries will remain net exporters of cheap raw materials to the developed nations and importers of costly manufactured goods. African aim should be to achieve the collective responsibility in ensuring that exploitation of natural resources within individual countries earns them their deserved shares of revenues generated for investing in All-African Master plans of integrated foundation of infrastructures and priority manufacturing potentials within the continent •
Finance NEWS GALLERY
500 million USD Investment in Tanzania Cement Production Dangote Cement Plc has invested 500 million USD in a new three million ton plant for Tanzania’s cement industry and the deal signals a new business relationship between Nigeria and Tanzania.
O
wner of Dangote Group; Aliko Dangote, expressed enthusiasm on Africa shaping its own destiny and his company’s new investment that will strengthen relations between Nigeria and Tanzania as well as commended the Tanzanian government and people of Tanzania for recent banking, legislative and public sector reforms which have boosted private sector investment. “We are excited for two major reasons. The first being that today’s event is a significant milestone for us in our quest to build a Pan Africa cement company. We are excited that an African company is making this investment in a sister African country. This indeed, shows that Africa is gradually taking its destiny in its own hands rather than wait for investors from outside Africa” he said. As the Tanzanian Prime Minister Pinda explained despite the abundant limestone resource in Tanzania, the East African Nation experienced a deficit in cement production and supply, the investment is expected to lift Tanzania’s emerging economy and Africa at large through its cement production. He said “We could not bring in Cement Plants with capacities to produce cement...this was becoming a growing concern to the Government, we came to know about the availability of Cement Grade Limestone in huge quantities in this village in Mtwara. But this was a challenge for us, as Mtwara is quite far from the market of cement, which is mainly in the cities.” Dangote Tanzania statement noted the construction was taking place in Mtwara, Tanzania due to good Limestone and Gypsum deposits, sound investment principles in the sector and the ideal opportunity Tanzania offered for Dangote Cement to consolidate its operations in Eastern Africa. 68 | TANZANIA BUSINESS FOCUS
ICT Broadband Connects Tanzania Under a 403 million USD loan from the Government of China, Tanzania will soon commence the third construction phase of the National ICT Broadband Backbone (NICTBB) that will see the nation’s districts connected and seal the communication gap in the country. Deputy Minister for Communications, Science and Technology; January Makamba has said “We signed a 403 million dollar loan when the President of China toured Tanzania two months ago. We will spend the money on construction of the National ICT Broadband Backbone. We will thus be able to connect the whole country including all district councils,” he said. The project will also implement the internet as a normal part of secondary schooling and internet exposure and usage will penetrate several generations. “We have also started connecting schools to the internet under a project known as TZ 21st. Mtwara primary schools have already been connected and we are continuing with other regions” Makamba said. The ICT Backbone will increase communication speed in Tanzania and has also registered a 57% decline in mobile phone expenses while the broader connection is reaping the reward as the country continues to improve its overall internet service.
NEWS GALLERY
Six companies Scoop Innovation Awards TZS85m Six companies have been awarded over TZS85m under the innovation Fund at the Commission for science and Technology. Speaking at the hand over in Dar es salaam recently, the Minister for Science and Technology Prof Makame Mbarawa said the fund was started to support innovation in developing the economy. “Entrepreneurship is growing; we need youth to start their own companies to employ themselves. Challenges of selfemployment are many and that is why young innovators have to take advantage of such
Tanzania innovator scoops $300,000 A 29-year-old Tanzanian software developer has won over US$300,000 in a landmark Information Technology innovation deal. The grant from the Financial Sector Deepening Trust (FSDT) was won by Mr. Eric Mutta through Problem Solved Limited, a company he created in 2008. “I am excited as this award represents the company’s first major breakthrough in the ICT world and hopefully it will encourage many other young innovators to test the uncharted waters,” Mutta said recently said.
Mr. Mutta’s innovation called Minishop’ beat a strong field of competitors to carry the day. The huge grant will help the selfemployed entrepreneur to grow his business. With the money, Problem Solved will now build a team of employees and buy laptops through which it would distribute Minishop to the target group.
His company beat 13 other companies, including well-established financial institutions, to clinch US$328,232 in the second round of awards under the SME Finance Innovation Challenge Fund (ICF). According to Mutta, Minishop is a user-friendly accounting software package targeting the more than 3 million small businesses, many of them in the informal sector.
