Wednesday, 02 November 2011 07:04

UZAWA: RUFFLING FEATHERS IN TANZANIA

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By The African, Tanzania

Since the onset of the debate on uzawa (indigenisation) in Tanzania, various articles have appeared in different Kiswahili newspapers written by several writers. Some of the allegations directed against the South Asian community, especially regarding the domination of the business sector, capital flight and the recruitment of expatriates by local South Asian business houses, needed to be answered. In this article, the African’s correspondent, Nizar Fazal, explored the real motives behind the debate, and encouraged South Asians in the country to discuss the concept of ‘uzawa’.

Nizar Fazal: I will start with the issue of domination in business. Iddi Simba alleged that six Asian businessmen dominate or control businesses in Tanzania, though he did not mention who these six Asian businessmen were. I think if Iddi Simba made a thorough investigation then he would discover that his allegation is not true. South Asian domination of businesses is gradually withering away if one takes into consideration the fact that Tanzanians of non-South Asian origin have an upper hand in the importation of goods from outside Tanzania i.e. China, Thailand, Indonesia, Taiwan, South Korea and now South Africa.

A major percentage of imported goods come from Dubai which is the gateway for transiting goods from the above-mentioned countries, not the Zanzibar route. If Iddi Simba were to go through the records of people travelling by air to Dubai, Bangkok and Mumbai he would find the passenger manifests would reveal more names of East Asians as compared to South Asians.

The evidence could be further corroborated scrutinizing import documentations with the Tanzania Revenue Authority in order to compare statistics on who imports more goods, South Asians or non-South Asians. However, a significant percentage of documentation relating to importation of goods into Tanzania and their original ownership would be difficult to establish bearing in mind the fact that a major percentage of goods imported into the country is smuggled through the ‘transit market’, via neighboring countries or through the now dominant ‘vipanya’ routes, using motorboats, schooners, dhows, and from thereon, using bicycles to deliver these smuggled goods to various distribution networks. Not forgetting cargo ships anchoring outside the territorial waters and smugglers using their networks of motorboats and dhows to infiltrate smuggled goods into the country. The local newspapers have highlighted some of these illegal tactics but that is just the tip of the iceberg.

Iddi Simba, I am sure knows about all this, since he has been in politics, in banking, parastatals and in business for a long time. He needs to go to the Kariakoo area, street by street to witness the number of shops, both wholesale and retail as well as the street pavements displaying, not only ‘mitumba’ but, finished goods from utensils, crockery, shoes, textiles, electronics and whatnot. In fact Kariakoo has now become the business centre, the shops in the city are now virtually marginalised, save for a few.

There have also been allegations that South Asians don’t cooperate with Africans in business. I am sure that Iddi Simba as a former Trade and Industry minister knows very well how some big African businesses are given colossal amounts of goods on credit basis. In addition, those using the so called ‘vipanya’ routes get a large quantity of goods from Kenyan South Asian manufacturers on credit basis.

Property development is another case where, apart from the National Housing Corporation, there are many cases of African plot owners going into joint ventures with South Asian-owned enterprises involved in property development and other related businesses. Buying of plots in the booming Kariakoo area, where it is common to find five to ten storey buildings being constructed, is a case in point. Former owners of the houses which are being demolished are remunerated tens of millions of shillings, ranging between fifty million shillings to one hundred million shillings.

Indeed for the former owners it is a jackpot bingo many times over. Those former houses were built for about TzShs.3000 way back in the 1930s. I myself have seen the ownership document of one such former house, dated 1937.

On the subject of South Asians not being willing to invest in industries, as has been alleged by Stephen Wassira in his article (Rai of 17 July, 2003), it does not hold water. Wassira should have done more research before making his accusations. He would have seen that in the colonial times, ownership of industries was very much the preserve of South Asians, especially with cotton ginneries and other such light industries. This was particularly so because the colonial government’s investment was restricted to only British-owned companies.

