STOP AID TO TANZANIA

The Dutch government has this week anounced it's decision to suspend aid to Tanzania. Dutch Development minister Bert Koenders wrote to the Lower House in his country, explaining that Tanzania was an unreliable partner for foreign investors after a Dutch business man lost his investor.

As in the Silverdale Case, the Tanzaian govenment state it is a purely 'commercial dispute'.

The decision is to be applauded. The reality of the situation in Tanzania is simply that the rule of law does not exist with any consistency or in a manner that affords existing or potential investors in Tanzania any tangible security for their investment. The message clearly is that if you want to invest in Tanzania be warned that the risks are high.

The Investment Guide to Tanzania produced in 2005 is a pristine publication produced with the clear intention of enticing foreign investment into the country. It sets out the ‘opportunities’ and ‘conditions’ prevailing in Tanzania for investors. It states that the rule of law is well established and the level of security relatively high. However, relative to what one has to ask. Wide spread corruption in the Police, Judiciary and Co-operative administrations (who in the main govern the agriculture sector by way of carving out sub-leases from head leases granted to them by the government) in Tanzania is perhaps the single most negative element fettering foreign investment and development in the country and adversely affecting the lives of Tanzanian citizens.

It is the issue of security in Tanzania that perhaps poses the most serious concern for the foreign investor in Tanzania together with, the overt and arbitrary use and abuse of the rule of law, judicial administrations and the Police. Many regional and district administrations are also corrupt and it would be foolish for any investor to overlook these very serious issues. Under no circumstances, can any investor (or citizen for that matter) presently rely on either the police or the judiciary for any consistent protection against harassment and abuse from those who seek to ignore Tanzania’s investment policy and interfere with investors.

It is true, that Tanzania has a comprehensive Civil and Penal code. However, in more cases than is comfortable, these are not followed and justice is delivered on a wholly arbitrarily basis. The bottom line is, Tanzania cannot at this moment in time guarantee the personal safety of any investor or his investment. Is Tanzania therefore a bad place to invest? Verk likely and for sure, the Investment Guide to Tanzania should carry a government health warning, caveat emptor, this is Africa!

The decision by the Dutch government follows calls by British M.P. Roger Gale (Thanet North) for the suspension of aid to Tanzania by the British Government on the basis of the Silverdale Case.

http://www.theyworkforyou.com/whall/?id=2008-02-27b.272.0