Empire Voice: Economic

Showing posts with label Economic. Show all posts

Hundreds of Tanzania mine workers have lost their jobs. FILE PHOTO | AFP

By ADAM IHUCHA,

The tumbling price of gold and poor gemstone output have forced mining companies to lay off hundreds of workers.

Two leading mining firms — Acacia Mining Plc and TanzaniteOne — have announced plans to shed 1,685 jobs or 16 per cent of the mining industry’s 10,000 strong formal workforce by the end of this year.

Whereas Tanzania’s largest gold miner, Acacia Mining Plc will cut 1,050 jobs in the next few months, TanzaniteOne will lay off 635 workers.

Acacia said in a statement that the move to cut back on staff was taken in response to the current slump in the price of gold and low performance. The world market gold price has fallen from $1,800 per ounce three years ago to $1,072 per ounce last week.

“As a result, approximately 1,050 of our people, representing 27 per cent of our workforce, have either left or are expected to leave over the next few months,” Acacia’s statement reads.

Bulyanhulu mines will be most affected by the cuts. Acacia also operates Buzwagi and North Mara in northwest Tanzania.

The restructuring is expected to lead to an annual saving of $25 million, prior to a restructuring charge of approximately $11 million predominantly incurred in 2015.

This is one of a number of initiatives to ensure costs within the business are optimised and in turn enhance cash flow generation.

Acacia is also working to further refine capital expenditure, renew discussions with contractors and major suppliers to improve their rates, rationalise corporate administration spend and ensure its community spending is in line with the corporate strategy.

Acacia CEO Brad Gordon says that after honouring its debts in June, Acacia had $145 million cash in its coffers, which fell to $99 million at the end of September.

In September 2015, the company reported that it had incurred a $13 million net loss in the third quarter, owing to lower output and high operational costs.

“Acacia had been one of the shining lights on the London Stock Exchange but the underperformance in the September quarter led to a 25 per cent fall in our share price relative to our peers” Mr Gordon says.

FINANCIAL DIFFICULTIES

Tanzania’s largest miner, which has produced nearly eight million ounces over a decade, said the $13 million loss was against a net profit of $28 million in the third quarter of 2014.

The loss reflected a 20 per cent slump in revenue to $193 million on the backdrop of declines in output and sales.

During the quarter, gold production at the company’s mines fell 14 per cent to 163,888 ounces while sales went down six per cent to 176,116 ounces.

The cost of producing an ounce of the precious metal rose nine per cent on the year to $1,195, which Acacia attributed to short-term operational challenges at its Bulyanhulu and Buzwagi mines.

TanzaniteOne has justifiedits decision to shed 50 per cent of the workforce by citing the decline in Tanzanite gemstone production.

Last week, TanzaniteOne, owned by Sky Associates and the State Mining Corporation announced that it would send way 635 staff out of its 1,284 strong workforce.

TanzaniteOne mining manager, Apolinary Modest said that the company was undergoing financial difficulty, thanks to the low production of the precious stone at Mererani Hills in Simanjiro district, Manyara Region.

Mining is one of biggest private sector employers in Tanzania, providing jobs for nearly 10,000 people.

By ADAM IHUCHA-- Commercial farmers would raise their glasses to toast for remarkable earnings this year, as the state offers them a huge tax breaks in a bid to spur agriculture development.

In the 2015/16 budget, the Finance Minister, Ms Saada Mkuya announced to include agricultural inputs and farm implements in the VAT exemption list.

The VAT Act 2014 aims to expand the tax base by capturing most economic activities, would have been imposing standard 18 per cent VAT on the agricultural inputs and pushing production costs high.

“The new VAT Act, which comes into force on July 1, abolishes tax on essential goods such as agricultural inputs and implements as well as all capital goods” Ms Mkuya said.

Initially, the new VAT law had excluded over 300 essential modern agricultural technologies and supplies critical for farming mechanization such as plant protection substances in VAT tax zero-rated items.

The Act also would have hit hard irrigation and water harvesting technologies, pest management products such as plant protection substances especially chemicals and biological control agents.

Others were special planting materials like plastic bags and seed trays, storage, post-harvest and cooling facilities and equipment such as refrigerators, materials for construction and expansion of farm infrastructures including greenhouses and packaging materials of all kinds.

“We are very grateful indeed to our government for being generous to us. We are very happy and our hopes are that this tax relief will translate into our earnings this year” says Renalda Mlay, a farmer in Kilimanjaro.

