Annual General Meeting 2018

Dear Member,

You are invited to our forthcoming Annual General Meeting, on Thursday 18 January, 5.30pm – 7.30pm, at the Kaskazi Room, Sea Cliff Hotel, Dar es Salaam.

We do hope that you will be able to join us as we reflect over our activities of the last year. We are sure it will be a very informative and enjoyable evening.  Following the presentation, we will be holding our annual board member elections. This year members will vote in 5 new board members.

We encourage your attendance and to use your right to help vote for the board member, as your role in selecting a board member is essential.  This year’s candidates are:

The candidate’s LOIs can be viewed by clicking on the candidate’s name. We look forward to seeing you there.

Yours sincerely,

Dan Holodnik, Chairman AmCham Tanzania

Lions (still) on the move: Growth in Africa’s consumer sector.

SOURCE: McKinsey&Company

SOURCE: McKinsey & Company, By Damian Hattingh, Acha Leke, and Bill Russo

Africa remains a high-potential region, but growth is concentrated in a few markets and income segments. To win, companies need a tailored, data-driven approach. Consumer spending across the continent amounted to $1.4 trillion in 2015, with three countries—South Africa, Nigeria, and Egypt—contributing more than half of that total. Food and beverages still constitute the largest consumption category, accounting for as much as one-third of Africa’s household spending in 2015 (and close to 40 percent of household spending in lower-income countries such as Ghana, Kenya, and Nigeria), but discretionary categories already make up a substantial share of consumption. Spending on nonfood consumer goods—including clothing, motor vehicles, and household goods—accounts for a further 15 percent of consumption. READ MORE HERE

Scientists are using drones to fight malaria in Zanzibar

The Millennium Development Goals prompted a number of large scale campaigns across sub-Saharan Africa to combat malaria. Millions of bed nets were distributed. Insecticide was supplied to spray in homes across communities. The aim was to stop people getting bitten, interrupting the transmission cycle.

It’s been a real success story, leading to a notable decrease in the disease’s prevalence. Some areas of Zanzibar have seen prevalence levels drop from 40% of the population having malaria to less than 1%.

Now epidemiologists and public health managers are looking to complement indoor-based nets and spraying with outdoor based solutions. In effect, they’re taking the battle to mosquitoes. And drones are a crucial part of their armory. One of the main challenges to disease managers is finding small water bodies that mosquitoes use to breed. This is where drones come in – for the first time, drone imagery can be captured over large areas which can be used to create precise and accurate maps of potential habitats.

READ MORE HERE

Africa Economic Outlook 2017

SOURCE: African Development Bank Group

In 2017 and 2018, Africa will benefit from commodity prices which started to rise in the latter part of 2016, increasing private demand including in domestic markets, sound macroeconomic policy management now entrenched in many countries, a generally improving and favourable business environment, and a more diversified economic structure, particularly towards the services sector and light manufacturing. Although current account deficits are expected to persist in 2017, they will be narrower compared to 2016, if the recent rise in commodity prices continues. The index of commodity prices was more than a quarter higher at the end of 2016 relative to the same period in 2015. Countries with more predictable policies and buffers should therefore be able to weather the storm in the wake of destabilising external imbalances.

This report analyses recent trends in external financial flows to Africa and domestic revenue collection. It explores how foreign direct investment, portfolio investment, remittances and official development assistance have evolved in 2015 and 2016, and their outlook for 2017. It highlights the growing importance of private flows in comparison to public ones.

READ MORE HERE

Tanzania’s Macroeconomic Outlook: Less Growth, More Repression

SOURCE: CGDEV

As economic indicators deteriorate, the Tanzanian government has jailed an opposition leader for questioning the Bank of Tanzania’s growth statistics. It’s time for the World Bank and the IMF to speak up. If it’s illegal to question a government’s statistics, why should anyone trust them?

Last week Zitto Kabwe, an opposition member of Tanzania’s parliament and former chair of the parliamentary accounts committee, posted on Facebook:

I am free, to report to police next week. Comrades, as you have been properly updated by the party, I was arrested by police at home around 6 in the morning. Charged with sedition at Chang’ombe police station based on the speech I gave at Mbagala. And charged with cybercrime and statistics offences based on the economic analysis I presented to the party central committee and later made public. Statistics act is being used for the first time since enacted. Let us test it in court.

