Tuesday 20 December 2011 SUPPORTING THE PROMOTERS OF THE GREEN REVOLUTION

…agriculture on climate change focus

kilimokwanza@guardian.co.tzFollow us on Twitter: Guardian kilimo@kilimo_kwanza

“African farmersand experts noware pushingclimate-smartagriculture to theforefront.However, one bigquestion remainsunanswered: Will itbe possible for thesufferers ‘to turnthe tide,’ given theworld industrialpowers’ stance?

Turning the tideon climate change

By Kilimo Kwanza Reporter

By the poorfor the rich

Poor communities in thedeveloping world are the hard-est hit by climate change and itis projected that they will be af-fected even more in the comingyears. Yet, these countries, pooras they are, have limited re-sources to deal with climatechange related disasters.

However, despite the factthat their contribution in caus-ing climate change is very min-imal, poor countries play an ac-tive role in reversing the trend.In Dar es Salaam, a non-gov-ernmental organisation,Appropriate Rural TechnologyInstitute-Tanzania (ARTI-Tanzania), is playing its part bypreaching forest conservationboth in words as well as actions.

Studies show that the coun-try’s forests are disappearing ata very fast rate. In Mlandizi forexample, there is rampant cut-ting of trees which has resultedinto disappearance of trees andwater sources.

Kibaha District CouncilActing District forest officerDastan Kinyenya, says the dis-trict’s vegetation has beengreatly damaged due to defor-estation. This, he says, isprompted by the rapid increasein Dar es Salaam’s population.Most residents of this city de-pend on charcoal for energy attheir homes.

He says there are areas inhis district that used to havewater sources ten years ago, butnow they have disappeared dueto wanton tree felling and otheruncontrolled human activitiesin forest reserves.

A World Bank study showsthat Dar es Salaam alone con-sumes half the charcoal pro-duced in the country. One mil-lion tonnes of charcoal are pro-duced in the country annuallywhereby Dar es Salaam aloneconsumes 500,000 tonnes. Morethan 30,000 bags of charcoalenter the city daily.

Curbingdeforestation

Having assessed the level ofdeforestation, ARTI decided tocontribute towards this area by

reducing deforestation. TheNGO is doing so by discourag-ing the cutting down of trees forcharcoal making. It offers an al-ternative to tree-based charcoalby training people on how tomanufacture charcoal by usingdry biomass.

The raw materials includeany waste that can be burnt toget char powder which is thenturned into charcoal briquettes.The raw materials for this al-ternative charcoal are foundeverywhere: Dry maize stalks,leaves, grass, small branches,coconut and rice husks, sawdust and wood shavings, amongothers.

The World Bank supportedproject not only helps reducedeforestation but also createsemployment. ARTI has startedby providing training to peoplein Kibaha and Bagamoyo dis-tricts on the fabrication of char-coal kilns, pryolizing of dry bio-mass, briquetting and basicbusiness and marketing skills.TheNGO also assists withmar-ket linkages.

Nachiket Potnis, ARTI’s ex-ecutive director says with thehelp from district forest officers,ARTI selected 12 villages infour districts. The project start-ed in Bagamoyo and Kibaha, aspilot districts where the NGOprovided people with equip-ment for making char powder.

In five villages in Mlandizi,people in the project formedcommunity-based enterprisegroups. The groups, commonlyknown as environmentalfriendly charcoal making group(KMM), are owned by membersof the five village briquettecharcoal committees. These aresupported by the World Bankwhich provides them with seedcapital to start the business.

“These groups bring inwhatever char powder they get.If they bring in 100 kilogramsthey get the payment for 70kilograms and 30 kilograms be-come their contribution to-wards their KMM groups. Weare also trying to teach thementrepreneurship skills - how tomaintain their accounts. We in-tend by March next year tohave five KMMs in different lo-cations in Bagamoyo andKibaha districts,” says Potnis.

The KMM members aremostly people involved in otherincome generating activitiesand are doing briquette makingas a side business. Potnis saysthe project was well received bythe people for it is cheap andsimple to produce.

So far, the World Bank hasinjected into the project aboutUSD 60,000, equivalent to90m/- and another USD 70,000,equivalent to 100m/- will be re-leased over the next year.

More jobscoming

Unemployed 20-year-oldHabiba Maneno is a member ofone of the KMM groups inMlandizi. Her hope is to be em-ployed in the industry whichshe hopes will pick up oncecharcoal users understand theimportance of using the char-coal briquettes made from bio-mass.

She, herself, has used thecharcoal and says it is as goodas the charcoal manufacturedfrom trees- perhaps this one ismuch better.

Maneno’s group has al-ready started marketing thecharcoal and she says the con-sumers’ response so far is verypositive. “We give our prospec-tive clients samples to try andthey really like it after trying,”says Maneno.

Kinyenya, the forest officer,says the alternative charcoalproject is very important notonly in forest conservation, butalso in creating new jobs forwomen and youths. “We need itmore, especially now that thepopulation increase seems to bethreatening our forests. Giventhe high demand for charcoal inDar es Salaam, young peoplehave been seizing the opportu-nity by engaging in charcoalbusiness,” says Kinyenya.