Wassira needs to read Dr Martha Honey’s PhD thesis on The Indians in Tanganyika, whereby the author explains in vivid detail how the Indians were referred to then, and how they had to fight tooth and nail to obtain licenses for cotton ginneries, and other agro-related industries. They started light cottage industries, such as making laundry soap. As far back as 1936, the late Habib Punja had a small-scale laundry soap industry in the Gerezani area. Indians then were only allowed to own small-scale milling plants for the grinding of maize into flour viz. dona. By then sembe had not been introduced. They also owned small-scale machines for extracting edible oil and making jaggery, or ghor as it is called, from processing sugar cane.

In the early sixties, the South Asians began to invest in large scale industries such as Kioo Limited for glass bottle manufacturing and ALAF (Aluminium Africa Ltd) for aluminium products, along Pugu Road (now Nyerere Road). There were also textile manufacturing plants or factories such as Sunguratex, Kiltex both in Dar es Salaam and Arusha, and a blanket factory in Dar es Salaam.

Soap factories in Tanga, Bukoba, Mwanza and elsewhere were initiated by South Asian-owned companies with assistance from the Industrial Promotion Services (IPS) which was owned by the Agakhan. The IPS embarked on a systematic promotion of industrial ventures by starting the first shirt and socks factory in Dar es Salaam known by the brand names of ‘Kamyn’ and ‘Socksey’. Other South Asian communities followed suit and established small scale industries all over the country.

The Madhwani group started the first South Asian-owned brewery in Arusha which manufactured Kilimanjaro beer. The Karimjee family developed large sisal, cotton and other plantations. The Chandaria group of companies started their famous ALAF enterprise.

In 1966, the Agakhan, on a visit to Tanzania, addressed a gathering of his Ismaili followers at the Diamond Jubilee Hall and advised them to move away gradually from trading i.e. from being dukawallas and venture into industries, engineering, agriculture and tourism. I personally witnessed this as a young lad of twenty years. Many Ismailis took the Aga Khan’s advice to heart and ventured into the rubber sandal industry (in Changombe), shoe-making, biscuit-making (Tabasco factory), wire and nail factories and so forth. Indeed the Agakhan had great ideas about moving his people from trading to industry, agriculture and tourism.

That is why, in 1968, the idea of building the landmark IPS building was conceived. It was opened in November 1970 by the late Mwalimu Julius Nyerere in spite of the frenzy of rampant nationalisation under the Arusha Declaration of 1967 and the eventual devastating effects of the infamous Buildings Acquisitions Act of 1971. The nationalisation broke the back of Ismaili entrepreneurship; since they were the largest single South Asian community numbering 35,000 out of the total South Asian population of 70,000.

Incidentally, 74 per cent of the nationalised buildings were owned by Ismailis including Dar es Salaam’s first ten-storey building, called Mawingo House, along Seaview Road. It was opened in 1958 by former Governor, Edward Twinning, and the IPS building in 1970, by Mwalimu Julius Nyerere.

Ismailis had to migrate to Canada as there was no future for them in Tanzania. I was a regular listener of Radio Tanzania’s Mzungumzo Baada ya Habari after the 8.00 p.m. Kiswahili news. Those commentaries attacked South Asians and called them ‘bloodsucking capitalists’, often inserting names like Patels, Meralis and Kanjibhais. The commentaries were nothing short of outright xenophobic incitements against South Asians. Such xenophobic statements were also directed against Greeks and Britons for owning sisal, cotton and coffee plantations.

Indeed such commentaries were extremely distressing. One needs to read old copies of The Nationalist, an English newspaper which was started just a few years after independence and owned by the former TANU party. The Nationalist was selling at just twenty cents as Tanganyika Standard (now Daily News) sold for thirty cents per copy. President Benjamin Mkapa along with Ferdinand Ruhinda (now a member of President Mkapa’s kitchen cabinet) managed The Nationalist, which regularly published xenophobic articles and editorials against the South Asian capitalists and others.

Times have changed. President Mkapa is now one of the most forceful and vocal of voices promoting private investment in Tanzania by South Asian and other investors. So is Ferdinand Ruhinda. Though the development of South Asian-owned industries has started in earnest, the absence of a level playing field is a major obstacle. Under the trade liberalisation and WTO terms and conditions, Tanzania is flooded with manufactured goods from Asian countries which are able to manufacture goods much more cheaply than our Tanzanian-owned industries. This is due to well-established and decades-old industrial concerns; coupled with a low-cost and efficient output by their workers.