The finance minister also reinstated agriculture in the skills Development levy (SDL) exemption list; seeking to amendment of VETA and Finance Acts to accommodate the changes.

For a decade, commercial farmers have been exempted from paying a five percent SDL, in a bid to encourage investment in agriculture industry.

But in 2013, the government amended the vocational educational training (VET) Act 2006, where it re-introduced the SDL for farmers with more than four employees.

According to revised law, farmers were required to pay the five percent of the total gross emoluments paid to their workers in each month.

Gross emolument comprises all the benefits extended to the employee such as wages, leave pay, health care payments, bonus, gratuity, allowances, and any subsistence paid by employers.

This implies, in other words, almost everything paid to the employee in farming industry would have been charged SDL.

As if that was not enough, the government has also reduced land rent rate from Tshs 10,000 ($4.6) per acre per annum to Tshs 5,000 ($2.3) for urban farming; and Tshs 1,000 ($0.457) to Tshs 400 ($0.183) for rural farms.

Policy and advocacy Manager at Tanzania Horticultural Association (TAHA), Mr Anthony Chamanga commended the government for listening their voice from the farm and grants their wishes.

"All these positive developments have come at the right time as we are struggling with other partners to streamline the agricultural taxes, levies and fees to improve business climate in the industry” Mr Chamanga explained.

With an enabling environment and massive involvement of mostly women and youth in horticultural farming at the moment, only the sky is the limit, TAHA Chief executive officer, Ms Jacqueline Mkindi.

“Our target is to hit an annual export value of $1 billion in 2018 and double in two years’ time to reach a staggering $1.85 billion by 2020,” Ms Mkindi says.

Horticulture brought home an extra $102 million in 2014, cementing its position as Tanzania’s one of major sources of foreign exchange alongside tourism, manufacturing, and mining.

Data from Tanzania Revenue Authority (TRA) shows $477 million worth of horticultural products were exported last year, up from $375 million in 2013, equivalent to 38 per cent of total agricultural exports valued at $1.18 billion.

By ADAM IHUCHA --Coffee production in Tanzania could rise, as much as 52 percent this year compared to the last year’s outputs, thanks to more rain in regions where the bean is grown.

Recently, Tanzania Metrological Agency (TMA) reported that sufficient rainfall is expected over the northern part, lake Victoria basin and the Southern parts of the country for the period of March-May 2015.

Indeed, experts say the ongoing heavy rainfall in all coffee-growing regions is supporting good bean formation and development.

The crop is grown in Kilimanjaro, Arusha and Mara regions in the north, Kigoma and Kagera in the west, as well as Mbeya, Iringa and Ruvuma in southern highlands.

Tanzania, the Africa's fourth-largest coffee producer after Ethiopia, Uganda and Cote I ‘devoir, could see annual crop outputs rise to 61,000 tons, up from 40,000 tons of 2014.

The state-run-Tanzania Coffee Board (TCB), said that the expected 61,000 tons harvest is below the 80,000 tons of coffee spelled in the Tanzanian Coffee Industry Development Strategy.

Mr Adolph Kumburu, Director General of TCB said that coffee diseases and issues related to pesticides importation as well as registration are the factors behind the mess.

The Coffee Industry Development Strategy aims to increase Tanzania coffee production from the present average of 40,000 tons to at least 80,000 tons by 2016 and reach 100,000 tons by 2021.

Increased production will be reached through improvement of productivity, suppressing unnecessary intermediaries and diminishing transaction costs.

In this way by 2021 farmers should receive at least 75 percent of coffee free on board (FOB) price.

The envisaged increase shall go hand in hand with an increase in quality from the current 35 per cent premium coffee to at least 70 per cent of the total national coffee production.

It is estimated that the progressive replacement of old coffee trees with improved varieties, together with the application of good agricultural practices (including stumping, pruning, weeding, mulching, fertilizing) would allow to increase by plus 100 percent the average yields from the current level of 225 kgs of clean coffee per hectare to the figure of 450 kgs in 2021.

Tanzania mainly produces Arabica and Robusta coffee. Prices of the country’s Arabica normally attract the New York market while those of Robusta take their route to London.
The country boasts of having 4.8 million hectares of land suitable for coffee farming of which only 200,000 ha, nearly 35 per cent is utilized.
The industry players say Tanzania has not fully utilized its huge market potential compared to other countries producing the coveted Colombian mild Arabica coffee and the Bukoba’s Robusta.
Over 95 per cent of Tanzania's coffee is exported. The country’s standards are not only high, but also the intricate system of international market policies and commodity prices are also dictated.
The industry provides direct income to more than 400,000 farmer households thus supporting the livelihoods of an estimated 2.4 million individuals.

