Traders split over Kariakoo strike ahead of crisis talks

Dar es Salaam. With Prime Minister Kassim Majaliwa today expected to meet with leaders of traders operating in Kariakoo, businesspeople in the area yesterday appeared to be split about the strike that began on Monday.

While a number of shops remained closed yesterday in defiance of Mr Majaliwa’s directive on Monday that traders open their businesses pending today’s discussions, Kariakoo Traders Association chairman Martin Mbwana said there was more to the stoppage than meets the eye.

He said those who were still on strike were being driven by “selfish interests”.

Mr Mbwana, who was the face of the protest on Monday, said he was ready to cooperate with security organs to identify those behind yesterday’s closure of businesses in disregard of Mr Majaliwa’s directive.

He said their main goal on Monday was to be heard by President Samia Suluhu Hassan, which they succeeded after she sent Mr Majaliwa from Dodoma to meet with them.

“We were told yesterday (Monday) to open shops and that discussions will continue on Wednesday (today). I’m surprised that some businesspeople don’t have faith in the Prime Minister. The problem is that there is a small group of people who seem to benefit from the strike,” Mr Mbwana said.

Some analysts said yesterday anything that happened before Mr Majaliwa went and spoke with the traders was justifiable.

“What happened after the Prime Minister met with them and asked them to reopen their shops, pending a meeting in Dar es Salaam tomorrow (today) suggests that something fishy could be going on,” said a source asked not to be identified due to the sensitive nature of the subject.

He said by insisting that they want to meet with the President, the traders could be attempting to arm-twist the government into addressing their concerns, whether genuine or otherwise.

“Under normal circumstances, you would have expected them to have opened their businesses today and meet with the Prime Minister tomorrow and list all their grievances without exerting more pressure on the government,” he said.

This happened as stakeholders maintained that any prolonged closure of the shops could have serious consequences on the economy.

Hundreds of merchants operating in Kariakoo, Tanzania’s biggest and busiest shopping area, on Monday closed their businesses and staged a peaceful protest against what they said were high taxes imposed by the Tanzania Revenue Authority (TRA).

They have also been demanding that they be granted the freedom to do business and thus pay the right amount in taxes without being coaxed into bribing TRA officials.

This was in apparent reaction to a decision by TRA to start a legal provision on registration of storage facilities which followed the endorsement of the Finance Act, 2022 which amended Section 45A of the Tax Administration Act, 2015, to require any person who establishes a storage facility with the aim of keeping goods for business purposes to register the facility with the Commissioner General.

With the implementation of the requirement commencing on 1st July 2022, TRA held a training

 session on May 10, 2023 where it clarified that the storage facility referred to a space/building/room utilized in any business for the storage of goods/products for sale and that a space used to store raw materials or goods that were not directly sold in the business would not be considered as a storage facility relating to the provision.

And yesterday, Tanzania National Business Council (TNBC) executive secretary Godwill Wanga said the strike has huge implications for the economy as the commercial centre holds a critical position in the money supply of the city and the nation as a whole.

He said the market engagements with traders and from foreign countries also tie well with the country’s economic diplomacy agenda.

Due to its criticality, the TNBC together with the regulatory authorities held a meeting with the Chief Secretary to discuss the way forward and how to find sustainable solutions.

“The government agenda on business promotion lies on creating a good relationship with the private sector and that is why all the efforts are directed to creating sustainable solutions to the problems,” he said.

Dr Wanga said the prolonging the strike could potentially result in the loss of Tanzania’s competitive advantage as the neighbouring countries may decide to open their own “Kariakoos” (commercial centres).

An economist from the University of Dodoma (Udom) Dr Lutengano Mwinuka, said there was a need to strengthen the digital system in the port that would be sustainable instead of a task force.

“Tax is for the development of the country, but if it’s not realistic definitely will create uncertainty for traders, what is important to be considered in this strike is transparency to all parties, the government and the traders, sometimes you find the store is not equal to products that are selling,” he said.

While negotiation efforts by former Regional Commissioner Amos Makalla and Prime Minister on Monday came to no fruition as to the end of the strike, the traders firmly demanded to speak with President Samia Suluhu Hassan.

On politics surrounding the protest, political analyst and Tanzania Citizens Information Bureau (TCIB) executive director Deus Kibamba said it is true that there has been a lot of politics surrounding this issue, and the government needs to take appropriate measures to address the issue.

This he said includes getting rid of business as usual and making leaders accountable.

“The demand by traders that they meet with President Samia Suluhu Hassan is valid because it seems like the traders have lost faith in the leaders that were sent to negotiate with them, and they believe the higher power in the government is the only way out,” he said.