The result is that even locally-owned South Asian industries have been forced to join the bandwagon in evading taxes and resorting to the black economy. The typical scenario, in the environment of a criminalised economy, is very much in evidence all over Africa, and in many third world countries. The forces perpetrating criminalisation of the economy are too powerful to be tackled since they involve the high and the mighty in our society who are just ‘untouchable’.

One does not need to delve into details as I, along with others, have written at length on this subject. The government on its part must acknowledge the reality of this situation as it seems to have become allied to these nefarious forces.

In 1965, the Agakhan commissioned a team of experts under Dr Hengel, a German industrial economist, who toured all the three countries of East Africa: Kenya, Uganda and Tanzania. The team carried out detailed research in a study aimed at enabling Ismailis to move away from dukawalla commerce and venture into industrialisation, tourism, agriculture, etc. The K J (Karmali Juma & Sons) Group of Companies, under its holding company called Industrial Management Services Ltd (IMSL) did a similar exercise. At one stage, The K J Group had around twenty industries.

A way must be found to discriminate between different players in the economy. Talking to Tim Sebastian on the BBC ‘HardTalk’ Programme, on July 29, 2003, the Liberian opposition leader, Ms. Ellen Johnson Sirleaf, talked at length about the merits of good governance. She candidly admitted on the programme that African leaders preach about the merits of good governance, but are reluctant to act on it, due to their own vested interests.

Many African leaders, along with their armies, police and intelligence services, have in the past decade or so been exposed in diabolical scandals for the joint looting of resources, minerals, oil and even timber logging. Any African leader, wishing to enforce good governance in his country, knows that confronting these evil forces can mean being overthrown, or at worst, being assassinated.

The key to solving this problem lies with the very forces, the donors, who constantly preach about good governance to African leaders, yet tolerate the necessary enabling environment. They allow their multinationals, their corporate interests and their banking system, including the secret off-shore accounts, to be given safe haven.

Some writers in the local press have written about South Asians engaging in capital flight, a phenomenon now practiced by other non-South Asians. The issue of South Asians indulging in capital flight needs to be examined with reference to past records. In the early sixties, after independence there was hardly any capital flight by South Asians. Then in 1965, exchange control on repatriation of money outside the country came into force. In fact the Exchange Control act was a replica of the British exchange control ordinance then in force in Britain under the government of British Prime Minister Harold McMillan.

The coming of the Labour government under Harold Wilson further enforced stringent exchange control on movement of money out of Britain by limiting only £50 for travellers, businessmen being the exception. This was due to instability in the British economy. South Asians in Tanzania had no reason to engage in capital flight at that time as they considered Tanzania to be their home. As the saying goes, they had burnt their boats when coming to East Africa from India, before partition of the subcontinent in 1947. This was evident in the way they put up both residential and commercial buildings, as well as other properties, all over Dar es Salaam and upcountry.

Non-citizen Indian civil servants working in Tanzania with the civil service, Posts and Telecommunications and Railways & Harbours were entitled to send their savings to their country of origin. Before the 1971 nationalisation of buildings, South Asians wishing to study abroad in countries like the UK (for the wealthy), India and Pakistan for the not so wealthy, could easily obtain remittances for college and university fees through local banks, without having to go through the Bank of Tanzania. Mind you, money earned in those days was all legal money and was hard to come by.

In the economic system today, money is abundant for a certain class of people; previously there was a tight control on the government budget. There was no corruption within the government or parastatal tendering or procurement systems, nor was there the grand smuggling of our mineral resources, or money laundering as is the case today. As a matter of fact, if immigration records were examined, one would find that there was hardly any movement of South Asians outside East Africa in those days.

Only a handful of South Asian businessmen could travel by air. The majority of Tanzanian South Asians who went for further studies or medical treatment, used passenger steamships. There were only two to three plying the Indian Ocean, sailing via Seychelles, where they stopped for refuelling, and visiting the East African ports of Mombasa and Dar es Salaam.

