Govt to retake 8 firms from ‘failed’ investors

Dodoma. The government has singled out eight factories for repossession after investors failed to comply with privatisation requirements.

Industry, Trade and Investment minister Charles Mwijage told reporters yesterday that the decision was part of government efforts to revive privatised companies that were nolonger operating. Factories to be repossessed are Lindi Cashew Nut, Pugu Kaolin Mines, Mkata Saw Mills Ltd, Manawa Ginnery Company Ltd, Dabada Tea Factory, Tembo Chipboards Ltd, Kilimanjaro Textile Mills and Mang’ula Mechanical and Machine Tools Company Ltd.

The Treasury Registrar said in 2015 that the owners of some of the factories and facilities had breached terms under which they were privatised.

Mr Mwijage said the investors would remain responsible for protecting the factories until they were officially handed over to the Treasury Registrar later this month. He also revealed that the proprietor of Mwanza Tanneries Ltd had voluntarily surrendered ownership of the leather processing factory to the government.

“The Fifth Phase government is determined to revive idle industries for two reasons. First, the move is aimed at creating employment and second is to increase production of goods for local consumption and export,” Mr Mwijage said.

The minister also warned owners of five other idle privatised companies, and gave them until August 22 to act or surrender the factories to the government. They are Sabuni Industry Ltd (Tanga), Tanzania Moshi Pesticides, Tanzania Bulk Corporation, Ilemela Fish Processing and Mzizima Maize Milling.

The development came a few days after President John Magufuli publicly rebuked Mr Mwijage for not taking action against investors who had left factories and other facilities taken over from the government “to rot”.

Speaking before officially commissioning Kilimanjaro Cement Company in Tanga last Sunday, President Magufuli said there were at least 197 dormant entities factories that were formerly owned by the government.

“We made mistakes in the past when we privatised factories. I urge ministers not to repeat the mistakes,” he said.

Mr Mwijage said at least 65 per cent of youth in the country were unemployed, hence the need to revive dormant factories.

“To start with, we are planning to invest in meat, cashew nut and cotton processing factories as we believe these can play a key role in stimulating the economy as well as creating jobs for our youth,” he said.

The minister added that the government had formed a task force to monitor the performance of privatised factories and ensure they operated according to the government’s expectations.

The team comprises the Treasury Registrar, Attorney General, Industry, Trade and Investment minister and regional commissioners.

Mr Mwijage said out of the 156 privatised companies, only 62 were operating normally, while 28 were under-performing and 56 had been shut by their current owners.

He added that 14 companies were showing encouraging signs of recovery. They include Bora Shoe, Dowico, Moproco, Newala, Tabotex, Kinu cha Manonga, Morogoro Canvas Mill, Morogoro Shoe, Ubungo garments, Kibaha Cashewnut Ltd, Shinyanga Meat Factory, Mwatex, Urafiki and Mutex.

In December 2015, the then Treasury Registrar, Mr Lawrence Mafuru, issued a list of 49 privatised companies that had breached terms of their privatisation. They were among 177 privatised firms assessed by the government.

Factories and facilities the 49 privatised companies took over from the government were either idle or had been abandoned altogether.

Mr Mafuru mentioned other concerns as non-payment of the full purchase price and interest and change of the use of acquired assets without the consent of the Treasury Registrar.

The list includes Embassy Hotel, Kunduchi Beach Hotel, Hotel 77 Limited, New Mwanza Hotel, New Savoy Hotel, Tanganyika Packers Limited (Shinyanga meat plant), Ilemela Fish Processing and Mbeya-based NMC Rice Mills.

Others are Mang’ula Mechanical and Machine Tools Ltd, Moproco, Ubungo Spinning Mill, Keko Pharmaceutical Industries, Tanzania Pharmaceutical Industries Ltd, Biashara Consumer Services Company Ltd and Iringa Wood Pole Treatment Ltd.

The list also has Ubungo Garments Limited, Tanzania Shoe Company Limited, Newala I Cashewnut Processing Factory, Mtwara Cashewnut Processing Factory and Masasi Cashew Nut Processing Factory.

All purchasers were required to submit reports of the implementation of the terms of the sale agreements showing shareholding structure, post-privatisation rehabilitation and production capacity, among other requirements.