A total of 10,000 hectares expected to be planted by both small holders and large-scale investors by 2021, which means at least 1,000 hectares per year from 2011.

This replanting, intensifying, and expansion strategy would go hand in gloves with Tanzania Coffee Research Institute (TaCRI ) seedlings multiplication program whereby, about 20 million seedlings would be availed annually on this period.

However, Mr Kumburu also cited smuggling of coffee could be one of the stumbling blocs to realize the national coffee export target.

One-third of annual Kagera's 10,000 metric tonnes of coffee, the black gold -- is being drained away by smuggling.

Intelligence sources say the smugglers are known to be well-off people with a large cross-border syndicate operating between Tanzania and Uganda.

The crop illegally exported to Uganda, where the country repackages and re-exports the produce.

Robusta and natural Arabica coffees grown in Kagera region, account for 25 percent of some 40,000 metric tonnes of Tanzania's annual coffee output.

Despite vast opportunities, including large tracts of volcanic soils suitable for high quality coffee farming, Tanzania’s production of coffee stagnated at 40,000 metric tonnes a year over the last three decades, generating export earnings averaging $100 million per annum.

Bukoba is now considered one of the world's top qualities Robusta, they added.

By ADAM IHUCHA – With an annual growth rate of 11 percent, Tanzania’s high-potential horticulture industry is blooming and is poised for a great leap forward, a new data indicates.

The sub-sector has become a growth driver of Tanzania’s agriculture, as its input to overall agrarian exports value has grown by 38 per cent in 2014, fresh data shows.

Comparatively, in 2013, horticulture contributed 31 per cent on agricultural exports value, implying that its input swelled by 7 per cent in a year.

In real figure, the horticulture brought home an extra $102 million in 2014, cementing its position as Tanzania’s one of major sources of foreign exchange alongside tourism, manufacturing, and mining.

Analysts say as it stands, horticulture potential offers a glimpse of hope for the struggling agriculture industry in the backdrop of the declining traditional exports such as coffee and cotton.

Relatively, coffee and cotton exports value dropped at the lowest level, in the period under review, pushing the agricultural exports value to $1.18 billion compared to $1.19 billion in 2013.

Latest economic review report by Bank of Tanzania indicates that coffee earnings declined from $171 million in 2013, to $121million last year, whereas cotton dropped from $111 million to $54 million in the period under review.

Tumaini University Senior Development Studies Lecturer Gasper Mpehongwa says the horticulture potential is a threat to the inflexible coffee crop.

“This suggests that the majority coffee growers have shifted their mind to the flexible horticulture crops. The coffee’s future is bleak because it takes years to yield with prices controlled in the world market,” Dr Mpehongwa says.

Tanzania Horticultural Association’s (TAHA) Policy and Advocacy Manager Antony Chamanga says the horticulture sub-sector exported nearly 265,302 metric tonnes of horticultural products in 2014, compared to 256,429.1 MT in 2013.

Vegetable export volume and value ranked high, compared to spices, flowers, fruits and seeds.

The country exported nearly 203,921 metric tonnes of vegetable in 2014, earning the economy $231 million, followed by 15,113 MT of spices valued at $125.7 million, 12,226.4 MT of flowers which fetched $82 million.

The country also exported 6,440.6 MT of seeds earning nearly $20 million and 27,601 MT of fruits valued $19.2 million, the Taha’s data shows.

Taha Chief Executive Officer, Jacqueline Mkindi says the subsector has recorded an average annual growth of 11 percent for the past six years.

“Horticulture has grown in leaps and bounds - from northern Tanzania to southern highlands as well as Zanzibar” she explains.

With an enabling environment and massive involvement of mostly women and youth farming at the moment, only the sky is the limit, she believes.

“Our target is to hit an annual export value of $1 billion in 2018 and double in two years’ time to reach a staggering $1.85 billion by 2020,” Ms Mkindi says.

The figure also suggests that over one million Tanzanians would directly work in the horticulture industry by 2020 when the global demand for the sub-sector’s products would reach $153 billion. Currently, about 350,000 Tanzanians are engaged in horticultural activities.

