Business interruption insurance in Tanzania: A cushion against COVID-19 losses?

Saturday May 16 2020




How could the Bank of Tanzania respond to COVID-19?

Thursday May 7 2020

Bank of Tanzania hedquater in Dar es Salaam.

Bank of Tanzania hedquater in Dar es Salaam. 


Although interventions to curb the spread of the coronavirus disease 2019 (COVID-19) such as physical distancing, self-quarantine, and closure of universities and other educational institutions are crucially important, they are disrupting the wider economy.

Speaking in Parliament last month, Finance Minister Dr. Philip Mpango said that many economic sectors in Tanzania are affected, with education, aviation, maritime, hospitality, construction, and tourism being the worst-affected sectors.  The impact of COVID-19 is enormous, but nevertheless ‘hopefully’ temporary.  

Central banks in neighbouring Uganda and Kenya as well as in Egypt, Namibia, Mauritius, South Africa, and Ghana have joined the global trend of unveiling big policy responses in consonance with their respective economies’ GDP to limit the human and economic impact of the pandemic.

There is a surge in the flow of money from investments seen as riskier to the safety of cash, triggered by business distress and closures and the uncertainty surrounding a COVID-19-clouded future. This abrupt development is the main driver behind the evaporation of liquidity and, if uncontrolled, the spectre of credit contraction lurks over the Tanzanian economy.

Tanzania’s central bank, the Bank of Tanzania (‘the Bank’), needs to consider cushioning businesses and individuals by ensuring that credit is affordable and accessible during this unprecedented time. If not, credit starvation would greatly impact the economy and, consequently, recovery and productive capacity would be staggered and eclipsed, respectively.

Inflation—caused by excessive creation of money—is the number one economic enemy of Tanzania, according to the Bank’s website. In fulfilling the monetary policy objective stipulated under section 7(1) of the Bank of Tanzania Act, 2006, the Bank must first stabilise the economy and employment so as to keep the rate of inflation as low as possible.


Ideally, the optimal level of inflation within the target range can be achieved by setting a realistic and appropriate level and structure of interest rates. The situation is different however during an era of disruption to lives, the economy and society.

In the face of COVID-19 disruptions, the Bank needs to take comprehensive, swift and decisive action to support the economy by ensuring the stability of the Tanzanian financial system and an adequate supply of credit during this incredibly difficult and stressful time.

From a monetary policy perspective, the Bank can support the economy by revising the discount rate and steering actual inflation towards its target. These tools would make it more profitable for commercial banks to lend by lowering their interest rates on loans and thus encourage businesses and individuals to borrow.  

This is by no means an exhaustive list of the monetary policy tools that can be deployed to further support the Tanzanian economy and achieve the inflation target but it gives an indication of the many tools that can be used.

Tanzania’s financial markets are fairly still at a nascent stage. All the same, intervention by the Bank is crucial to ensure that these markets continue to function properly.

In this period of COVID-19, financial institutions might be disinclined to invest in government securities (Treasury bonds and Treasury bills) and other financial assets. Substantial fluctuation in the prices of these securities would discourage banks and financial institutions from trading in securities, which operate as a benchmark for other interest rates, thereby leading to illiquidity and, ultimately, a more inefficient market.

As the outbreak of the virus is straining financial markets, the Bank could expand its balance sheet by acquiring financial assets and acting as a lender-of-last resort to banks and financial institutions so as to ensure the smooth functioning of the financial system, seen as a critical factor to recovery.

The complexity and uncertainty emanating from the coronavirus may weaken the ability of financial institutions to obtain funds for lending to customers as well as force these institutions to cut back on lending for fear of insolvencies or default. In this case, the Bank’s role in making liquidity available to financial intermediaries to support financial market functioning and the flow of credit is critical if businesses and individuals are to navigate the COVID-19 crisis.

Ultimately, addressing the human and economic impact of coronavirus is not an all alone affair for the Bank; fiscal policy—the use of government spending and taxation to influence the economy—is similarly crucial in, inter alia, providing the financial muscle needed for the Bank’s interventions, including supplying official liquidity.


Paul Kibuuka (, a tax and corporate lawyer and tax policy analyst, is the CEO of Isidora & Company and the Executive Director of the Taxation and Development Research Bureau.




Sisal workers seek review of working conditions deal

Thursday March 26 2020

Sisal workers sun-dry the products at an estate

Sisal workers sun-dry the products at an estate based in Tanga Region. PHOTO | FILE 

By The Citizen Correspondent @TheCitizenTZ

Dar es Salaam. Workers in the sisal subsector have urged the Tanzania Plantation and Agricultural Workers Union (TPAWU) to review its collective bargaining agreement (CBA) with the Sisal Association of Tanzania (SAT), an agreement they consider outdated and is against their best interests.

The voluntary agreement was entered into by TPAWU and SAT to determine and regulate relations between the two in the interests of mutual understanding and co-operation.

It stipulates such matters as the number of days of work, wages, and incentive schemes, as well as how work performance will be determined.

Of particular interest is that the workers want the review to pay careful attention to the issues of wages, the measurements used to determine whether or not a worker has met the required goal to deserve payment, as well a guarantee that they work only five hours on Saturdays.

The call comes against the background of a botched strike by sisal workers at the Amboni Plantations Ltd (APL), Tanzania’s largest producer of sisal fibre who took the step to press the firm to improve their working conditions by allowing them more time off-work, as well as the right to air their grievances.

The workers - most of them sisal cutters, porters and others mainly on menial jobs – decry being ignored by authorities and left at the mercy of employers whose profit-making motive has subjected workers to inhumane conditions.


“We are being governed by an outdated agreement. But when you to talk about it, brother, prepare to pack your bags and go,” said the father of seven, Rashid Kapinga, from APL’s Sakura estate in Pangani, Tanga. APL also operates the Kigombe and Mwera estates in.

The firm does not want to hear anything like that, says the 38-year old Kapinga who has been with the company for about five years: “It has created a fearsome environment. But we are a free country. We don’t have to fear each other but rather respect each other.”

Apart from denying the dictatorial charges levelled against his firm, the APL human resources manager, Akida Abdallah, said it was not fair to point out the firm while all sisal companies are guided, in their relationship with the workers, by the agreement. “The agreement is what SAT and TPAWU agreed on. If there have to be any changes they have to come from the two bodies,” he said.

“It is difficult for Amboni [Plantations Limited] alone to change that. It is difficult because even if we wanted to reduce the working hours, for example, we will have to apply to SAT and if they see it logical then they would allow us to proceed,” he said.

Kapinga is just one of the eight hundred workers working at the APL’s three estates who went in a stay-at-home strike on February 1, 2020, which lasted for seventeen days trying to force APL to reduce Saturdays’ working hours from eight to five, among other demands.

The strike took place against the background of a Tanga regional labour officer Eliza Kalenga to the APL Sakura estate where among other things she told workers there that the law requires that they work only half a day on Saturdays, a call that was immediately followed by demands from the workers to the APL management.

Although the strike failed to provide what the workers wanted, it forced APL to reduce the measurements used to measure the workers’ performance. For example, for cutters, from expected to cut 110 sisal bundles a day they are now required to cut a minimum of 103 bundles.

While TPAWU local representative at Sakura estate, Mr Kabunda Butije, calls the changes “substantive,” workers have nevertheless criticised the union for its failure to work on their demands, while accusing it of being a sell-out and unrepresentative of workers’ demands, accusations that TPAWU denies.

One is Mr Bellason Mtolela, 38, a father of three who has been with the firm for about two years. He said the crux of the matter is that Saturday is supposed to be a half-day work something he sees has not been implemented since they called off their strike.

“We asked for a reduction of working hours on Saturdays but they [TPAWU and APL] brought us issues of measurements,” said Mr Mtolela whose explanations were supported by about fifteen workers from Sakura estate interviewed by The Citizen. “We did not send them [TPAWU] to negotiate measurements. We wanted a reduction of working hours.”

The government says the question of whether or not to review the collective bargaining agreement between sisal workers and their employers is on the hand of their respective associations, according to Mr Andrew Mwalwisi, a director of labour from the Prime Minister office.

The TPAWU general secretary Kabengwe Ndebile Kabengwe told The Citizen that the review of the union’s collective bargaining agreement with the SAT is not a matter of impossibility, saying, in fact, the agreement is revisited frequently as soon as a matter of contention arises between the parties.

Although he did not say when was the last time the agreement was reviewed, Mr Kabengwe said he “would look at the demand” by the workers as TPAWU is “committed to ensuring workers welfare while at the same maintaining good industrial relations between the workers and their management.”

SAT executive director Raphael Ngalondwa had this to say on the need to review the agreement: “The need to review the agreement, especially on measurements, has always been on top of our agendas. The measurements are outdated and there is basically a need to review them.”


FRANCHISE: International master franchise agreement

Thursday March 26 2020

Wambugu Wa Gichohi

Wambugu Wa Gichohi 

By Wambugu Wa Gichohi

While franchise agreements are generally the same, the master franchise agreement slightly differs from the normal franchise agreement signed with franchisees at home. In different articles, we have discussed the contents of a normal franchise agreement. The next few articles discuss the contents of a master franchise agreement signed for international markets.

Second is the term of the agreement and the terms of renewal. As discussed elsewhere, franchise rights are granted to be used for a period, they are never sold. The international master franchise agreement will, just like the domestic one, specify the period of the grant. Grant periods differ depending on the franchise model and the sector involved. Additionally, the grant period mainly depends on the investment levels required and the period the master franchisee and their sub-franchisees would take to recoup their investment and make some descent profits. The difference with local franchising is that since the master franchisee is allowed to sub-franchise, the period granted must essentially be long enough for all partied to make a decent return of their investments.

The term of a master franchise is likely to be ten to twenty years, often with renewals, subject to achievement of both annual and cumulative targets. There will be provisions for termination or loss of exclusivity if the minimum performance is not reached. Alternatively there may be provisions for the master franchisee to make payments to the franchisor of the same amounts as would have been payable to the franchisor if the minimum performance targets had been met instead of termination or loss of exclusivity.

Whether the sub-franchise period can be longer than that of the master franchise with the international franchisor is a matter of agreement with the franchisor, and should be clearly indicated on the agreement. Remember, the franchisor’s brand comes first and whether the current master franchisee is the same one or a different one in future, the brand should not be adversely affected. Should a master franchise be terminated midstream, the international franchisor has the responsibility to protect the brand by either taking over the territory and running it as they jointly seek a suitable master franchisee with the terminated party or appointing one of the sub-franchisees to take over the master franchise either permanently or on a temporarily as they seek a permanent solution. This has to be agreed at the beginning, and if a re-purchase option by the franchisor is agreed on, the financials have to be agreed upon from the onset.

The conditions of renewal of a master franchise need to be stated outright, just as in domestic franchising. These include, but are not limited to the agreed targets (both in turnover terms and the number of outlets), whether there is and the amount of fees charged upon renewal, any renovations and upgrades required for all outlets in the master franchisee’s network-includes the sub-franchisees- and generally any other issue that might be of interest to determine renewal. The key to success in franchising is consistency, hence most international franchisors, just like in domestic franchising, are keen to renew their franchisees as long as the brand is growing.

According to the International Franchise Association (IFA), overly stringent renewal conditions or extremely broad grounds for termination such as excessive renewal fees, burdensome forms to be filled out for release, or the franchisor retaining the ability to deny renewal for trifle matters or a small breach of the agreement should be a red flag. This may indicate that the international franchisor is more interested in selling and reselling franchises than in assuring the success of existing franchisees or in assuring a long-term relationship.


Further, any provision for termination upon death of the main master franchisee without the right to transfer the franchise to an heir or a surviving spouse indicates that the international franchisor may not be interested in orderly transfer of property rights or in continuation of a family member in an essentially family-owned and operated business.

The writer is a Franchise Consultant helping indigenous East African brands to franchise, multinational franchise brands to settle in East Africa and governments to create a franchise-friendly business environment


Unlocking businesses potential by implementation of the ‘Blueprint’

Thursday March 26 2020

Raphael Mgaya

Raphael Mgaya 

By Raphael Mgaya

Just as job seekers compete in the jobs market, so, too, do countries. In a globalizing world, countries compete against one another for capital and technology, poor and rich alike. It is a race for survival. It is not different from the race in the jungle between a lion and a gazelle. This phenomenon has been well captured by the Ruler of Dubai, Mohamed Bin Rashid Al Maktoum in his book My Vision: Challenges for Race of Excellence he points out that each day a gazelle must outrun the fastest lion in order to survive, equally a lion, in order not to starve it must outrun the gazelle. The same way is for nations, from time immemorial, nations that were faster than others in the race for attracting or accumulating capital or technology have prospered while their counterparts faltered.

Modes of accumulation of wealth or capital have evolved and changed throughout history. Bourgeoisie thinkers had it that the original wealth was accumulated through the abstinence, hoarding and savings undertaken by the diligent, intelligent and frugal elite as opposed to lazy rascals who had nothing but to sell themselves.

Of course, this thinking did not square well with Marx, who criticized it in his Critique of Political Economy as nursery tale that was aimed at obscuring and legitimizing the emerging capitalist relations.

Some of the notorious ancient means of accumulation of wealth, which are more or less universally acknowledged were the use of slave labour and oversea plunder mostly through colonization.

From several centuries ago to the recent times, countries deployed and still deploy protectionist trade policies to protect the national manufacturers and other industries. In England, laws against vagabondage were passed and enforced whipping the disposed producers into factory as a wage labourers.

In a technologically-driven globalized world, nations struggle against one another for capital, talents and technology. The means with which nations compete in this struggle is the creation of a good environment for doing business. As capital looks for cheaper labour markets and raw materials, Africa is becoming acknowledged as a new frontier, where the raw materials and labour are relatively cheap. With the youngest population on earth, burgeoning middle class and expanding infrastructure, Africa is unrivalled in terms of opportunities for business expansion. Tanzania, being among the top ten biggest economies in Africa in terms of gross GDP and the sixth most populous country in Africa, it could tap into these immense emerging opportunities. However, for this to happen, Tanzania must create an attractive business environment.


The World Bank’s Doing Business Report of 2020 reported that Tanzania has a less friendly business in the East African region, pointing out that starting of the new business was associated with challenges relating to cumbersome procedures, debilitating fees and time-consuming process. The World Bank’s Doing Business 2020 Report shows the following results among 190 economies for East African States with their positions in the brackets, Rwanda (38), Kenya (56), Uganda (116), Tanzania (141) and Burundi (166). This means, Rwanda and Kenya are leaders in the region while Tanzania and Burundi trail from afar. In terms of its potential, in terms of geographical size, population (market) and natural resources wealth, Tanzania is a ‘sleeping giant’ of the region.

There is a ray of hope at the end of the tunnel though. In April 2018, Tanzania published the Blueprint for the regulatory reforms to improve business environment in the country (Blueprint). This came after a recognition by the authorities that the business environment in the country was not attractive to both local and foreign businesses.

The Blueprint seeks to address the legal and regulatory challenges facing the businesses in the country, including the multiplicity of regulatory bodies with consequent conflicting roles and plethora of charges and fees which has proven quite burdensome to businesses. For instance, a 2016 report by the Confederation of Tanzanian Industries showed that there are more than 16 government authorities at the Dar es Salaam port each of them charging separate fees. The Blueprint also points out to the duplicative roles among various government agencies. For instance, inspection for illegal workers at workplaces is undertaken by various institutions, namely: the police, the labour office and the immigration department. This has been a source of nuisance, inconvenience and wastage of time for business owners. Besides, the overlapping of roles of OSHA and the Fire and Rescue Force on the one hand and OSHA and TFDA, TBS and the Tanzania Dairy Board(TDB) on the other in inspection of premises and the accompanying exorbitant fees, has been a long time concern for businesses.

The government’s initiative to address some legal and regulatory challenges facing businesses is praiseworthy and will attract foreign capital, technology and talent and ultimately unlock the country’s economic potential and accelerate the government’s industrialization agenda. Crucially, it must be emphasized that, time is of essence in this race. The Blueprint was published two year ago, but we are yet to see its full implementation. The Doing Business Report shows Tanzania’s business environment has deteriorated since 2017. The historical position of Tanzania among 190 economies in the world in the Doing Business Report over years since 2017 as shown in bracket for each year were 2017 (132), 2018 (137), 2019 (144) and 2020 (141).

The weaknesses pointed out by the Blueprint must be addressed through reforms of the existing legal and regulatory framework as a matter of urgency if the economic potential of our great country is to be unleashed anytime soon. It is relishing to know that the private sector is being involved in the processes towards the implementation of the Blueprint, but it is important to emphasize that, involvement of private sector is not in itself sufficient unless the actual concerns and inputs of the private sector are taken on board during the implementation.

Raphael Mgaya is the executive director of Tanzania Association of Oil Marketing Companies(Taomac)


DIGITAL TRENDS: Digital diet status quo in the age of Covid-19

Thursday March 26 2020


By Innocent Swai

Food production technologies are changing. Today, humanity has revolutionised a number of things including their digital and physical diets. The latter used to be stuff like vegetables and fruits, whole grains, fish, chicken, and meat. Technology advancements in agriculture and the fast food chain evolved into a new flexible mobile society. That resulted in far less wholesome foods which penetrated into the whole society. Manufacturers capitalised on emerging technologies by figuring out different ways to get rid of certain parts of the physical traditional diets. Other ingredients like preservatives were added, so that foods could last longer with less spoilage. That skyrocketed the value of food chain. And the processed food culture was born.

Science and technology was sort of the ‘new god’ - till coronavirus changed everything around. What is happening? Lets play the wait and see game. The world is grounded. Science and technology had shifted the known healthier food culture which was decentralised. That led to a different food taste preferences as the society switched into refined sugar and refined grains. Big malls and supermarkets were born; killing the known corner shops and traditional markets in big cities. Can coronavirus reverse the trend again? Today with emerging technologies, I dare say, we have everything store like Amazon. Change is the only constant as digital diet is taking over. Industrial farms have been designed to feed animals with more cost-efficient grains instead of traditional grass. They are making use of growth hormones in their diet to boost the production cycle, hence more profits. On the other hand, the fast food chain industry has reinvented itself by becoming a cultural staple, as did the processed foods devoid of nutrients but crammed with salt, sugar, and synthetic chemicals. Most of the calories consumed today, come from refined grains, added sugars, vegetable oils, and solid fats.

Today, humanity consumes highly varieties of processed food stuff than ever before. Imagine, the harmful side effects coming from the usage of high-fructose corn syrup, a sweetener made from corn starch. Besides side effects, the place of essential nutrients for the proper functioning of our bodies has taken over resulting to people having lifestyle diseases.

Nanotechnology is a field of applied science and technology whose unifying theme controls matter on the molecular level in very smaller scale (less than 1 micrometre). The good news is that, you are a walking nanotech miracle. Today, with the help of emerging technologies, we are building tiny robots that would circulate through the human body and eliminate cancer cells, repair arteries, etc. hence accomplishing all sorts of other miraculous things. That is what is trending. Interestingly, our human body already has nanotechnology that does all of this and much more. Why not? If humanity can stop fighting nature! Look at the way nature is designed to function just by itself; then brilliance can be borrowed. Design thinking is the way to go. Our own immune system can put most of these man-made technologies to shame. Our bodies without external intervention already knows how to repair itself. Our bodies have their own mechanism of appropriate technologies on how to use optimum nutrition and put it to good use to support not just a healthy organ but the whole body system of yours. If don’t get what I am saying, take it easy. Just look at the human body to see a nanotech miracle. You’re already a walking miracle of molecular technology that works even when you don’t understand how it works. Go figure!


Poor road to Mozambique clogs trade

Thursday March 26 2020

Roads play a key role in economic development.

Roads play a key role in economic development. When they are in poor condition, they hamper economic growth by adding to the costs of doing business. Given that Tanzania aims at industrialisation, investing in better roads is a must. PHOTO | FILE 

By The Citizen Correspondent @TheCitizenTZ

Songea. The business community in Songea District, Ruvuma Region, have raised concerns about the poor state of roads linking the region to neighbouring Mozambique, saying the situation affects cross-border trade between the two countries.

Geographically, the region - which is among the leading producers of cereals in the country - shares borders with Mozambique and Malawi via Mkenda and Mbababay crossing points respectively.

“The 124-kilometre road that links Songea Municipality and Tanzania’s border with Mozambique is inaccessible - especially during the rainy season. Therefore, trade is affected by the poor road situation,” said Mr Samson Swedi, a maize trader at Songea at a meeting with the Tanzania Chamber of Commerce, Industries and Agriculture (TCCIA) delegation last Monday in Songea.

