The Tanzania Investment Centre Executive Director,
Mr Emmanuel Ole Naiko
“We want to attract investors who will either invest in both agriculture and irrigation infrastructures or invest in irrigation infrastructures and become service providers to farmers,”
Mindful of the land problems in Zimbabwe and relying on the investor friendly rhetoric of the Tanzanian government at the beginning of 2004, British investors Stewart Middleton and Sarah Hermitage invested their life savings in Tanzania purchasing the lease to Silverdale and Mbono Farms from Benjamin Mengi (Fiona Tanzania Ltd). The purchase (a lease assignment) was conducted in full compliance with the laws of Tanzania and no court has set the assignment aside.
The farms consisted of 520 acres of prime (but derelict and commercially unproductive) agricultural land. They planned to grow vegetables for export to Europe, produce seed crops and re-generate coffee as agreed with the co-operative societies, renovate buildings and employ a large local workforce, all of which would bolster the local economy and provide sustainable development. Having purchased the lease, they began to develop and invest. They established irrigation systems, renovated buildings, housing, and offices and staff facilities. Within six months, their farming skills, financial investment, and their dedicated Tanzanian staff they had transformed the farms into a profitable farming operation. the investors employed over 120 Tanzanians from the local community and exported more than eight tons of fine green beans to Europe weekly. Under their management, the farms were the first farms in Tanzania to earn EUREPGAP accreditation. Their initial success was only the beginning of a much larger operation that would substantially boost the local economy and demonstrate the positive impact that foreign direct investment, coupled with local skill and labour can have on the economy in the Kilimanjaro Region and in Tanzania as a whole.
A year after purchasing the lease Mengi began negotiating with British investor Konrad Legg (Tudeley Estate) to sell him the same lease again. Mengi demanded its return falsely asserting that he had not been paid in full (although he signed a receipt for payment in full) and unilaterally declared the lease assignment void. When the investors refused Mengi threatened to drive the investors out of Tanzania by any means, “cut to pieces in a coffin, if necessary.” When they held their ground, he unleashed a campaign of violence, intimidation and harassment to drive them from the property which included:
Using state officials to prevent the registration of the lease to the farms;
Coordinating with the police to ensure that they ignore his criminal behavior, refuse to protect the investors and staff and, repeatedly arrest, imprison, detain and interrogate the investors and their key employees;
Using the judiciary, police, and prosecutors to institute, maintain, and prolong baseless civil suits and criminal prosecutions against the investors and their staff;
Four years of threats, intimidation, harassment, violence, and denial of justice took their toll and ultimately succeeded in driving thew investors from Tanzania. Mengi had invaded the farm using local armed Militia. The investors were unable to walk on the farm due to the presence of thugs armed with pistols and clubs. Four key management staff were in prison and the investors were facing a serious death threats and unlawful imprisonment. There was a complete absence of any law and order and the violence reached an unprecedented level. It was clear that the investors were completely unprotected and that we would be killed. The investors fled in 2008 to Kenya in the middle of the night with three suitcases, three dogs and a cat. The next day, Mengi broke into the investors house and stole the contents of their home.
In 2006 Mr. Ole Naiko sent a probe committee to Silverdale Farm and investigated the situation vis-a-vis the Tanzania Investment Centre. The TIC concluded that the lease to the farms was lawfully owned by the investors and that it was clear that Mengi had engaged in fraud in an attempt to steal the property.
Delapidated condition of staff housing when the investors purchased the lease
Renovated building to provide showers, changing rooms and rest facilities for farm labor.
Renovations cut short due to the failure of the government to protect the investment.
Renovated office
Farm House showing renovations started to extend the property
Renovations cut short due to the failure of the government to protect the investment
Simple Farm House painted and showing extended pantry of the left hand side
Renovations cut short due to the failure of the government to protect the investment
Side view of house showing unfinished renovations
Renovations cut short due to the failure of the government to protect the investment
Renovations of lawn and grounds
Newly built staff quarters consisting of shower, sleeping and rest and lounge facilities
Renovations cut short due to the failure of the government to protect the investment
All of the above (and more) investment was stolen from the investors. The Tanzanian government’s overt acts (e.g., police intimidation) and inaction (e.g., failure to investigate and prosecute the vandalism, death threats, and trespasses) were nothing less than a sustained, four-year onslaught. Our case presents the government of Tanzania with a choice: - whether to support the lawful interests of bona fide investors, or: - the criminal activities of a well-connected Tanzanian. So far, it has chosen the latter.
The Tanzanian Investment Center has done nothing
to protect the investors
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