One of the crimes Zitto allegedly committed was to question the GDP growth numbers published in the Bank of Tanzania’s quarterly report. The central bank says the Tanzanian economy grew at an annual rate of 5.7 percent in the first quarter of 2017. Zitto argues that this is implausible given the Bank of Tanzania’s own reports about the collapse of money supply growth since 2016, and calculates—with some bold assumptions we’ll revisit below—that the true GDP growth rate may be closer to 0.1 percent.

The government’s interpretation of the 2015 statistics act turns skeptics into criminals—myself included

As a former advisor to Tanzania’s National Bureau of Statistics, and someone who has conducted polling and RCTs in Tanzania as an independent researcher, I wrote back in 2015 when the new statistics law was proposed that it appeared to criminalize a broad swath of academia and civil society.

I asked Aidan Eyakuze, executive director of the Tanzanian civil society organization Twaweza, about this, and he noted that after the bill passed the National Bureau of Statistics clarified that the act “does not prohibit any agency or person from conducting their own research”—which Twaweza does frequently. Indeed, the final text of the act limits the criminal offense to anyone who “publishes or communicates official statistical information which may result in the distortion of facts” (p. 25, para. 5, emphasis added). That’s good news, but that last phrase is a little vague.

Unfortunately, the charges against Zitto Kabwe show that the government interprets that phrase to prohibit not just lying about, but even merely disagreeing with the Bank of Tanzania’s statistical findings.

If that’s the bar for breaking the law, count me guilty. I’ve previously questioned official statistics quite openly, noting that for years the National Bureau of Statistics’ official inflation rates appear to have been significantly underestimated. For that matter, note the massive, unexplained revisions to GDP growth figures from one quarter to the next in the Bank of Tanzania’s own reports (see graphs below). Maybe the Bank of Tanzania is guilty too.

Any application of the law premised on the infallibility of official statistics in Tanzania is a recipe for selective, politically motivated enforcement, which we’re now seeing.

Even if the official growth figures aren’t wrong, the opposition’s main critique still applies

So what did Zitto actually say? And is he right? His main critique is that government policy is leading to a decline in investment and slower growth. His narrower technical claim is that the GDP data is wrong. That claim is based on something called the quantity theory of money. It stipulates that the growth rate of real GDP should be equal to the growth of the money supply minus the inflation rate.

y = m – p

He notes that this relationship used to hold for Tanzania, but recently broke down. The growth of the money supply collapsed in 2016, while inflation and growth were fairly steady. It literally doesn’t add up. So either the theory is wrong or the data is wrong.

READ MORE HERE

Building the grid of the future, today.

SOURCE: Gabriel Davies,

The Brookings Institution

Every evening, the sun drops behind the horizon and darkness falls. And, every evening, although 6 billion people reach out and switch on the lights, over 1.2 billion remain off-grid. 

For over 100 years, since Thomas Edison’s coal-fired power station first lit up homes and offices in downtown Manhattan, the power for that light has—for the vast majority—been delivered by the electricity grid. 

But the grid as it is today cannot meet the challenge of delivering power to the 1 billion people who remain without it. 

Delivering power to the final billion will require the grid of the future—combining governments, the private sector, and the technological innovations that are revolutionizing the energy industry as we know it.

The challenge is best illustrated by the 650 million Africans who don’t have access to electricity, and living mainly in remote, rural areas. At the moment, the economics of electrifying those communities are non-viable for three main reasons.

READ MORE HERE

Can Africa Be a Manufacturing Destination? Labor Costs in Comparative Perspective.

SOURCE: Center for Global Development – Alan Gelb , Christian Meyer , Vijaya Ramachandran and Divyanshi Wadhwa

Stable, coastal countries like Senegal, Kenya, and Tanzania seem like strong candidates for a role in global manufacturing, yet they’re still too expensive when labor and capital costs are considered.

Our central question is whether African countries can break into global manufacturing in a substantial way. Using a newly-constructed panel of firm-level data from the World Bank’s Enterprise Surveys, we look at labor costs in a range of low and middle income countries in Africa and elsewhere. Using fixed effects and random effects models, we estimate a set of labor costs, both actual and hypothetical—what would labor costs for Sub-Saharan African firms look like if they were located outside of Africa? What would Bangladesh’s labor costs be if it was located on the African continent?

Our results suggest that for any given level of GDP, labor is more costly for firms that are located in Sub-Saharan Africa. However, we also find that there are a few countries in Africa that, on a labor cost basis, may be potential candidates for manufacturing—Ethiopia in particular stands out. We conclude with thoughts on the future of manufacturing in Africa.

READ MORE HERE

/ In News / By Zuweina Farah / Comments Off on Can Africa Be a Manufacturing Destination? Labor Costs in Comparative Perspective.