The trader also revealed that the 240-kilometre long road that connects Congress and Lichinga towns on the Mozambican side was also inaccessible, hence equally affecting trade between the two sides.

“I appeal to the Tanzanian government to consult with its Mozambican counterpart and make sure the damaged road is rehabilitated as soon as possible. The road is potential for Ruvuma and the nation as a whole,” said Mr Swedi.

He argued that improving the roads would help boost business and create jobs for both sides of the common border.


Among other cross-border socio-economic activities, the business community in the region exports both processed and unprocessed maize products to the aforementioned neighbouring countries.

According to government statistics, Ruvuma has a total of 4,007,746 hectors of land suitable for cereal cultivation.

The statistics further shows that during 2018/19 agricultural season, the region produced a total of 1,255,134 tonnes of crops. At least 644,934 tonnes of the produced crops were maize. For his part, TCCIA’s President Paul Koyi during the meeting, called upon the Tanzania National Roads Agency (Tanroads) and other relevant authorities to make immediate efforts to rehabilitate the roads.

He added that the roads would accelerate business activities between Tanzania and Mozambique upon its rehabilitation.

“We will take this matter into further consideration by consulting with the top government leaders in the Ministry of Works, Transport and Communications and ensure they act accordingly,” said Mr Koyi.

He added: “Connecting that road which acts as a shortcut between the two destinations will reduce time for the Tanzanian traders within the region as they will be able to reach Mozambique’s market more easily.”

Referring to the business environment in Ruvuma, the assistant Regional Administrative Secretary (Economics and Production sector) for Ruvuma, Mr Deogratius Sibula, acknowledged that the poor condition of the road connecting the region with the neighbouring country Mozambique does affect business.

“We have listened to the traders’ concerns regarding the state of roads linking the region to the neighbouring country of Mozambique.

“Let me assure them that the government is working hard on the matter so as to ensure that business activities with neighbouring country continue smoothly without hurdles,” said Mr Sibula during the meeting.

He added: “We have already consulted with the relevant government authorities in Mozambique and we will soon start rehabilitating the road.”

Focusing on business activities between Tanzania and Malawi, the acting Regional Administrative Secretary said that Tanzania’s business community were not facing challenges to access Malawi’s market as the government recently constructed three passenger and cargo vessels plying from Tanzania to Malawi via Lake Nyasa.

“The road from Songea Municipal to the Bambabei border with Malawi is accessible. At the border, there are two cargo vessels and one passenger vessel that offer transport service to business persons from Tanzania and Malawi on regular basis, “ said Mr Sibula.

The Tanroads regional manager for Ruvuma, Mr Lazeki Alinanuswe, assured stakeholders that the road authority would start rehabilitating the damaged road when the rains stop.


YOUR BUSINESS IS OUR BUSINESS: Is coronavirus the Armageddon we fear...?

Thursday March 26 2020


By Karl Lyimo

If you thought the new coronavirus outbreak would be a passing fad soon to be forgotten, you need to think again!

Code-named ‘SARS-CoV-2’ (Severe Acute Respiratory Syndrom-CoronaVirus-2) – with the disease that the virus causes code-named ‘Covid-19’ (CoronaVirusDisease-19) – the hydra-headed viral monster has been wreaking havoc across the world in the last three months or so.

The virus has been infecting and killing people right, left and centre across Planet Earth this side of Heaven, leaving behind trails of wailing, confusion and panic.

It even killed the Chinese medic who sounded a warning about the deadly outbreak in late December 2019, Dr. Li Wenliang, 33.

Based at the Wuhan Central Hospital in China’s Hubei Province, the whistle-blower had noticed/recognised symptoms in a patient of the SARS disease that had erupted in southern China’s Guangdong Province in November 2002.

The SARS epidemic spread only to 26 countries – the farthest from the ‘epicentre’ being Canada – infecting upwards of 8,000 before it was brought under control in 2003.



So, when Ophthalmologist Wenliang tried to raise the alarm on December 30, 2019, he was severely reprimanded and silenced on January 3, 2020 – with his employer and the local police accusing him of spreading ugly rumours - and threatening him with fate worse that death... Ye gods!

Then – as the seemingly-tireless Sisters of Fate would have it – our Dr Wenliang just as soon died from ‘Covid-19’ on February 7. [See ‘Chinese doctor, silenced after warning of outbreak, dies from coronavirus.’ New York Times, updated Feb. 7, 2020].

Let’s hit the ‘F-F’ button...

By noon on March 25 – less than three months after Dr Wenliang had blown the whistle on the new coronavirus outbreak on December 30 last year – the malady had spread to at least 196 countries and territories.

It had infected a total of 439,654 persons worldwide – and killed more than 19,744, with 111,941 cases having recovered from the ailment.

Incidentally, those who get infected with Covid-19 and recover can kiss the demon goodbye, as reinfection is generally ruled out. Lucky fellows, should we say? Sheesh!

Covid-19 is breaking all records in History dating back to the ‘Spanish Flu’ pandemic (Jan. 1918-Dec. 1920) from the H1N1 influenza virus.

Although the data is disputed here, there and over there, it’s nonetheless insisted by diehards that the Spanish Flu infected 500 million people: about 27 percent of the world population of 1.8-1.9 billion at the time.

The resulting death toll from the Flu was estimated at anywhere from 17 million to 50 million – and, possibly, as high as 100 million, making it one of the deadliest epidemics in human history. [World Health, Organization. December 9, 2005].

What bothers me most is why the Chinese authorities did not heed Dr Li Wenliang when he raised the alarm on the conspiratorial ‘SARS-CoV-2’-cum-‘COVID-19’ outbreak last December!

Had they done so – and accordingly taken the requisite measures to contain the outbreak in their backyard – the world would have had no cause to shutdown life’s daily activities.

Countries are closing down schools, sports activities, passenger services, national borders, communal gatherings, shaking hands, smooching – and many more...

All this is bound to play merry hell with economies, social lifestyles... and, indeed, the worst is yet to come.

Talk of Armageddon, the final battle between Good (humans) and Evil (COVID-19) that’ll destroy the world and the human race... Tears, friend and foe alike!


MANAGING TAX RISKS: Impact of virus crisis on tax collections

Thursday March 26 2020


By Shabu Maurus

Tanzania has recently reported cases of people with the deadly coronavirus (Covid-19). Like other countries hit by the pandemic, Tanzania is already taking several necessary steps to combat the spread of the deadly virus. Schools have been closed for a month. Social distancing and personal hygiene are highly being emphasized. Likely, further steps will be taken. Probably depending on the rate of spread and mortality. The economic impacts of the pandemic are far-reaching. Even to countries with no reported corona cases. The pandemic is likely to affect Tanzania’s Sh135 trillion economy. But how the economy and hence tax revenue will be affected may be difficult to accurately predict. It will depend on several factors, including measures taken locally and globally in fighting the virus.

In this fiscal year (2019/2020), Tanzania expects to collect and expend Sh33.1 trillion. The economy (GDP) is expected to grow by 7.1 percent this year. But it is unlikely that this budget factored in the impact of the current pandemic. And out of this budget, Sh19.1 trillion (almost 60 percent) is to come from tax. The total tax collected for the first half of the fiscal year is Sh9.2 trillion. An impressive 96 per cent tax collection performance. But if the economy is affected, tax collections will also be affected. There are several ways the pandemic may affect tax revenue including the following.

International trade: The pandemic will negatively impact international trade. Movement of goods and people become more restricted as one of the measures to combat the spread of the coronavirus. The tax collection statistics show that around 40 percent of tax is collected from importers. It is the biggest source of tax revenue. Accordingly, the extent of decrease in the imports will determine the impact on tax revenue.

Local consumption: VAT and excise duty are the biggest consumption taxes. Mainly coming from the use of mobile phones, beverages (particularly alcoholic drinks), cigarettes and petroleum products. How will the ‘social distancing’ measure impact consumption of these products? Well, I think it will depend on the extent of social distancing. A total lockdown (which I hope is unlikely), will have more impact. With less social events and similar gatherings, consumption of beverages may go down. The use of telecoms products (data, airtime) may go up for both individuals and corporate. Whether staying at home may make smokers take more cigarettes may be difficult to tell. Consumption of fuel may also go down. But staying at home may raise the consumption of other products.

Tax compliance: The pandemic and the measures taken against it will affect individuals and businesses in several ways which may impact both the amount of tax that can be paid and the extent of tax compliance. A complete lockdown, for example, would mean no business at all and hence no tax to pay. With social distancing, filing of tax returns may be affected. If due to, say quarantine, people are unable to go to the banks or if the bankers are not working then tax-paying will be a challenge.

Tax administration: What happens if tax collectors are restricted to work or meet taxpayers? Efficient digital tax administration platforms would have been so helpful. But even in the digital world, tax administration involves people. Social distancing may hence affect tax administration.



Franchise lessons from World Franchise Council

Thursday March 5 2020

Wambugu Wa Gichohi

Wambugu Wa Gichohi 

By Wambugu Wa Gichohi

China’s production stable amid the novel coronavirus scare

Thursday February 20 2020


By Francis Semwaza

The world has slowly started to experience the economic impact of the outbreak of the novel coronavirus (COVID-19) both at the individual and institutional levels. The concern can be whether or not China will be disconnected from the world due to the COVID-19 outbreak, and for how long that would last.

Reports of factory closures, low investor morale and undersupply of goods in some of the major markets, especially in the Western world, swirl around like wild fire, and all major stock markets also experience a hard hit both in Asia and the West.

While most of the scare seems to be in the West, African countries may also feel the pinch at any time given their increased interactions with China and the fact that they host more contractors from and rely more on China for consumer products at an affordable price.

Amid the impact that the COVID-19 and its resulting scare have caused, the world needs to be supplied with adequate information to help people protect themselves from it and be able to support their lives during the time of the emergency.

Currently, the Wuhan city in Hubei province is the most affected region as the point of origin, although the disease has spread to some other regions within China and other countries including Britain and the United States. Thus, it’s of crucial importance to know that the whole of China is not infested or affected in the same way.

As a standard practice in addressing health emergencies, a few cities with the highest number of victims or the ones facing a higher degree of vulnerability have been locked down in China to contain the virus from spreading further, which implies that production activities in the respective areas have to stop.


This has affected China as a strong yet still growing economy that feeds into, influences and is connected to the majority of the economies across the globe.

Literally, the mandatory internal mechanisms, such as quarantines, to contain the disease hurt the economy, but the global reaction to the virus may seem to be exaggerated, with several airlines canceling their flights to and from China, except for Ethiopian Airlines and a few other companies that maintain their schedule as usual, which means more business for them.

The movement of people, commodities and services has largely been disturbed at a time when it should be encouraged: the advent of the COVID-19 deals a heavy blow to the global trade, making losses imminent due to a shrink in the market demand; increases the difficulties to resume production due to travel restrictions and quarantine requirements, as well as raises the degree of general social vulnerability. So far no distinct cause has been established for the COVID-19, although it is largely blamed on the Chinese people’s love for bushmeat and exotic food. But in a developed society where humans live today, no eating culture should be shamed, stereotyped or its aspects exaggerated: The bird flu (H1N1), for instance, was largely blamed on poultry products, but chicken and related birds and products were never stereotyped for the fact that they are food for the majority of the global population.

Irrespective of the cause, the global community needs to focus on fighting the disease together rather than leaving it on China and the World Health Organization (WHO) alone or simply succumb to blaming some food cultures as being the cause of the disease.

In fact, China needs to be commended for the efforts it has made to address the challenge within a short period of time. Despite its diverse demographics, China has demonstrated enough commitment toward fighting the COVID-19 by, for example, building two new hospitals within around ten days and converting seven large stadiums and exhibition centers in Wuhan into mobile cabin hospitals in order to receive and cure more patients. China has also been cooperating with the international community to develop vaccines of the new virus.

Moreover, China’s foreign missions abroad, including its Embassy in Tanzania, have issued warnings to its citizens aimed at protecting themselves and others by, among other things, monitoring their own health conditions and seeking medical attention whenever experiencing the symptoms of the COVID-19 infection, and urging the new arrivals from China to quarantine themselves for 14 days before returning to work.

Other safety measures include raising its people’s awareness on the need for maintaining sanitation and personal hygiene, as well as wearing masks at all public places, including in the offices and factories.

China’s commitment to curb the spread of the virus targets not only its own citizens, but also foreign nationals in China. The non-discriminatory approach in containing the threat to public health is a commendable one given the level of global economic interdependence we’re currently pegged at.

Life definitely has to move on amid the fight against the epidemic. But while addressing the short-term consequences of COVID-19, we must not forget that in due time and with the ongoing efforts, the epidemic will disappear just like others and China will resume its long-term production for the fact that both its determination and infrastructures remain intact.

Francis Semwaza is a development communications consultant based in Dar es Salaam, Tanzania. Email:


YOUR BUSINESS IS OUR BUSINESS: What is this 4th industrial revolution?

Thursday February 20 2020


By Karl Lyimo

I’ve been asked what the ‘Fourth Industrial Revolution’ is all about.

People know about the ‘Agricultural Revolution:’ the period of technological improvements and increased crops productivity in Europe during the 18th and early 19th centuries.

But: Industrial Revolution – and, a fourth one, at that? They ask... While there’re four Industrial Revolutions so far, Historians also argue that there were NOT one, but several Agricultural Revolutions in History – including the Green Revolution, complete with new chemical fertilisers, synthetic herbicides and pesticides!

The first Agricultural Revolution was at around 10,000BC: roughly at the time of transition from ‘hunters-and-gatherers’ to ‘stationary farming.’

This was followed by the 18th Century Revolution when European agriculture shifted to new farming techniques: crops rotation; large-scale wheat, maize and potato-growing; wealthy landlords pushing small farmers to metropolises in search of jobs in the emerging Industrial Revolution...

The First Industrial Revolution largely involved new manufacturing processes in Europe and the US from about 1760CE-to-1820CE. The transition included going from hand-to-machine production; new chemical and iron production processes; increased use of steam and water power; development of machine tools and mechanized factory systems.


Textiles manufacturing dominated, with jobs creation, output values, invested capital and modern production methods.

Prior to the Industrial Revolution, the largest workforce was in Agriculture, mostly as labourers. Then came the Second Industrial Revolution/‘Technological Revolution,’ from about 1870 to 1914.

This was rapid advancement of mass production and transportation – making life a lot faster, easier. That was also when “cities grew, factories sprawled – and people’s lives became regulated by the clock rather than the Sun rising and setting.” [/>].Rapid advances in the creation of steel, chemicals and electricity fueled mass production of consumer goods and armaments.

Ideas and news spread via newspapers, radio and telegraph...But, that Revolution was also the dawning of Child Labour, industrial action/strikes...

Roughly a century later, the Third Industrial Revolution dawned with the emergence of nuclear energy, whose potential surpassed its predecessors. It was the age of electronics, starting with transistors, microprocessors, computers and vastly-improved telecommunications.

That’s to say nothing of space research and biotechnology, as well as high-level automation in production – thanks to automatons and robots.

While the First Industrial Revolution (1765 onwards) used water and steam to mechanize production – and the Second (1870 onwards) used electricity to create mass production – the Third Industrial Revolution (1969 onwards) used electronics and info-tech (IT) to automate industrial production. The Fourth Industrial Revolution is steadily but surely unfolding with the dawn of the current Millennium, the ubiquitous Internet and digitization/digitalization amid such thingamajigs as ‘Cloud Technology/Cloud Computing,’ ‘Big Data Analytics’ and the ‘Internet of Things’ (IoT).

Cloud Computing is the on-demand availability of computer system resources – especially data storage and computing power – without direct active management by the user.

‘Big Data Analytics’ is the complex process of examining large, varied data sets to uncover information that helps to make informed (business) decisions.

‘Industrial Internet of Things’ is, of course, the interconnection via the Internet of computing devices embedded in everyday objects, enabling them to send and receive data.

Are we on the cusp of the Fifth Industrial Revolution (5IR) – or is it already upon us, pray? Cheers!


DIGITAL TRENDS: Why multiple mental models are key to success

Thursday February 20 2020


By Innocent Swai

There was a group of six blind men who heard about an animal, called elephant. None of them was aware of its shape and form. Out of their curiosity, they wanted to inspect and could only feel different parts of an elephant: the trunk, the leg, the ear, the side, the tail and the tusk.

For the first person case, whose hand landed on the trunk, felt like a “thick snake”.

For the second one whose hand reached its ear, his experience is like a “kind of fan.”

As for third person, whose hand was upon its leg, it seemed the elephant is a pillar like a tree-trunk.

The fourth blind man who placed his hand upon its side, felt like the “elephant is a wall”.

The last but one whose hand was upon its tail, described elephant as a “rope.”


The last one, interestingly felt its tusk, stating an elephant is hard and smooth like a spear.

What do you thinj is the moral of this parable? We humans have a tendency to claim absolute truth based on our different limited, subjective experiences, biases, attitudes, etc. as we ignore other people’s limited subjective experiences which may be equally true.

In other words, these blind men were wrong in isolation, because they could only see from a single perspective. They were wrong about the elephant’s overall appearance. We must see the Elephant from every perspective in order to truly understand the animal.

In real life and business, when we make use of too few mental models, we risk falling prey to the fable of these blind men. The Elephant scenario has just demonstrated the whole situation. The more varied perspectives we possess, the more of the world we can understand easily. Perhaps the most important part of a mental model is that they always act to prevent and minimise human errors.

With a toolbox of multiple models, they keep challenging each other to produce a more unified overview. Instead of just using one or two mental models; whereby we end up being restricted to our long-range view to a limited context or discipline. Having a huge

range of mental models can expand your viewpoint and cancel out some of the stray “errors” that using just one or two models would produce.

It’s not a must to know all the ins and outs of a million different disciplines to use multiple mental models. You just need to understand the basic points and fundamentals of a few essential ones. You need to differentiate yourself with that the person with a single hammer who sees whole world as a nail. We can be better than that.

In a sense, in today’s digital economy era, most mental models are eventually helping in making both reversible and irreversible decisions. There are specific mental models about how best to process big data more quickly and searching for outcomes that are more likely to be Impactful. In other words, they make us move from Point A to Point B in less time, and they might also help us in defining what Point A actually is.

Most of the time when it comes to making decisions, with digital gadgets in our hands 24/7 we are overloaded with information—the classic signal-to noise ratio problem. It’s time to learn the art of becoming selectively deaf and input only what matters. That’s how and where mental models comes in.


FRANCHISE: International markets franchise entry strategies

Thursday February 20 2020

Mr Wambugu Wa Gichohi

Mr Wambugu Wa Gichohi 

By Wambugu Wa Gichohi E-mail: or

International franchise brands entering a new market have a choice between three entry strategies. The first is direct franchising where the franchisor sets up an office in the target market and directly recruits franchisees in the same manner as they would at home. Given the distance from head office and the attendant complications of directly dealing with market dynamics in a foreign country, most international franchise brands avoid this choice as much as possible. They mostly only register their Intellectual Property Rights (IPRs) in the target market and opt for either of the following strategies.

Second is the area developer strategy where the foreign franchisor, having protected IPRs in the target market, recruits and selects one franchisee who assumes the franchisor’s role in the assigned territory.

Under this strategy, the area developer franchisee is allowed to recruit franchisees in their assigned territory (sub-franchise).

The area developer supports the franchisees, in the same manner as the franchisor would if the franchisor was recruiting franchisees directly. The franchise fees collected by the area developer is shared with the international franchisor on a pre-agreed ratio.

This strategy is also not very popular with international franchisors because it reduces the fees that the franchisor receives.

Also, since the franchisee area developer takes the role of the franchisor, it could easily fall into a principal-agent legal relationship where acts and omissions of the international franchisor are deemed to be carried by the local area developer franchisee, a situation which is against the normal principles of franchising.


The third market entry strategy, and the most commonly used by a majority of international franchisors, is the master franchise model.

The international franchisor, having secured IPRs in the target market, recruits and selects a local franchisee to grow the brand. The selected franchisee has to set up an agreed number of outlets over an agreed period, using own resources, unlike in the area developer model which allows sub-franchising. The international franchisor supports the master-franchisee in the same manner as the direct franchisees at home, only that this time, the master franchisee is far away from head office and might need more attention than the local franchisee at home.

Generally speaking, and in the traditional franchise set ups, master franchises are, ideally, set up and run by locals based in the target international market. This is because locals are presumed to know the local environment better, command a better grip of the local culture, command some deep respect in the local environment and generally understand the political landscape and other market dynamics better than outsiders.

There are, however, incidences where international franchisors recruit and assign master franchise rights to international business people. This is mainly where they are unable to identify locals with the requisite capacity to invest to achieve the target outcomes.