“Minishop aims at helping businesses to keep better financial records and apply for loans easily,” said Mutta. This would be the second time that the Minishop innovation was winning recognition. In March 2012, Mutta won US$15,000 from the United States Department of State in an upcoming ICT innovators’ competition. Mr. Mutta was educated in Tanzania, Kenya, and the UK where he graduated with a degree in Computer Science. He returned to Tanzania in 2006 and founded his company at the age 25.
He said that the government has demarcated innovation space on the fast internet service to drive young innovators’ ideas forward and has also put in place a strategy to ensure government organizations have innovation spaces for young people who engage in IT entrepreneurship. He also revealed that the Department for International Development (DFID) is in the process of starting another fund to drive innovation in water and health sectors. The innovation Fund for ICT innovation is managed by COSTECH and set up and funded by TANZICT-project. The fund is a competitive grant fund focusing on supporting ICT innovators with innovators with innovative projects fostering solutions to social and economic problems in the country. It focuses on getting new ideas, products and services using ICT to demo, prototype or pilot stage, where the ideas can be tested in the market with end users and a feasible business model can be built around the idea or prototype. TANZICT opened the first call for applications for the innovation Fund last year in November and received 25 applications.
ENTREPRENEUR NEWS
Compiled By: Michael Kagumya
70 | TANZANIA BUSINESS FOCUS
ENTREPRENEUR NEWS
Microsoft sets out to transform Africa
Microsoft Corporation has introduced an initiative under the auspices of improving the continent’s global competitiveness, but which, if successful, will in essence not only transform Africa but also revitalise the company that critics have seen as faltering in the recent years. The initiative dubbed Microsoft 4Afrika Initiative aims at making the software giant which is trying to lay foot in the devices, get a slice of Africa’s economic success.
have affordable access to best-in-class technology to enable them to connect, collaborate, and access markets and opportunities online.
Through the initiative, Africa will adopt smart devices, empower small and medium enterprises and increase the skills that will ignite the continent innovation.
To improve technology access, Microsoft also announced the deployment of a pilot project with the Kenyan Ministry of Information and Communications and Kenyan Internet Service Provider, Indigo Telecom Ltd., to deliver low-cost, highspeed, wireless broadband and create new opportunities for commerce, education, healthcare, and delivery of government services across Kenya.
According to the official 4Africa website, the project is a multi-year initiative that represents the company’s increased commitment to Africa as it celebrates 20 years of doing business on the continent.
“… We wanted to explore new ways to link the growth of our business with The goal is to initiatives that accelerate growth for the continent. To do this, we empower every are focusing on three critical areas African who has – World-class skills, Access and a great idea for Innovation” the site states. a business or an
The deployment is called “Mawingu,” which is Kiswahili for cloud. It is the first deployment of solar-powered base stations together with TV white spaces, a technology partially developed by Microsoft Research, to deliver high-speed Internet access to areas currently lacking even basic electricity.
“The goal is to empower every application and to African who has a great idea for a turn that idea into business or an application and to a reality which in turn that idea into a reality which in turn can help their community, turn can help their Microsoft hopes to implement their country, or even the continent community, their at large. The Microsoft 4Afrika country, or even the similar pilots in East and Southern Africa in the coming Initiative is built on the dual beliefs continent at large. months to further explore the that technology can accelerate commercial feasibility of white growth for Africa, and Africa can space technologies. also accelerate technology for the world” These pilots will be used to encourage other As a first critical step toward increasing African countries to accelerate legislation the adoption of smart devices, Microsoft that would enable this white spaces and Huawei are introducing the Huawei technology to deliver on the promise of 4Afrika – a full functionality Windows Phone universal access for the African Continent. 8 which will come pre-loaded with select To help empower African SMEs, Microsoft applications designed for Africa. announced a new online hub through The phone will initially be available in which African SMEs will have access to Angola, Egypt, Ivory Coast, Kenya, free, relevant products and services from Morocco, Nigeria and South Africa later this Microsoft and other partners. month. If these initiatives are successful, they will The Huawei 4Afrika phone, which is the first transform Africa and deliver to Microsoft in what will be a series of smart devices the next virgin market in the world, ensuring designed “4Afrika,” will be targeted toward its continued dominance and success for university students, developers and firstmany years to come. time smart phone users to ensure they TANZANIA BUSINESS FOCUS | 71
BUSINESS TRAVELLER
Must-Visit Tourist Attractions in Tanzania MOUNT KILIMANJARO, NORTHERN TANZANIA Located 340 km south of the equator, Mount Kilimanjaro is one of the three mountains open to the eternal snow on the equator, in addition to the top of Cayambe in Ecuador and Jaya in Indonesia. As the main object in Tanzania and the symbol of the East African countries, in 1973, Kilimanjaro region, used as a National Park, and in 1987, Kilimanjaro National Park (KINAPA) is recognized as a World Natural Heritage by the United Nations. Currently, the Kilimanjaro region with Kibo Peak (5895 m above sea level) as the highest roof of the African continent, visited by more than 35,000 visitors each year. Various facilities of access, accommodation, security, and professional guide services, enabling more people to enjoy the natural beauty of Mount Kilimanjaro. Kilimanjaro as a world natural heritage and improve itself in four years and tourist arrivals increased over threefold. Amazing.