According to the officer, un-employed youths have been en-gaging in wanton tree cuttingfor economic reasons and there-by depleting the forests.Kinyenya says, the project willreduce deforestation and im-prove the environment. “If wemanage to control randomfelling of trees, then we shall beable to restore our beautiful en-vironment,” he says.

Dar keybeneficiary

Allan Shaidi, a businessman in Dar es Salaam plans toventure into the business. “I

EDITORIALThe Guardian KILIMO KWANZA Tuesday 20 December, 2011

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The Guardian KILIMO KWANZADEFORESTATION

Tuesday 20 December, 2011

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The effects of climate change are now officiallybeing felt in Tanzania, with ZanzibarPresident Dr Ali Mohamed Shein declaringthis week that the island will soon find itselfin a precarious situation if no remedial meas-ures are taken.

Opening a three-day symposium on the effects of cli-mate change on the islands, held atMigombani in Zanzibarrecently, Dr Shein noted that the effects included rising sealevels which had started eroding the Isles shoreline.

He said six out of 10 districts in Zanzibar were experi-encing water erosion precipitated by rising sea levels, ren-dering previously productive land unusable with cemeter-ies waterlogged and people's economic activities directly af-fected.

The president confirmed that the government hadworked out strategic plans to support people directly af-fected by the changes, such as providing them with cleanand safe water, particularly in Nungwi northern Unguja,where freshwater had mixed with seawater.

The President said the government is working to en-sure climate change does not put at risk the welfare andgrowth of Unguja and Pemba islands.

But Tanzania is not the only country in the world ex-periencing the pangs of climate change. Even as the coun-try strives to commercialise her agriculture through KilimoKwanza, corporate agri-business has received severetongue lashing from a broad coalition of international socialmovements and civil society organisations rallying againstthe decisions resulting from the just ended UN COP17Climate Change Summit in Durban, South Africa.

“Corporate Agribusiness, through its social, economic,and cultural model of production, is one of the principalcauses of climate change and increased hunger. We there-fore reject Free Trade Agreements, AssociationAgreements, and all forms of the application of IntellectualProperty Rights to life, current technological packages(agrochemicals, genetic modification) and those that offerfalse solutions (biofuels, nanotechnology, and climatesmart agriculture) that only exacerbate the current crisis,”a statement from the coalition said.

The missive comes in light of agreements reached atthe climate summit that still leave Earth on track for 3-4degrees of warming or 5-6 degrees for Africa, by 2100, cer-tainly a disastrous situation which was termed as consti-tuting a crime of global proportions against humanity, andone that is not dissimilar to apartheid.

According to Nnimmo Bassey, Chair of Friends of theEarth International, “An increase in global temperatures of4 degrees Celsius, permitted under this plan, is a deathsentence for Africa, Small Island States, the poor and vul-nerable worldwide. This summit has amplified climateapartheid, whereby the richest 1% of the world have decid-ed that it is acceptable to sacrifice the 99%.”

“The only way forward for agriculture is to supportagro-ecological solutions, and to keep agriculture out of thecarbon market,” said Alberto Gomez, North AmericanCoordinator for La Via Campesina, the world’s largestmovement of peasant farmers.

By some estimates the cost of cutting greenhouse gasemissions will be four times more beyond 2020 than theywould cost today.

Achim Steiner, UN Under-Secretary-General andUNEP Executive Director, concurred that the big questionmany will ask is how the commitments agreed in Durbanwill translate into actual emission reductions and by when?Whatever answer emerges in the coming months, he said,Durban has kept the door open for the world to respond toclimate change based on science and common sense ratherthan political expediency.

However his view of the previous decisions on financ-ing, technology and Reduced Emissions from Deforestationand Forest Degradation (REDD+) were negated by TheGlobal Alliance of Indigenous Peoples and LocalCommunities against REDD and for Life which said thatREDD + and forest carbon projects threaten the survival ofIndigenous Peoples and forest-dependent communities.

“Mounting evidence shows that Indigenous Peoples arebeing subjected to violations of their rights as a result of theimplementation of REDD+-type programmes and policies,”the group declared.

Without addressing these fundamental concerns, theenvironmental, social and cultural effects of climate changevaluation of technologies have been taken out of theDurban outcome.

Grim outlook asclimate change nips

i n s i d e

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Nuisance taxes: Dialoguekey to effective abolition

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COVER STORYThe Guardian KILIMO KWANZA Tuesday 20 December, 2011

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The Guardian KILIMO KWANZACOVER STORY

Tuesday 20 December, 2011

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By Kilimo Kwanza Reporter

and Agencies

Climate-smartagriculture

AFRICAN farmers, researchersand high-level politicians have nowjoined their hands to push climate-smart agriculture to the forefront. Thiswas evident during the UN ClimateConference (UNFCCC) in Durban,South Africa last week.

“We must deliver the resourcespoor farmers need to sustain theirlives,” said Prof Jumanne Maghembe,Tanzania’s Minister of Agriculture,Food Security and Cooperatives to acrowded room at the Africa Pavilion.

He spoke to the opportunities andchallenges of climate-smart agriculture

for African farmers, one of the hottest,and sometimes contentious, issues atthis year’s UN Climate Conference inDurban.