By ADAM IHUCHA -- “I am overwhelmed with joy! Honestly, I never knew my name would fly beyond the crown of a plant,” said Ms Jacqueline Mkindi as tears trickled down her cheeks.

The youthful Chief Executive Officer (CEO) with Tanzania Horticultural Association (Taha) could not hold back her tears when she received the most prestigious Tanzanian Women Achievement Award (TWAA) for 2015- Agriculture Category.

Ms Mkindi, or Jacque as she is simply known, is a modern flamboyant lady whose personality and bearing have shaped the multi-million-dollar horticultural industry in the past 10 years.

She could not control her emotions for several reasons. Key among them was memories of her decade-long struggles for the promotion of the nascent agricultural sub-sector.

Ms Mkindi was often in movements between farms and boardrooms in her quest to persuade not only farmers, but also technocrats that horticulture was, indeed, a green gold in disguise.

At a point her critics called her names, portraying her as an envoy of outsiders who intended to promote alien cash crops in the country at the expense of traditional ones.

“Challenges are always there, but we should not let them block our way towards the realisation of our goals,” says Ms Mkindi, adding: “We should always see challenges as opportunities for pushing us to the next level.”

Ignorantly though, her critics maintained that there was a ploy among outsiders with whom she was conspiring to discourage local production of food crops for the foreigners to import their foodstuffs at exorbitant prices.

Greenhouses, for instance, were the biggest foes of the entire community in Meru, where the contemporary horticultural farming first cropped up.

It all began with a widespread myth in the community that greenhouses prevented rains. Promoting usage of the temperature-controlling buildings was tantamount to declaring a war with the community.

Investors, who pioneered the industry, had experienced a myriad of wee-hour attempts to destroy their greenhouses in the community members’ bid to discourage horticulture altogether.

But Ms Mkindi, a talented young professional, applied her charismatic personality and high-level diplomatic qualities to swiftly overcome the widespread myth.

Today, greenhouse technology is the way of life in many parts of the country as day in day out TAHA receives inquiries from all walks of life on the technology.

Even in areas such as Dar es Salaam where the greenhouse technology is not always suitable, people tend to install it in order to grow vegetables.

“I am always ready and happy to work beyond the call of duty,” reveals Ms Mkindi, believing everything is possible provided one engages a positive attitude towards achieving his or her individual and organisation’s goals.

Yes, her gifted hands, aided by a young professional and dynamic team such as Anthony Chamanga, Amani Temu, David Mlaki, Cyrila Mlay and Wendi Lyimo, are credited to have mobilised nearly 2.5 million locals who are now engaging in horticultural value chain activities.

“Ooh God, thank you for raising us from farms to sit with stars,” she remarked at Dar es Salaam Serena Hotel where new women celebrities were on 7th of March 2015 feted.

But Ms Mkindi, whose both parents were humble teachers, quickly dedicated the prestigious award to all farmers out there who are struggling to feed Tanzanians and fill the national coffers with the much-needed foreign currencies.

“One of the lessons I learnt in my decade-long engagement in the career is that farmers do not need an intelligent mind that speaks, but a patient heart that listens,” notes Ms Mkindi, explaining that sometimes it is better to be kind than to be right.

Taha’s Board chairman, Eric Ng’maryo admitted that indeed, Ms Mkindi deserved recognition, as she has been instrumental in putting horticulture on the map of Tanzania and in the minds and hearts of millions of local agricultural entrepreneurs.

“Horticulture has changed many people’s lives to the better. In terms of the national economy, horticulture has become a game changer in the agricultural sector,” Mr Ng’maryo explains.

Horticulture growth

Through Taha under Ms Mkindi, the horticulture sub-sector has become a growth driver of Tanzania’s agriculture, as its input in overall agrarian exports value grew by 38 per cent in 2014, fresh data shows.

Comparatively, in 2013, horticulture contributed 31 per cent on the agricultural exports value, implying that its input swelled by 7 per cent in a year.

To put it in perspective, horticulture brought home an extra $102 million in 2014, cementing its position as one of Tanzania’s major sources of foreign exchange earner alongside tourism, manufacturing, and mining.

Analysts say as it stands, horticulture potential offers a glimpse of hope for the struggling agriculture industry in the backdrop of the declining traditional exports such as coffee and cotton.

Relatively, coffee and cotton exports value plunged in a record low, in the period under review, pushing the agricultural exports value to $1.18 billion compared to $1.19 billion in 2013.

