Is Tanzania a safe place to invest?

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By Linda Garner | Published 09/18/2006 | Uchumi | Unrated

The UK is a major investor in Tanzanian and is its largest bilateral development partner. Tanzania enjoys preferential debt status vis-à-vis the UK government based on good governance. Eager to attract foreign investment and promote a diversified and reformed economy led by the private sector particularly, the agricultural sector the Tanzanian government has recently engaged in an aggressive and vocal campaign to portray Tanzania as an investor friendly country committed to the rule of law. However, the investor friendly rhetoric does not sit comfortably with the realty of life in Tanzania for the foreign investor.

It is the issue of security that should pose serious concerns for investors in Tanzania particularly issues of widespread corruption in the police and the judiciary. Can investors rely on any consistent protection from those who seek to abuse their lawful interests? The indications are that they cannot and that corruption, particularly in the police and the judiciary and district administrations now often crosses international boundaries.

A recent worrying illustration was the arrest of British investor Stewart Middleton a bona fide investor in Tanzania in all respects. Mr. Middleton operates in the agricultural sector and his company; Silverdale Tanzania Ltd employs 120 staff bringing much needed financial independence to the local community. He purchased an assignment to a lease to a farm, Silverdale & Mbono Farms, Hai, from Tanzanian hotelier Benjamin Mengi legally and, transparently. Subsequent to the money being paid to Mengi, he demanded the lease back. When refused, Mengi is alleged to have engaged in an unlawful campaign to terrorise Mr. Middleton into leaving Tanzania despite a High Court ruling (Hon. Kileo. Revision 1. 2006) denying Mengis application to evict Mr. Middleton from the farms.

In November 2005 armed police seized Mr. Middleton from the streets of Moshi on the instruction of RCO Kighondo. He was not told why he had been arrested, charged, cautioned or given legal representation. Taken before a district court he was asked to plead to trumped up charges (CC. 24-25, 2005), which do not appear in the Penal Code and, were dropped by the Director of Public Prosecutions as soon he was informed of the circumstances.

Since November 2005, the IPP Media Group, (the CEO of which is Reginald Mengi, Benjamin Mengis brother), have engaged in a libellous campaign defaming Mr Middleton in newspapers printed in English and Swahili and published on the internet. No right to reply is given. See particularly but not exclusively, The Guardian 23/11/2005, Nipashe 3/1/2006, Guardian 19/1/2006, Mwananchi 22/11/2005, Nipashe 22/11/2005, Guardian, 23/11/2005, Nipashe, 2/2/2006, Alhamisi 19/1/ 2006 and the Guardian 19/1/ 2006.

In July 2006, Mr. Middleton was again arrested RCO Kighondo and committed to prison for two weeks by magistrate Temu (CC-635/2006). Prior to the hearing, he was placed in a public cage for four hours. The arrest was sanctioned by Regional Police Commissioner Tossi. Mengi watched outside the cage laughing at Mr. Middletons incarceration.

A representative of the British High Commission stated Mr. Middletons committal was a foregone conclusion with armed police waiting in vehicles outside the court to take him to prison before he had a chance to speak. He was denied bail on the grounds that he had previously failed to appear at court.

Hearing a Revision of the committal (No.1. H.C. 2006) on the 21st July, Judge Mwakugile at the High Court in Moshi released Mr. Middleton immediately stating there was no evidence to support Mr. Middletons arrest and refusal of bail and no evidence that he had any history of disobeying court orders. He dismissed magistrate Temu from the case stating she was not free from bias and, that the case contained irregularities. The principle State Attorney Lyimo offered no evidence stating the arrest was a travesty of justice and obtained by corruption. Little comfort to Mr. Middleton as he rotted in an African jail for three nights.