Prof Maghembe was joined byProfessor Tekalign Mamo, EthiopianState Minister in the Ministry ofAgriculture, as well as the leaders ofAfrican farmers unions’ from Southern,Eastern and Western Africa.

Clear commonmessage

The common message was clear –negotiators at COP17 must put agricul-ture up front and centre. The UNFCCChas largely ignored agriculture, espe-cially the adaptation benefits. Climatesmart agriculture can help Africanfarmers adapt to climate change andsafeguard their food security and liveli-hoods, while enhancing their ecosys-tems and supporting mitigation.

In Africa, the biggest threat to poorfarmers is the increase in unexpectedextreme events that come with climatechange. Prof. Maghembe described thevicious cycle of droughts and floods thatare currently affecting areas of EastAfrica, killing livestock and destroyingfarms. “Where are the priorities foragriculture faced with these condi-tions?” he asked.

There aresolutions

The speakers, including Prof Mamoof Ethiopia, and the farmer unionheads, noted that of many of the solu-tions for adapting agriculture to cli-mate change are already known, for ex-ample planting trees that increase soilfertility and boost crop yields.

Other examples include rainwaterharvesting and greenhouses. Dr JamesKinyangi, who coordinates the EastAfrica program for the CGIARResearch Program on Climate Change,Agriculture and Food Security, notedsuccessful innovations exist to reduceclimate risks to farmers including cropand livestock insurance, seasonal cli-mate forecasts, and seed varieties thatare resilient to pests and diseases.

Give usincentives

While solutions exist, farmers arenot able to adopt these practices wide-ly. Douglas Taylor-Freeme, president ofthe Southern African Confederation ofAgricultural Unions (SACAU), sharedhis union’s position.

“We as farm leaders want to makeworld leaders and decision makers

aware of agriculture’s potential as a so-lution to deal with climate change,” hesaid. “Farmers from Southern Africaofficially recognise climate-smart agri-culture in achieving important objec-tives of adaptation, food security andmitigation.”

Mamadou Goita, executive secre-tary of the West African Network ofFarmers’ and Agricultural Producers’Organisations (ROPPA) noted that insome countries over 99 per cent of agri-culture production comes from smallfarmers.

Despite this, small African farmersare not getting the finance they need toscale up. Agriculture must be at thecentre of development programs, hesaid, and we must scale up good prac-tices already implemented by farmers.Farmers can be more greatly involvedin research activities, he said.

Philip Kiriro, president of the EastAfrica Farmers Federation also high-lighted the need to scale up urgently, sothat farmers can experience the bene-fits of increased food security and re-silience that climate-smart agriculturecan bring. He called for COP17 nego-tiators to place farmers at the centrestage.

More financing The African Development Bank

(AfDB) will be making a substantial in-

vestment in agricultural research tosupport climate smart agriculture. KenJohm, who represented AfDB said thatthe Consortium of InternationalAgricultural Research Centers(CGIAR) will receive a funding to focusresearch efforts on climate-proofingcassava, maize, rice and wheat. Johmalso recognised that a work program onagriculture should be adopted by theUNFCCC.

Key actions Session chair Michael Hailu,

Director of the Technical Centre forAgricultural and Rural CooperationACP-EU (CTA), also noted that food se-curity is ultimately at the center of cli-mate smart agriculture.

The session was wrapped up byLindiwe Sibanda, who leads the Food,Agriculture and Natural ResourcesPolicy Analysis Network (FANRPAN)and has been a strong advocate forfarmers in the climate negotiations.She called a standalone program onagriculture under COP17, with a focuson financing and science.

The roundtable event was coordi-nated by the CGIAR Research Programon Climate Change, Agriculture andFood Security (CCAFS), CTA andFANRPAN, who also helped organizeAgriculture and Rural DevelopmentDay.

COP17negotiations

THE SACAU took taking farmers’concerns about climate change to COP17 in Durban with seriousness of itskind, calling for the global negotiationsto put agriculture firmly on the climatechange agenda and establish a workprogram that will outline and coordi-nate the necessary responses for thesector.

SACAU reiterates the major roleagriculture plays across the continentand the challenges that climate changeposes to the sector.

“Agriculture is the economic foun-dation of most African countries and itmakes a significant contribution to foodsecurity and poverty alleviation for mil-lions of households on the continent,”said SACAU CEO Ishmael Sunga.

“Climate change will challenge ourability to feed ourselves and it will af-fect areas which are already vulnera-ble.”

SACAU is concerned about the ab-sence of agriculture in the currentagreed text of the UNFCCC.

“We are calling for a secured texton agriculture in the UNFCCC negoti-ations in the common vision for Long-Term Cooperative Action (LCA),” saidSunga.

“Specifically, SACAU wants a textthat recommends the establishment ofa work program on agriculture underthe UNFCCC’s Subsidiary Board forScientific and Technical Advice (SBS-TA), covering both adaptation and mit-igation”, Sunga said in a statementahead of the conference.

Agriculture is being coupled withbunkers fuels and trade in the negotia-tions. “We are calling for agriculture tobe decoupled from bunker fuels, and fortrade related issues to be handled sep-

arately within the international tradenegotiations,” said Sunga.

