Rostam Aziz in a major investment victory

Dar es Salaam. Tanzanian tycoon Rostam Aziz must be a happy man as his investment plans and aspirations in East Africa seem to be going in his favour.

Almost one week after Axian Group of Madagascar announced that it has partnered with Mr Aziz to close the $100 million acquisition of Tigo and Zantel in Tanzania, a liquefied petroleum gas (LPG) firm with links to the tycoon has been given the go-ahead to invest in Kenya.

Kenya’s principal secretary in the Ministry of Industrialisation, Trade and Enterprise Development, Mr Johnson Weru, is quoted by The EastAfrican this week as saying that Tanzania and Kenya have resolved four of the 18 outstanding issues in an effort to grow trade and investment between the two countries.

Under the resolved issues, Kenyan airline Jambojet will now be allowed to fly to destinations in Tanzania while Tanzania’s Taifa Gas has been granted permission to establish a plant in Kenya’s Export Processing Zone.

The deal comes after a series of meetings that have been going between Kenya and Tanzania since May 2021, following President Samia Suluhu’s inaugural state visit to Kenya.

The two East African Community partners have also resolved the disputes involving aviation, tour vans, Covid-19 clearance certificates, clearance of goods at the Namanga-Kenya-Tanzania border and mutual recognition of engineers’ certificates, Mr Weru is quoted by The EastAfrican.

Mr Aziz could not be reached for a comment yesterday but when he spoke during a Kenya-Tanzania Business Forum that was also addressed by President Hassan and her Kenyan counterpart in May last year in Nairobi, he bemoaned bureaucracy in Kenya, saying it was the reason Tanzanian investors were finding it increasingly difficult to invest in Kenya.

He said Tanzania and Kenya could be much bigger than they were, noting however that the two countries were being bogged down by petty politics, protectionism, inward looking and trivial issues that impede economic development.

“You can see that the relationship between Kenya and Tanzania is skewed because it was very easy for Kenyans to come to Tanzania and invest and we have many examples. There are more than 530 Kenyan companies in Tanzania which have invested over $1.7 billion but there are only 30 Tanzanians companies in Kenya, with hardly $50 million,” he said.

As a result, said Mr Aziz, the relationship between Tanzania and Kenya was that trading in tomatoes, oranges and powdered milk.

“It’s not a relationship that can build the two economies. These two economies are giants, with $180 billion in Gross Domestic Product, 120 million people. We hardly have to work with other countries if we really realise the potential of these two countries,” said, disclosing how his plan to invest $130 million in an LPG plant in Kenya was being shot down by various obstacles.

“We from Tanzania have tried to come and invest in Kenya. I came here in 2017 and met President Uhuru Kenyatta at State House and he welcomed me to come and invest in Kenya….I said well, I see there is opportunity in gas in Kenya and he said do it. It has taken me three years and I have not yet got a response on my investment proposition…,” he said.

Mr Aziz was of the view that to make the relationship between Tanzania and Kenya sustainable, the former should not be forever an exporter of raw materials while the latter enjoys the luxury of exporting manufactured goods.

“We need equity in this relationship. We need a relationship that is beneficial to Kenya and Tanzania, to Tanzanians and Kenyans,” he said.

It was in an apparent response to Mr Aziz’s statement that when it was his time to speak, President Kenyatta announced a raft of incentives aimed at wooing Tanzanian investors to Kenya including the lifting of work permit and visa requirements.

He said his administration would do all in its power to eliminate all non-tariff barriers for Tanzanian investors seeking to do business in Kenya.

Mr Kenyatta cautioned Tanzanians and Kenyans against competing with each, and instead focus on creating a conducive environment for businesses to thrive.

Mr Aziz is chairman for the board of director for Taifa Gas, which was commissioned in June 2019 by former President John Magufuli. It is a Sh150-billion investment in LPG storage and filling facility in Dar es Salaam. Taifa Gas Limited has also built 35 plans and storage facilities in Tanzania Mainland and Zanzibar since 2016. The firm changed its name from Mihan Gas to Taifa Gas following investment made between 2016 and 2018.

In September 2019, Mr Aziz earned Sh499.8 billion after selling his 26.25 percent stake - which was held in form of 588 million shares under ‘Mirambo Holdings’ - in Vodacom Tanzania Plc – through the Dar es Salaam Stock Exchange (DSE) yesterday.

In 2014, Mr Aziz sold off a 17.2 per cent stake in Vodacom Tanzania to Vodacom South Africa for a reported $240 million. At the time, Mr Aziz held the shares via Cavalry Holdings, a Jersey island-registered private investment company.

The issues that Tanzania and Kenya have agreed so far could also see Kenya’s low-cost airline Jambojet, a subsidiary of Kenya Airways, flying to Tanzanian destinations.

Jambojet recently launched cargo operations to the city of Goma in eastern Democratic Republic of Congo.

The carrier operates six De Havilland Dash 8-400 planes and currently serves local destinations from its Nairobi hub: Kisumu, Eldoret, Malindi, Lamu, and Mombasa.

However, the carrier will have to wait for a while as the two countries thrash out details of the pact.

Mr Karanja Ndegwa, Jambojet CEO, said they are awaiting some approvals.

“We are closing some items. We will confirm once we are done,” he said.

Kenya and Tanzania were engaged in vicious trade spats during the regime of the late President John Magufuli, which almost killed cross-border trade between the two states. But the coming into power of President Samia heralded an era of reconciliation and cooperation.

To arrive at the new deal, the negotiators involved multiple institutions, including the Tanzania Dairy Board, Weights and Measures Agency, Tanzania Medicines & Medical Devices Authority Home, the Veterinary Department, Tanzania Atomic Energy Commission and the Logindo and Arusha municipal councils.