THE SERENGETI, NORTHERN TANZANIA The Serengeti National Park offers the absolute classic African safari setting. The migration of millions of wildebeest and zebra starts here. The vast expanse of grasslands make the Serengeti fantastic for spotting lion kills because you can see the whole spectacle clearly. There are mobile camps that are worth staying at because the wildlife concentrates in certain parts of the park depending on the time of year and the rains. Click here for a list of recommended accommodations. If you can, spend at least 4 days to make the most of it. The best time to go is between December and June, but you can’t really go wrong any time of year. A hot-air balloon ride at dawn is a truly magnificent experience.
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BUSINESS TRAVELER
Zanzibar At dawn, the natural scenery of the island of Zanzibar, Tanzania is so wonderful. Zanzibar is one of Tanzania’s top destinations because of its fascinating past and its incredible beaches. Zanzibar’s location in the Indian Ocean has made it a natural trading center throughout its history. Zanzibar has many beautiful beaches that can be enjoyed on any budget. Some of the surrounding islands offer total paradise for the luxury traveler; Mnemba Island is absolutely idyllic for a romantic vacation.
Zanzibar is great for scuba diving, snorkeling, and swimming with dolphins. Other attractions include spice tours and the Jozani Forest, which shelters a small population of red Colobus monkeys.
Ngorongoro Conservation Area Ngorongoro Conservation Area also home an abundance of wildlife, particularly in the Ngorongoro crater. Formed by the s ame volcanic activity that generated Kilimanjaro and the Great Rift Valley, Ngorongoro consists of the highlands around the crater (rich in elephants) and the crater itself (similar animals to Serengeti, but at higher densities and with a small population of black rhino).
Mafia Island Mafia Island is an undiscovered Tanzanian gem. It has a rich history, and a strong Swahili culture unspoilt by tourism. Much of the isalnd and its beautiful beaches have been designated as a marine park. It is one of the best places to deep-sea fish, dive and snorkel in Africa. You can watch whale sharks, turtles and many other interesting species of wildlife. Mafia Island offers some fantastic scuba diving and snorkeling. You may also get to swim with whale sharks, as this is one of the few areas in the world where they congregate annually. Sep 2012 | TANZANIA BUSINESS FOCUS | 73
STANDOUT from the crowd
Euro Consultancy (T) Ltd | 4th Floor, Harbour View Tower, Samora Avenue, P.O. Box 11286, Dar es Salaam, Tanzania Tel: +255 22 2120616 | Fax: +255 22 2120617 Hotline: +255 655 40 74 75 | Email: info@eurocom.co.tz
Catering for BUSINESS all youFOCUS indoor and outdoor signage and advertising requirements 74 | TANZANIA | Sep 2012
BUSINESS TRAVELER
Travel Tips for an international traveller Make sure you have the proper voltage adapter
funny comments at you.
Lesson number one is that not all voltage adapters are created equal. If you are travelling to a country that uses a different type of outlet from what you have at home, it is crucial to get the correct type of voltage adapter.
One of the best pieces of advice to those travelling on business is to try to get some rest before you go (or sleep on the plane, if nothing else). Don’t expect to be able to rest when you arrive — there is a good chance that you will be expected to jump right into your work upon arrival.
There’s more to choosing a voltage adapter than just looking for the right type of plug. Some adapters are designed for high wattage devices, such as irons, and are not suitable for electronics. Others might be okay for electronics, but can’t be used for higher wattage accessories, such as blow dryers. Some voltage adapters are merely pass-through devices and can fry your electronics unless the device’s power supply is designed to accommodate the voltage in your locality.