SACAU also calls for the simplifi-cation of the financing mechanisms putin place within the framework of theUNFCCC, especially the CleanDevelopment Mechanism (CDM), tomake them accessible to farmers in de-veloping countries.

“It is clear that without sustainedadaptation and mitigation measures,and the technologies and financing tosupport them, the goals of food securityand poverty reduction will not be metand the progress made in economic de-velopment could be jeopardised on thecontinent,” added Sunga.

Post-Kyotoregime

SACAU also adds its voice to grow-ing calls for a binding agreement in thepost-Kyoto regime and for Annex 1

countries to honour their pledges for fi-nancing adaptation and mitigation.

“We urge the global community toprovide resources to support Africa’sinitiatives and frameworks in respond-ing to climate change. We also advocatefor adequate allocation of GreenClimate Fund resources to agricultureas well as the participation of farmersin the Fund’s governing bodies,” Sungasaid.

SACAU (the Southern AfricanConfederation of Agricultural Unions)is a regional farmers’ organization thatwas established in 1992. Its core mem-bership is open to national farmers’unions in Southern Africa. It is in-volved in agricultural development inthe region by strengthening the capaci-ties of farmers’ organizations, providinga collective voice for farmers on region-al and international matters, and byproviding agriculture related informa-tion to its members and other stake-holders.

…agriculture on climate change focus

Turning the tide on climate change

…the 15-point position

“We as farm leaderswant to make worldleaders and decisionmakers aware ofagriculture’spotential as asolution to deal withclimate change

“SACAU wants a textthat recommendsthe establishment ofa work program onagriculture

…scale ofthe problem

A 2009 study by theInternational Institute forEnvironment and Development(IIED) shows that the impact of cli-mate change on the country’s agri-culture could cut Tanzania’s GDP by1 per cent in 2030 and by as much as68 per cent by 2085.

According to the study, it’s thepoor that will be hit the hardest.“The impacts of climate change onagriculture will hit the poorestTanzanians first and hardest, so thesooner they can adapt the better,”says James MacGregor, an econo-mist with IIED and the co-author ofthe study.

The researchers say changingweather patterns will boost harveston crops like barley, rice and wheat,but might hurt maize, which is cul-tivated by more than 80 per cent ofTanzania’s poor. They say womenwill be worst hit while poor small-holder farmers who constitute themajority of the farming populationwill not benefit from rising foodprices.

This is because they cannot af-

ford to irrigate their farms or otherways to boost production. The urbanpoor will also suffer due to high foodprices.

“If Tanzania’s farmers andfarming practices do not adapt, theimpacts of climate change will be ex-treme and they will ripple throughthe country’s entire economy as somany other sectors are dependenton agriculture,” says MuyeyeChambwera, also an economist withIIED and the co-author of the re-port. Tanzania is doing its best toadapt to the climatic changes. Oneof the mitigation measures includesconservation of forests. Healthierforests will ensure farmers adequateand reliable rains and will also pro-tect water sources which could beused for irrigation.

Studies show that the country’sforests are disappearing at a veryfast rate. Statistics from the min-istry of natural resources show thatthe country has been losing an esti-mated 400,000 ha of forest per an-num.

According to the US based envi-ronmental watchdog ConservationInternational (CI), the country is setto lose its entire forest cover withinthe next 100 to 160 years if more isnot done to reduce the current rateof deforestation.

“Changing weatherpatterns will boostharvest on cropslike barley, rice andwheat, but mighthurt maize...

“We must deliver theresources poor farmersneed to sustain theirlives”Professor Jumanne A. Maghembe,Tanzania’s Minister for Agriculture.

“Many of the solutionsfor adaptingagriculture to climatechange are alreadyknown, like plantingtrees that increase soilfertility...”Professor Tekalign Mamo, Ethiopia

“Scale up urgently, sothat farmers canexperience the benefitsof increased foodsecurity”Mr. Philip Kiriro, president of theEast Africa Farmers Federation.

“We as farm leaderswant to make worldleaders and decisionmakers aware ofagriculture’s potentialas a solution to dealwith climate change”Douglas Taylor-Freeme, president ofthe Southern African Confederationof Agricultural Unions (SACAU)

PHOTO: BY COURTESY OF JET

FINANCEThe Guardian KILIMO KWANZA Tuesday 20 December, 2011

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The Guardian KILIMO KWANZAFINANCE

Tuesday 20 December, 2011

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By Angel Navuri

THE Tanzania Exporters Association (TANEXA)has proposed the establishment of the TanzaniaCredit Guarantee Fund (TCGF) as a source of fi-nance to boost the efforts of local producers andexporters. The proposal to form the TCGF, ac-cording to TANEXA, is crucial due to the current

shortcomings in the Export Credit Guarantee Scheme (ECGS)and the Small and Medium Enterprises Credit GuaranteeScheme (SME-CGS).

Tanzanian exporters and producers of export commoditiesbelieve that the performance of the two schemes will improvetremendously if a legal separate entity with a clear missionand strategy is established.

The proposal to create the Fund follows a study on theutilisation of the two schemes which was commissioned byTANEXA in 2008 to shape these schemes into an effectivesource guarantees for accessing funding from private financialinstitutions. TANEXA is a private, non-governmental apexassociation, which serves as a focal point for uniting and giv-ing voice to Tanzanian exporters.

