Foreign investor speaks out
Invest in Tanzania tourism at your own risk
By Dr. Wolfgang H. Thome, eTN Uganda | Nov 13, 2012
Citing the ongoing saga over the Lupita Lodge’s owners, who according to the latest information are now also being hounded by the Tanzania Revenue Authority after earlier attempts to frustrate them and make them pack up and go by lands department officials have failed, has a regular source in Arusha – a foreign investor it should be pointed out – been vocal and highly critical of the business environment investors face in Tanzania once they have spent their money.
“Corruption in Tanzania is getting much worse now. Before the last elections, CCM officials would extract contributions from us, and if you are reluctant, they are very open that they will make trouble through immigration, municipal authorities, the ministry licensing people, labor department, and the tax man. It is clear that they are willing to frame you or unjustly accuse you. And after you pay, they come back for jobs for relatives and the same threats. When they look for investments, they promise Heaven on Earth, but when you have put up structures and all, they start looking at you as a life source of revenue, and I am not talking just paying your taxes which are required.
“So when I read about Lithgow’s troubles, I am almost sure that he was also given the same treatment option. Maybe he thought because he is Tanzanian he is immune, but truth is, when you are Asian or White here, they turn you into a punch ball faster than you can move out of the way. And when they failed with the lands issue, now they are sending the tax people for what they call audits. That is just the way they do it here - only meant to intimidate and harass and have people sign papers.
“I for one have been told before that I must give shares to locally well-connected people fronting for big shots. Are you saying this cannot be the same here? There is more than meets the eye, and I know from experience how vicious this can get. I guess in Lithgow’s case, it all started with an attempt to either get bribes or jobs or grab his land. And when he goes to the land office, his files have disappeared, and he is told he never owned it. How do you think he registered his business and got his licenses and put his money there if he had no land rights? So I hope you see where this is going.”
Asked if he would invest in Tanzania again the same source then said: “We have a lot of friends here. Tanzanians generally are friendly and welcoming people, but elected and administration officials are getting worse by the day. Even ordinary Tanzanians confirm that. Yes, I would invest again but anyone coming here should be aware of what reality looks like when your project is ready and suddenly has many co-owners after you have spent your money. I have been told YOU KENYAN WE CAN THROW YOU MUHINDI OUT RIGHT NOW which is a double bias, against me as Kenyan and against myself being of Indian descent though I am third generation Kenyan now.”
Other sources would not want to be drawn into the controversy, citing fears of backlash from officials if their name came out, but conceded that dealing with government departments like immigration, labor, licensing, and municipal inspectorates was a nightmare, compounded by tax officials. “Corruption is rife here, and I think only last week, when the latest index came out, Tanzania has been catching up with you guys in Uganda and across in Kenya,” was all one added source was willing to add while not saying a word about the Lupita Lodge saga.
In a country which needs foreign investors to further develop the tourism industry, of which many think it can become Tanzania’s mainstream economic backbone in years to come, it is hard to see how such misbehaviour can be tolerated and targets for investment and job creation be met. It rather appears that such practices as described above are outright condoned, as administrative and elected officials seem to be in league to grab as much as they can, while they can.