This trend is also supported by recent developments in globalization and technology which allow business owners to generate and easily access in-depth market information, enabling them to run businesses off-site.

A good example is the first Dominos Pizza and Cold Stone Creamery master franchisee for East Africa, who is a Singapore-based businessman.

Regardless of the market entry model chosen, the bottom-line remains achievement of the franchisor’s set financial targets and the relative ease thereof. The model chosen must support the system-wide financial targets without reducing the contribution of the target market to the group results, which would otherwise dent the franchisors’ financial outlook.

The writer is a franchise consultant working to promote adoption of franchising in Africa. He works with country apex private sector bodies to increase the uptake of franchising by helping indigenous African brands to franchise.


Why the environment is tied to livelihoods

Thursday February 20 2020


By Dr. Felician B. Kilahama

The Almighty God did a wonderful job in six days and rested the seventh day as stipulated in the Holy Scriptures. God created the world that possesses dry land; water bodies such as lakes, dams, rivers and wetlands but also the Oceans and Seas. Additionally, God the creator, positioned forests above the land composing different types of tree species and other natural vegetation; and below the ground placed various minerals including different types of soils. The Oceans are a home for various types of fisheries and other living creatures and other matters like coral reeves and mangrove species. The atmosphere is composed of various gases for instance nitrogen, oxygen, carbon dioxide (gesiukaa). In nutshell, all of these form the Natural Environment created by God for the benefits of human and the wildlife. Under any circumstances, I’m compelled to thank and honour the Almighty God for the wonderful creations completed in six days including the human-beings created in his image. The Almighty God became amused with the creations and placed the first humans; Adam and Hawa to manage and control all the resources above and below the ground; in water and the oceans and in the atmosphere

In 2017, Pope Francisco of Assisi issued a “Pastoral Letter” known as “LAUDATO SI”. Through this invaluable initiative, the world was cautioned about the importance of natural environment for our wellbeing. The Pope clearly indicated that “natural environment is like the sister who devotes her life for others and like a good mother stretching her arms to safeguard us”. Despite that, the state of environment worldwide, as of today, is not good as it used to be more than fifty years ago. Although the general tendency is to associate population explosion with environmental destruction; experiences indicate that it is mainly due to unsustainable utilization of natural resources including also poor farming and animal husbandry practices (not living friendly with the environment). It is true, globally population is increasing (now about 7 billion people) however, and this is used as kind of camouflage to continue the habits of destroying the natural environmental base in the context of fighting poverty and hunger. Nevertheless, in doing so without bothering to seriously care about the natural environment, we generate weaknesses in the ecological systems thereby endangering our livelihoods and survival of other flora and fauna species.

Pope Francisco’s “LAUDATO SI” of 2017 reminded our mandatory duty to protect the environment and emphasized that land in our natural mother producing beautiful and flowering plants for the good of humans and other creatures. This demonstrated that if the natural environment shall be sustained, all the time, we shall continue breathing fresh oxygen, and getting food, water and required rains during the rainy seasons. However, based on the realities in Tanzania, “natural environment” has been seriously destroyed leading to high rates of forest and land degradations hence the environment, instead of caring us, is observed to fight back. The environmental situation is also not appealing in the developed nations due to frequent occurrences of natural disasters. This is an indication that the state of environment in developed countries has been worsening (due to global-warming associated with climate change) since the industrial revolution era.

While Tanzania is affected by impacts of climate change like droughts or floods including rainfall during January and February 2020, leaves a lot to be desired. Again heavy rains during these months are very unusual particularly for the two rainy seasons (bimodal) regions. On the same footing developed countries continue facing disasters like unpredictable tsunamis and tornadoes including disastrous fires like that erupted in Australia during January 2020 destroyed forests and caused loss to properties.

Significant increase in industrial activities for the purposes of establishing strong economic base has led to ecological disorders due to increased quantities of CO2 into the atmosphere leading to increasing global warming and climate change. Since 1992 heads of states and governments, who are members of the United Nations Framework Convention on Climate Changes (UNFCCC), together with global experts on climate change; have been meeting annually looking for amicable solutions against impacts of global warming and climate change yet it is 27 years in a row but no solution reached. Again, Pope Francisco through “LAUDATO SI” warmed the world that “nothing in the world that does not have links to human-beings”. Based on that view, global warning and climate change are challenges faced by all countries despite the state of development reached. The world is faced with increasing environmental pollution and critical destruction of natural forests and woodlands. Hence it is the responsibility of all countries making sure that global warming and impacts of climate change are highly contained for the good of all.

All countries should endeavour to control economic activities that are likely to accelerate global warning in excess of 2o Celsius annually. Together we should struggle to make our economies more responsible by using climate friendly sources of energy like hydropower, wind or geothermal. Additionally, human activities that endanger environmental stability like farming up-to edges of river banks and establishing habitats in floods’ vulnerable areas including wildlife corridors should be avoided. Furthermore, environmental education is emphasized in schools and colleges as well as to the society and general public as a whole. What is needed is sustainable farming practices and livestock husbandry while maintaining the environment green (conservation farming and livestock keeping practices).


In principle the need is to have positive changes in perceptions and behaviours to environment, which is there to safeguard our wellbeing.

Dr Felician Kilahama is the Chairman, Wildlife Conservation Society of Tanzania (WCST)


Graduating is much more than just attaining good grades

Thursday February 20 2020


By Jumanne Mpimbi and Junior Shavuna

Graduating with good grades is one thing but the ability to apply what you have learnt on the job is totally different. In the increasingly competitive job market, hiring managers typically look for graduates who can offer more than just good grades. Employers seek both technical and soft skills.

Technical skills are learned abilities acquired and enhanced through practice, repetition and learning. These are typically quantifiable skills that can be easily defined and evaluated.

For example, for an IT professional, literacy in computer programming would be referred to as a technical skill while for an accountant this would be generating financial reports.

Soft skills, on the other hand, are interpersonal skills which include communication, listening, teamwork, networking and time management among others.

They are personal attributes that affect your interaction and relationships with others and also enable you to engage in meaningful ways with colleagues and clients. In order to succeed in your career, the modern workplace requires more than just technical skills. Hence why it is important to possess soft skills.

For graduates, these soft skills will enhance employability which paves way to achieving your dream career. It is important for graduates to note that hiring managers not only seek candidates who can perform their jobs well, but also those who are able to fit into the company culture and interact well with various stakeholders. The advantage is that these soft skills are not specific to work environments. They are applicable in social settings too.


Students who are yet to graduate should also take note. It would be advantageous to start developing soft skills on campus through experiential learning, case studies, proactive participation in group discussions and extra-curricular activities. To be ready for the job market and have that extra edge over other qualified professionals, students ought to use a combination of these methods to develop different soft skills that would then be applied at work and also in any social setting. Increasingly, we are seeing curriculums being tailored to provide a holistic learning environment in order for students to develop their soft skills and maximise their potential.

Students should also take advantage of opportunities presented by employers who collaborate with tertiary institutions to offer soft skills training in order to add value to their technical training.

Students need to seek and analyse the feedback employers share with these institutions about changing industry trends and suitability of various soft skills in addressing these evolving market needs. Additionally, they should strive to understand how these employers integrate competency assessments within their recruitment frameworks.

Once students have equipped themselves with soft skills in addition to the technical skills acquired at university or college level, the next challenge is presenting their capabilities as dynamic and versatile professionals to prospective employers. There are several ways to do this. List and describe these skills in the cover letter and resume. Identify and describe them in a clear and confident manner during interviews. Make sure the skills actually relate to you and ensure that your references are aware of them and are willing to verify that you possess these skills in their letters of support. Be bold, be you.

The important thing to note is that soft skills and technical skills go hand in hand. They are important complementary tools used by firms to evaluate the performance of their employees. As they say ‘technical skills will give you an interview but soft skills will give you the job’. The onus is on you.

Jumanne Mpimbi ( is an accounting consultant and Junior Shavuna ( is a finance officer at KPMG in Tanzania The views and opinions are those of the authors and do not necessarily represent the views and opinion of KPMG.


Impact of market psychology on stock exchange performance

Thursday February 20 2020


By Moremi Marwa

Have you come across cases where prices of shares decline and then rises with no underlying fundamentals supporting that movement – and you wonder, what was it all about? We recently have observed a similar situation in one of the listed companies. And today, our discussion will focus on how market psychology and market cycles affect market prices, read on:

Market Psychology

Market psychology is the overall sentiment or feeling that the market experiences at any time. Greed, fear, expectations, circumstances, etc are all factors that contribute to the market’s overall investing mentality or sentiment.

While financial theory describes situations in which all the players in the market behave rationally, such theory, however, do not account for the emotional aspect of the market that can sometimes lead to unexpected outcomes that can’t be predicted by simply looking at the fundamentals of the economy, or the underlying performance of the company, etc.

However, analysts normally use trends, patterns and other indicators to assess the market’s current psychological state in order to predict whether the market is heading in an upward or downward direction.

Market sentiment


Market sentiment refers to the psychology of market participants, individually and collectively.

It represents the general prevailing attitude of investors as to the anticipated price development in a market.

This attitude is the accumulation of a variety of fundamental and technical factors, including price history, economic reports, financial performance reports, seasonal factors, as well as national and world events.

Market sentiment is perhaps the most challenging category because as it is, it matters critically, but we are only beginning to understand it. Market sentiment is often subjective, biased, and obstinate.

For example, you can make a solid judgment about a share’s future growth prospects, and the future may even confirm your projections, but in the meantime the market may simply decide to dwell on a single piece of news that keeps the share artificially high or low. And you can sometimes wait a long time in the hope that other investors will notice the fundamentals.

Market sentiment is monitored with a variety of technical and statistical methods such as the number of advancing versus declining stocks and new highs versus new lows comparisons.

A large share of overall movement of an individual stock has been attributed to market sentiment.

In the last decade, investors are also known to measure market sentiment through the use of news analytics, which include sentiment analysis on textual stories about companies and sectors.

Emotions and perceptions

Share prices can change because of perceptions, greed, hype, momentum, fear, rumors, etc. Sometimes the stock market can be seen as the sum of the emotions of its human entrepreneurs, subject to the arbitrary human whims and flights of fancy.

According to a Wall Street saying, only two influences are at work on the stock market – “fear and greed”. Most of the time they are in equilibrium, with greed only staying dominant long enough to produce the long-term trend depicted on a share market graph.

The 1999 - 2000 technology boom was a good example of greed taking over. The Internet, and all that is connected with it, became the spice of the moment and the technology shares skyrocketed in price. But when it all got too much later in the year 2000 — some of us may recall what happened in the Nasdaq Stock Exchange.

Bullish & Bearish

This is the other side of hype and momentum of the market. If investors expect upward price movement in the stock market, the sentiment is said to be bullish.

On the contrary, if the market sentiment is bearish, most investors expect downward price movement. When a bear market sets in, fear takes share prices downward, to a long, bitter winter of discontent. During a recession nobody wants to buy shares. Only in hindsight do people realize that it was the best time to buy shares. This is what “value investors” the like of Warren Buffet operates and recommend. Himself being a student of Benjamin Graham, also commonly known as the father of value investing.


“To everything there is a season, and a time to everything, and a season for every activity under heaven”, says the author of the Book of Ecclesiastes in the Bible. He could have been talking about the stock market as well!

Most stock markets show a distinct seasonal pattern. It has a regular seasonal correction at the end of the financial year.

This is normally followed by a major seasonal rally i.e. beginning of the tax year, periodical financial reporting seasons, etc.

The stock market is more likely to rise and fall in certain months than in others, i.e. portfolio or fund managers tend to withdraw from the markets at the end of each tax year to balance their holdings. They start spending again at the beginning of the subsequent tax year. Next week we would look on the impact of market cycles…


Things to know before acquiring a franchise

Thursday December 12 2019

Wambugu Wa Gichohi

Wambugu Wa Gichohi 

In a previous article we emphasized the need for prospective franchisees to check that they are getting into the right franchise relationship by asking some key questions that we discussed. Additional to these are the following.

First, ask if the franchisor has carried out a competitor analysis to identify who the business’s main competitors are, their respective strengths and weaknesses and what the franchisor proposes the franchisee to do to outsmart them within the assigned franchise territory.

A good franchisor will invest in detailed market research prior to inviting franchisees, and fighting competition should be a collaborative effort-relying only on prospective franchisees to do so will not deliver optimum results.

Second, ask about the proximity of competition and other franchisees in your trading area and what the franchisor will do to protect you from them. Some brands are known to operate open franchise territories, which turns teammates into competitors, for instance, Subway.

Their decline from over 42,000 outlets at peak to about 40,000 currently and a fall in revenues by more than 25 percent between 2014 and 2018 was largely caused by external competition offering better products and by allowing Subway outlets to cannibalize each other by opening within close proximity of each other (

Third, ask what the franchisor sees as the biggest threat to the business. The franchise-specific strategic plan of the franchisor should have, as a bare minimum, a detailed SWOT analyzing these four dynamics with ways to turn threats into opportunities.


Not having done so exposes the prospective franchisee to threats that could translate into losses, e.g. if a proposed law would change the way business is done and the franchisor hasn’t taken that into account.

Forth, ask how the franchisor deals with franchisee grievances. The last thing you want is to invest your time and money into a franchise only to later realize that your voice doesn’t count.

While the franchisor often arranges the franchise system in a manner mostly to protect franchisor interests, cognizance that the franchisee is an investor in the business will inform setting up an acceptable system through which to channel grievances, for instance, the Franchisee Advisory Council.

Fifth, ask if the franchise system has a Franchise Advisory Council and if so, whether you can meet the chair person.

As discussed in other articles, this is a communication forum with franchisees, controls distribution of discounts accruing from bulk purchases by the franchise system and oversees the franchise network’s marketing budget to which all franchisees and the franchisor contribute.

In some cases, it is constituted in a way to resolve minor franchisor-franchisee disputes before escalating to other dispute resolution mechanisms laid out in the franchise agreement.

A franchisor without it most likely, unfairly, keeps all discounts and uses the marketing fees contributed by franchisees in whatever manner they wish.

Sixth, ask how marketing is handled and whether you will be expected to handle local marketing separately.

Ideally, national marketing is handled by the franchisor to support the brand for them and the franchisees, using the marketing fund to which all franchisees and the franchisor contribute.

Marketing within individual franchise territories is handled by the franchisees from own budgets, but all marketing materials should be supplied by and marketing messages cleared by the franchisor to ensure uniformity.

Seventh, ask about the terms of exit. When it is no longer tenable to continue as a franchisee for whatever reason, it is important the disengagement is fair and equitable to both parties.

Remember the franchisor owns the brand on which the franchisee operates while in most cases the franchisee owns the physical infrastructure of the franchised outlet.

The ideal exit is where the franchisee gets a chance to sell the outlet to another investor who meets all the requirements of the franchisee profile developed by the franchisor. Where such isn’t possible within a timeframe given by the franchisor, the franchisee should yield to the franchisor to take over the outlet either on pre-agreed buy-out terms or to run it as a company-owned outlet as both parties look for a mutually acceptable buyer.

The ideal exit is where the franchisee gets a chance to sell the outlet to another investor who meets all the requirements of the franchisee profile developed by the franchisor.

The writer is a franchise consultant working to promote adoption of franchising in Africa.

He works with country apex private sector bodies to increase the uptake of franchising by helping indigenous African brands to franchise.

We turn around struggling indigenous franchise brands to franchise cross-border.

We settle international franchise brands into Africa to build a well-balanced franchise sector.

We help African governments create franchise-friendly business environments for quicker African economic integration under AfCFTA.


TZ’s share in conference tourism growing rapidly

Thursday November 28 2019


Arusha. Tanzania is emerging as an African leader in the rapidly-growing meetings, conferences and events industry.

Tanzania’s growth within the business tourism sector has been driven by growing international recognition of a tourism industry second to none in terms of diversity and quality of experiences.

As younger business travellers and entrepreneurs increasingly look to combine business and leisure travel, Tanzania is moving to ensure the connectivity and infrastructure is in place to welcome growing numbers of African business travellers. Arusha International Conference Centre (AICC) CEO Elishilia Kaaya revealed: “We are steadily preparing the country for the big time when it comes to business tourism.

“Arusha is home to some of the most acclaimed natural sites in the world such as the Serengeti, Mount Kilimanjaro, and Ngorongoro crater. Our centre is closely associated with these amazing sites because of our proximity to them. We want people to think about these wonders of the world whenever the AICC is mentioned.”

The development of the industry in Tanzania will see continued investment in infrastructure and facilities with new conference centres developing close to the country’s main tourist and business hubs such as Zanzibar and Dar es Salaam.

Mr Kaaya explained “Our vision is to create a road map for the development of this sector in the country. “As far as I am concerned, this sector still has a lot to accomplish to reach its full potential. Arusha ICC runs a similar facility in Dar es Salaam known as the Julius Nyerere International Convention Centre (JNICC). That centre just hosted the thirty-ninth Sadc heads of state summit.


We are looking to develop many more such centres all over the country to boost business tourism and conferences in the future. We are currently scouting areas like Zanzibar, Dodoma, Mwanza, and also the southern part of Tanzania that is rich in natural endowments. As the only public organisation in the country dealing with business tourism and conferences, we feel it is high time other parts of the country also partake in the share of this huge cake.”

World’s best safari experiences

Right on the doorstep of the Arusha International Conference Centre (AICC), you will find some of the best safari experiences on the planet.

The northern part of Tanzania hosts Ngorongoro Crater and Serengeti National Park. At Serengeti, you can watch the yearly wildebeest migration.

If you have more time and want to go even more off the beaten track, the southern part of the country is home to Ruaha and Selous Game Reserves. Arusha National Park is little more than half an hour drive from AICC, while the Serengeti can be accessed 335km from Arusha.

Lake Manyara, with scenery Ernest Hemingway called “the loveliest I had seen in Africa”, is a 90-minute drive from Arusha, and offers an excellent and easy to navigate game drive.

Perhaps the most spectacular experience within easy reach of Arusha and its conference facilities, however, is the Ngorongoro Crater.

The crater is a microcosm of the African savannah, and the Ngorongoro Conservation Area is home to animals ranging from leopard, cheetah, elephant and hyena to warthog, buffalo and impala. The crater was formed when a large volcano erupted and collapsed in on itself, and is a unique experience for any visitor to Tanzania.

Mt Kilimanjaro, the Roof of Africa

As the highest mountain in Africa, Mt Kilimanjaro requires little introduction. The region surrounding the mountain is increasingly popular for meetings and events, with a host of five-star lodges and hotels equally adept in meeting the needs of hikers or visitors attending meetings in the shadow of the spectacular mountain.

It is not only Africa’s tallest peak but also the world’s tallest free-standing mountain. The summit, Uhuru Point, is 5,895 metres above sea level.

Island life

Completing the incredible diversity of Tanzanian tourism options are spectacular Indian Ocean islands such as Zanzibar, Pemba and Mafia islands.

Historically, Zanzibar was a base for traders from the African Lakes region, India, and the Arabian peninsula. It grew to become a significant trading hub and has a unique culture from mainland Tanzania as a result.

The ancient city of Stone Town on Zanzibar is a Unesco world heritage site and is a spectacular maze of history to enjoy getting lost in. The island is already home to a series of five-star hotels in beautiful and unique settings ready to accommodate meetings and events of any size.

Investment in best facilities

Tanzania will continue to invest in its conference facilities and business tourism infrastructure. Key to the strategy is ensuring the facilities are within reach of the national jewels of the tourism industry, allowing visitors to combine business and leisure visits.

Arusha International Conference Centre is currently working on developing and enhancing conference facilities across the country. Arusha ICC itself is a spectacular custom-built facility, with the capacity to host up to 10,000 delegates. The JNICC is expected to continue hosting international conferences. With a proven track record in hosting events in both Arusha and Dar es Salaam, Tanzania is firmly established as a hub in East Africa for meetings and events industry.

Connectivity and infrastructure

The return of national carrier Air Tanzania in 2016 offering direct flights to Uganda, Zambia, Zimbabwe and South Africa was a significant boost to the tourism industry. (APO)

The national carrier’s routes are complemented by an extensive network of airlines including Precision Air, Ethiopian Airlines and South African Airways serving the country.

Investment continues into the road infrastructure which connects the business and tourism hubs of the country.

Mr Kaaya cites infrastructure investment as a key driver of growth for the industry, stating “The Tanzanian market is growing fast because we are improving our infrastructure. Someone who last visited our country ten years ago will be pleasantly surprised at the developments we have made.” (APO)


Planning the marketing communications - 2

Thursday November 28 2019

Wambugu Wa Gichohi

Wambugu Wa Gichohi 

Various communication techniques are available to communicate with the franchisor’s target market. Using them selectively rather than synergistically, can lead to failure in the effectiveness of a communications programme. We continue exploring these communication techniques.