Tumaini University Senior Development Studies Lecturer Gasper Mpehongwa commended Ms Mkindi with her technical team comprising young professionals for unlocking the horticulture potential.

“This suggests that the majority of coffee growers have shifted their mind to the flexible horticulture crops. The future for coffee is bleak because it takes years to yield with prices are controlled in the world market,” Dr Mpehongwa says.

Taha’s Policy and Advocacy Manager Anthony Chamanga says the sub-sector exported nearly 265,302 metric tonnes of horticultural products in 2014, compared to 256,429.1 MT in 2013.

Vegetables export volume and value ranked high, compared to spices, flowers, fruits and seeds.

The country exported nearly 203,921 metric tonnes of vegetables in 2014, earning the economy $231 million, followed by 15,113 MT of spices valued at $125.7 million, 12,226.4 MT of flowers which fetched $82 million.

The country also exported 6,440.6 MT of seeds earning nearly $20 million and 27,601 MT of fruits valued $19.2 million, Taha’s data shows. Ms Mkindi says the subsector has recorded an average annual growth of 11 per cent for the past six years.

“Horticulture has grown in leaps and bounds - from northern Tanzania to southern highlands as well as Zanzibar,” she explains.

With an enabling environment and massive involvement of mostly women and youth farming at the moment, only the sky is the limit, she believes.

“Our target is to hit an annual export value of $1 billion in 2018 and double it in two years’ time to reach a staggering $1.85 billion by 2020,” Ms Mkindi says.

The figure also suggests that over one million Tanzanians would directly work in the horticulture industry by 2020 when the global demand for the sub-sector’s products would reach $153 billion.

Currently, about 2.5 million Tanzanians are engaged in horticultural value chain activities from a mere 350,000 in 2004.

Who is Jacque?

She was born in late 1970s in Arusha, which by coincidence turned out to become her workstation after she accomplished her preschool, primary, secondary, and university studies.

When her mother was still teaching at the famous special talent Ilboru Secondary School, her late father was appointed headmaster with Marangu Secondary School in Kilimanjaro, prompting her family to relocate to the neighboring region.

Ms Mkindi pursued her primary school education at different places in 1980s before she joined Ashira Secondary School for "O" Level between 1990 and 1993 and at Msalato high School in Dodoma.

She then joined Sokoine University of Agriculture for her Bachelor of Science in Forestry where she obtained a first class with honors degree, prompting the prestigious university management to retain her as an assistant tutor.

Nonetheless, Ms Mkindi turned down the university management's offer in favour of her calling to directly serve the people and pursue her Master Degree in Business Administration (MBA) at an international university headquartered in Arusha--theEastern and Southern African Management Institute (ESAMI) after a working stint. She again passed with flying colours.

Tanzania National Parks (TANAPA) had successfully recruited her in mid 2000s, but again, owing to the mission she had to accomplish, she could not last long with the authority.

Relinquishing opportunities, which come with the rewarding white-collar job at the parastatal, Ms Mkindi surprisingly opted for agriculture, the sector, which rarely attracts educated youth in Tanzania and other African countries.

She started her career as a mere extension officer at a Tengeru flower farm in Arusha with an agenda in mind of turning the horticultural industry from subsistence to a commercial undertaking in the country.

Indeed, Ms Mkindi's leadership potential for building a teamwork spirit led her way through the ranks and file, rising to the CEO post with the horticultural industry's apex body.

Statistics speak volumes on her ability, for there were not only less than 50 commercial horticultural farmers countrywide when she assumed the TAHA office in 2004, but production volumes for export markets were also insignificant.

However, a decade later she managed to bring together over 15,000 large-scale and smallholder farmers into a single bloc with a common business oriented set of interests.

"I encourage young women to shake off any psychological barrier in life and emancipate themselves from various cultural and societal yokes, "Ms Mkindi says, believing in so doing, their inherent talents can be unearthed to benefit their families and the society at large.

Subscribe to: Comments ( Atom )

Empire Voice

featured Slider

Tanzania mining industry cuts jobs as gold price slumps

Relief as Tanzania's Commercial Farmers Get Huge Tax Breaks

Tanzania Coffee Output to Rise by 50pc in 2015

Horticulture Becomes Tanzania's Economy Backbone

JACQUELINE MKINDI; From Flower's Farm to A Hall of Fame!

About Me

Fellow Bloggers

Search This Blog

Total Pageviews

Labels