Financial constraintsOver the years, the lack of reliable source of finance to

support production and export undertakings has been one ofthe major challenges facing TANEXA members. According toa recent study by TANEXA, which was financed by theBusiness Environment Strengthening for Tanzania (BEST-AC), with the operations of the two schemes being under theGuarantee Fund issues of transparency and accountability tothe public will also improve.

The study says the proposed Fund should be headed by achief executive officer under a Board of Trustees whose mem-bers should be drawn from the ministries of finance and in-dustries, Small Industries Development Organisation (SIDO),TANEXA, Tanzania Bankers Association, TCCIA, Industries

By Kilimo Kwanza Reporter

Call for public education

THE Tanzania Chamber ofCommerce, Industry andAgriculture (TCCIA) hascalled for the provision ofadequate education totaxpayers and local gov-

ernment authorities on nuisance taxesand the reasons why such taxes wereabolished in 2003.

According to a study carried out byTCCIA in Arusha region, the existenceof the information gap on the taxregime and the resulting resistanceamong the taxpayers militates for theformation of a framework for dialoguebetween district councils and the tax-payers.

‘”There is a need for the govern-ment to build and strengthen the taxadministration capacity of the localgovernment authorities. The reformsshould be similar to those carried outby the Tanzania Revenue Authority(TRA) whose implementation havebrought remarkable and commendableimprovement in the tax administrationboth in terms of revenue collection aswell as taxpayer and business/invest-ment friendly tax regime,” says thestudy.

Jointly undertaken by the TaxplanAssociates Limited and BusinessAdvisory Services Company Limited,the survey was undertaken in Arusharegion mainly to gather empirical data(evidence) and views of all stakehold-ers on the current situation about theimplementation of the government de-cision to abolish nuisance taxes by therelevant authorities in the study area.

The TCCIA - Arusha chapter con-ducted preliminary enquiries and ob-servations on the implementation ofthe abolish order through a survey in2003, as part of its core objectives ofplaying a leading role in improvingpublic/private business partnershipand environment conducive to volun-tary tax compliance which is beneficialto both parties.

The survey was in line with theprimary objective of the government tocreate a business friendly tax regimeand conducive business and invest-ment environment by abolishing taxesconsidered to be nuisance to the peopleand barrier in the productive areas,apart from weakening the administra-tive capacity.

The survey revealed that there areserious shortfalls in the expected re-sults of abolishing the nuisance taxes.In order to get down to it, the Chambersolicited and obtained a grant from theBEST-AC it spent on commissioning aconsultancy to undertake the study.

The objective of the study was toidentify all the nuisance taxes whichwere abolished by the central govern-ment, as per Finance Act No. 15 of2003. It also sought to evaluate theabolition process in order to know if thesteps taken were in order as expected;to evaluate which taxes were actuallyabolished and whether the order wasbeing effectively adhered to.

Additionally, the study sought toidentify new taxes which have pur-portedly been introduced in place ofthe abolished ones; to examine the im-pact of the abolition in revenue termswith regards to Councils and loss ofbusiness opportunities with regards tothe private sector; the effect of the im-plementation of the order on voluntarytax compliance as well as its impact on

the war against corruption; and finally,to identify the anticipated impact onthe Councils and businesses.

Authorities dividedThe study shows that all inter-

viewed local government authoritiesresponded in the affirmative that theywere aware of the abolition of nuisancetaxes in 2003. “They were, however, di-vided with respect to the impact of theabolition and the process leading to-wards it. While one respondent ex-pressed relief in terms of hardship en-countered in collecting and administer-ing the abolished taxes, another re-spondent wished the governmentshould have involved adequately allstakeholders and provided educationprior to embarking on the abolition ex-ercise,” the study notes, adding: “Theyfelt that the exercise would have beenmore fruitful if the local governmentauthorities were involved in the pre-abolition process.”

The study further revealed that al-though the local government authori-ties claimed to have implemented thegovernment decision to abolish nui-sance taxes, only two of the councilstook steps to enact new by-laws whichintroduced the taxes which they werelegally allowed to impose and collect.

“One council has not, as of today,enacted any by-law in compliance withthe government decision. Even the twowho acted within the letter and spiritof the law still continued to collect theabolished taxes or introduced taxeswhich are similar to the abolished nui-sance taxes,” the study informs.

In the studied area, all the threecouncils indicated that they had been

severely hit by the abolition of nui-sance taxes although they were not ina position to quantify the amount ofrevenue they lost from the abolishedtaxes. Even the promised governmentsubvention which was meant to bridgethe gap was either inadequate or wasdisbursed a bit late, hence hamperingexecution of the councils’ developmentplans and provision of social services,the survey reveals.

It says that another impact of abo-lition of nuisance taxes reported by thecouncils is the proliferation of streetvendors and unlawful business under-takings. In addition, abolition of li-cense fees for small traders has result-ed into high administrative costs,sometimes involving travelling to dis-tant areas to issue them.

The councils gave a number of rec-ommendations for effective implemen-tation of the government decision toabolish nuisance taxes as well on waysand measures to minimise the impactof abolition on revenues.