Fifth is public relations. This can be used to build trust, goodwill, interest and ultimately relationship with the franchise system’s target market, and also to counteract unfavourable rumours, stories, events or incidents.

Favourable publicity at franchisee level generates excellent results, e.g. at product, corporate or community events. It can also include controlled publicity in the various media.

Sixth is sponsorship where financial and/or other support is provided in return for the sponsor’s name, product or brand/logo being used in connection with the sponsored event/activity.

Golf-tournaments, CSR events backed by balloons, banners, printed bags are methods that franchisees can use at local level-but such materials are always produced by the franchisor to ensure consistency.

Seventh is word of mouth-an endorsement of the product (or lack of it) by the consumer. It is communication freely given through word-of-mouth conversation. It is based on experience relating to the product or service and where the receiver regards the communicator as impartial.


Very important, however, is that the primary communicator of the message is usually the customer. When an existing franchisee talks positively to their networks about the franchise system, the franchisor is likely to attract more better franchisees.

Likewise, when a final customer who has used the goods/services at an outlet talks positively in their networks about them, more foot fall is generated -and vice versa.

Eighth is the new media, commonly known as social media. New media opportunities developed in recent years are the worldwide web, e-mail and social media sites such as Facebook, Instagram, YouTube, WhatsApp, Telegram, LinkedIn, Twitter and mobile technology (SMS and mobile apps).

These can be used separately or in combination with the more conventional marketing communications media by both the franchisor and the franchisee.

Marketing through the internet is done over the world-wide web (website). A franchisor seeking new franchisees or to market products to the final consumer could sum up product attributes and post on their own website or prepare a targeted advertisement which internet marketing companies such as Google then broadcast to their millions of customers on the internet in the chosen locality.

Emails targeted to certain audiences are also prepared and given to social marketing companies which send them to a pre-generated email list. Marketing on social media sites is done by either posting on an own wall or paying certain individuals and other social media influencers who have massive following to post on their walls. Tracking mechanisms such as coupons can easily be incorporated.

Targeting the communication is key. Each of these social media vehicles has, over time, curved its own space. LinkedIn, for example, is considered more business-like tool while Facebook is a social tool.

Twitter has grown mainly to be a critique tool while YouTube is a repository of messages one wishes to communicate and keep online.

Though SMS messaging has been overtaken by messaging apps like WhatsApp and Telegram, it is still useful for mass market products whose target audience has no smart phone.

A targeted message is prepared and sent to thousands of mobile phone numbers through the bulk SMS service provided by most mobile phone operators. Messaging apps enable formation of groups that can be reached instantly with targeted messages.

Most attractively, these social media tools allow uploading of product visuals, making it easier for the target audience to “feel” the product.

This, combined with the fact that most are accessed through a smart mobile phone, enables targeting the communication 100 per cent to the audience, to which it is delivered instantly.

Finally, when planning the marketing communications mix it is important for the franchisor to ensure that the media combinations are carefully planned to limit potential waste.

Cognizance must therefore be taken of the local marketing communication efforts undertaken by the franchisees.

The writer is a franchise consultant working to promote adoption of franchising in Africa. He works with country apex private sector bodies to increase the uptake of franchising by helping indigenous African brands to franchise.

We turn around struggling indigenous franchise brands to franchise cross-border. We settle international franchise brands into Africa to build a well-balanced franchise sector. We help African governments create franchise-friendly business environments for quicker African economic integration under AfCFTA.


Planning the marketing communications - 1

Thursday November 21 2019

Wambugu Wa Gichohi

Wambugu Wa Gichohi 

In order to attract and retain the right franchisees, the franchisor needs to develop a marketing strategy through which to inform the target market that the franchise system is ready for deployment- for them to consider investing their hard-earned cash and time in it.

It is important to note that marketing as discussed below is a function carried out by the franchisor-to attract new franchisees-and jointly by the franchisor and franchisees-to attract the final consumer to the franchised and company-owned outlets.

Various communication techniques are available to communicate with the franchisor’s target market. Koekemoer (2005:2) warns however, that using these techniques selectively rather than synergistically, can lead to failure in the effectiveness of a communications programme. In his view, effective communications can be improved by taking an integrated marketing communications approach.

According to Koekemoer (2005:3) integrated marketing communications is “……a process for managing the customer relationships that drive brand value. More specifically, it is a cross functional process for creating and nourishing profitable relationships with customers and other stakeholders by strategically controlling or influencing all messages sent to these groups….”

It is important to note that when it comes to marketing the product to the final consumer, the franchisor handles national while the franchisor handles local marketing.

In attracting new franchisees and marketing the product to the final customer, there are different primary tools of marketing communications that can be used in different combinations and with different degrees of intensity in order to achieve specific communication goals.


The choice will depend on the target of the communication. These tools are as follows:

First is advertising: A distinctive quality of advertising is that it reaches a large and often a mass audience and is generally used to create demand for products and/or services. Advertising messages are delivered in a variety of formats using many different media which include newspapers, magazines, television, cinema, radio, outdoor and the internet including social media.

Advertising targeted to prospective franchisees to invest in the franchise network and to the end user of the franchise network products should therefore be placed in appropriate media where the respective prospects are likely to see and act accordingly.

Second is sales promotion: This communications medium consists of short-term incentives to encourage the purchase or sales of a product or service. Sales promotions offer customers additional value in order to induce an immediate sale.

In attracting new franchisees, a franchisor could use discounts by offering the franchise at a discounted rate.

In attracting the final consumer to the franchised outlets, both the franchisor and the franchisee could use coupons, premiums, discounts and promotions to attract and retain new sales.

Third is personal selling: A franchisor seeking to recruit franchisees could use personal selling by engaging prospects on a one-on-one basis and explaining the benefits of the franchise system. In attracting the final consumer, this function is primarily performed by the franchisee and their staff.

It is a powerful form of communication because the message can be presented in a personal way.

In the franchise system this is a group activity in that all franchisees across the franchise network are expected to present the same message.

Forth is direct marketing: In this method, marketing offers and communications are tailored to the needs of narrowly-defined market segment or even individual buyers or users.

This method consists of direct contact being made with prospects and customers. Communication is often on a one-to-one and interactive basis.

A franchisor seeking prospective franchisees could arrange a presentation at a leading business association. During the presentation, the franchisor takes the audience through the franchise offer and takes details of interested prospects for follow up.

In attracting the final customer, franchisees could use other direct marketing techniques such as direct mail, telemarketing, inserts in print media and catalogues.

Even the electronic media can be used to generate a direct response by both the franchisor seeking new franchisees and the franchisees seeking to attract the final consumer.

The writer is a franchise consultant working to promote adoption of franchising in Africa. He works with country apex private sector bodies to increase the uptake of franchising by helping indigenous African brands to franchise.

We turn around struggling indigenous franchise brands to franchise cross-border.

We settle international franchise brands into Africa to build a well-balanced franchise sector.

We help African governments create franchise-friendly business environments for quicker African economic integration under AfCFTA.


Enhancing liquidity for further growth, development

Thursday November 21 2019

Deputy Finance Minister Ashatu Kijaji rings the

Deputy Finance Minister Ashatu Kijaji rings the bell during the listing of a company at the Dar es Salaam Stock Exchange in the city. PHOTO|FILE 

The DSE recently achieved the Frontier Market Status by FTSE Russell, it could meet criteria for an Emerging Market Status, if liquidity constraints are addressed.

According to FTSE the DSE liquidity is not sufficient to support sizeable global investments.

Also, the recent OMFIF-Absa Africa Financial Markets Index 2019 Report paints a similar picture with regard to liquidity in our market.

The report indicates that much as we have made significant progress in many aspects, but the one key impediments towards a better ranking is the limited liquidity. So, what can be done to enhance liquidity? These are some of the proposals:

Promoting a diversified domestic investor base

Currently, over 80 per cent of liquidity on the DSE listed securities in the equity segment emanates from foreign investors, while local investors (both retail and institutions) makes up about 20 per cent.


This tells us that promoting domestic investors base, including both retail investors and a range of institutional investors with different investment horizons and perspectives, is central to the development of our domestic equity markets.

Of course, the right investor mix ultimately depends on the goals being pursued by market participants.

In our case, policymakers, regulators, and exchange operators could focus both on increasing long-term domestic savings and enabling the investment of a portion of those savings into DSE.

This can be approached by focusing on both retail and institutional investors in the context our market-specific considerations.

Learning from others, one could observe that some markets have a large retail investor base from the outset of the stock market inception, while others have grown this investor segment over time.

In such cases as market matures, regulators and market operators continue to promote the development and diversification of the domestic investor base, while also opening the market to (greater) international investment.

Our experience in this has been different, in the sense that we overly rely on international investors somehow too early in our growth trajectory, since we liberalized our market further in 2014 by removing foreign investors’ limits, domestic investors ownership and liquidity participation declined significantly.

The case for increasing participation of local institutional investors

In many early-stage markets like where we are, the size of the institutional investor base could be relatively small and often highly concentrated, with relatively low levels of assets under management and limited participation in equity markets.

The reasons for this vary, but for us these include: (i) implementation of mandatory and defined benefit pension schemes that restrict the development of a competitive private pension fund sector; (ii) preference to invest in low-risk financial instruments, thereby limiting pensions participation in equity markets; (iii) restrictions on who manage pension fund assets, thereby limiting the emergence of a competitive asset/fund management industry; and (iv) other restrictions, including restrictions of pension fund investment in listed equity markets, in preference for assets classes.

Many frontier and emerging market jurisdictions have sought to address these by transforming pensions schemes by reducing the size of defined benefit pension schemes, the removal or relaxation of legislative and regulatory barriers to investment in equity markets, and the use of tax incentives to encourage both the allocation of funds to institutional investors and the funnelling of investments into equity markets.

Providing an enabling environment for retail investors

Growing the retail investor base requires investor education, the presence of a suitable investor protection scheme, and the existence of mechanisms to facilitate access to markets.

Tax incentives also encourage increased retail savings and investment. Providing investor education and improving financial literacy are essential to increase retail participation.

They are particularly important where levels of financial literacy are low. A number of markets have introduced successful education programs.

For example, some emerging markets have dedicated education arm. For us, we have not made significant progress in this space.

In addition to providing retail investors with the tools to understand the risks of investment, markets also ensure the existence of relevant investor protection schemes, in our case we have the fidelity fund.

This fund provides investors with compensation in case they suffer financial loss due to misconduct by intermediaries (available as a last resort where the bank/broker is not able to ‘make good’ the client).

Finally, the use of tax incentives can act as a simple and effective method to attract retail flows. In our case, investors are exempted from paying taxes on capital gains from stock trading.

Investors are also partly exempted from dividends taxes, where withholding tax on dividends is half compared to investors in non-listed companies.

Finally, Retail investors can also funnel their investment through indirect market access, for example, mutual funds/unit trust or ETFs, and many Asian markets have enhanced liquidity by using this approach.


How self-promotion can transform your career positively

Thursday November 21 2019

Peter Sabuni

Peter Sabuni 

Without question, self-promotion can make you successful. And if you’re already successful, it can make your personal brand huge. You don’t get to be a success without knowing a lot of people and having a lot of people know you.

If you want to be stuck in a little, gray cubicle for your entire career, never rising above lower middle management, keep your head down and don’t attract attention.

But if you want to make a name for yourself, establish a good reputation, finally get that corner office, or even own your own successful business, you need to promote yourself.

To do that, you need to be passionate about two things: the work you do and yourself. If you’re not passionate about what you do, find the thing you’re passionate about. If you’re not passionate about yourself, seek professional help.

The person you should love the most, admire the most, and treasure the most is you. And when you have that confidence in yourself, others see it, too. When you share that confidence with other people, they feel confident about you as well.

So don’t sit in your cubicle any longer. Figure out what you want to do, make it happen, and then start telling people about it. Let them know that you are good at what you do. Let them come to you for answers and information.


If you ask 100 people what personal branding is, you’ll get 100 different answers.

But the answer we’re going with is that it is an emotional response to the image or name of a particular company, product, or person.

Think of some corporate brands you have positive or negative feelings toward. These brands are popular because they have created a lot of positive feelings in their fans, even if they also engender negative feelings in their detractors.

Similarly, people have emotional responses when they see you or meet you for the first time. These responses can be feelings of joy, pleasure, love, dread, fear, or anger.

When they hear your name again, they will either have new experiences and emotions, or they will relive the old ones. The kinds of emotional responses they have depend on you.

So a brand is an emotional response to the image or name of a particular company, product, or person.

Branding yourself means that you create the right kind of emotional response you want people to have when they hear your name, see you online, or meet you in real life.

The “right” kind doesn’t mean being someone you’re not. It’s your personality, your voice, your interests, your habits—everything about you that you want people to know.

This means that the information you show to other people, the things you say, and the photos you post should all fit within that theme of your personal brand.

If you’re a stand-up comic, your brand is “funny.” You want people to see that you actually are funny, which means posting some of your jokes and posting links to videos of your routine and even to your blog.

If you’re a freelance graphic designer, your brand is “creative.” You want people to know you have creative skills, so you’ll show people samples of your work through an online portfolio, possibly a blog.

If you’re a cost reduction analyst, your brand is “saving companies’ money.” You can demonstrate your knowledge by answering questions on LinkedIn, writing useful articles on your blog, and giving talks to Chambers of Commerce.

Peter Sabuni is a Marketing & Brand Consultant


What it takes to pay your taxes - 5

Thursday November 21 2019

Shabu Maurus ,

Shabu Maurus ,  

The self-assessment system (SAS) used by most modern tax administration systems (including Tanzania), inherently, tends to push operational costs of the tax system more to the taxpayers. But under certain conditions, SAS can optimize tax collections while minimizing administration costs and taxpayer compliance costs.

We discoursed the conditions in the preceding two articles. In case, you missed the first two articles in this series, tax compliance costs (TCCs) are the expenses that a taxpayer incurs to fully accomplish his tax obligations but excluding the tax liability itself.

The TCCs may include salaries paid to employees handling tax affairs and the costs of purchasing tax-related equipment (e.g. EFD machine).

How much do you incur as a cost to handle a tax audit by the tax authority (say TRA)? Or worse, handling tax disputes from the objection stage with the tax authority to the court of appeal? The value of your time, the legal fees you may pay, and the cost of deposits or provisions.

These are the money and time that, in the absence of tax laws, would have gone into your core business, right? In this and the next article, we explore some of the business aspects that may influence TCCs.

Legal status: Are you an individual in business or a company? The choice of vehicle for doing business may affect your compliance costs. Not least your TCCs.


The income tax law, for example, requires entities (non-individuals) to have their books of accounts prepared on accrual basis (as opposed to cash basis that individuals may opt to use).

Now, the accrual basis of accounting may not be as palatable to non-accountants (think of small private companies which cannot afford to hire an accountant).

Also, unlike individuals (sole proprietorships), entities cannot account for their income tax on a presumptive basis even when their annual turnover is below 100 million shillings.

Nature of your business: What you sell (goods and services) and how you sell them (distribution model) may affect tax compliance costs. If you the goods and services that you supply are VAT exempt, there is no requirement to register for VAT.

Most businesses engaged in agriculture may fall under this category.

A telecom supplying mobile money services using agents (“wakala”) on commission basis attracts withholding tax obligations as the commissions paid to the agents are subject to a 10 per cent withholding tax. The choice of your distribution model may also affect the geographical spread of your business which may, in turn, affect your compliance footprint (see comments on location).

Location of your business: Your presence (physical or even mere digital) may trigger tax compliance obligations in the jurisdiction or area.

Cross-border supply of goods and services is a good example. Businesses operating in multiple tax jurisdictions are likely to have higher TCCs. Imagine a business (say a bank or a telecom company) operating in both Mainland Tanzania and Zanzibar.

VAT and excise tax are not among the Union matters and hence each side of the Union has its own set of tax laws.

A bank or telecom operating in both sides of the Union is likely to incur more TCCs than those operating on one side of the Union only.

Also, think of local government taxes such as a service levy. Businesses operating across Tanzania (again some banks and the telecoms) must comply with service levy obligations in almost each local government authority (LGAs) (district, town, municipal or city council) in which they have some presence (e.g. towers, ATMs, branches, etc.).

When there are over 100 LGAs in which a service levy must be paid and some documents manually filed, the TCC for service levy may be extremely punitive.


Automated learning in African SMEs context

Thursday November 21 2019

Innocent Swai

Innocent Swai 

Ours is a displacement proposition. Most African households spend a lot of money on crappy energy sources like kerosene, diesel, petrol and batteries.

Have you ever seen how the process of turning such data from our roads infrastructure is becoming dangerous? Ever seen how the challenge of turning such data into tangible value? Call it a negative automated learning as it keeps repeating itself especially when heavy energy tankers are self-driven into accidents; and people end up experimenting deadly fire drills.

More on negative automated learning from a different context shortly.

Is it possible to enable our SMEs to design ways to stop wasteful expenditure in our society hence serving humanity from destroying itself when trying to serve itself on ‘free energy’ whenever, a tanker gets an accident? The fuel: whether it’s diesel, petrol or kerosene with the help of battery sparks has become another deadly love affair.

How can our people switch to cheaper and better options? How can positive automated learning be useful in converting solar energy into electrical power? It’s time to turn solar energy which is sustainable into self-serving, self-new energy to be found on roof-tops with solar panels.

Anyway, it turns out that solar energy is a secret freer of cash, which people can re-apply to buy fridges or pay school fees. The latter invention narrative is better than waiting for self-distraction oil tanker accidents in our roads infrastructure.


On the other end, automated learning, or machine learning is a branch of artificial intelligence (AI) that allows machines to learn by self-teach without any programming for specific purpose.

It’s an essential skill to make systems that are not only smart, but autonomous, and capable of identifying patterns in the data to convert them into predictions.

Imagine, what could happen if machine learning is fed wrong data? Say, it captures what is happening when others are busy stealing fuel and batteries endangering themselves into death? Can’t we provide better opportunities to youngsters? Great leaders provide opportunities to young people so that they can use their energies productively.

Today, emerging technologies like machine learning are providing endless opportunities. We have different applications, such as the Netflix and Spotify which are recommending what to do in your free time. Also, Gmail’s smart responses in our inboxes and the like.

Ultimately, automated learning is not just becoming a master at pattern recognition, but also is able to convert data samples into a computer programme that extracts interferences from new data sets it has not been previously trained for, provided everything is secure in our environment.

Africa will only leapfrog the rest of the world by using its own home-grown appropriate technologies.

Most Africans like their digital gadgets. Long time ago, they used to spend a portion of their earnings on (non) essentials.

One of such first luxuries they liked most was home brew. Unfortunately, almost everything has changed to commercial foreign alcohol brands. Why is Uganda Waragi, a local gin made in a landlocked nation still thriving? May be technology adoption is key. Why not?

The primary movement of the industrial revolution was facilitated by manual labour. Slaves were made redundant by automation; thereafter humanity managed to achieve greater productivity, quality of life, and the society was transformed as a result.


How to choose the best mortgage lender

Thursday November 21 2019

Kelvin Mkwawa

Kelvin Mkwawa 

Buying a house for most people is the biggest financial purchase of their life. When you get a mortgage loan, you are in for a long haul because mortgage loan repayment periods are usually between 10 to 30 years.

A mortgage loan is the most important financial and complicated decision one can ever make and that is why it is imperative to consider your financial situation and all available options.

There are more choices for mortgage lenders now in Tanzania than ever before.

According to Tanzania Mortgage Market Update of December 31, 2018, the total mortgage portfolio balances amongst banks stood at Sh421.10 billion as at the end of the year of 2018 representing 4,996 properties compared to Sh344.84 billion outstanding balance for financing 4,174 properties that were reported for the previous year.

This signifies an annual increase of 22.04 per cent in Mortgage Finance market while the number of mortgages increased by 18.76 per cent from 2017.

One of the most complicated decisions one will likely make concerning home mortgage will be which lender to choose. Here are steps in choosing the best mortgage lender:


Evaluation of Financial Situation: Before considering the mortgage loan options, one should evaluate his/her financial needs and situation.

After the self-evaluation, he/she will have an idea which terms fit this/her unique needs.

For example, how much can you afford? And for how long? Can you afford the monthly repayment of the mortgage loan which depends on the value of the house you want to buy? In addition, do you have the down payment needed which is based on the price of the house? One will only be able to answer all those questions after the evaluation of his/her current financial situation.

