October 28, 2002

South African investments in Tanzania - "Colonisation"?

Tanzanian President Benjamin Mkapa dismissed criticism that his government was encouraging South African companies to "colonise" Tanzania, after sectors of the media and opposition parties claimed the companies were being favoured as equity partners in the privatisation of state enterprises.

Mpaka said at the launch of the Tanzania Tourism Investment Forum in the country's northern town of Arusha in the end of October, that they claim that a monopoly will result if South African companies are allowed to take over strategic state companies. "I have only one answer to such criticisms," Mkapa said. "I wish we could have more South African investment in this country. The old apartheid South Africa was our enemy," he added. "The new independent South Africa is a friend and partner to development."

The Johannesburg Chamber of Commerce recently ranked Tanzania as the most promising market in East Africa. The country was the leading recipient of capital flows from Southern Africa in 1998, with direct investments topping US$443 million. Since the fall of apartheid South African companies have taken an interest in the Tanzanian market and already have stakes in the mining, aviation, service industry, tourism, banking, manufacturing and information technology sectors. Amalgamated Banks of South Africa (ABSA) already controls majority stakes in the country's largest commercial bank. Cellular network provider Vodacom, South African Breweries (SAB) and Southern Sun Hotels also has firm roots in the country. The latest company to enter the fray is South African Airways with last month's acquisition of 49% of Air Tanzania Corporation. Tanzania is about to conclude privatisation agreements of various state utilities. Major utilities earmarked for privatisation later this year include: The Dar es Salaam Water and Sewerage Authority, the Tanzania Electric Supply Company and the Tanzania Railways Corporation. (AFRICAN EYE NEWS SERVICE)

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