Whilst Mr. Middleton was in prison Benjamin Mengi and Anold Kimaro attended Silverdale Farm and threatened Mr. Middletons staff screaming that he had put the Masungu (foreigner) in prison and that anyone that challenged him would be put them there to. Mr. Middleton has reported Mengi for Conspiracy To Murder, RB No BNG/RB/1585/2005, Threats To Kill, RB No BNG/RB/155/2006 and RB No MOS/RB/1787, 2305/06, Criminal Damage, RB No MOS/RB/1787, 2305/06 and Fraud, RB No MOS/RB/1787, 2305/06. Not one criminal charge has yet been brought against Benjamin Mengi.

With the above events resembling daily life in neighbouring Zimbabwe rather than investor friendly Tanzania, how can Tanzania proclaim to be investor friendly? Amidst the rhetoric of assurances from the Tanzania government that it is, lurks a frightening reality that smacks of racism and intimidation not dissimilar to the Zimbabwe regime. To dismiss individual cases such as Mr. Middletons under a small fish in a big pond response is not appropriate when citizens of the UK are donating aid to Tanzania on the basis of good governance. Mr. Middletons situation is now so serious that British M.P. Roger Gale has laid a motion before the British Parliament for the immediate suspension of all preferential debt aid to Tanzania until such time as Mr. Mengi is brought to task for his activities and Mr. Middletons land tenure secured.

How then can Tanzania move forward and provide a more secure environment for foreign investors? What is clear is that this cannot be obtained by rhetoric alone no matter how convincing that might be. To date, the rule of law is not being applied to Mr. Middletons situation and his commercial interests are thereby, being destroyed.

Until Tanzania, demonstrates a fact rather than fantasy commitment to good governance, the UK government and public should be questioning Tanzanias privileged debt status and investors, should be asking the question, is Tanzania a safe place to invest. At this point in time, the evidence suggests it may not be. In any case, if relying on the Investment Guide to Tanzania be aware, Caveat Emptor, this is Africa.

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Comments

Comment #1 (Posted by Florentina Masawe)
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Ask yourself is South Africa a safe place for Tanzanians to Invest? If Tanzanians high official prefer to invest outside its country then Tanzania cannot be a safe place for foreigners to invest. It is sorrowful that we tanzanians friendly people and investor of this country are questioned by less serious people. Especially we who have once been Tanzanians and willing to invest in this country should have a special preference and given special security for our money.
Comment #2 (Posted by Alvam)
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The writer of this article has colonial mind. Completely affected by colonial legacy. We are tired of being treated like second class citizens in our own country on the grounds of the so called 'INVESTORS'. No more! We have seen those investors in the corrupt contracts in every angle. they mistreat tanzanians and when asked they threaten to close down their investments. Examples are vivid in Serena Hotel, Sea Cliff, Mining areas, Muhimbili (the former MOI accountant/ the former Muhimbili Director etc.), and many more.They used to be protected by the former government which every tanzanian comment was grouped as jelous or ignorance. NO MORE!!!! This is a new era my friend, equality and rule of law should be respected. What is happening in UK and US?? People are just arrested for questioning and sometimes imprisoned or even killed on the grounds of terrorism. Have you, (the writer of the article) wrote anything on this?? So likewise, even in Tanzania, regardless of your status, investor or non investor, OUR SECURITY MACHINERY HAS THE RIGHT TO ARREST YOU, QUESTION YOU AND IF NOT GUILTY, BE SET FREE. THE SECURITY ORGANS HAVE THE RIGHT TO DECIDE WHAT POSES A THREAT AND WHAT DOES NOT. SO ARREST OF THE MZUNGU AND NON ARREST OF MENGI, IS NOT A QUESTION OF YOU LITTLE CHAP TO DECIDE.
Comment #3 (Posted by Joel Mchomvu)
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Just in brief lets hear the mengi's side of the story
Comment #4 (Posted by Fabian Mesanga)
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If what has been narrated is true then the government ought to urgently do something. Of course it is true that the most corrupt institutions in Tanzania as everybody knows are the Police and judiciary. Local people are probably worse off than foreigners when it comes to dealing with two institutions. Ministers are always promising to do cleansing but it appears there are serious obstacles. The Tanzanian media is not wholly impartial. Complaints do surface now and then that one with money can buy media editors to write what he/she wants, be it defamatory, libellous etc. The president Mr. Kikwete has promised to work hard on fighting this menance of corrruption and misuse of public office to intimidate innocent people. Let us hope that he will succeed to do it so that all of us can enjoy the rule of law and good governance. I am requesting foreign investors to come to Tanzania to invest and that should they encounter any irregularities or uncivilised behaviour they report the same to state house. In fact those who are intimidating investors are already well-off and would like to continue being feared and praised.
Comment #5 (Posted by Linda Garner.)
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Thank you for your comment.