Consider Loan Options: After the evaluation of the current financial situation, look at what kind of mortgage loan is best from the pool of mortgage lenders.

There are three main factors to consider when choosing the mortgage loan options: the tenure, interest rate, and interest rate type.

i. Typically, the mortgage loan tenure varies between 10-30 years; this indicates how long the borrower has to pay off the loan.

The longer the tenure the lower the monthly repayment amount but the higher the interest charges over the life of the loan.

ii. The average interest rate in the market charged on mortgages by available lenders is between 15-24 per cent. The housing market is very competitive so through comprehensive research, the borrower can get the best and affordable interest rate.

iii. There are two basic interest rate types for mortgage loans; fixed and adjustable(variable) interest rate.

Adjustable rates are normally lower but carry higher risks: they fluctuate due to their dependence on the macroeconomic environment.

The fluctuation of interest rate will cause the mortgage monthly repayments to fluctuate as well.

On the other hand, fixed interest rates remain the same regardless of any external or internal factors and the mortgage payments will not change over the course period of your loan.

In our market, most of the interest rates offered by mortgage lenders are variable rates which means more risk to borrowers. I believe it is now timefor mortgage lenders to start offering fixed interest rates to mitigate the interest risk and encourage morelending.

Understand Loan Costs and Fees: The next and last step is to start shopping for lenders. The best way to start shopping for mortgage lenders is through friends and families and ask for their recommendations.

Through them, one will be able to get the details (fees, interest rates, tenures, percentage of down payments) of mortgage loans from different banks and start physically visit those banks for comparison. The total cost of the mortgage loan depends on this exercise so take all the time necessary to shop around.

Choosing a mortgage loan is a complicated decision and choosing the best one is not easy. Following the steps shared here can help you towards making a decision of choosing the best mortgage lender per your unique housing needs.


E. Africa rides high in 2019 Africa visa openness survey

Thursday November 14 2019


By Mnaku Mbani @mnaku28

Dar es Salaam. As African countries continue to open their borders to allow free movement of people across the continent, the East African region emerged top in visa openness among all regions.

The 2019 Visa openness report, published by the African Development Bank (AfDB) and the African Union (AU), indicates that reciprocity of visa openness in East Africa is 60 per cent, behind West Africa with 100 per cent while Arab Maghreb Union becomes third.

The report also shows that the EAC regional visa openness scores between 2016 and 2019 recorded an improvement of 0.588 higher than all regions average increase of 0.459.

West Africa was the second top mover with 0.583, followed by Southern Africa with 0.439.

However, two regions including North Africa and Central Africa experienced the decrease of their scores during the period by 0.258 and 0.166 respectively.

“Progress is being made but much still needs to be done. To integrate Africa, we should bring down all the walls! The free movement of people, and especially labour mobility, are crucial for promoting investments,” commented Dr Akinwumi Adesina, President of African Development Bank Group.


“An African continent without travel and document restrictions should be an Africa we can be proud of,” commented Mr Kwesi Quartey, the Deputy Chairperson, African Union Commission.“It is clear that the aspiration for an integrated Africa, with free movement of people, as set out in Agenda 2063, remains unchanged.”

He added; “Here, an African business traveller can meet contacts in another capital at a moment’s notice; an African family can visit eco-tourism sites in a neighbouring country with ease; and African students can move freely across national borders to gain the labour market skills they need.”

The Africa Visa Openness Index measures how open African countries are when it comes to visas by looking at what they ask of citizens from other countries in Africa when they travel.

The index report shows that EAC has nine countries out of top 20 most visa open, followed by West Africa with seven countries and southern Africa with only three countries.

East African countries featured in the report are Comoros, Djibouti, Ethiopia, Kenya, Rwanda, Seychelles, Somalia, Tanzania and Uganda.

The report also shows that Rwanda is top most visa open country in EA after scoring 0.864 points in 2019, followed by Uganda with 0.853, Kenya with 0.823, Ethiopia with 0.777 and Tanzania is fifth with 0.679.

Rwanda is leading because it has joined the Single African Air Transport market, signed the protocol of free movement of persons, has ratified the continental free trade area and is offering eVisa.

During the period, Tanzania improved its score by 0.039 points following the adoption of e-visa and signing of a protocol on free movement of persons (PFMP), and positioned at 19th in the continent.

The PFMP, which also covers the right of residence and establishment on the continent, had been signed by 32 countries as of mid-July 2019.

However, the report shows that non ratification of the African Continental Free Trade Areas and failure to join the single African Air Transport Market remained the major challenge for Tanzania to be most visa open.

The AfCFTA will be one of the largest free trade areas in the world, covering 1.2 billion people, growing to 2.5 billion by 2050.

Empowering Africa’s population to travel will be vital to facilitate both trade flows and capital investment, according to the report.

Currently, peoples from 16 African countries do not need visas to come to Tanzania, while citizens of 25 countries obtain their visas on arrival.

The report also indicates that only peoples from 12 countries need visas to come to Tanzania, according to the International Air Transport Association (IATA)’s report for June-July 2019.

The Vice-President, AfDB’s regional development, integration and business delivery, Dr. Khaled Sherif comments that in 2019, a record 47 countries improved or maintained their visa openness scores, which on average are rising year-on-year.

“Today, African travellers no longer need a visa to travel to a quarter of other African countries, whereas visa-free travel was only possible to a fifth of the continent in 2016,” he said.

To streamline the travellers’ experience, 21 countries Africa-wide, including Tanzania, now provide eVisa platforms, boosting transparency and accessibility.

The report indicates that the number of countries offering eVisas increased by 31 per cent in 2019, with 21 countries now hosting an online platform from 16 in 2018.

Two-thirds of countries that offer eVisas also made the most progress on visa openness since 2016, with the majority having recently introduced the system.

Moving forward, the index report says, championing greater visa openness across Africa will help capitalize on the gains to be realized from the launch of the Free Trade Area, the Single African Air Transport Market and the Protocol on the Free Movement of Persons.

According to the report, Seychelles and Benin are being ranked the most visa-open countries in Africa with 1.000 scores each, as they allow all Africans an entrance without visas.

Senegal is ranked third with 0.883 scores, as citizens from 22 countries do not need a visa while peoples from 31 countries obtain visa on arrival with no visa requirements.

Rwanda is the fourth in Africa with 0.864 scores, as residents of 17 countries do not need visas when entering the country while those from 36 countries are obtaining their visa on arrival.


Marketing the franchise system – 1

Thursday November 14 2019

Wambugu Wa Gichohi

Wambugu Wa Gichohi 

In past articles we traced the franchise development process to the point where a prospective franchisor develops, documents and tests their operations systems and generates the franchise package and other legal documentation required to protect the franchise system. Up to that point, the franchisor has a product that can be used to attract franchisees to help grow the franchise network through their investment of time and money.

This product is the tried, tested and successful system, as opposed to earlier where the product was the individual goods or services offered in the company-owned outlets.

The franchise system as a whole now becomes the focus of the franchisor, while the franchisees will focus on the individual goods or services sold in their franchised outlets.

In order to attract and retain the right franchisees, the franchisor now needs to develop a marketing strategy as part of the franchisee recruitment strategy, which should therefore aim to develop a process through which to attract the right franchisees, develop confidence about the brand to the target, create awareness about the franchise opportunity and give as much information about the franchise opportunity as would attract the right franchisees.

We will also use the discussion ahead to show how the overall franchise system will be marketed to prospective customers of goods or services carried by the franchise system in order to drive foot fall into the franchised outlets.

Product or service distribution is probably the most important part of any marketing strategy.


Franchising represents an organized form of interdependent network of marketers (franchisees) that make the franchise product or service available to the target market at a location where they can visit an outlet or buy a product or service when needed.

The franchise model is used because of its greater efficiency and to perform the marketing channel functions of product, price and distribution more effectively.

Marketing from the franchisors point of view is not a transactional concept (i.e. pricing, distribution etc.) but a relationship concept such as the importance of customer/client trust, satisfaction, customer retention which would then ultimately lead to profitability.

The franchisor’s marketing should therefore be focused on creating demand not just for the franchise to prospective franchisees but also product or service demand amongst the system’s target audience. As such the franchisor’s activities must be associated with the management of successful relational exchange in understanding and communicating with the prospective franchisees and the ultimate customer.

In the franchise relationship the franchisee has control over the distribution of the product or service, price and location. The franchisor’s responsibility is to direct and manage the marketing communications effort.

Brand is an important and the most valuable of a franchise system’s assets. In fact, it is generally acknowledged that franchising is all about branding.

Brands are the products and/or services deliberately created and developed by the franchisor that have added-value that are recognized and meaningful to the franchise systems customers.

The marketing perspective of brand value is established in the images, beliefs and core association’s customers have about a particular brand, and the degree of loyalty or retention a brand is able to sustain.

Baines et al (2008:374) highlights the importance of branding as a method that “helps customers to differentiate between the various offerings in a market.

It enables them to make associations with certain attributes for feelings with a particular brand. If this differentiation can be achieved and sustained then a brand is considered to have a competitive advantage”.

Successful brands also, according to Baines et al (2008:374) create “strong, positive and lasting impressions through their communications and associated psychological feelings and emotions, not just their functionality through use”.

It is the responsibility of the franchisor to build a brand that means something to the customer.

The franchisor must therefore have a strategy in place that will help franchisees establish the same brand equity in their local market. That strategy is based on an effective and sustainable marketing communications program.

The writer is a franchise consultant working to promote adoption of franchising in Africa.

He works with country apex private sector bodies to increase the uptake of franchising by helping indigenous African brands to franchise.

We turn around struggling indigenous franchise brands to franchise cross-border.

We settle international franchise brands into Africa to build a well-balanced franchise sector.

We help African governments create franchise-friendly business environments for quicker African economic integration under AfCFTA.


Impact of struggling cotton sub-sector

Thursday November 14 2019


By Halili Letea @hletea

Shinyanga. Cotton processors in Tanzania are facing a pile up of cotton yarn, as the crop is countering the export market crisis, due to the ongoing trade war between China and the US.

As China is the main market for Tanzania’s cotton yarn exports, cotton ginners are finding it difficult to sell their goods due to slowing demands.

Tanzania Company Limited (JOC), one of the cotton processing factories based in Shinyanga, says it worries about the future of cotton sector, due to market collapses.

“Despite buying an average of 5,000 tonnes of cotton lint each year (full capacity demand 8,000-10,000 tonnes, at least 24,000 tonnes of raw cotton), the company has not made it this season,” said JOC’s assistant managing director, Mr Marco Kyaruzi.

He said the company is currently having a stock of at least 2,000 tonnes of cotton yarns un-exported.

“During the previous years, we could only have less than 500 tonnes of yarns at our warehouse compared to this amount we have now,” he said.


He then said they have bought at least 4,000 tonnes of cotton lint from two ginners only compared to at least five ginners during the previous years.

The processing based in Kizumbi ward, Shinyanga Municipal Council, is also facing several challenges and the biggest one is the trade war between the United States and China which cut down the volume of garments exported to the US and hence from Tanzania to China.

Mr Kyaruzi said since its establishment they have employed at least 147 people on contracts.

JOC managing director Mr Meng Liu said the firm has been operating well since its inception in October 2014, despite several challenges including this year’s huge textile marketing crisis.

“We are currently facing a huge market challenge in the global market, but we are still struggling to operate our factory” he said, adding that this made them cut down demand for cotton lint from ginners and also the amount of the yarns they export.

He mentioned other challenges as transportation challenges due to the introduction of a new policy by the Tanzania Revenue Authority (TRA) which needs cargo to be transported by the truck with only C40 documents.

To get its required input and help farmers, JOC launched training sessions to them so that they could improve their productivity.

For his part, Shinyanga Municipal Executive Director Geofrey Mwangulubi said JOC is a very renowned company for supporting people around them and is cooperating well with the municipality.

“The company plays a role in social responsibility like organising seminars for farmers and constructing classrooms among others,” he said.

Tanzania Cotton Board (TCB) director general Marco Mtunga has confirmed the exports market challenge, adding that the government was taking remedial measures.

“This has been a tough season because of the volatility of prices in the world market,” he said in an interview with The Citizen.

According to Mr Mtunga, over 400,000 tonnes of cotton were harvested this season.

He reiterated that the trade war between the US and China has caused the crop’s price in the world market to drop to 61 US cents (Sh1,400) per pound from 77 cents (Sh1,800).

Mr Mtunga added that this was also being reflected in the domestic market, but the government, through the Bank of Tanzania (BoT), has established a mechanism to mitigate effects of the price volatility.

Mr Boaz Ogola, general manager of Alliance Ginneries Limited in Simiyu Region, said ginners and other buyers were unable to buy cotton from farmers.


Managing and developing talent in skills based industries – 2

Thursday November 14 2019

By Amour Muro and Paul Mbithi

A management style that does not resonate with an employee can quickly usher the beginning of the end for a person’s employment at a company.

A ruthless and demanding manager, for example, who uses fear to push his team to their limits for the sake of “winning” without caring about their development is unlikely to retain the best people, especially among the Generation Y or Millennials. This autocratic style may garner short term results but is not sustainable for the long-term success of the company.

Conversely, a patient and understanding manager who relies on understanding her team’s strengths to reach their targets is more likely to have a lower turnover rate and achieve long term success.

Understanding an employee’s strength or talent is a two-way street which demands for self-awareness from the employee and facilitation of the ideal environment by an organization to inspire this journey. “Who do I want to be?” and “Where do I see myself going?” are good starting points for anyone looking to better understand themselves. Quiet moments to reflect and to hear the answers from your inner-voice forms one part of the process.

However, this must be complimented with external sources of knowledge such as reading or listening to ideas developed by others who have also gone through a similar route.

An organization can accelerate this process by exposing their employees to an enabling environment that acts as a catalyst for self-discovery.


Well thought out trainings, e-learning platforms, applying tried and true personality test models, are just a few of the ways to do this.

Exposure does not always mean a business-class ticket to Australia for a convention although it can also be that!

A decision to take action is needed once strengths have been identified.

This is the hard part as it often requires courage to overcome the fear that causes inertia.

A conscious effort is required at an individual level to step out of the appealing comfort zones we all establish and to take deliberate action towards fulfilling what has been uncovered through greater self-awareness.

This can take the form of speaking up at opportunities that allow you to voice the ideas that pave the way towards who you want to be.

This also means networking with a wider audience that can resonate with where you see yourself going. By identifying and engaging with people who have “been there, done that” you will not have to re-invent the wheel which leaves room for exponential growth in both talents and skills.

Now imagine a whole team of individuals moving forward with that sense of purpose.

Not only will it create an infinite circle of learning for each employee but the organization will also benefit by harvesting the talent and skills that it has played a role in cultivating.

“When the student is ready, the teacher will appear.” There is an immeasurable amount of wisdom and possibility found in the teachers or situations we encounter.

But it remains our choice whether or not we will be ready when those opportunities come knocking.

Percy Spencer would not have discovered the microwave if he hadn’t decided to be an engineer and developed his skills along that path. He would have just been another guy with a melted chocolate in his pocket.

Similarly thousands of organizations today have missed out on valuable chances to excel beyond their perceived limitations by undermining their students.

The key takeaway for organizations is to facilitate the ideal environment for employees to complete their journey of self-awareness which will uncover hidden talents or skills and work to develop them.

Thereafter when a teacher appears there may be a student waiting in your hallways ready to notice chocolate melting!

“The writers are involved in Talent Development activities within Tanzania and in the East Africa Region. They may be reached on email address”


Does your brand offer variety?

Thursday November 14 2019

Innocent Swai

Innocent Swai 

Variety is not just the spice of life but an essential element of what it means to be human being.

The thriving brands know two key things; the struggling brands do not. It’s about design and varieties.

At first glance, there may not be an obvious connection between design and varieties of different products at brick-and-mortar grocery store and e-commerce brands. For example: Amazon’s true value to consumers is not low cost (WalMart) and free shipping but it’s the great design on the variety of products made available to consumers, both directly and from third-party sellers.

Does humanity really needs all that product varieties? In reality, people have have their own sensitivities based on a multitude of factors, so having product varieties in life is key to human’s happiness. Have you ever suffered from a minor shoe irritation you are wearing? Do you know how it feels? If you do, how many choices of shoes do you want? A simple response, say one size fits all is that “ enough multitude of pairs of shoes so that we can pick the one that doesn’t hurt.”

It’s unfortunate that, the market does not always provide splendid product varieties as a wasteful option.

Product varieties are necessary to accommodate our human differences. It has been said one size fits all doesn’t work.


Since immemorial, the needs for different varieties to meet humanity challenges has been always a vicious cycle being rediscovered every time there’s value in the discovery process.

A good example, happened in WWII; the American Army found out that there were no average pilots when it was designjng a standard cockpit in their fight jets to decrease pilot-error.

Despite going extra mile to measure thousands of pilots, looking what they thought could be an average pilot.

At the end of the day, the conclusion was that, seats and control mechanisms had to be made adjustable to the variation in pilots’ unique body features e.g. their leg and arm sizes.

They learned something the hard way. But shoe designers had learned time and again that one size fits all doesn’t add up.

It has been said that what humanity wants is what humanity needs to thrive. We can argue about a big difference between need and want.

That a single pair of shoes which makes someone comfortable and adjustable seats and control mechanisms for aircraft safety are different.

But they help in providing a comfortable movement from one point to another.

If humans were built on assembly lines, we could be standardized to need only one type of aeroplane, one type of a pair shoes, and one type of car, and everything could be provided in one type of outlet. But to our brilliance, we are not so standardized, even in a mass consumerist society.

Variety is not just the spice of life but an essential element of what it means to be a human being.

And so it is that there’s a truly awful and dehumanizing hubris when politicians think, they can speak better for the ordinary people than they can speak for themselves about their needs or wants; whatever you call it.

The most thriving brands in the world, the likes of Apple, Amazon, Microsoft and Facebook have made their fortunes on offering the great variety of goods that their consumers want.

However, what the American politicians (Warren’s and Sanders’s) want: breaking down such brands, they are mistakenly targeting humanity indirectly for their decisions to choose best services that they feel meet their personal needs and wants. Go figure.


What does it take to pay taxes? – 4

Thursday November 14 2019

Shabu Maurus ,

Shabu Maurus ,  

This article is fourth in the series focused on the costs of taxation. Last week, we briefly discussed two main approaches to tax assessment.

The approach used to assess tax determines the interplay of costs and risks between taxpayers (compliance costs) and tax authority (administrative costs).

We saw that under the administrative assessment system it is the tax authority’s responsibility to examine taxpayers declared information, compute the amount of tax owed and notify the taxpayers of the tax liability. On the other hand, the self-assessment system (SAS) requires taxpayers to compute tax liability, submit their tax returns (or similar declarations) and proceed to make pay the self-assessed amount to tax.

Many countries, including Tanzania, have adopted self-assessment principles in tax administration. However, SAS shifts the burden of proof of the tax liability from the tax authority to the taxpayers. According to Andrew Okello (of IMF), for SAS to be able to optimise tax collections while minimising administration costs and taxpayer compliance costs, some seven conditions need to be met.

Are the tax laws clear and simple to taxpayers? For taxpayers to easily determine their tax liabilities, they must foremost understand the tax laws and how the laws apply to them and their businesses. Unclear and complex tax laws tend to increase compliance costs. Simple tax laws facilitate self-assessment while minimizing taxpayer effort and compliance costs.

Does the tax authority provide good service to taxpayers? SAS requires that the tax authority adopt a service-oriented attitude toward taxpayers.


To ensure that taxpayers have the relevant information and support they need to meet their tax obligations. Information regarding their obligations, applicable taxes, dates and place of payment.

Also, easy access to tax forms, enquiry centres, web sites, public tax seminars and similar channels. Taxpayers also need information regarding changes in tax laws.

Are there simple filing and tax payment procedures? Overly complicated tax forms or returns makes tax compliance difficult, costly and increases the chance of errors.

Filing of returns and payment of taxes should be through means convenient to taxpayers. And what is the frequency of filing the tax returns or making tax payment?

Is tax enforcement effective and timely? SAS requires a mechanism for prompt detection of taxpayers failing to file tax returns or pay the tax due.

This is critical to improving tax compliance. Tax collection enforcement must be prompt and expeditious.

The older the debt, the more difficult it is to collect (or pay).

Are the tax audits risk-based? SAS relies heavily on a strong audit program focused on higher-risk taxpayers.

Taxpayers must know that if they fail to comply with the tax laws, they face a reasonable risk of being detected.

The tax authority must have enough resources to audit a reasonable percentage of taxpayers each year. Delayed audits (like those done five or more years later!) increases the chance of tax disputes as well as compliance costs.

