Tanzania news update – President blames ‘incompetent foreign management’ for corporate failures

In an astonishing outburst has Tanzanias president Kikwete laid into selected foreign companies, blaming them for huge corporate failures when opening the Lake Tanganyika Investment Forum earlier in the week. He cited in particular the Tanzania Railways Corporation and the City Water Company although the equally failed joint venture between Air Tanzania and South African Airways falls into the same category.
What was not mentioned is that his own government had selected these partners after what was supposed to have been due diligence and sufficient scrutiny of investors financial and technical capabilities, but it now appears that either these processes were seriously flawed or else influenced by considerations other than meeting the outlined specs alone. It could also not be established in any of the cited cases what role the respective company boards played in which the Tanzanian government was fully represented, and if such corporate failures had not been caused by other underlying reasons, as was the case with Air Tanzania.
When that joint venture was eventually dissolved the ailing airline only made a brief recovery, before spinning out of control again, according to observers due to political influence peddling, poor management chosen for political reliability rather than for technical competence, failure to avail the required funds at the time to renew the fleet and finally the influence of unions. The latter is in fact a reason blamed for scaring potential investors away, fearful of inheriting a substantially overstaffed airline with huge financial obligations and being unable to make the necessary staff changes without being tied up in courts for years, meanwhile bleeding money.
In contrast have many purely private investments, where government has no shares, flourished and grown, inspite of an often more difficult working environment compared to other East African countries like Rwanda and Uganda, casting further doubts on the presidents assertion why past joint public / private enterprises have failed. Watch this space.

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