Private sector eyes a piece of Sh1.3 trillion pie from IMF

Friday October 22 2021
Agoa pic

Tanzania’s Investment minister Geoffrey Mwambe. PHOTO | FILE

By Alex Nelson Malanga

Dar es Salaam. Members of the business community are scrambling for a pie of the Sh1.3 trillion loan that Tanzania got from the International Monetary Fund (IMF).

Last month, the IMF approved a total of $567 million (about Sh1.3 trillion) in emergency lending for Tanzania’s health system and economic recovery efforts as the nation battles the Covid-19 coronavirus pandemic.

President Samia Suluhu Hassan said in Dodoma recently that the money is to be utilised in a period of nine months - and, within which the country would construct thousands of classrooms and purchase hundreds of thousands of desks.

Part of the money will also be channeled to the construction health facilities, implementing water projects and revitalising the tourism business.

Official data has it that a large share of the Sh1.3 trillion loan meant to help in tackling economic challenges of the Covid-19 pandemic, goes to the economic sectors of Health (Sh466.9 billion), Education (Sh367.6 billion), Regional Administration and Local Government (Sh302.7 billion), Water (Sh139.4 billion), and Tourism (Sh90.2 billion).

The government wants the money to “remain in the country” by requiring the private sector to supply the needed project materials like cement, roofing sheets, reinforced bars, as well as ambulances, tourist safari vehicles and hospital beds.

Advertisement

Members of the business community who spoke to The Citizen on the sidelines of a meeting with the Investment minister, Mr Geoffrey Mwambe, said they were rethinking the modality of their operations so that they qualify for the resulting contracts.

Some members of the business community voiced similar sentiments last week when they met with the Industry and Trade minister, Prof Kitila Mkumbo. They seek to supply 134,250 tonnes of cement for construction of 15,000 classrooms; 1.71 million pieces of iron sheets and 795,000 pieces of reinforced bars (12mm).

Ando Roofing Company’s managing director Ado Maimu said his company was directing its production plan at the materials required for the projects.

However, for local manufacturers to make it, he called on the government to consider giving them tax incentives with a view to cutting operational costs fueled by high costs of raw materials.

The Tanzania deputy secretary general for the Association of Private Investors in Education, Mr Albert Katagira, said they were well prepared for seeking capital and coming up with competitive tender documents to enable them to grab the opportunities.

However, he called on the government to increase advance payments to suppliers from the current 10 percent to 50 percent so that they can implement the projects timely and efficiently.

Simba Pipe Industries’ general manager Jitin Singh said they were “well-equipped, excited and awaiting the action to start on the ground” so that they could do their best to grab some share from the pie.

However, he said, it is his belief that the success of the time-bound program will majorly depend upon how quickly government and private players sit together to address the probable challenges which might derail all the plans, if not addressed well.

Hanspaul Automechs Limited chief executive officer Satbir Hanspaul said: “We are capable of supplying ambulances, special vaccination vehicles and water drilling trucks locally fabricated.”

He said that, on a monthly basis, his company could modify 100 vehicles, making them fit for tourism and ambulance uses, among others.

The Tanzania Private Sector Foundation (TPSF) board of directors’ vice chairman, Mr Paul Makanza, said they were urging their members to increase their production capacities to align with the current needs.

“We have been and we are urging our members to not only increase production, but also abide by business ethics,” said Mr Makanza, who doubles as the Confederation of Tanzania Industries (CTI) chairman.

KGG Investment Limited’s managing director Richard Mlay called on the banks to relax lending terms so that they can have enough working capital.

TPSF board director Susan Mashibe said tourism stakeholders, tour operators in particular, were calling for financial institutions to reduce accumulative interest rates and extend low interest rates.

The Tanzania Bankers Association’s chairman, Mr Abdulmajid Nsekela, said banks were ready to issue short-term loans to those who would win tenders for implementing part of the Sh1.3 trillion projects.

Lodhia Group of Companies’ managing director Sailesh Pandit called on the government to simplify the process of importing scrap metals that are used as raw materials in steel manufacturing.

Mega Woodcraft Products Limited marketing executive Jonathan Kibona said with a traditional convention building system, it would be hard to construct 15000 classrooms in just nine months. “If the projects are to be completed in a very short period of time, the government needs to think of mega panel technology,” recommended Mr Kibona. Minister Mwambe and Mkumbo pledged to work on the raised challenges as soon as possible.