US envoy warns Tanzania

Dar es Salaam. A top US diplomat has expressed concern about “discouraging signs” of backtracking on transparency, human rights and the rule of law in Tanzania, which if unchecked could undermine business and the country’s place as a key player in regional security.

Ms Virginia Blaser, the Chargé d’Affaires at the US Embassy in Tanzania and the East African Community (EAC), spoke on Thursday in an exclusive interview with The Citizen, ostensibly her last before the end of her four-year tour of duty in the country.

She said while the government should be applauded for the positive path it had taken in fighting corruption, it should also sincerely take stock of its record on transparency and the rule of law, and pay attention to some worrying retrogressive signs, especially on the private sector.

“Tanzanians need a future, and that won’t come from development partners; that is not going to come from government jobs; it needs to come from a broad-based, healthy, strong, confident private sector,” she said.

“And instead, I see some discouraging signs on the private sector side; and I worry about what path that will take Tanzania.” She added that she would like to see more US companies in the country, but that would depend on a “more open, and transparent, and supportive private sector environment”.

Ms Blaser, currently the most senior diplomat at the US embassy in Tanzania, spoke barely two months after the US-based Symbion Power took the Tanzania Electric Supply Company (Tanesco) to the International Court of Arbitration in Paris, seeking $561 million settlement for breach of contract.

In March, the firm filed an application for arbitration at the court after efforts lasting over a year to amicably resolve the dispute about the validity of the 15-year Power Purchase Agreement (PPA) failed.

The disputed PPA was signed in December 2015, handing the US firm a long-term contract to supply Tanesco with 112 MW through the firm’s Ubungo gas-powered generators until December 2030.

However, on January 26, 2016 Tanesco wrote to Symbion, saying the PPA was put on hold.

“I think it’s really important when a US company signs an agreement, that both parties receive the goods and services and payments that have been agreed upon… that is an issue of rule of law; that’s an issue of transparency,” said Ms Blaser. “I think there can be some improvements there.”

She also called for the creation of a private sector environment that will help Tanzanians create more companies and jobs for the country’s robust youth population, so they can have a future after graduating.

“The United States has invested a lot to help see that future… we believe that the health, the safety, the security of Tanzanians, the growth, positive growth of Tanzania is in our interest as friends, trade partners and a longtime ally.”

She referred to the current statistics the government has released showing that exports of manufactured goods went down in the last quarter, saying there is a need to pay attention to those signs.

“It’s just a quarter, but we need to pay attention to these signs and look to see how we can create a private sector environment, how do we encourage entrepreneurism so that Tanzanians can create companies, and create jobs that as youth get out of schools they have a future.”

According to the latest Bank of Tanzania (BoT)’s Monthly Economic Review (MER), exports of manufactured goods dropped significantly by 37.5 per cent to $879.7 million during the year ending March 2017 from $1.408 billion during the year ending March 2016 as manufacturers grappled with a lack of funds to boost their operations.

The BoT report and Ms Blaser’s comments on the negative signs also come in the wake of a widespread outcry from across the business spectrum over the tight liquidity situation and lack of support credit to the private sector.

A significant number of companies have closed, scaled down operations and laid off workers in recent months.

They cited poor business, mainly arising from the slow implementation of public investment. The International Monetary Fund has also recently warned that the cloud of uncertainty about the government’s economic strategies could adversely affect growth.

However, Ms Blaser said the US would continue supporting Tanzania to stay on course because it “has invested a lot” to help create a future for the country’s robust young population and university graduates.

But she quickly pointed out that the onus is on government to create a more enabling environment for business through transparency and respect for the rule of law.

“I see a scenario, which we, as friends, as partners, as trade partners, people who count on Tanzania for its engagement in the region, you know, its help with security in the region, and peace building in the region… there needs to be a Tanzania that has a democratic, forward-meaning, positive path. And there are a lot of signs that that’s the way Tanzania will go as we are still on these crossroads.”

See full interview in Political Platform magazine inside