I truly beleive, that all good Tanzanians want and deserve better than the current situation with the Media. Why then does it appear to be such a difficult issue to address by Mr. Kikwete?

Kind regards,

Linda Garner.
Comment #6 (Posted by Linda Garner.)
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To Alvam

With respect, you are missing the point. You have a government (whether you lke it or not) that is asking investors to come to your country.

Your government has committed itself to the rule of law. This case demonstrates a lack of rule of law. With respect, this issue has more to do with recisim from Tanzanians than a colonial state of mind. I was not born in colonila times. Is it colonial to rely on your governments rhetoric, deveolpe, provide jobes, mediacl and infrastructure and traing?

Please, see the wider picture and stop hiding behind the past days of colonialism.

Mr. Middelto was arrested as a result of corruption and bribery and abuse of due process of law. Due process of law should be available to all, black or white so your point with respct is very misguided.

Yes I agree, some investors have and will continue to do as you suggest. Those the subject of the article do not and have not.

The lease they could expect is that the rule of law is applied to them.

Finally, the British government give aid to Tanzania on the basis of good governance. The least, British investors mght expect, is what is being asked.

If you do not face up to the rpoblems that you have with the police and the judiciary in your country then it is you as a Tanzanian that will suffer so much more than any investor.

Colonialism is dead. Who then is keeping it alive? Please try and address your mind to the wider isseu at stake here.

Respectfully,

Liond Garner.
Comment #7 (Posted by Linda Garner.)
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To Florentina Masawe

You make a very good point.

Linda Garner.
Comment #8 (Posted by Linda Garner.)
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To Joel Mchomvu

Thank you for your comment,

With respect, that is not the issue.

Go and inspect Compamy's House in Dar where you will see the assignment registered. The court ruling from Hon Kileo is a matter of public record. The legal situation regarding the lease is therefore objective.

The two arrests were well documented and the unlawful imprisonment confirmd by the High Court of Tanzania and published in the Daily News on the 23rd July 2006.

The Mengi's own their own personal media and their side of the story has been well documented in it over the past months.

The Middleton's do not have that luxery!!

KInd regards,

Linda Garner.
Comment #9 (Posted by ABDULLA AL-HARTHY)
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Wanaukumbi,

Sijui kua kuna makampuni au mtu binafsi Muengereza na akili yake kamili anae
weza kuekeza pesa zake ka hali ilioko hivi sasa au huko nyuma Tanzania, kuna
Waebgereza wizi, wahuni, malofa na majambazi ambao hivi sasa hawana pa
kwenda kwa vile hawana kima hata huko kwao ndio wanaokaa na kujaribu kubakia
knako masokowasio yajua.

makampuni makubwa na yanayo jua kazi za kufanya hazina tashjii ya uwekezaji
Tanzania, kwa sababu mia moja, moja kati ya hizo sababu ni kua kukiwa na
kampuni ya Kingereza ilikua inahitajia Muengereza awe ndio mkuu wa kampuni
hio, hivi sasakwa hali ilio Tanzania hakuna Muengereza mweye akili yake
timamu atakaye weza kuishi Tanzania kwaajili ya USALAMA wao haupo.