They called on the government togive commensurate, adequate andtimely compensation to the local gov-ernment authorities on the loss of rev-enue due to abolition of nuisance taxes.

The Councils also advised thatcompanies or organisations enjoyingtax waivers or holidays at other levelsshould not be exempted from payinglocal government taxes. They alsowant the abolition process be reviewed,particularly in the agricultural sector.

Another key recommendation isthat the central government should letthe Councils collect the taxes and re-mit the required percentage to the cen-tral government unlike the current sit-

uation whereby the central govern-ment collects and disburses subven-tions which sometimes are thought tobe less than what should have actuallybeen remitted. “In short, they call fortransparency in the whole process sothat there is no incidence of grudges onthe part of the councils,” notes the sur-vey.

Info gapThe study further underscored a

salient fact that the business commu-nity and the public in general are ap-parently not adequately informed byeither the central government or thelocal government about which taxesthey are required to pay and whichones have been abolished.

“From interviews that were con-ducted, it is portrayed that the centralgovernment has not been monitoringthe enforcement of the Finance ActNo.15 of 2003. The lack of monitoringfollow-up and evaluation of the imple-mentation has created the managerialdistance between the central govern-ment and its local authorities, allowingthem to tax and or extort levies con-trary to the law almost at will,” showsthe study. It adds: “It’s sad that the ig-norance of many of the taxpayers orlack of information on the abolishednuisance taxes is being exploited, bythe local authorities, hence they arestill complying though with disquiet.”

The survey further notes that “inthe opinion of most respondents, theinformation gap is a serious weaknessthat needs to be addressed by variousstakeholders, most importantly thebusiness chamber and the governmentauthorities. There is therefore the need

to disseminate comprehensive infor-mation regularly on tax law to the pub-lic.”

The study further reveals a glaringcontradiction in the implementation ofthe reformed tax law at issue. Whilethe government promised to end theoppressive nature of the nuisance tax-es, implementation was unfortunatelyleft to the interested local authoritiesto ensure adherence to the provisionsof the law, but without the necessarycorresponding central command, con-trol, monitoring and reporting.

As a matter of stated policy, thesurvey shows that in terms of the newAct the councils were to be compensat-ed by being given 60 per cent budget-ary grant and the balance was to beraised through own sources. However,“the facts on the ground are such thatthe councils have had to resort to ‘cre-ative invention’ of new levies which inreality are the old nuisance taxes innew names.”

Tax burdenThe study further says while ef-

forts to bridge the revenue gap by localauthorities are understandable, suchefforts have not been pursued withinthe limits of the law providing for thatprerogative and in particular, it hasbeen pursued in contravention of theprohibited provisions.

“Abuse of power renders such tax-ation illegitimate, unfair and unac-ceptable under good governance.Indeed, such surrogate taxes amountto over taxation on poor people who thereformed law undertook to protect andpromote from the start,” it notes.

The study says it is evident thatthe surrogate taxes are not the onlyburden imposed on the business com-munity and the citizens at large. Theyhave had to shoulder as well the bur-den of multiple taxes and double pay-ment across the councils.

”It would be wise for public au-thorities to restrain themselves fromover concern to revenue without givingcorresponding due concern to businessgrowth or basically, to the economythat sustains the taxpayers, includingprivate and public institutions,” thestudy recommends.

Payers dissatisfiedIn summing up their dissatisfac-

tion with the way the abolition of nui-sance taxes has so far been imple-mented, the respondents aptly viewthe matter as a case of setting a thief tocatch and punish himself! In otherwords, what could anyone expect fromthe councils long steeped in the cultureof collecting revenue using the con-demned nuisance taxes to implementreforms which spell out “constrained”revenue options?”

According to the survey, the busi-ness community again indicated itsdissatisfaction with regards to re-quests, demands, levies and fees im-posed on them on top of other taxes col-lected by the local government author-ities.

However, a good number of re-spondents showed positive apprecia-tion of the culture of contributing tothe good cause of social developmentprojects such as school construction,health facilities and the Uhuru torch.

“The pervasive feeling,” the studynotes, “is that the culture should besustained without councils resorting toviolence or other crude economic de-vices which may harm their business-es.”

Nuisance taxes: Dialogue key to effective abolition

think with the rapid population growth,we need to have concerted efforts, in-cluding promoting recycling of wasteand creating financial opportunitiesthrough recycling,” he says, adding:

“When I learnt about this particu-lar project, I liked it simply because ithelps in protecting the environment.Most importantly, it creates wealthfrom waste.”

What he likes about this kind ofcharcoal is the fact that one can simplycollect dry grass or any other waste,carbonate it and make charcoal out ofchar powder and make the briquettesthat create charcoal that burns longerand is cheaper to produce.

For Shaidi, this is an opportunityproviding a side income for many peo-ple. He has already spoken to people heknows would be interested in the busi-ness and he has spoken to entrepre-neurs who collect garbage so that asthey return with empty vehicles afterdumping garbage, they could pick uppiles of waste materials or go to wherepiles of them are dumped to collectsome.

Shaidi says as the population growsin their area, there already an increas-ing concern about deforestation andthat this alternative energy source andits use would be a great opportunity forthose using charcoal to continue de-

pending on it, but without affecting theenvironment negatively.