Play nice with customs agents Be nice to customs agents, even when you don’t think that they deserve it. Business travel by its very nature often receives extra scrutiny from customs. Mouthing off to customs officers can turn a little extra scrutiny into a lot of extra scrutiny. Admittedly, sometimes it can be hard to bite your tongue when they throw
Get some rest before you go
Familiarize yourself with local customs Things that are perfectly acceptable at home can be extremely offensive in other parts of the world. For example, once a person made the mistake of giving someone the “okay” sign, only to find out that it was considered a vulgarity in his country. This might be an extreme example, but each country has its own expectations for social behaviour. For instance, in Korea you are expected to pay extra respect to the oldest person in the room. Likewise, in some countries it is considered rude to speak during a meal. It’s a good idea to look into the local customs before travelling to an unfamiliar destination.
Research your Internet connectivity options ahead of time In the United States, finding Internet
connectivity is no big deal. You can get free wireless Internet access at just about any coffee shop, book store, or fast food restaurant. However, that is not the case in some other parts of the world. In some countries, it might be difficult to have or locate public Wi-Fi hot spots. Furthermore, most of the hot spots may not be free.
Eat smart Nothing can ruin your trip faster than an intestinal parasite. You don’t have to worry too much about the food quality in many parts of the world, but food safety can be a major consideration in certain locations.
HERE ARE A FEW GUIDELINES: Avoid raw fruits and vegetables unless they have a thick peel (like an orange) and you peel them yourself. If the water quality is questionable, stick to bottled water for drinking and brushing your teeth. Don’t put ice in your drinks and be careful not to get any water in your mouth when you are showering. •
Make sure meats are cooked thoroughly.
•
Stay away from anything containing uncooked milk or eggs. TANZANIA BUSINESS FOCUS | 75
TECH TALK
Blackberry Z10: The New Smartphone for Business Users?
Can the BlackBerry Z10 be the ideal smartphone for business users?
Finally, there is a new BlackBerry in town! After few years of total silence, BlackBerry has finally come up with the new BlackBerry Z10, a smartphone specifically designed for business users. So, why should you choose the Z10 over its competition? The Hub is a combined inbox for your communication and calendar apps. Different sweep and swipe gestures let you Peek at the Hub from any app, and Flow around the UI — which lacks a conventional home screen or button.
How to Create a Web Presence on a Small - Business Budget •
Establish a social-media presence. Think about where your customers are and how to reach them.This is as simple as starting a Facebook business page, Google Plus business page, Pinterest pinboard or LinkedIn profile. Social-media sites have different target audiences; Facebook is ideal for business-to-consumer deals, and LinkedIn is suited for business-to-business sales. • Learn about keywords and how to use them. Make your content search-engine-friendly by using the exact words people use when searching for your type of business. • Develop a website you can manage yourself. A content management system features dashboards that allow users to make changes to the content on their own websites. • Sites such as WordPress offer free blogging programs. The Web coding is free but requires a Web hosting company to run the site. These websites are generally inexpensive, costing less than $100 per year, including the domain name. • Link all of your business’ social media and directory sites to your website with buttons that are positioned at the top your website’s homepage. 76of | TANZANIA BUSINESS FOCUS
3-D Printers Go Mainstream 3D printers are changing printing and design as we know it. Teetering on the cusp of the mainstream, the latest hobbyist- and consumer-friendly versions start at about $800 and can cost well over $3,000. Some are limited only to creating small plastic objects that measure just a few inches, but others can print using a variety of materials, producing objects that measure up to two feet per side.
There’s More Than One Way to Connect It’s not enough these days to wonder what to watch on your TV; a growing question for many is how to watch. Just like any device in your life, TVs can now connect to the Internet. This lets you grab shows from the Internet and watch content whenever you want. Most new TVs come with the ability to connect to the Internet, but there are a number of ways to easily turn an existing TV into a so-called smart TV. Here’s a primer. The simplest way to do so is to connect a TV to a laptop or computer using either a VGA or HDMI cable. In most cases, this will give users either a second screen for their computer or it will mirror what they see on their machines. From there they can play digital content they own or they can visit websites with video such as Netflix, Hulu, YouTube and HBO GO. Of course, using a computer as a TV involves a lot of work by the user, who has to move the mouse and type out each website to go to. This is why digital media receivers exist.
TECH TALK
Wireless Power
POCKET PROJECTOR THE MPRO150is designed for those times when the screen of a laptop or iPhone just isn’t big enough. The device uses liquid-crystal-on-sili-con technology to display images projected with a super-bright LED. With a cable, it can show presentations and videos directly from lap-tops, iPods, and iPhones. It can also play fi les preloaded into either a memory card or the projector’s one-gigabyte built-in memory.