The future of farming in Africa is not agriculture but agribusiness.

Africa is a farm lover’s dream: abundant uncultivated arable land, roughly over half the global total; tropical climates that permit long growing seasons; a young labor force; and an expanding population that provides a readily available market for produce consumption.

Yet, African countries are yet to harness these opportunities to ensure sustainable food security and food production. The average age of farmers is about 60 years—in a continent where 60% of the population is under 24 years of age. Farmers are also less educated, with younger, more educated Africans are leaving rural areas, where farms are located, and moving to cities.

Some of these youngsters are also discouraged by the difficulties of accessing funds or land, the reliance on manual technology in smallholder agriculture, all compounded by the low and volatile profits.

But to remedy these issues, a new report suggests governments should change their outlook on agriculture from a subsistence, daily activity into a commercial enterprise. The African Center for Economic Transformation (ACET) says focusing on the entire value chain of the process—land tenure, farming technology, markets, and pricing—would help transform food systems around the continent. Positioning farming “as a business and entrepreneurial endeavor” would also help draw younger people into the practice, and make them see it as less of a “cool” idea and more as a “career option.”

Former Nigerian president Olusegun Obasanjo, a commercial farmer himself, told Quartz in an interview last month that he sees agribusiness as one of the few sectors that can “create the quantum of jobs needed for Africa’s youth.”

Technology and mobile phones should also be increasingly adopted as a way to not only to reach farmers, but also as a mechanism for data collection and analysis on soil conditions, fertilizer application, and climate change. Mechanization should also be expanded in order to ease the back-breaking manual labor and increase yields.

And just like in the modern workplace, the report notes that women should be put on an equal footing with men in order to drive agricultural transformation in Africa. Many countries still have laws governing marriage, divorce, and inheritance, which still put a barrier against women land ownership—and hinder them from using their plots as collateral for loans.

Original Post: QUARTZ AFRICA

October Newsletter

Letter from the Chairman

Thanksgiving is upon us, but for many, 2017 has been a year of difficult economic news.  AmCham doesn’t want to shy away from tough conversations about the business environment, but we believe that Thanksgiving is an opportunity to look on the bright side and celebrate this beautiful country that we all call home.

On 19 November at 5pm, AmCham will be holding its annual Thanksgiving dinner at Best Western Coral Beach Hotel in Masaki.  This will be a celebration with members, key stakeholders, and guests.  As always, all are welcome.

There will be some great Tanzanian music from the 1970s and 80s by the DDC Mlimani Park Orchestra, new ideas from around the region, and of course, plenty of good food.  If you can attend or would like to sponsor the event, please book now at info@amcham-tz.com.

Please read on for more information about other upcoming initiatives. And let me know if there are other ways we can assist you and your company.  I always appreciate your feedback.

Regards,

Dan Holodnik

Managing Partner, Ametan Contractors

 

AMCHAM OCT NEWSLETTER

September Newsletter

Letter from the Chairman:

AmCham is proud to support the many talented and influential women who are leaders in their businesses and organizations.  This month, AmCham announces the launch of a new initiative: Women’s Leadership Organization (WLO). WLO will be led and organized by women and aimed at providing female leaders in business, government, and civil society with a forum for discussion and collaboration on vital issues.  If you’d like to get involved in this initiative—and we encourage you to do so—please let us know at info@amcham-tz.com.

AmCham is also a strong supporter of policy that promotes a more even playing field, enables business growth, and contributes to long-term competitiveness for Tanzania and all its people.  This requires close coordination and collaboration between the government and the private sector.  But despite strong leadership from capable women and men, many businesses in Tanzania are currently facing challenging times.  Some of these challenges make the headlines—but many do not.  This month, the Chamber has launched a series of industry-specific roundtable discussions, starting with agriculture.  These engagements provide an opportunity for members to offer feedback on policy and business environment changes specific to their sectors.  Individual feedback is always kept confidential.  But the Chamber will be meeting in the coming months with a number of ministers and permanent secretaries, and the trends identified in these roundtables will be highlighted in our meetings.  If you would like to attend or contribute to AmCham’s high-level dialogues, please inquire about gold and platinum membership at info@amcham-tz.com.

Please let me know if there are other ways we can assist you and your company.  I always appreciate your feedback.

Regards,

Dan Holodnik, Chairman

DOWNLOAD THE FULL VERSION OF THE NEWSLETTER HERE: AMCHAM SEP NEWSLETTER