IMF hits at ’long-term’ govt deals with private investors

[BAK]

I rarely agree with IMF policies or advises, but this time I do.

IMF hits at ’long-term’ govt deals with private investors

SEBASTIAN MRINDOKO
Dar es Salaam
THIS DAY

THE International Monetary Fund (IMF) has advised the government to rethink the long-term contracts entered with foreign investor companies, citing questionable deals like the infamous 20-year IPTL power generation agreement.

The IMF senior Resident Representative to Tanzania, David Robinson, also yesterday cautioned the government to stop taking the seemingly-lucrative offers made by foreign private investors at face value, saying such deals usually come with strings attached.

He was speaking at an IMF seminar for non-governmental organisations in Dar es Salaam.

On existing long-term contracts now costing the government heavily, Robinson mentioned energy sector agreements like the Independent Power Tanzania Limited (IPTL) and the Songas gas-to-electricity deals as key examples.

He said the government had agreed to sign such lengthy pacts of 20 years or more without duly considering the consequences to the country’s future economic growth during all these years as the world economy itself undergoes regular periods of drastic change.

’’The government should not enter into such long-term contracts. Most of them have hidden agendas that have far-reaching consequences to the country as a whole�like what has happened to TANESCO with IPTL,’’ he said.

The IMF country representative advised the authorities to adopt clearly-defined, short-term contracts ranging from between five and 10 years, while constantly looking at the economic impact of the clauses in the agreements as time wore on.

According to Robinson, investors have a habit of sweet-talking governments with very huge offers at the negotiation table, showing billions of dollars in returns that appear quite beneficial to the country.

He said despite the rosy pictures painted of possible revenue projections and benefits of a given project, thorough, independent and intelligible studies should be conducted by government to verify the figures presented by investors, before reaching a decision to sign any contract.

Robinson advised government officials involved in contract negotiations with investors to visit other countries that have managed to enter into beneficial contracts with the same companies, so as to learn from their experiences.

He said the Tanzanian Government should always measure the ’’costs to the nation’’ of each individual project before signing such contracts.

He noted the increasing evidence of much-hyped foreign direct investment projects that promise billions of dollars in returns to the government, but ultimately end up being burdens to the whole nation.

He stressed that contracts signed under emergency crisis situations, such as national power shortages due to drought and the like, should definitely not be long-term agreements lasting for up to 25 years - as indicated in some of the existing deals.

’’Although Tanzania is greatly in need of public-private partnership for the country’s economic growth, it should remain keen to offers brought by various investors because not all are healthy to the economy,’’ he said.

Likewise, the IMF’s assistant director and mission chief for Tanzania (African department), Roger Nord, said the government requires experts and specialists to make intelligible studies of the various contract offers from foreign investors, before signing them.

’’This is serious when referring to the country�s long-term economic plans, because in the short-term such deals will be seen as a grace to national economic growth, but in the long run they will turn out to be a disgrace,’’ he said.

On the general state of the country’s economy, Nord said the government has to improve the existing business environment by easing the regulatory burden and reducing infrastructure bottlenecks, particularly the financial viability of the Tanzania Electric Supply Company Limited (TANESCO).

He said infrastructure and power supply were among key sectors in any economy which attract more investment, but again urged the government to be careful and avoid making the mistake of signing more bad contracts.

Echoing Robinson’s remarks, Nord asserted that behind many of the glossy project proposals, there were usually hidden traps that local authorities must be keen to avoid at all times.

 

[Morani75]

Wow!! Mimi nilikuwa nakumbuka kuwa hii issue yote ya "Privatization" ni ushauri tuliopewa na hawa "IMF, WB, na Donors wengine".... Sasa kama wakati ule wlisema "ile ndiyo ilikuwa ni njia pekee ya kuinua uchumi wetu"; na leo yamekuwa hayo!?!?!?! Nakumbuka miaka ya mwisho ya 90 na mwanzo ya 2000 tulikuwa tunaambiwa na hawa hawa "IMF, WB, etc" kwamba GDP yetu inapanda na mambo meengi kumbe ilikuwa ni rongorongo na usanii tu?? Manake GDP ilipopanda tuliambiwa ni kutokana na wawekezaji ambao leo tena jamaa wanasema eti ni sera yetu ya kuwapa mikataba mirefu ndio maana tumepigwa bao.... Sasa hawa jamaa watujibu kwamba "Walikuwa wapi wakati mikataba hii iliposainiwa (mingi ni ya miaka ya 2000 mwanzoni) waje kutuambia leo hata hili la TANESCO miaka 3 baadaye??"

Hivyo sikatai hiyo evaluation yao lakini tatizo kwa nini siku zote wanakuja na kutuambia "Mngejua mnge fanya hili na hili" baada ya kuchomwa na moto ambao wao ndio walitushauri in first place!! Huu ni ushauri wa kweli au ni "kujiosha" baada ya kuona macho yetu yameanza kufunguka?? Tungoje tusikie hao hao IMF, WB na wengine wakija na kusema "The EPA was a wrong move for Tanzania" yetu macho na msikio!!

 

[Rev. Kishoka]

Morani,

Usishtuke sana. IMF, WB na wadau wengine imebidi wakae chini na kujiuliza kama kila mipango yao ni bora.

Ni wao waliokuwa nyuma ya juhudi zetu za kujenga Ujamaa. We had intentions to build a self sufficient nation, wao wakasema ngoja tuone hawa panya wa maabara kama watafanikiwa. Tulishoshindwa si sera za Ujamaa na Azimio, bali ni utekelezaji mbaya uliotokana na kukosekana na watendaji makini.

IMF wakabadilisha somo, wakadai hawatatupa misaada mpaka tufungulie milango wenye pesa kutoka nje. Tukakimbilia kufungua milango bila kuwa makini. Kama alivyosema, si kila mkataba ni mali kwa Taifa. Wao IMF walitegemea kuwa tungekuwa makini kwa kuanza ujenzi wa polepole. Lakini wakasahau kuwa hata kwenye Ujamaa, tulikuwa makini wa maneno na si vitendo. Hivyo tumefungua milango kama changudoa na kuruhusu kila mwanaume aingie na kututumia wanavyotaka.

La zaidi tumeharibu mambo kwa kuwa walaini kudhibiti mapato kwa kutoa misamaha ya Kodi na Ushuru kwa kila mwekezaji na ukosefu wa udhibiti na ukaguzi wa shughuli hizi za Wawekezaji!

Sasa kwa kuwa huu uwekezaji wa soko huria umeleta Rushwa na Uhujumu maarufu kama Ufisadi, wao IMF na WB wanaona kasoro nyingine tena ya experiment yao. Wanaanza kutushauri ni vema tuwe na miradi midogo midogo ya muda mfupi ilikuhakikisha kuwa tunaona mafanikio na ukweli wa nguvu za kiuwekezaji za Wawekezaji hawa. Sasa IMF wanaogopa kuangamia n kufilisika kwa Taifa letu kutokana na msukumo wao wa biashara huru ambao ulipokelewa na watu wasio makini!

Ni mpaka lini tutaendelea kuwa Taifa la Majaribio? Je ni lini tutaamka na kuanza kufanya vitu kwa umakini na sii tamaa ya kupata mali haraka au kutafuta viraka vya haraka haraka (IPTL, RADA, RICHMOND,)?