THE POWERMAT Portable is intended for travelers who are tired of lugging around a collection of chargers for mobile devices. Place any device on the mat, and it uses induction to deliver a wireless charge; the power flows to small receivers that can be fitted to most handheld gadgets. The Powermat is powered by an AC adapter, but a built-in lithium-ion battery allows
charging when you can’t find a wall socket
FASTER PORTABLE DRIVE WITH USB 3.0, the next generation of the popular USB standard for connecting peripherals, this portable hard drive can transfer data up to three times as fast as USB 2.0 drives can. The hard drive has 500 gigabytes of storage capacity and comes with an adapter card for laptops not equipped with built-in USB 3.0 ports. (The new ports are compatible with USB 2.0 devices and cables, but USB 2.0 cables cannot be used with USB 3.0 devices.)
PLASTIC PAPER AIMED AT business users, the Que e-reader uses a 266.7-millimeter display from E Ink, based on the same sort of technology used in the Kindle. But unlike other e-reader displays, which are controlled with silicon transistors on a glass backing, it uses organic transistors deposited on plastic. This makes for a lighter, tougher device.
DIGITAL LEASH TRAVELERS WHO worry about leaving their phone in a hotel room or airport will like this small Bluetooth device designed to be worn on a keychain. The Zomm monitors the signal strength of a Bluetooth connection to your phone and sounds an alert if you get more than a few yards away. It can also be used as a speakerphone and as a panic button to call 911.
To order for these gadgets please contact: Michael Kagumya, 0713 335360 OR kagumyamichael@gmail.com TANZANIA BUSINESS FOCUS | 77
Finance LAST WORD
CHIEF EDITOR
Africa is on the moveno turning back!
Michael Kagumya kagumyamichael@gmail.com
T
here is something I always enjoy whenever I’m working on Tanzania Business Focus— its power to educate. The fact that most of our writers are impeccably accomplished experts in the areas they write about makes it, not only more credible, but also more informative. Every time I’m going through their articles, new insights, just like ocean waves, come sweeping into my mind. Now into our 8th edition, this issue, much as it is dedicated to this special event (2013 Smart Partnership Dialogue), its relevance outlasts the event itself. You will need to look for it as point of reference on a number of occasions for its insightful features.
Africa is on the move. A lot is happening on a technological front. Look at M-Pesa, for instance. A purely African innovation. It is truly transforming lives, and a lot is yet to come. In one of our features, you will see some of our picks on this—Africa’s technology innovations that are changing lives.
“Transforming the African Technologies: What does it take” are spot-on; compellingly simple-to-read, you will find a lot of insights that if, taken into consideration, may catapult our continent to the next level. The same goes for technology: where we are heading is a very interesting and promising future. Some features, such as “Transforming the African Technologies: What does it take” are spot-on; compellingly simple-to-read, you will find a lot of insights that if, taken into consideration, may catapult our continent to the next level. The same goes for technology: where
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we are heading is a very interesting and promising future. A future that will belong to a nation that will be able to harness the power of technology. It is no longer going to be the geographical size of a nation or its natural resources base that matter, but its capacity in leveraging technology in many respects. But behind all this, optimism is winning over pessimism. In its May 11th 2000 cover edition, The Economist Magazine, one of the most respected papers in the world, published a cover story on Africa, where they tagged it “The Hopeless Continent.” It made many people furious! In 2011, Time Magazine along with The Economist came with a cover story on Africa; this time with the title, “Africa Rising, where they talked about the great potential within the continent. Although this change of stance could have left many wondering, there is some sense. Africa is on the move. A lot is happening on a technological front. Look at M-Pesa, for instance. A purely African innovation. It is truly transforming lives, and a lot is yet to come. In one of our features, you will see some of our picks on this—Africa’s technology innovations that are changing lives. You will discover that it is no longer M-pesa alone that has become the landmark of the recent African innovations; lots of mobile applications are happening in agriculture, education, health, finance and many other field. What we need, in my humble opinion, are things like a well-structure infrastructure, right policies, good governance and an enthusiastic populace—ready to explore the heights and limitless opportunities that technology can offer. Before I forget, as Ms Rehema Mtingwa, in her opening foreword beseeched you to take time off your busy schedule and taste some of the natural wonders of Tanzania, we have, just briefly, picked a few areas that may interest you. So, don’t forget to check that out.
I wish you all the best.