Are interest and penalties applied fairly? Interest and penalties are important under SAS. Neither too lenient nor unrealistically harsh. Must be applied consistently across taxes and taxpayers.

Interest and penalties, if applied fairly, serve to remind taxpayers of the need to take reasonable care in managing their tax obligations.

How long it takes to resolve tax disputes? SAS requires a fair and timely tax dispute resolution processes.

Taxpayers must have access to an appeal process to protect their rights.

Mr Maurus is a Partner with Auditax International


Diabetes cure: is Big Pharma hiding something?

Thursday November 14 2019


Today, November 14th, is ‘World Diabetes Day,’ jointly launched in 1991 by WHO and the International Diabetes Federation in response to the rapid rise of diabetes globally.

IDF is an umbrella organization of over 230 diabetes associations in 170 countries and territories, representing the interests of the growing number of diabetics.

Diabetes Day is commemorated with campaigns to spread awareness on ‘diabetes mellitus,’ a non-communicable disease (NCD) from metabolic disorders characterized by high blood sugar levels over a prolonged period.

In type-1 diabetes, the body doesn’t make insulin: a pancreatic hormone which enables body cells to use sugar to produce energy...

In type-2 diabetes, the body doesn’t make or use insulin well enough.

Diabetes symptoms include high blood sugar/glucose levels, frequent urination, increased thirst and hunger.


Briefly put: diabetes mellitus impairs the body’s ability to produce or respond to insulin (‘insulin rejection’), resulting in abnormal metabolism of carbohydrates and elevated levels of glucose in the blood.

If left uncontrolled, diabetes causes many complications, including cardiovascular diseases, neuropathy (nerve damage), nephropathy (kidney damage) and retinopathy (eye damage), hearing impairment, Alzheimer’s disease, feet damage and adverse skin conditions...

Diabetes is one of the several non-communicable diseases currently plaguing the world. Other non-communicable diseases (NCDs) are, for example: Parkinson’s disease, autoimmune diseases, strokes, most heart diseases and cancers, chronic kidney diseases, osteoarthritis, osteoporosis, Alzheimer’s disease, cataracts...

NCDs are not transmissible directly from one person to another. For example, tuberculosis is NOT an NCD; it is an infectious malady caused by Mycobacterium tuberculosis...

Today, NCDs are the leading cause of death globally. In 2012, they caused 68 per cent of all deaths (38 million), up from 60 per cent in year-2000. About one-half of the dead were under 70 years old.

Tanzania is facing an increase in NCD-related deaths, with the deaths having doubled in numbers from 1990 to 2015.

As reported by The Citizen on May 20 this year, NCDs accounted for about 33 per cent of all deaths in Tanzania in 2016. This is according to the findings of research by ‘HelpAge International’ and ‘Global Health Watch,’ reported under the title ‘The Right to Health and Access to Universal Health Coverage for Older People.’ [Google for ‘Tanzania faces rise of non-communicable diseases’ by Mnaku Mbani; The

Citizen: May 20, 2019].

Currently, some 425 million people are living with diabetes mellitus on Planet Earth this side of Hades – mostly Type-2 diabetes, which is preventable through regular physical activity, a healthy and balanced

diet: healthy living generally...

Is all this ‘Shangri-La in the Lost Horizon?’ You can say that again...

Anyway, whether one likes it or not, diabetes is a matter for concern not only for individuals and families/households; it is also a matter for concern nationally and internationally. Hence the 2-year theme:

‘The Family and Diabetes,’ which held forth in 2018 and 2019.


But, is it true that there is no cure for diabetes? How much money would the big pharmaceutical companies (‘Big Pharma’) lose if and when a cure is found for the hydra-headed malady?

The global diabetes market was valued at $48,753.1 million in 2018 – and is projected to grow to $78,261.7 million by end-2026.


Market liquidity for further growth and development

Thursday November 14 2019

Moremi Marwa

Moremi Marwa 

Recently, the DSE achieved the Frontier Market Status by FTSE Russell.

Reading FTSE Russell’s qualification criteria one will notice that the DSE currently meets criteria for an Emerging Market Status, except for one key criteria, namely the liquidity of the market.

According to FTSE Russell the DSE liquidity is not sufficient to support sizeable global investments.

Furthermore, the recent OMFIF-Absa Africa Financial Markets Index 2019 Report painted the same picture with regard to our market. This report indicates we have made significant progress in many aspects to the extent that we were ranked number seven (7) from number fifteen (15) in 2018, out of the 20 benchmarked markets in Africa, but the one key impediments towards a better ranking is the lack of/limited liquidity in the market.

The reason provided is that we lack or have limited local investors capacity.

Whatever way one to look at it, liquidity seems to be the existing elephant in the room.


So, what is liquidity in the stock markets context?

Stock market liquidity can be broadly understood as the ability to facilitate large volumes of trade without causing excessive price movements, while still reflecting a steady and fair market price.

This concept of liquidity encompasses multiple dimensions, namely: (i) breadth of the market: i.e. the case where the cost of reversing a transaction position over a short period is minimal; breadth is usually identified (and measured) by the bid/ask spread (the tighter the spread, the better); (ii) the depth of the market: a deep market has large numbers of pending orders on both sides of the bid/ask spread.

This usually limits the influence of orders on price movements; (iii) the market resilience: this is speed at which stock prices return to stability levels after a shock; and (iv) immediacy of order execution: this is indicated by the speed at which trades can be conducted at a given cost.

Market operators, investors, regulators, and others use a range of metrics to assess liquidity.

These include bid-ask spreads, turnover, and turnover velocity (value traded relative to the overall market capitalization). For example, is we consider these past five years, annual turnover on the equity (shares) segment of the DSE has been Tsh. 475 billion while on the bonds segment it has been Tsh. 580 billion.

These figures are 5 percent and 6 percent of market capitalization for equity and bonds respectively. At any measure, these ratios are on the very low side.

That’s why improving market liquidity in our securities market seems to be the only way to go if we want to make any further progress.

It is important to note that liquidity in the stock exchange, like in other trading venues, is the fundamental enabler of the rapid and fair exchange of securities between stock market participants. Liquidity enables investors and issuers to meet their requirements in capital markets, be it an investment, financing, or hedging, as well as reducing investment costs and the cost of capital.

Liquidity has a lasting and positive impact on economies. As it were, stock exchanges, regulators, and other capital market participants needs to take action to grow liquidity, improve the efficiency of trading, and better service issuers and investors in their markets. The indirect benefits to our market economies could be significant.

So, why does liquidity matter?

The importance of market liquidity and its relationship to financial market development could better be understood by examining the impact it has on various market actors: (i) For investors -- more liquid markets are associated with lower costs of trading, an ability to move more easily in and out of the listed securities, lower price volatility, and improved price formation; (ii) Issuers -- are attracted to more liquid markets, as they reduce the cost of raising capital and produce more accurate share price valuations; (iii) Stock exchanges -- they value the increased attractiveness to issuers and investors, as this translates into greater use of the market, greater confidence, greater ability to attract new stakeholders, and greater ability to do business, which drives revenues both directly (through trading fees) and indirectly (through extending their product offering, for example); (iv) Economies/Countries -- as a whole benefit, with companies able to access capital at a reasonable cost, subsequently increasing investment in their business and driving increased employment and their overall contribution to the economy.

There are many ways in which the market can enhance its liquidity. However, the difficulty by market stakeholders, such as institutional investors, to work with exchanges towards the direction of enhancing liquidity is a major hindrance for the DSE.

The case for increasing participation of local institutional investors:

In many early-stage markets like where we are the DSE, the size of the institutional investor base is usually relatively small and often highly concentrated, with relatively low levels of assets under management and limited participation in equity markets. The reasons for this vary between markets, but for us these include: (i) implementation of mandatory and defined benefit pension schemes that restrict the development of a competitive private pension fund sector; (ii) preference to invest in low-risk financial instruments, thereby limiting pensions participation in equity markets; (iii) restrictions on who manage pension fund assets, thereby limiting the emergence of a competitive asset/fund management industry; and (iv) other restrictions, including restrictions of pension fund investment in listed equity markets, in preference for assets classes.

Many frontier and emerging market jurisdictions have sought to address these by transforming pensions schemes by reducing the size of defined benefit pension schemes, the removal or relaxation of legislative and regulatory barriers to investment in equity markets, and the use of tax incentives to encourage both the allocation of funds to institutional investors and the funneling of investments into equity markets.


Financial guarantees: the forgotten leg of intra-group financing?

Thursday November 14 2019

By Omari Nina

Raising loan funding at the start up phase of a business can be very challenging.

At times, where the borrower is part of a group, then financial institutions may make any loan funding contingent on a guarantee from a related party.

But whilst this might help unlock financing, it can create potential tax pitfalls.

What do we mean by a financial guarantee in this context? Well, in essence it is a legal promise made by a party (guarantor) to another party (bank/creditor) to cover a borrower’s debt in the case of the borrower defaulting on its obligations.

The lender obtains advantageous conditions, either lower interest rates, better terms and conditions or a higher credit limit i.e. simply “piggybacking” on the guarantee provided by the guarantor.

Whilst most professionals understand the need for setting an appropriate interest rate on an intra-group loan from both a financial and tax perspective, most of the times guarantee fees are not considered.


In addition, different considerations apply depending on whether a financial guarantee is explicit or implicit.

For an explicit guarantee, there is no doubt that the lender enjoys an economic benefit and should therefore be charged.

Economic benefits will be determined by several factors such as whether the lender was able to borrow at a lower interest rate or benefit from less stringent covenants, borrow at all, or more than it would on a stand alone basis.

This view was upheld in the famous Canada vs. General Electric Capital case heard in November 2010, and is supported by Base Erosion and Profit Shifting (BEPS) Action 8-10 (ensuring transfer pricing outcomes align with the value created).

Accordingly, where there is an explicit guarantee fee, tax authorities for both the guarantor and the lender will be interested to determine whether the guarantee fee charged is at arm’s length.

By contrast no charge should be made for implicit guarantees.

This position is set out in the Organisation for Economic Co-operation and Development (OECD) Guidelines (2017) which confirm that there should not be any charge for an implicit guarantee that an entity gets by simply being part of the group.

This position was also upheld in the Chevron Australia Holdings Pty Ltd case decided in 2017.

So if you establish that there is an explicit financial guarantee, the next step is to determine the arm’s length guarantee fee.

In the absence of internal comparables, the so called “yield approach” can be used to arrive at the maximum potential interest rate savings achieved by the borrowing entity because of the guarantee.

This approach calculates the spread between (i) interest rate that would have been payable by the borrower without the guarantee; and (ii) interest rate payable with the guarantee in place. The difference can then be used to test/ set up the guarantee fee charged by the related party guarantor.

Given the transfer pricing risks associated with financial guarantee arrangements, tax practitioners within organisations should (i) liaise with treasury and legal departments to review in detail loan offer letters from banks to check whether a guarantee has been used to determine the terms of the offer; (ii) consider the arm’s length nature of the financial guarantee; and (iii) in the event of an explicit guarantee, assess the tax implications, especially from a withholding and corporate income tax perspective.

The concern is to ensure alignment of treatment of a guarantee fee in the jurisdiction of the borrower and the guarantor; otherwise, the risk is that the fee is taxed in full on the guarantor, but without full deduction being given to the borrower for this cost - so potentially leading to double taxation.

Omari Nina is PwC Senior Associate - Tax Services. The views expressed do not necessarily represent those of PwC


Challenges of banking the poor

Thursday November 14 2019

Kelvin Mkwawa

Kelvin Mkwawa 

Many poor people in Tanzania feel alienated and neglected by the banking industry because most of the banking products and services are usually not tailored to their needs.

Research shows that only 17 per cent of the population in Tanzania have an official bank account which means over 80 per cent of the population in the country are outside the financial system. Complicated administrative processes, high costs, and insensitive bank staff are the main reasons why the majority of poor people do not have bank accounts.

Due to rapid growth in technology, the opportunity to increase the banked population has increased and it’s important for the government to play a major part in facilitating the process by looking closer at its policies to find out why they are not working and what more can be done.

Financial exclusion is bad for our economy as it can breed poverty traps and inequality, and delay the development of the country, hence it needs to be tackled with all the resources we have.

In this article, I will share some challenges of banking the poor which I hope the banks will take note of and work on them to ensure the poor population is not left behind.

• Technology Knowledge Gap – The growth of technology is fueling new financial products and services that will enable banks to reach the previously unbanked population.


While technology can help to reach the poor, we know that technology alone cannot help to solve the problem because of the illiteracy rate in the country.

The technology gap that exists in society can be reduced only by educating consumers about the new technology and the importance of banking products in their life, creating products, and developing engagement strategies that are better designed to meet the needs of the poor.

In addition, Government can play a big role by partnering with banks in financing the education programs that are aiming to educate the poor about the new “high-tech” products that serve their needs and improve their financial health.

• Lack of Collaboration among Stakeholders –Financial technology Companies known as Fintechs are in a unique position to identify customer challenges and needs of the market, and rapidly build solutions to address them because of the advanced technology that is now available.

Because of that, it will be a great idea for fintech companies to collaborate with banks to develop products for poor consumers. But it can be difficult to encourage collaboration in this current business environment.

Collaboration has its own challenges as stakeholders are usually struggling to find shared agenda, measure impacts and agree on sharing revenues.

These challenges can be solved by each stakeholder assessing its core strengths and seeking partners to outsource any functions that are not competent. Only through collaboration among the stakeholders of entire financial inclusion, can banks expand their reach to the more underserved population by combining available technology and government policies that prioritize and support these types of partnerships.

• Government Financial Inclusion Plan – According to the World Bank, only 50 countries globally have formal financial inclusions plans. Even with a plan, many are still struggling to support and maintain financial inclusion as a public priority policy and very few have data on the scope of the problem.

In Tanzania, we have a National Financial Inclusion Framework (NFIF2) 2018-2022 which builds on the first Framework (NFIF1), which was implemented over a period of three years from 2014 to 2016 but the results so far are not as expected.

Lack of coordination across Government agencies and poor private sector involvement is a major reason why the financial inclusion plan is far from reaching its goals.

As the largest stakeholder, the Government needs to do better in fostering the relationships among the stakeholders and create a better environment that promotes the offering of financial products to the poor.

To summarize, giving the poor access to financial services is accepted wisdom.

Kelvin Mkwawa is a Seasoned Banker

Email address:


Linda Riwa’s rise up the ladder in Vodacom Tanzania

Thursday November 7 2019

Ms Linda Riwa, the Vodacom Commercial Business

Ms Linda Riwa, the Vodacom Commercial Business Unit Director. 

By The Citizen Reporter @TheCitizenTZ

Dar es Salaam. Getting hold of Ms Linda Riwa, the Vodacom Commercial Business Unit Director for this interview was not at all easy.

Her schedule kept changing and clashing with the writer’s as she shuttled in and out of her Vodacom Tanzania office with pep unseen in an expectant mother (she is expecting her first child).

That notwithstanding, she managed to spare a few minutes for the interview because as it were, she was winding up for her maternity leave.

A Commercial Business Unit Director is one of the main driving forces behind a thriving company.

He or she is willing to make difficult decisions to drive the strategies and effectiveness of the unit – be it what service to launch, when and how to launch it, continuous market analysis, understanding customer needs as well as finding best ways to address them, forecasting and a myriad of other roles that in turn make teams more effective in delivering Vodacom’s commercial objectives.

It therefore goes without saying that leadership skills and a broad knowledge base entailing the company and the industry at large are requisite ingredients to ensure overall success of a business unit and subsequently, the company as a whole.


Other Business Units at Vodacom are M-Commerce and the Enterprise Business Unit.

Ms Riwa is a young woman who has risen through the ranks to become Vodacom’s first woman Commercial Business Unit Director.

A vivacious young woman exuding confidence, good humour and indisputable capabilities on the job, she says that burning ambition and exposure in the telecom industry have been the hallmark of her success.

There is no doubt that we are currently at the peak of innovation in the telecoms industry as companies strive for excellence and differentiation. What occupies Linda’s time is leading the team through this journey to give birth to life transforming products and services powered by Vodacom’s technologies, wide range coverage and accessibility across the Country.

Ultimately contributing to transforming lives of Tanzanians through the use of mobile technologies.

Linda’s many feats did not come on a silver platter. She had to orient herself towards the position by taking advantage of opportunities as they unfolded. A five years stint in the telecom sector in and out of Tanzania whetted her appetite for further grounding in the telecom sector.

She had a burning ambition to achieve her goals even though what she did at the time was not exactly what she trained for through her university degree. Of course, when one leaves university, they have their ideal jobs cut out for them in their minds but just as the saying goes- when life gives you lemons, make lemonade - Linda grabbed what she saw as an opportunity before her and started off her career as a telecoms professional in marketing and she has never looked back.

“Armed with a bachelor’s and a master’s degrees in Economics from the University of Dar es Salaam, I reckoned that I would find myself in research. This was deemed swanky at the time. However, when one is looking for their first job, they cannot afford to be choosy. You are driven by a strong desire to just get started – I therefore, too started out at a telecom company.”

She was so ambitious that even when a job was mundane and simplistic, she went further and tried to decipher a deeper meaning and heighten the impact of her involvement in a roll. According to her, she would always go the extra mile.

“I consider myself very ambitious and aggressive and love working on complex things. This saw me work with figures and charts from early on. At the beginning of my career, I was not so sure of the trajectory my career would take having found myself in telecoms and not economic research somewhere else. However, because I enjoyed a good challenge, even if the tasks seemed rather mundane and commonplace, I would go an extra mile to make it interesting to ensure that the end products met or even exceeded expectations,” she added.

Weaving her way upwards

“Following a certain restructuring exercise at my former employer’s, I got an opportunity to decide what I where I wanted to take my career. Pricing was a new concept then and many people sort of shunned upon it. I took lead on the new possibilities and responsibilities and I can only say my efforts were rewarding in the end” Linda recalled an experience that truly propelled her up the corporate ladder at the beginning of her journey where within a year she had rotated into four different roles.

In her quest for exposure to other markets, she requested to be given an opportunity to explore. “I was transferred to the African Regional Operations Headquarters overseeing a project in six African countries,I was stationed in Rwanda which gave me a lot of exposure and challenges that spurred my growth”.

She later came back to Tanzania to take on a bigger responsibility and at that time, she was determined to work for the leading market player in Tanzania that is Vodacom.

“All these culminated to acquisition of wide range of knowledge in a far as CBU aspect of telecom industry.

This meant I was ready to take on responsibilities in Tanzania. I understood the Tanzanian market relative to other markets. Getting the feel of being a leader and in a position to influence the market was top in my mind. I crossed over to Vodacom to experience its market dynamics that are different from where I started,” she said.

Rising to the top of the game

Joining Vodacom presented new challenges, nothing she couldn’t handle. As a woman she attests that there are challenges but she is grateful for her employer who is able to accommodate them.

“Starting a family is no doubt a challenge. I am grateful that Vodacom is a company that greatly addressed my concerns through its women friendly policies. By virtue of the company having a large number of women in leadership positions means that women have the confidence to aspire to reach to the top. The company is an equal opportunity employer that maintains positive environment that nurtures supportive of women. At Vodacom, you will find a good number of women working in all departments alongside men. The female-male ratio is 40-60”

Asked about the misconception that has bred gender imbalance in institutions despite deliberate efforts to encourage gender inclusivity, she noted that there are positive changes that are beginning to recognize women and reward them for their input at work.

“In the past, a good majority had the notion that women are incompetent. They were doubtful that women could achieve unless perhaps bribed their way to the top. It does not have to be this way. Hard work, commitment and aggressiveness are key for any woman to rise,” she said.

She advises the young and aspiring professionals especially women to espouse tenets of hard work and commitment.

“Always be ready for the opportunity that may present itself. Apart from seeking to deliver the best, be daring believing in yourself that you can take on responsibilities and don’t shy away from being assertive and focused. These are traits that one must always espouse,” she said.


How to succeed in developing a strong personal brand

Thursday November 7 2019

Peter Sabuni

Peter Sabuni 

Each person has a brand but the strength of them differs from person to person.

Some people have managed very well to develop and maintain a strong and interesting brand. Other succeeds to strengthen them, but unable to maintain them strong (one example of this are people from reality shows). Some persons are not even aware of the fact that they have a personal brand, but still they seem to do everything right to develop and maintain it.

The question comes, what is the determinant factor(s) of who is going to succeed with developing a strong personal brand and who is not?

A personal brand on the other hand is something that every person has. It is not something that you are, but something that you have.

