Wednesday, June 3, 2015

Tanzania: News update on Oct. 25 elections

Tanzanians will go to the polls on 25 October 2015 to elect a new president, the government and the National Electoral Commission (“NEC”) announced last week. This ends speculation of a possible postponement of the elections. The list of candidates for legislative and presidential elections will be published on 21 August and the election campaign will start the following day. The election timetable comes at a time when the NEC is also conducting countrywide voter registration using the biometric voters registration (“BVR”) kits. According to the final timetable for registration of voters issued by NEC, the exercise is currently taking place in various regions and it is expected to be completed by 16 July 2015. The major opposition party, Ukawa, has been vocal on their doubt over the reliability of the servers administering the system. They are also questioning the process of the referendum on the proposed constitution, and when it will now be held after it being postponed from the original date, 30 April 2015. If the general elections and the referendum were to happen at the same time, as speculated, it will be a chaotic run-up to October.

Edward Lowassa (“Lowassa”), former prime minister 2005-2008, is seen by many Tanzania watchers to be the country’s next CCM leader. The ruling CCM party has been in power since independence and the opposition is not expected to challenge its opposition in the forthcoming elections, despite its plans to field a single presidential candidate. An AML source said many in Tanzania saw Lowassa’s campaign launch as a “swearing in” ceremony. However, there are many troubling aspects with Lowassa, he said. One problem political analysts often cite is with the company he keeps. Some of which are controversial figures in the country.  Launching his campaign on 31 May, Lowassa said his top priorities would include overhauling the education sector, reducing poverty, boosting economic growth and fighting corruption. Worryingly however, in his scripted speech in Arusha, Lowassa supposedly mentioned corruption only once. He is seen as a divisive figure in the ruling party after resigning in 2008 over corruption allegations in the energy sector. In the previous issue, we raised the Vodacom scandal where links have been made to Lowassa. Deputy Finance Minister, Mwigulu Nchemba (“Nchemba”), also cited fighting corruption as a top priority as he launched his campaign.

The list of CCM members running for President continues to grow and if it continues to rise further the number of candidates this year will be much larger than the number of candidates who have run for the CCM nomination in any previous elections. Last week Daily News reported that Makongoro Nyerere (“Nyerere”), the son of the founding President Julius Nyerere, confirmed rumours and announced he will run for election.  Nyerere is a retired army officer of the Tanzania People’s Defence Forces and serving member of the East African Legislative Assembly (“EALA”). His declaration is likely to change the political terrain within the ruling party, thanks to his late father’s reputation.  However, an AML source said Nyerere has no political base within the party, and like MP Steven Wassira, Minister for Agriculture, Food Security and Cooperatives, who declared his bid recently in Mwanza, he once abandoned CCM. Others potential CCM runners AML are watching with interest include: current Prime Minister Mizengo Pinda; Foreign Affairs and International Cooperation Minister, Bernard Member; Deputy Minister for Communication, Science and Technology, January Makamba; and Amina Salum Ali, mentioned in the 19 May issue.

An intriguing aspect with all the contestants launching their campaign is that the presidential runners are outlining their priorities if they get to be picked by their party, however the party’s election manifesto is yet to be released and it is uncertain if the individual’s priorities will match with the party’s.

In infrastructure news, the Minister for Transport has told parliament that Tanzania has awarded contracts to build new railway lines worth about US$9 billion to Chinese firms, Reuters reports. The Minister, Samuel Sitta, said a Chinese consortium had been awarded a contract to build a 2,561 km standard gauge railway connecting Dar es Salaam port to land-locked neighbours at a cost of US$7.6 billion. The consortium will provide 10 percent of the funding for the project while financial adviser Rothschild is finalising procedures for financing of the project through banks. Construction of the railway line is expected to start this month. Tanzania has signed a framework agreement with another Chinese company, China Railway No.2 Engineering Group Co. Ltd., to build a railway line linking coal and iron ore mine projects, also under development by a Chinese group, to the southern port of Mtwara near big offshore natural gas discoveries. The 1,000 km standard gauge railway line is expected to cost at least US$1.4 billion. These major railway plans combined with government plans to upgrade the congested Dar es Salaam port should facilitate the transport of goods across the country and region.

In oil and gas news, Africa Energy Intelligence reported that the new boss of Tanzania Petroleum Development Corporation (“TPDC”) is making serious attempts to prepare the company to launch exploration in its own accord and overhaul the corporation. That might seem a big ask at a moment when LNG projects are advancing only at snail’s pace, an issue raised in the19 May issue. New head, James Mataragio, is thinking of launching a gravimetric and full tensor gravity (“FTG”) campaign in unexplored zones in Tanzania’s offshore. A knowledgeable source on the company said TPDC has substantial capacity issues and a cultural issue which manifests itself as deep mistrust of commercial entities which extends throughout the private sector. This does not bode well for incoming investors into the sector. In further recent news relating to the organisation, it is reported that the Chief Secretary to the Tanzanian president wants to set up a high-level team of negotiators to try to compensate for Tanzania’s lack of specialists in oil contracts and the inexperience of new staff. An influx of young graduates has coincided with a wave of retirement at senior executive level which has left a gap where practical skills were not passed down.

In business news, Tanzania’s government has agreed to buy back a 35 percent stake in a state-run telecoms company from the local subsidiary of India’s top mobile carrier Bharti Airtel for TShs14.6 billion (US$7 million). The government has decided to regain 100 percent ownership, a process which has been ongoing for the last five years. Communications is one of the fastest-growing sectors in east Africa’s second biggest economy. Seven players in the mobile telecoms industry are fighting for market share, forcing tariffs lower. Tanzania now has a mobile penetration rate of 67 percent, and analysts expect this to increase rapidly.

A final piece from regional news, Heads of State from Kenya, Uganda and Tanzania met to discuss the ongoing Burundi crisis and have called again for the national elections to be postponed for at least one and a half months in order for the country to have the right context to conduct stable and peaceful elections. More than 100,000 Burundians are now estimated to have crossed the border into Tanzania. A cholera outbreak was declared in one of the refugee camps resulting in the deaths of over 30 Burundian refugees.

With less than five months until parliamentary and presidential elections there is still little certainty on who will be the country’s next leader, despite there being little doubt that the ruling CCM will remain. This is down to the long list of contenders, the confusion consuming the political structure, the ongoing BVR system and the postponed referendum. As one of our sources said, people are no longer paying attention to the referendum; they are too busy trying to register with BVR and the noise of the aspirant presidential candidates. Meanwhile, the new TPDC head attempts to fast track some changes to prepare the all important sector for major development once political clarity resumes and investors make final decisions.

by Chiara Van Oekel


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