Better energy for homesShaidi says the best thing about

briquette charcoal is that it can be usedinside the house with-out problems becauseit has no smoke. Thebusinessman, whohas himself tried thecharcoal, says it iseconomical as it burnsslowly; and that it isas good as the normalcharcoal commonlyused in Dar esSalaam households.

He says there is alot of biomass wastearound that people donot know could gener-ate wealth for them.“There is a lot of trashthat is not beingused.” Shaidi hasstarted researchingon the availability ofthe raw materials inthe city and has seenthat there is quite alot. “You will be sur-prised…People cuttrees and get rid ofbranches and leaves,”he says, adding that

there is a bright future in the business.Shaidi says implementation of the ini-tiative requires a vision and determina-tion, as “anything good doesn’t comeeasily.”

The fact that this is a new product

in the market is what Shaidi sees as be-ing the major challenge. He says effortsshould be made to convince and educatethe people on the new energy sourceand its application in their lives.

“I think the government, with itsappropriate institutions, could promotethis tremendously. They could promoteit in the charcoal line,” Shaidi says.According to him, today’s charcoal sell-ers would be the most appropriate peo-ple to start selling the new energysource, as a side business and then re-placing the traditional charcoal overtime.

Charcoalbriquettesunpopular

Tanzania Traditional EnergyDevelopment and EnvironmentalOrganisation (TaTEDO) programmecoordinator Shima Sago agrees char-coal briquettes are still not popular inhouseholds. He says some people pro-duce briquettes for institutions.

But how about promoting charcoalbriquettes as an alternative source ofenergy? Sago thinks emphasis shouldbe put on sustainability. This is giventhat charcoal and firewood are the

main sources of energy for 90 per centof the Tanzanian population and 90 percent of Dar es Salaam dwellers.

He says all available sources of en-ergy should be used while maintainingecological balance.

Sago says the problem when itcomes to tree-based charcoal produc-tion is the fact that most producers useinefficient kilns that consume morewood and produce less charcoal.

Using efficient kilns like TaTEDO’simproved basic earth mound kiln or thehalf orange kiln saves a lot of trees.These use less wood and produce morecharcoal. “Deforestation can only beaddressed using combined efforts.Charcoal producers should not onlyharvest trees but replace them too. Andcharcoal users should go for stoves thatuse less charcoal,” says Sago.

The manager emphases on selec-tive harvesting of trees and the use ofdifferent alternative sources of energyor else it will reach a point when char-coal will be scarce.

He points out land use plan as an-other solution to deforestation wherethere should be specific areas for agri-culture, tree harvesting as well as for-est reserves.

Sago calls upon government to con-trol the prices of gas and electricity oreven provide subsidies to make thesesources of energy affordable to the poormajority poor.

Exporters call for new credit guarantee fund

FROM PAGE 3

Waste to wealth: Saving forests from depletion

CONTINUES ON PAGE 8Minister for FinanceMustafa Mkullo

FINANCEThe Guardian KILIMO KWANZA Tuesday 20 December, 2011

8

and Agriculture, Confederation of TanzaniaIndustries (CTI) and the Tanzania Women Chamberof Commerce.

The study also says that in order to extend thetwo schemes to Small and Medium Enterprise andexporters all over the country, the proposed Fundshould decentralise the services of these schemesthrough a branch network in line with the size andpopulation of the country.

“The Ministry of Industries, Trade andMarketing through its public institutions, SIDO andthe board of external trade, should be proactive inplaying their noble role of promoting SMEs and ex-ports,” says the study.

It adds: “Since establishing a branch network atthe outset is costly, the Fund could arrange initiallyto utilise SIDO regional offices or private financialinstitutions’ offices to provide services to entrepre-neurs and exporters in respective regions.” The pro-posed initial capital for the establishment of the

Fund is 29bn/-, five times the current available fundsfor two credit guarantee schemes which cater for aminimum of 300 clients a year.

To enable the Fund function efficiently, theTANEXA study proposes capacity building and re-cruitment of workers to perform such tasks as as-sessment and approval of eligibility, monitoringguaranteed loans, processing and reviewing claims,storing information on borrowers, preparing reportson schemes’ operations and possibly providing addi-tional services as part of the Fund’s portfolio of serv-ices.

“The business re-engineering process will in-clude the recruitment of competent and able fundstaff who will improve the operations of the fund.This means administrative work will be reduced forall involved thus shortening the period from guaran-tee request to grant from several months of waitingto less than five working days,” the study says.

Current schemesThe Export Credit Guarantee Scheme and the

Small and Medium Enterprises Guarantee Scheme,both under the Ministry of Finance, were establishedby the government between 2003 and 2005 to pro-mote economic development in general by encourag-ing high value exports, such as horticulture and flori-culture and other value added exports that will gen-erate employment and foreign exchange.

Another goal of the twin schemes was to promoteand support Small and Medium Enterprises, whichhave a significant role in the economy by creating anenabling environment for expansion and facilitatingand facilitating access to financing resources.

These objectives are in line with government ef-forts of promoting economic growth and poverty re-duction as outlined in other policies, national and in-ternational initiatives such as the National Strategyfor Growth and Reduction of Poverty (MKUKUTA),Vision 2025 and the Millennium Development Goals(MDGs).