A personal brand is those values that a person stands for and communicates to the surroundings.

Everything that a person does will contribute to the picture that the surrounding has of that person.


A strong brand, both corporate and personal, needs to be clearly defined and the people around it should be able to quickly grasp what it stands for.

A strong personal brand is well-known and it has good values connected to it.

It belongs to people that are known among more people than just their friends. You do not have to be a ‘celebrity’ to have a strong brand, you can have a strong brand at a company or in a school.

There are three key components that determine the strength of a personal brand. A strong brand must be distinctive, relevant and consistent.

Distinctive personal brand is when you believe in something and act on those beliefs. Your brand is separate from the crowd when the brand stands for something.

As the beliefs are not always shared by others, it is important to stand for and hold on to the beliefs.

Your values are your beliefs and principles by which you live your life after. The values distinguish you from the crowd and people observe your actions and make judgments after them.

A personal brand grows strong when meeting the needs of others, without sacrificing the beliefs and values that the brand stands for.

A relevant brand stands for something that is relevant for other people. What you believe in and stands for is important for them.

The more relevant a brand is for someone, the stronger the brand becomes to them.

A relevant brand is a process that is built by determine other people’s needs and interests and then connect those needs with your own abilities and personal strengths.

A consistent brand is to repeat the same thing over and over again. People believe in relationships that are based on the consistency of behaviors that they observe and experience.

People around you know what to expect from you since you have been doing the same thing over and over again.

Every time that you behave in the same way that the people around you expect you to do, your brand becomes stronger to them. The trust grows in the relationship. If you behave in a rollercoaster way with inconsistency, this can easily destroy the trust that people have for you and your brand.

To be consistent demands courage since it is important to show your true values.

To be able to develop a strong personal brand, it is important to make sure that the brand resonate and is distinctive - that it is relevant for those people around you who you want to develop strong relationships with.

The shape of the brand is the ability to make what you do relevant, distinctive and consistent to people around you.

To base your personal brand on inconsistency and ever-shifting values is the “wrong way” to develop a personal brand.

Peter Sabuni is the Marketing & Brand Consultant. he can be contacted through Phone +255 689 616 035, Email. IG @peter_sabuni


The importance of credit risk management

Thursday November 7 2019

Kelvin Mkwawa

Kelvin Mkwawa 

Credit risk refers to the probability of loss due to a borrower’s failure to make repayments of any type of credit, and credit risk management is the practice of mitigating the probability of loan loss due to borrower’s failure to make loan payments at any given time.

The importance of credit risk management for banks is tremendous. For the last two years or so, the banking industry has been facing Non-performance loans (NPLs) problem due to weak credit risk management processes and lack of effective controls in place.

As a result, it put the credit risk management into the Bank of Tanzania (BOT) spotlight and they began to demand more transparency from the banks and want to know that banks have a thorough knowledge of their customers and their associated credit risks.

Loans make up the biggest risk for any bank and because of that, the banking industry has been focusing more attention than ever on credit management which highlights its importance to the banks.

The credit risk management is one of the core processes for banks hence the ability to manage its process is essential for their success.

Banks are constantly faced with risks all the time; risks are always associated with banking activities and taking risks is very common in banking. To ensure their healthy financial status, banks must balance their risks daily by having a formal credit risk management practice in place.


In today’s article, I will discuss the importance of credit risk management in banks.

Credit risk management practices differ from bank to bank based on the type and complexity of the credit activities taken by the banks.

Some of the best practices in credit risk management are the consolidation of customer’s data, active portfolio management, centralized decision-making process, and efficient tools for risk exposures.

Even though the credit risk management practices are different from banks to banks, there are four pillars the banks should rest on: a suitable credit risk environment, appropriate credit administration and monitoring processes, sufficient credit risk controls, and clear credit criteria of the bank’s target.

Managing credit risks is the main focus of any banking operations these days as fraudsters and unethical customers have sophisticated methods to deceive the banks. Because of this, the effective management of credit risk has become a critical component and the banks need to monitor, control, and measure its credit risk practices more often to ensure their long term success.

Mitigating risks is one of the components of managing risks and there are three main strategies banks can consider: eliminate/avoid risk completely, transfer risk to third parties, and actively managing risk.

There are so many benefits to banks for having proper credit risk management, including, lowering the capital that is locked with the debtors hence increasing the ability to manage cash flow more efficient, reducing the possibility of getting into bad debts, improved bottom line (profits), enhanced customer management processes, and increased accountability within the institution.

In conclusion, we have seen that credit management is an important aspect of financial management for all banks.

The proper management of credit will enhance the bank’s profitability, hence increasing the wealth of the shareholder and ensure that the bank generates sufficient positive credit from its operations to continually fund the deposit and lending activities.

Therefore, the efficient management of credit will solve problems and save time.

Also, we have seen that credit risk management practices differ from bank to bank but all base their practices on four pillars: a suitable credit risk environment, appropriate credit administration and monitoring processes, sufficient credit risk controls, and clear credit criteria of the bank’s target.

Lastly, to ensure the positive growth of the bank, credit risk management must play a role in managing the risks.

Mr Mkwawa is a seasoned banker.


The knowledge about shares and stock markets – 2

Thursday November 7 2019


How can a society benefit from the existence of stock markets in its midst? How can businesses and government projects and individuals and a collective community optimize the use of stock markets? How would it benefit from such optimal use? In trying to answer these questions (albeit partly), in the last week’s piece I provided the historical context of stock markets enlightening to us on how far the world of stock markets have come and how fast we have to run to catch up.

I wrote about how stock markets dating back in the 16th to 18th century were used to facilitate the financing of slave trade as an enterprise.

How economic entities in this business were organized and financed by investors using stock markets.

How private slave trading companies sold shares in the Amsterdam, London, Paris stock markets to finance slave trade enterprises, while providing an opportunity for people looking for better investment returns to buy shares of such enterprises.

The context being, yes the concept of stock markets and the role it plays, as far as matters of savings, investments, resources mobilization, financial literacy and inclusion, collective ownerships, inclusive economic empowerment, risk management, etc are concern -- has been relatively for long, and yes there are many business ideas and social-economic projects opportunities have accessed public markets for funds to actualize and enhance their undertakings.

However, for us, so far, we have not been able to learn to unleash the power of collective ownership of enterprises and assets through financial instruments that are listed in the stock exchange for tradability and liquidity and wealth creation.


As a result, we have an economically weak stock market, not optimally utilized by both the private and public sector, without adequate supply of securities and has just but a few investors who benefits on its existence.

Because of this – plus other factors, we remain a less inclusive economically growing society. So, what are the benefits of the stock market in a society? Read on:

Promotes capital formation

The stock exchange provides companies with the facility to raise capital for business enterprises expansion through selling shares, and bonds and other financial instruments to the investing public.

Besides the borrowing capacity provided to an individual or firm by the banking system, in the form of credit, stock exchanges are the other common form of capital raising used by companies and entrepreneurs. Thus, the stock exchange plays an important role in capital formation in an economy.

Facilitates mobilizes savings for investment

When people draw their savings and invest in shares and bonds (through IPOs or the issuance of new shares or bonds of an already listed company), it usually leads to rational allocation of financial resources, because funds, which could have been consumed, or kept idle are mobilized and redirected to facilitate companies’ finance their enterprises. This promotes business activity with benefits for other several economic sectors, resulting in stronger economic growth and higher productivity levels of firms.

Facilitates companies’ growth

Companies view acquisitions as an opportunity to expand product lines, increase distribution channels, hedge against price volatility, increase market share, acquire other necessary business assets, etc.

A takeover bid or a merger agreement through the stock market is one of the simplest and most common ways for a company to grow by acquisition. Apart from acquisition model of growth, even in organic growth, companies use stock markets to raise capital through IPOs and listing of these instruments in the stock market to enable access to liquid by investors.

Enhances government funds for development

The government can undertake projects of national importance and social value by raising funds through sale of its securities to the investing public, but with the intention to list the said instruments on a stock exchange, which is a promise of existence of liquidity and fair price discovery.

At various levels the Government may decide to borrow money to finance infrastructure projects such as sewage and water treatment works or housing estates or building bridges, roads, ports, airports, health facilities, education facilities, etc by selling bonds. These bonds are then listed to the Stock Exchange whereby members of the investing public can sell them to interesting others, thus creating liquidity and a sense of fair prices and valuations for the same.

Profit sharing and capital gain to Investors

Both casual and professional investors in the stock markets, as large as institutional investors or as small as an ordinary middle-class family, gets their share of investment benefits of the company they have invested into through dividends payments and price increases that result in capital gains, and hence gets a share in the wealth of profitable businesses.

Promotes the habit of saving and investment

Stock exchange provides a place for saving of financial resource to general public. Thus, it creates the habit of saving and investment among the public in the sense that people in the society have a place where they have choices to deploy their savings for investment purposes.

The funds placed at the disposal of companies are used for productive purposes within the economy.

Mr Marwa is chief executive officer of the Dar es Salaam Stock Exchange Email:


Data and sustainable forest management

Thursday November 7 2019

Generally the forestry resources are heavily

Generally the forestry resources are heavily human dependent natural endowment in the sense that they are sources of essential cross-cutting ecological and other socioeconomic services to other key sectors. PHOTO | FILE 

By Dr Felician Kilahama @TheCitizenTz

The Tanzania Forestry Research Institute (TAFORI) was established through the Act Number 5 of 1980.

The Institute is an important public service organization in the forestry and beekeeping sub-sector under the larger natural resources sector in Tanzania.

By then it was established to undertake research on forestry to generate data/information needed for policy formulation and/or decision making in the contexts of forestry resource contributions to sustainable development while improving the quality of services delivery to people in Tanzania and globally.

Currently, the Institute is supposed to address issues and challenges, focusing on forestry and beekeeping components with a view to providing a guidance to making well-informed decisions through scientifically generated and reliable forestry and bee resources data and/or related socio-economic information.

How does TAFORI generate useful data? Generally, it is through carrying out inquiries (socio-economic); undertaking experiments and demand driven research as well as facilitating the collection of information for the purpose of promoting forestry and beekeeping programmes, projects and activities, thereby leading to sustainable economic growth and improved livelihoods, particularly in rural areas.

Furthermore, the institute is obliged to carry out experiments related to tree planting, growth, development, conservation and use of local and foreign trees and to evaluate their suitability for adoption plus alternative uses in the wood and/or other industries in Tanzania.


TAFORI is also required to investigate the causes including ways of controlling and preventing the occurrence of diseases and/or forest/bee resources pests for the good of forestry & bee industry in Tanzania. Generally, the forestry/bee resources are heavily human dependent natural endowment in the sense that they are sources of essential cross-cutting ecological and other socio-economic services to other key sectors like agriculture, water, food security, nutrition, energy, livestock, environment, health, education, trade and industry.

Thus, continuous research and scientific investigations are required, at all times, to provide useful data/information to various key stakeholders.

Sometimes, it is said “no data no right to speak”, which implies that the importance of forestry and beekeeping research to provide useful data for decision making and advocacy cannot be over-emphasized.

The importance of research in forestry was recognized even during the colonial era when in 1893 the Germans established a 2.5 hectare research plot in Dar es Salaam.

Through that plot, about 270 various tree species for tropical plantations, ornamental and other trees were screened and tested for their suitability and adaptation.

In 1992 a biological agricultural research station was established in Amani, Muheza District, to undertake systematic tests for indigenous tree species (Juniper and Podo) and some exotics (Cypress, Pines, Eucalypts, Teak and Black Wattle).

In the process, Tanzania established plantations using the tested species mainly Cypress, Pines, Teak and Eucalypts, which are valuable sources of wood for forest industries and woodworking enterprises and workshops.

In 1928, during the British Rule, the Amani biological agricultural research station was renamed to East African Agricultural Research Station (EAARS).

However, in 1948 it was shifted from Amani to Mguga in Kenya and transformed into the East African Agricultural and Forestry Research Organization (EAAFRO).

Furthermore, in 1950s the colonial government established the silvicultural and timber utilization research stations at Lushoto and Moshi respectively to cater for challenges specific to the country and EAAFRO focused mainly on regional matters. The operations of EAAFRO ended following the collapse of the first East African Community in 1977 hence the activities of EAAFRO were taken over by the Forest Division of the Ministry of Natural Resources, Land and Environment till the establishment of TAFORI by Act Number 5 of 1980.

Additionally, TAFORI, with mandate to research and coordinate other research activities related to forestry, concentrated on issues associated with forestry.

On the other hand, research in beekeeping was handled by the Tanzania Wildlife Research Institute (TAWIRI) but early 2019 beekeeping research became TAFORI’s mandate hence the Institute is charged to conduct forestry and beekeeping research activities throughout the country.

The Institute, apart from having adequate human and financial resources; requires a powerful and useful corporate strategic plan for medium and long term plans. The strategic plan will be explicitly used as a tool for mobilization of required human and financial resources and as a key basis for providing links among inputs, outputs and outcomes as well as showing responsibilities of various directorates and units within the organization in achieving agreed institutional objectives.

The Institute has prepared the Corporate Strategic Plan (CSP) for 2020 to 2025 and October 28, 2019 the draft plan was presented to about 50 key stakeholders to provide some useful inputs before it is adopted for implementation.

This important meeting was facilitated by the Tanzania Forest Fund (TaFF). My gratefulness to the fund Governing Board Chairman, Professor R.C. Ishengoma, the Board of Directors and the Fund Management led by the Administrative Secretary, Dr. Tuli Msuya, for providing timely invaluable financial support without which TAFORI couldn’t have conducted the stakeholders’ meeting.

Dr Felician B. Kilahama is chairman of the Wildlife Conservation Society of Tanzania and retired Director of Forestry and Beekeeping.


Possible gains from Africa’s free trade area

Thursday November 7 2019

Wambugu Wa Gichohi

Wambugu Wa Gichohi 

The Africa Continental Free Trade Agreement (AfCFTA) is a flagship project within Agenda 2063 of the African Union AU- a 50-year master plan to transform Africa into the “powerhouse of the future”. But why is AfCFTA good for Africa?

Currently, Africa trades least amongst itself. Intra- African trade accounts for only about 18 per cent, compared to intra-regional trade in other regions of the world- 68.5 per cent of EU’s total trade; 50.2 per cent in North America and 52.3 per cent in Asia, as at 2015. AfCFTA targets to increase this to at least 25 per cent by 2040- you will increasingly find more goods produced in Africa on sale in your country than those imported from elsewhere.

Production structures in Africa are weak, fragmented and undiversified; economies are small and poor. For some countries, “Aid” accounts for as much as 40 per cent of GDP. With an AfCFTA, small countries will no longer be considered so by investors who would now look at the whole of Africa as one market.

Innovative small economies know not to rely on their size in square kilometres but rather on the size of their innovation. It is no wonder that Rwanda is busy opening factories (e.g. the recently launched cell phone factory), ready to export to the rest of Africa.

Infrastructure deficits, in particular lack of trade facilitation infrastructure significantly add to the costs of doing business; and render production and trade uncompetitive.

Sample this; sixteen African countries are landlocked, trade facilitation bottlenecks account for 14 per cent of trade costs in Africa’s landlocked countries, compared to a developing country average of 8.6 per cent.


African farmers typically receive only 20 per cent to 25 per cent of the final market price of their goods, compared with the 70 per cent to 85 per cent Asian farmers receive.

Most of the difference comes from transport costs. Further analysis shows that a 5 per cent reduction of time spent at borders could trigger a significant 10 per cent increase in intra-regional trade.

To address these, TradeMark East Africa leads in easing intra-EAC trade through establishing one-stop border posts across many borders of the EAC states.

This also includes landlocked countries- e.g. the recently-inaugurated one-stop Tunduma/Nakonde border post between Tanzania and Zambia. Further, hard infrastructure development ranks high on the African Union agenda with the appointment of Kenya’s Hon.

Raila Odinga as High Representative for Infrastructure Development mandated to mobilize further political support from Member States and Regional Economic Communities-RECs and to facilitate greater ownership by all concerned stakeholders.

These initiatives will eventually remove the current tag of Africa as the least integrated into the global economy.

The AfDB has developed four scenarios that could cumulatively lead to a total gain of USD 134 Billion through AfCFTA. First, the removal of tariffs on intra-African trade with adopted Rules of Origin is estimated to result in a 0.1 per cent increase in net real income for the continent and a gain of USD 2.8 Billion.

Second, and building on the first, extending the free trade agreement to removing the ad valorem tariff (levied as a fixed per centage of the value of the commodity imported) equivalents of nontariff barriers on goods and services on an most favoured nation -MFN-basis would increase the total real income gains 13-fold, for a 1.25 per cent increase in net real income, or $37 billion.

Third, building on the above, adding implementation of the trade facilitation agreements-TFA, also on an MFN basis would lead to an estimated aggregate real income gain of 3.5 per cent, or some $100 billion. Finally, adding an increase in market access in other developing countries to the domestic reform agenda would increase the gains from implementing the TFA to 4.5 per cent of the continent’s GDP, or an additional $31 billion, bringing the total gain to $134 billion.

According to the Brookings Institute-2019, AfCFTA is projected to increase intra-African exports and lead to trade diversification through increased resilience to movements of demand, enhanced productivity, inclusion of small enterprises, innovation and shift to higher value-added products.

AfCFTA will improve export sophistication across the continent to integrate regional and global value chains and increase the quality of exports.

The writer is the Project Promoter and Lead Franchise Consultant at Africa Franchising Accelerator Project aimed at achieving faster African socio-economic integration under AfCFTA.

We work with country apex private sector bodies to increase the uptake of franchising by helping indigenous African brands to franchise. We turn around struggling indigenous franchise brands to franchise cross-border.

We settle international franchise brands into Africa to build a well-balanced franchise sector.

We create a franchise-friendly business environment with African governments for quicker African economic integration.,


Scholars call for the revival of industries

Thursday October 31 2019

President John Magufuli cuts a ribbon to

President John Magufuli cuts a ribbon to inaugurate the 21 Century Foods and Packaging factory which is owned by Mohammed Dewji (second right). At right is Industry and Trade Minister Innocent Bashungwa. Second from left is the First Lady, Janeth Magufuli, while third from left is the Dar es Salaam Regional Commissioner, Paul Makonda. PHOTO | FILE 

By Elias Msuya @MsuyaElias

Dar es Salaam. Industrialisation refers to the development of the economy - mainly through manufacturing. It transforms a country’s economy from being a primarily natural resources-based to one based on the manufacturing of goods.

The manufacturing sector is key towards reinforcing sustainable development, a crucial growth factor necessary for poverty alleviation.

Statistics show that, the bulk of world exports (about 70 per cent in 2010) is of manufactured goods.

The development of the manufacturing sector, apart from its huge potential for jobs creation, stimulates demand for more and better services, including banking, insurance, communication and transport, which lead to further jobs creation.

Currently, Tanzania has been pushing its industrialisation agenda by expanding and strengthening its manufacturing sector.

However, this road has not been smooth, as there are many hurdles in the way that inhibit fast development of the manufacturing sector as a matter of course.


According to the Economic Survey of 2017, currently, the services sector is the leading contributor to Tanzania’s economy, with more than 40 per cent share.

Normally, positive structural transformation is accompanied by increased per capita income, thus making countries richer. But, in the case of Tanzania - as is the case with many other African countries - the country remains more services-oriented, and with its structural transformation remaining poor and premature.

Tanzania’s manufacturing sector is still very small in size. It is also largely low-tech and resource-based, with very low levels of value-addition activities.

Discussing the relevance of industrialisation, innovation and development in Tanzania recently in Dar es Salaam, various stakeholders came up with some ideas on how to improve the sector.

Science, Technology and Innovation Policy Research Organisation’s (Stipro) executive director Bitrina Diyamett stressed policy improvements in order to produce competitive commodities in the market.

She added that, in order to achieve the industrialisation goal, innovation is a crucial factor that must be given top priority.

“With globalisation and a free market global economy, industrialisation is impossible without adequate capabilities in innovation. Moreover, poverty alleviation is a process of capability-building - and, most importantly, innovation capabilities,” she stressed.

She added that the manufacturing sector is basically a knowledge intensive sector and in the free market economy country firms compete both in the domestic and export markets.

“One has to sell better products at competitive prices - and firms cannot do this if they are not empowered technologically and innovation-wise,” she says.

She also pointed to policy reformation as a critical factor, saying the world is a free market, with rapid technological changes – and very little time and opportunity to learn.

“The government needs to intervene through policy to speed up the learning process. Policy has always been part; but, now, it is critical,” she says. “Many people think that when one is dealing with practical issues, theory is irrelevant. But, all the time, whether knowingly or unknowingly, we use some mental maps that inform our decisions to act – some model of best practices

“Theory remains essential for diagnosing events, explaining their causes, prescribing responses, and evaluating impacts of different policies,” she emphasized.