 

The journey by ship took eight to ten days to Bombay (now Mumbai) or Karachi. Some of my schoolmates who went for further studies to India and Pakistan travelled on deck class or third class, paying Tzshs300 which included three meals a day. They had to take their own bedding. Even after the 1967 Arusha Declaration and the subsequent nationalisations of the commanding heights of the economy such as banks and sisal, cotton and coffee plantations; investments by South Asians did not stop; there were considerable investments in residential and commercial buildings.

The Ismaili community, under its motto of homes for all, built up elaborate housing schemes. The vast housing estates in Dar es Salaam, like the Garden flats, Nizari flats, City flats along Kisutu Street, Crescent flats opposite Riddoch Motors, Kamyn flats near the Fire Brigade and many others in the city center as well as in Upanga and Kariakoo, were built between 1967 and 1970.

The political turmoil in Africa right after independence in 1960, marked by coups, civil strife and arbitrary detentions all over the continent, fuelled capital flight.

I remember having read an article, written by Andrew Cohen, then Assistant Secretary of State for African Affairs in George Bush Senior’s government in 1991, in one of the English newspapers in East Africa which revealed that in many African countries, wealthy personalities keep their money abroad in Europe just because the regime in power happens to be not of their tribe.

The recent revelation in the ongoing Goldenberg inquiry in Kenya reveals that some one billion of US$ in Kenya were siphoned out of the country during the 1992 and 1997 elections and this is just one of the many scams. Some independent studies made by international experts claim that KShs636 billion (or $72 billion) is lying abroad. The money belongs to both the political elites, civil servants, parastatal executives and businessmen of South Asian, African and European origin. I wonder how much of Tanzania’s wealth is lying in secret enclaves abroad?

The South Asian and Arab communities have not spoken about the debate on uzawa save for the Dodoma urban Member of Parliament, who spoke in parliament in response to Iddi Simba’s public pronouncement on the uzawa issue.

In addition, one Dr Hussein Datoo, has written an interesting article on uzawa in The Guardian. Premy Kibanga, the BBC African Service correspondent now in London, was recently interviewed on the BBC Kiswahili Service about uzawa. Amongst other issues relating to the meaning of uzawa, Premy remarked that the South Asian community has so far not declared its stand on the issue. Its silence is perplexing to her as many South Asians are two to three generations old here.

Indeed it is high time the South Asian community spoke about the uzawa issue since the whole debate is targetted at it. Let it be said that some South Asians born here have played important roles in politics. People like the late Amir Jamal, Alnoor Kassum, late Mahmood Nasser Rattansy, the former Tabora MP, and the country’s ambassador to The Hague and France. Also included are the late Akber Saiehe, the only South Asian elected Member of Parliament of the Mafia constituency and the ageing but active, Wolfgang Dourado, former Attorney General of Zanzibar.

Other Asian MPs followed later, people like Rostan Aziz, the late Abbas Gulamali, Azam Premji of Kigoma later to be dethroned on a citizenship technicality, Amirali Mulji, Shamin Khan, now Deputy Minister for Women and Children Affairs, Mohamed Sidiq of Morogoro, Yasmin Aloo, nominated to parliament on a special women’s seat and Baby Mawami, the former NEC member from Dodoma.

As for captains of industries, there are numerous South Asians who played their part in the past before nationalisation, not forgetting many who are now prominent businessmen, industrialists and academicians in their own right.

If uzawa is construed to mean Tanzanians of black origin than the question of uzawa is not equal to patriotism, for then this does not hold water as there are many uzawa and non-uzawa who have been, or are not, patriots to their country.

The fact that the uzawa debate has now been unbanned within the ruling party, the CCM, is a welcome move. Free ideas and thoughts should be allowed to prevail as long as they do not get out of control and generate into chaos. We have to bear in mind that Dar es Salaam, with a population nearing four million and with the majority of the people living below the poverty line, can resort to civil commotion at the slightest pretext and with devastating consequences.

At the moment what Tanzanians of all races, colour, creed or religion should be crusading for is good governance so that poverty can be tackled on all fronts. The gap between the rich and the poor which is widening day by day is the root cause of all the problems in the country. The present corrupt oligarchy in power is totally indifferent to the problems of the majority. It is bent on looting and accumulating as much as possible for itself, just as was done by the previous corrupt administrations.

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