ACT Wazalendo critiques Zanzibar’s economic stagnation despite proximity to mainland Africa

Chake Chake. The Opposition party ACT Wazalendo has emphasised that Zanzibar’s closeness to mainland Africa, which should offer economic advantages, has instead turned into a significant challenge for its people.

The party’s Vice Chairman, Mr Ismail Jussa Ladhu, highlighted the stark contrast between Zanzibar and distant islands, noting that despite its rich natural resources, Zanzibar remains mired in poverty.

The party’s leaders criticised the current budgeting system and governmental missteps that have hindered economic progress and development opportunities.

Speaking in Wawi on the third day of their tour of Pemba, Mr Ladhu noted that islands located farther away have better economic conditions than Zanzibar, which is just a stone’s throw from the mainland.

“Our island is rich in natural resources compared to others in the Indian Ocean, yet our people remain trapped in poverty,” Jussa said. He attributed the stalled progress partly to Zanzibar’s budgeting system, which targets the same businesses every year with heavy taxes.

“These high taxes have become a burden on the people. Normally, a government should foster economic growth through friendly policies that attract investments,” he explained.

Jussa also criticized the costs associated with the rehabilitation of Gombani Stadium, which was originally budgeted at Sh2.8 billion but ballooned to Sh5.6 billion.

“The CAG report indicates that the tendering process did not follow public procurement guidelines and the contractor failed to meet the necessary requirements,” he noted.

Othman Masoud Othman, the party’s national chairman, lamented the missed opportunities for Zanzibar to become an economic powerhouse.

He recounted an initiative from 1996 when the government hired a UK company to establish a system for registering offshore companies.

 “I spent two months in the UK learning how this system works,” he said.

However, despite preparing a bill that reached the committee stage, progress was halted when then-finance minister Kigoma Malima wrote a brief letter blocking the initiative.

As a result of this slow progress, islands like Mauritius seized the opportunity, and today, numerous companies are based there, contributing to its economic growth.

Mauritius has become one of the world’s most credible offshore jurisdictions, benefiting from no capital gains or withholding taxes and access to a network of double tax treaties (37 DTTs), supported by a strong government commitment to the financial sector.

Othman highlighted that the company registration system was not the only area where Zanzibar faced stagnation, citing a proposal for the formation of Zanzibar Airlines.

“Recently, an event was held in Mkoani to inaugurate the new container berth. However, issues related to ports and air transport are enshrined as Union matters in the constitution, meaning we cannot even enact laws to govern such facilities,” he stated.

A statement released yesterday indicated that the renovation through the Ports Authority cost the government Sh6.4 billion.

This project included the construction of a 4,200-square-meter container storage area with secure fencing capable of accommodating 580 containers.