Utulivu wa nchi kwa kila maana ya utulivu ndio unao vutia watu woote
kutamani na kuaka kuishi kunako nchi,Tanzania hakuna utulivu wa watu wenye
nafasi zao kuweza kuishi kwa salam bila ya kuona majambo ya kila khatari kia
siku, kulikua na kampuni moja ya Kiengerea ambayo iitaka kumaliza na
wananchi ili kufungua kampuni ya kuchonga Furniture, na kuingiamikataba kwa
kuweka fedhanyingi sana na kupeleka kila nacho hitajiwa, hali ilikua tayari
kabisa, kabla ya kingiana mikataba na Wananchi, siku hio hio kuliibiwa
fedhaUSmillioni mbili airport asubuhi mchana, na mmoja kati ya walinzi wa
fedha hizo ambazo zilikua za Citybank.

Wawekezaji baada ya kusoma khabari hizo, walikua wakingojea matokea ya kisa
hicho, kwa fupi walighairi kufanya mipango waliokusudia kwa kuhofu usalama
wa management yao, wakati huo huo, baada ya kukamatwa mtuhumiwa redhanded,
kesi hio iko mahakamani inangoja ushahidi hadi leo. Ikiwa mlikua mkifuatilia
kadhia hio maona kua hakukua na haja ya ushahidi baada uliopatikana,lakni
kulikua na njama za ulaji pesa hizo kwa kula muhusika na kesi hio ili
icheleweshwe Tu. Hilo ni moja katika madogo yaliotokeakuhusu ujambazi na
dhamana na wahusika nchini Tanzania, kwa hio Uwekezaji ni dhamana ya wanao
shughulikia na fedha za watu, na watu hao wakiona hakuna usalama wa kila
kitu inakua taabu kuweza kuingia kunako nchi kama anzania.

Kampuni hio ilibadilisha dhamiri yake na kutuma barua ya kughairi kufanya
hivyo, hilolilikuanipgo kubwa kwa Wananchi waliokua wamejiweka tayari
kuingia kunako fadhila hizo. Hii hali ilioko Tanzania hivi sasa kama
haikutengenezwa itakua vigumu sana makampuni anayo weza kuweka fedha kunako
mitaji mikubwa kufanya hvyo.

Nyuma za Tanzania zinazo kaliwa na watu kwa ujumla ziko kunako hali yakama
magereza, ina kila mlango na dirisha vyuma , na kila nyumba na kila kampuni
ila walinzi, kwa sasa makampuni ya ulinzi wa majumba ndio makampuni yanayo
fanikiwa tanzania kutoa huduma ya ulinzi, kitu ambacho nchi ningine
hutoyaona hayo kabisa, watu wanalala milango iwazi au numba zao zina viyoo
yu. Kuna kahatari kunako nyuma nyingine anzania kua ukija ukaingia moto basi
watu wanateketea kabla hawaja weza kutoka nje kwa hali ya nyumba ilivyo
fugwa kwa makufuli wenyee wakiwa ndani, na inakua nyumba inatisha badala ya
kupendeza.

Kikwete anakazi kubwa Mungu ampe hikma ya kutatua matatizo yaliopo nchini.

Abdulla
Comment #10 (Posted by Jason Jason)
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If anything, contributors like Abdulla Harthy are but dangerous,ignorantand arrogant. How can you spite on the country like Tanzania this way!
You can't be serious. If you are you are but a blind lot!
To Ms Gardner, with due respect, your comment that colonialism is dead can not go scott free. Colonialism is still alive save that what has changed is tactics and possible name.
Globalisation,terrorism by west,investment,privatization,economic structural adjustment and what not.
So be informed that colonialism will never die as long as the perpetrators are still alive and their economies are heavily depending on africa abudant resources.
Jason
Comment #11 (Posted by musa juma)
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"the people know what they want- ask them" Mwalimu JK Nyerere. it is not whether investors should be protected it is whether they are investing in good faith or they are just interested in reaping and looting resources and go like the protected Buzagwi achitects....
Comment #12 (Posted by an unknown user)
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what kind of mentality is this, am not tanzanian but hate collonial mentality, is Meddlton you dady, i dont care... u ar investing hate, who is Britain? ya all go to Hell. May the Lord Bless Mr. Mengi.

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