She explained that theories have been developed as a result of empirical observations, so they are not abstract.

“If you get theory wrong, you will have a flawed policy,” she argued.

She called on universities and the government to make sure the country has adequate expertise in teaching and doing research.

“Government ministries, especially the one responsible for STI, need them for innovation policy analysis. The Commission for Science and Technology (Costech) needs them to make sure a correct research policy that spurs innovation, is put in place,” she observed.

The issue was also discussed by various economists, including Dr Donald Mmari, who is the Repoa executive director, a research in development think tank, who went back to the Tanzania industrial history up to the current industrial movement and provided solutions to current challenges.

“Tanzania is not the only country that has been experiencing poor industrial development; almost all African countries have the same problem. Our previous policies - especially Ujamaa na Kujitegemea - contributed to the fall because it didn’t promote market competition. We fail to compete domestically and globally,” he noted. He also mentioned the lack of technology and skilled people as some of the factors of industrial fall.

“There was no sustainable technological and innovational development and people were not skilled in running the industries. As a result we were exporting raw materials.”

However, he says the current industrial era is full of automation, which requires a more skilled generation.

“We are now in the fourth industrial revolution in which all things are ran digitally. We must build the needed capacity. We must also encourage innovation to enable the production of competitive products,” he said.

He also stressed the need to attract more foreign investments in agriculture and mining to drive industrialization. “We have gas which can be used for electricity generation, we also have coal and iron ore which can be used for industrial improvement. We should also use Export and Processing Zones to boost investments,” he said.

Prof Samuel Wangwe pointed out the importance of the government to invest in industrial agencies.

“We started well with industrial agencies like the Tanzania Engineering and Manufacturing Design Organization (Temdo), Tanzania Industrial Research and Development Organization (Tirdo), Tanzania Bureau of Standards (TBS) and the like.

But, recently, we lost direction because of poor investment. We can’t improve without investment,” he noted.

He insisted on technological and innovational investment for the betterment of industrial development.


Irrigation goal missed for lack of funds

Thursday October 31 2019

Agriculture deputy minister Omar Mgumba (4th

Agriculture deputy minister Omar Mgumba (4th left) inspects one of the irrigation canals at an irrigation scheme. PHOTO | FILE 

By Alfred Zacharia @azacharia3

Dar es Salaam. Since 2006, Tanzania has aimed to expand its irrigated land to one million hectares by 2020, but as of February, 2019 the area under irrigation was only 475,052 hectares.

The National Irrigation Corporation (NIRC) has set new strategies to meet the target by 2035, according to its acting director general Marco Ndonde.

The low pace was mainly due to lack of funds, as shown by the commission’s report published at Ministry of Agriculture, showing the allocation and disbursement of development funds in consecutive five years (2014/15 to 2018/19).

“Only 9.8 per cent of the total allocated funds to irrigation development projects were released during the period of five years, with zero disbursement in some financial years,” statistics show.

During the period, a total of Sh38.6 billion was allocated to the commission, but only Sh3.78 billion was released.

The situation got worse in 2014/15, 2015/16 and 2018/19 financial years where Sh15 billion, Sh6 billion and Sh6 billion, respectively, but the commission did not received even a single sent.


In 2016/17, Sh6 billion was allocated but only Sh2.23 billion were released while in 2017/18 financial year Sh5 billion were allocated and Sh1.53 were disbursed.

The commission also got funds from foreign sources where the total of Sh130.02 billion was allocated in five years with only Sh24.62 billion being released until June 2019.

Further, the commission has no a board of directors to make decisions on time, suffering a shortage of 216 employees.

Other challenges including low participation of private sector in irrigation interventions, poor operational, management and maintenance of existing irrigation schemes, climate change effects and degradation of water sources and inadequate irrigation research and technology promotion.

Acting director general of NIRC Ndonde said the country has at least 29.4 Million hectors potential for irrigation but so far the irrigated land is only 475,052ha.

According to him, the commission (NIRC) sets strategies for attaining 1,000,000 ha of the irrigation agriculture by 2035 in two phases.

A total of 261 schemes will be rehabilitated in 25 regions of Tanzania Mainland, as well as the construction of 208 new schemes in the first phase.

“The end of phase one will add 302,120 ha of irrigated land to reach 763,120 ha by 2025,” he said.

He added that the second phase will see 643 new irrigation schemes are constructed, adding another 312,110ha to irrigation land in 2035.

In addition other 88 irrigation dams will be constructed in different parts of the country before 2035, according to him.

In attaining the target, the government decided to shift activities of the NIRC to the Ministry of Agriculture from the Ministry of Water.

At least Sh29.76 billion was allocated to the Commission where Sh25.82 billion was set for development activities.

The amount is bigger than Sh6 billion as allocated in 2018/19 financial year.

Mr Ndonde said the amount gives him energy to speed up the implementation of the previous unfinished projects including that of Small Scale Irrigation Development Project (SSIDP) whose 16 schemes are currently under implementation in various regions.

So far, six of them are completed while other 10 schemes are at 54.2 per cent of completion, according to him.

The Commission is also implementing the Expanding Rice Production Project (ERPP) in Msolwa ujamaa and Njage (in Kilombero DC), Kigugu (Mvomero DC) and Mvumi and Kilangali seed farm (Kilosa DC).

Currently, irrigation sub contribute 24 per cent of the national food requirement in the country with 475,052 under irrigation agriculture.


The intelligence trap: money talks vs twitter rules

Thursday October 31 2019

Innocent Swai

Innocent Swai 

In the world of surveillance capitalists, which is which? Design thinking can make a big difference in humanity.

The lyrics for the song money talks is a puzzle for design thinking. Part of puzzle (lyrics) goes like this: Hey little girl, you want it all. The furs, the diamonds, the painting on the wall! Then the chorus: Come on, come on, love me for the money.

Come on, come on, listen to the moneytalk. Likewise, Twitter Rules the world using its own (puzzle) lyrics: Twitter’s serves the public conversation. No violence, harassment and the like.

Never discourage people from expressing themselves.

The value of global public conversation must be attained. Twitter rules ensures all people can participate in the public conversation freely and safely.

With that comes it’s chorus: Twitter Rules. Unless money starts talking!


Here comes an interesting question, is tweetstream a feature or a bug? Whoever said money talks knew something about business models.

In real sense, business models are representations of how things are done. They could be any products or services.

Business models are constructed to show something which is nominally already existing. The key issue with any business model must work as expected. In other words, does the business model great for “user engagement”, which, can be a wonderful feature for a service or an App like Twitter? And that’s revenues for surveillance capitalists, meaning a loaf of bread on the table daily!

Look at what is happening with most of these big brands like Google, Amazon, YouTube, Facebook and Twitter.

As private companies, they are free to design anything they want with their platforms. Yes, they can anything. They can even ban their consumers overnight if they break the rules of engagement.

However, because they are, after all, surveillance capitalists, that never happens.

Why not? They know which side of their bread is buttered. Nothing else matters to them. That is by design.

With automation on the horizon, robots will be taking repetitive human jobs like never before. However, the robot that is taking over any job might also pay tax so as to temporarily slow the spread of unfair helpless automation caused by surveillance capitalism.

In most cases, emerging technologies e.g robots are not replacing humanity, but rather fulfilling a function of augmenting us, where a certain capability is brought into existence.

In other words, automatiin can only make the process of value creation easier, less troublesome and less unsafe.

Today, the real problem worldwide is that political leaders have limited understanding of the scale of the challenges that confront humanity in the face of the fourth industrial revolution.

They need to educate themselves through social engagement with the relevant experts to put in place the necessary models and frameworks to prepare the workforce for jobs of the future.

Parents take front row seats on their kids learning, re-learning and un-learning process. Moreover, parents are bounded on how their children absorb knowledge and life skills in surprising unique difference ways.

That alone gives more clues as to how we humans can systematically acquire “great rules” and effortlessly store them away for later recall, the way kids are doing it.

Hence, the emerging technologies like blockchain, AI, big data and data mining are all excellent but not good enough.


What does it take to pay taxes? - 2

Thursday October 31 2019

Shabu Maurus ,

Shabu Maurus ,  

Last week, we started this series on the burden of taxation. It will touch on the efficiency costs, administrative costs and more importantly to taxpayers, the compliance costs.

The efficiency costs involve tax-induced market distortions. The administrative cost is what it takes for the government to administer the tax system.

And compliance costs are the costs incurred by taxpayers to fulfil their various tax obligations but excluding the burden of the actual tax liability.

Coincidentally, last week also the World Bank issued its latest report: “Doing Business”. The report ranks countries according to how conducive they are for doing business.

The timing of the report and how Tanzania fares globally and among its peers makes this discussion of tax burden invaluable. The ease of paying taxes (which roughly suggests the tax compliance costs) is one of the components making up the ease of doing business index. On the ‘ease of doing business index’, Tanzania ranks 141 out of 191 economies globally lagging most of its peers in the East African Community (EAC).

Rwanda ranks 38, Kenya (56) and Uganda (116). This is an improvement from last year’s 144th position, likely the fruits of the Blueprint for Regulatory Reforms that Tanzania has started to implement.


In terms of the ease of paying taxes index, Tanzania ranks 165 globally and tailing all its peers in the EAC.

On this score, Rwanda ranks 38, South Sudan (74), Uganda (92), Kenya (94), and Burundi (140). These indices and the rankings are very symptomatic of the tax and other regulatory burdens in Tanzania.

But several tax scholars contend that unlike developed economies, in the developing economies very little attention has so far been given to burdens of taxation by policymakers.

In the early 1990s, Jeff Pope, a professor of economics at Curtin University (Australia) enlisted six stages in the development of the compliance costs of taxation as a policy area. Jeff’s framework provides a good assessment tool for countries.

Phase one is denial. The tax compliance costs are hidden. There is no interest in the topic at all by policymakers, practitioners or academics.

Phase two is the professional “qualitative recognition” whereby both the tax practitioners (like accountants, tax consultants and tax lawyers) and academics recognise the compliance costs being inflicted upon taxpayers.

And they also speak and write on the subject. The “estimation and evaluation” of compliance cost is the third phase. This is when attempts in the country are made to quantify compliance costs in monetary terms from taxpayer data.

This can take place at both macro-level (all taxes for a country) and micro-level (for a tax, industry, firm or individual). An may also be aimed at identifying specific issues on compliance costs. Phase four is “policy recognition”.

This means that the government and tax administration recognise both the socio-economic and political importance of the tax compliance costs as an issue and act on it. Then phase five is “effective policy measures”.

This is when the policy, legislative and operational reforms are made and prove effective in reducing the tax compliance costs for all or targeted groups of taxpayers (say the SMEs or the micro-enterprises).

And lastly, phase six which entails the persistent monitoring of compliance costs and administrative costs. It includes the publication of compliance and administrative cost assessments for every key tax reform.

In Tanzania, already there are some few academic studies. One of them dates to 1999.

The various initiatives which culminated in the recent Blueprint for regulatory reforms signal some recognition and concerns over the regulatory burdens by policymakers.

Arguably, Tanzania is just beyond the first two phases.


How to create sound business ideas in a digital world

Thursday October 31 2019

Benson Mambosho

Benson Mambosho 

The digital world is rapidly changing. We are in an era where business opportunities are also endless.

An era where customer needs are expanding – for businesses to flourish, they must adjust to these new trends.

Therefore, businesses need sound ideas that are well thought and strategic, the reason is simple – customers are people who have unique and never ending demands.

So, where would you begin as a marketer to make your business sound?

The golden rule is – know your buyer. Not everyone is relevant or your target niche.

You must research intensively and extensively on your target industry. Understand their behaviour, buying habits, preferences, interests, dislikes and pain points to mention but a few.


Modern research tools such as google analytics and google trends can offer you an in-depth view of your buyers across the globe. Understanding your customers will help you to make sound and logical business decisions. Moreover, data-driven solutions create favourable grounds for business to flourish and attract potential investors.

Give room to your clients or customers to engage with your business. A website is a significant factor to build your credibility. It exposes your service/product to the public.

Your website must be user friendly, interactive and informative. Each click must trigger conversion or value.

Remember this, the world is on the go – it would, therefore, be convenient for your website to be mobile friendly.

Personalize your customer’s experience. Establish automated lead follow up process or emails that feed your niche with valuable info about your business.

Emails nurtures relationship between you and your audience. They promote your business by sharing new updates, sharing testimonials, offer promotions and eventually increase sales.

Get higher returns on investment (ROI) by building and maintaining a contact or prospects subscribed to your newsletter.

Keep in mind, customers don’t appear from thin air in the digital space. There are people right now looking for your business out there. You need to create a simple path for them to get to you.

Therefore, focus part of your energy in search marketing. This is one of a digital marketing strategy which helps you bid on relevant keywords your customers are searching for. Again, research is crucial to get your wheels up and running.

Personalize your search ads to attract attention. Each time a keyword is activated or a search is made for that particular product or service – it means you are getting your target audience.

Moreover, you can strengthen your search campaign by deploying an outreach program such as; digital public relations or co-marketing. Create news articles and journals to amplify your message across the digital space.

Give your customers lifetime value each time they interact with your business online. Take them through personalized and exciting customer journey.

Customers need personalized guidance in choosing products or services that offer more convenience in their lives. In a fast-moving society driven by enormous data, empowering your buyers with high-quality content and marketing automation will attract more leads and nurture their expectations.

Create multi-channel that sell and communicate with your potential clients.

Why wouldn’t you want to start with social media? It’s one of the quickest way to engage with everyone and get direct feedback about your business.

Through social media, you can listen and respond to customer’s feedback, hear their discontents, joy, and view competitor’s actions and most importantly make your marketing strategy evaluation worth-a-while.

The bottom line is – being proactive is significant to making your business ideas sound.

You have to be way ahead of your consumers, therefore, you have go beyond their expectations. It’s never easy but you have to invest time and resources to get there.


Kipchoge’s lessons for business owners

Thursday October 31 2019

Wambugu Wa Gichohi

Wambugu Wa Gichohi 

The recent world marathon record-shattering by Eliud Kipchoge offers business owners key lessons if seeking to take their enterprises to the next level. We continue with these lessons.

Seventh is planning which was evidently at play. Long before D-day, the organizers knew Kipchoge would conquer if he followed their set plan.

They simulated the run many times over, putting everything in place that was needed to make it happen.

It is rumored that during one of the simulations, a pace maker made 1.58.08 but obviously this couldn’t count as he was not the subject.

As a business owner, do you have a written business/corporate/strategic or do you run it based on the direction on the wind. Failure to plan invites calamity to your business.

Eighth is teamwork. The pace makers who kept Kipchoge on track are themselves seasoned athletes in different distances.


They gave up their individual ambitions to help him achieve his set goals. Each ran for a set number of kilometers and gave way to the next until the task was achieved.

In your business, teamwork between the various teams is necessary to deliver success.

This becomes more relevant in a business where one team relies on another to successfully deliver their targets. For overall success, team members work in synch with each other.

Ninth is coaching and mentoring. This is a key lesson many businesses miss out.

The most successful business owners have mentors and coaches.

While a coach helps you see around the corners to avoid costly mistakes, the mentor focuses on the big picture and keeps you inspired to the finish line. Kipchoge’s coach, Patrick Sang is a former marathon world record holder.

INEOS owner Sir James Arthur Ratcliffe is an avid runner and mentored Kipchoge to believe that humans have no limit. If you are in business and you have no coach and mentor, you are missing out on great wisdom.

Tenth is technology. The car ahead of the runners was the real pace maker.

The green laser lights ensured that each pace maker ran at the pace required to break the world record.

If you do not embrace technology in your business, you are selling yourself short. Technology needed to run your business needs not be complicated. Simple technology-based improvements will improve how you serve your customers, translating into more revenue.

Eleventh is focus. The solid yellow lines around corners on the running route kept Kipchoge from losing even a second through a misstep off a designated trajectory.

In business, there are many opportunities that appear at different points.

They all look worth the effort, until you start spreading yourself thin and your mother-business suffers.

Focus on one business to a point where you have set systems to enable it run by itself, then you can take on new opportunities.

Twelfth is celebration. As he crossed the finishing line, Kipchoge had no doubt that he had done the impossible.

The last 50 meters saw him unleash his celebratory trademark hand stretches, suggesting he had the strength to do it over again. If you do not celebrate achievements in your business, you fail to unleash the energy needed to keep going for more.

Thirteenth is the copycat nature of humans. No sooner had Kipchoge achieved the fete than people on social media started their own challenges, with some men proclaiming their 1.59 challenge to get home that night at 1.59am.

In business there will always be copycats, but it is the value proposition that sets your business apart.

Last is family. Kipchoge’s first contact at the finishing line was his wife (forget the stories around hugging). His kids and parents were all there. Do not allow your business to take away your family time. The best way is to build systems that allow it to run on autopilot, releasing you to enjoy family time.

A business at this level is easily franchisable and if Kipchoge’s legs were a brand, he would be a franchise worth investing in.

The writer has ran many local and international full marathons. He is the Project Promoter and Lead Franchise Consultant at Africa Franchising Accelerator Project aimed at achieving faster African socio-economic integration under AfCFTA.

We work with country apex private sector bodies to increase the uptake of franchising by helping indigenous African brands to franchise.

We turn around struggling indigenous franchise brands to franchise cross-border. We settle international franchise brands into Africa to build a well-balanced franchise sector.

We create a franchise-friendly business environment with African governments for quicker African economic integration.,


Managing digital bank customers

Thursday October 31 2019

Kelvin Mkwawa

Kelvin Mkwawa 

According to the 2017 Global Consumer Trends Survey, more than 80 per cent of globally connected consumers are using mobile connectivity to browse the internet on a weekly basis.

In addition, the survey found out that consumers in the 18-24-years-old bracket are the heaviest users of digital products/channels, with 82 per cent of smartphone owners in this demographic segment using mobile banking.

Furthermore, according to PwC’s Digital Banking Survey of 2017, 46 per cent of banking consumers used only digital channels, a substantial increase from the 27 per cent recorded in 2012.

It is obvious that customer’s hunger for digital and mobile interaction for banking services won’t stop growing hence banks need to adjust to this new “norm”.

The banking industry has been working hard to deliver a better experience on digital channels but in today’s world, consumers have more power to choose from different products and services at their fingerprints 24/7.

Hence, digital channels no longer just represent “a cheaper and convenient way” but are a critical aspect in executing promotions, stimulating sales, and growing market share for banks.


The challenge for banks isn’t just to create and deploy new technology to facilitate simple transactions (e.g. transferring money or checking balances), but to rethink how to build and maintain relationships with their digital customers and to provide value to customers throughout different life stages.

So, to keep up with digital customers, banks need to take a different approach to manage them. Here are a few tips on this:

Invest in advanced analytics – Banks must invest in advanced analytics of a large amount of financial and non-financial data at their disposal to gain a 360-degree view of their customers.

Banks can only achieve this by being vigorous on the collection of customer data, by investing in and developing systems that mine consumers data and partnering with Fintechs to develop behavioural financial models.

Through the data collected, banks will obtain a broader perspective of customer activity, transactions, mental state and emotions, allowing banks to become more relevant and contextual.

Digital customer’s behaviour is completely different from traditional ones, therefore, banks will be able to learn the behaviours of their digital customers and provide recommendations on what products and services fit their customer’s lifestyle and goals.

This is only possible because banks are able to craft a compelling customer experience where all the interactions are specifically tailored to a customer’s needs at any given time.

Build an Agile Marketing Plan – To manage digital customers, banks need to support their countless interactions and must find ways to be more agile in their marketing operations.

Currently, banks tend to launch campaigns focused on pushing a single product at a time across a range of channels.

This approach will not yield desired results from digital customers as they are more sophisticated and easily bored with the same selling message of products/services.

To serve digital customers, banks must be willing to conduct a lot of small-scale marketing activities involving a variety of products and third-party providers using advanced digital tools and processes. These small-scale marketing activities must be supported by a marketing team that has the right digital skills and tools to create and maintain creative marketing campaigns that relate to digital consumers.

Building an agile marketing plan will take time, therefore, banks must embrace a new approach and ensure the entire staff is aligning with it.

In a summary, banks need to re-invent to remain competitive. According to PwC’s Digital Banking Survey of 2017, 46 per cent of banking consumers used only digital channels, a substantial increase from the 27 per cent recorded in 2012.

Hence, the future of the banking industry will depend on its ability to leverage the power of customer insights, advanced analytics and digital technology to provide services and products to its digital consumers.