Schemes’ weaknessesAmong the major weaknesses of the two credits

guarantee schemes noted in the TANEXA study in-clude high fees on export credits, unsatisfactory han-dling speed of guarantee application as the entireprocess undergoes a cumbersome bureaucracy andlow capital. “The entire ECGS process seems to bequite bureaucratic and thus information availabilityand flow about the two schemes remains a problemwhich makes the Bank of Tanzania seems unpre-pared to manage the two schemes,” reveals thestudy.

Again, the study says coverage on existing fi-nancing and export promotion facilities among ex-porters and SMEs producers is limited. “This short-coming is enlarged by the absence of measures to en-hance marketing and promotion of SMEs and theirproducts by relevant organs,” it notes.

“These limitations and the fact that all SMEs aretreated the same as if they are homogenous, portraythe ECGS as not supportive of value-added products,particularly in the agricultural sectors,” adds thestudy.

Scheme as separate entityAccording to this study, most successful state-

run Credit Guarantee Schemes in the world are runas separate legal entities and that placement of theschemes under a government agency creates conflictin purpose for lack of interest and experience by pub-lic officials in working with SMEs and guaranteeschemes.

Four countries of Botswana Namibia, SouthAfrica and Swaziland in the Southern AfricaDevelopment Community (SADC) have establishedsuccessful Credit Guarantee Schemes targetingSMEs. The schemes in Botswana, Namibia andSwaziland are supported both by the governmentand donor. In South Africa, the credit scheme iswholly government funded. Tanzanian exportersand businesspersons believe that the establishmentof the Guarantee Fund could also allow the accom-modation of more empowerment schemes as theneed may arise.

“With a separate legal status, government inter-vention to the Fund should be restricted to policy de-cisions, funding and extending counter-guarantees.Technical support could be sourced initially while ca-pacity for local staff is being built,” explains theTANEXA study.

The study further says in order to achieve its ob-jectives of improving SMEs’ access to finance and toassist economic decentralisation; the Fund has to beproactive in gaining recognition and acceptance byleaders and borrowers.

“Therefore marketing of the two schemes is im-portant, since most SMEs in Tanzania seem to beunaware of the existence of the two schemes,” thestudy concludes.

KILIMOKWANZADIRECTORY

FINANCETanzania Investment Bank Ltd (TIB)Tel: +255 22 2411101-9Private Agricultural Sector Support (PASS)Tel: 023-3752/3758/3765

Bank of TanzaniaP.O. Box 2939, Dar es Slaam, Tanzania

WATER AND SANITATION

Dar es Salaam Water and Sewerage Authority(DAWASA) – Tel: +255 22 276 0006

Dar es Salaam Water and Sewarage Corporation(DAWASCO) Tel: +255 22-2131191/4

Drilling and Dam Construction Agency (DDCA)Tel: +255 22 2410430/2410299

Energy and Water Utilities Regulatory Authority Tel: +255 22 2123850, 22 2123853

Water and Environmental Sanitation ProjectsMaintenance Organization (WEPMO)Tel: +255 22 2410738, 716 099959

Ministry of WaterTel: +255 22 245 1448

INDUSTRY SUPPORT ANDASSOCIATIONS

Small Industries Development Organization(SIDO) – Email: dg@sido.go.tz, info@sido.go.tz

ANSAF - P.O. Box 6370, Dar es Salaam

CNFA - info@cnfatanzania.org

Tractors LimitedCells: +255 784 421606, 786 150213

Consolidated Holdings Corporation (CHC)Tel: 255 (022) 2117988/9

Vocational Education and Training Authority(VETA) – Tel: +255 22 2863683/2863409

Export Processing Zones in Tanzania (EPZ)Tel: +255 22 2451827-9

Agricultural Economics Society of Tanzania(AGREST) – Tel. +255-23 260 3415

Tanzania National Business Council (TNBC)Tel: +255 22 2122984-6

Tanzania Agriculture Partnership (TAP)Tel: +255 22 2124851

Tanzania Milk Processors Association (TAMPA)Tel: +255 222 450 426

Rural Livelihood Development Company (RLDC)Tel: +255 26 2321455

Tanzania Cotton BoardTel: +255 22 2122564, 2128347

Horticultural Development Council of Tanzania (HODECT)Cell: +255 789 222 344; Fax: +255 27254 4568

TATEECO Ltd – Tel: +255 784 427817

AGRO-PROCESSING

ERTH Food - Tel: +255 22 2862040

MUKPAR Tanzania Ltd Tel: +255 28 250038/184

ASAS Diaries Limited - Tel: +255 26 2725200

Tanga Fresh – Tel +255 27 2644238

NatureRipe Kilimanjaro LimitedTel: +255 22 21 51457

EQUIPMENT

Achelis Tanganyika Ltd+255 22 2700 760 or +255 784 300 084

National Service Corporation Sole (SUMAJKT)Cell: +255 717 993 874, 715 787 887

AGRO-INPUTS

Minjingu Mines & Fertilizers LtdTel: +255 27 253 9259 250 4679

Exporters call for new credit guarantee fundFROM PAGE 6

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