Private sector targets IMF 1.3 trillion shillings pie
Dar es Salaam. Members of the business community are scrambling for a pie of the 1.3 trillion shillings loan that Tanzania has secured from the International Monetary Fund (IMF).
Last month, the IMF approved a total of $ 567 million (roughly 1,300 billion shillings) in emergency loans for Tanzania’s health system and economic recovery efforts as the country battles the pandemic of the Covid-19 coronavirus.
President Samia Suluhu Hassan recently told Dodoma that the money was to be used over a nine-month period – and during which the country would build thousands of classrooms and purchase hundreds of thousands of desks.
Part of the money will also be channeled towards the construction of health facilities, the implementation of water supply projects and the revitalization of tourism activity.
Official data indicates that a large portion of the 1.3 trillion shillings loan to help meet the economic challenges of the Covid-19 pandemic is going to the health economic sectors (466.9 billion shillings), from l education (367.6 billion shillings), Regional administration and local government (Sh302.7 billion), Water (Sh139.4 billion) and Tourism (Sh90.2 billion).
The government wants the money to “stay in the country” by requiring the private sector to provide the materials needed for the project such as cement, roofing sheets, reinforced bars, as well as ambulances, tourist safari vehicles. and hospital beds.
Members of the business community who spoke to The Citizen on the sidelines of a meeting with Investment Minister Geoffrey Mwambe said they are rethinking the way they operate so they can qualify for the resulting contracts.
Some members of the business community expressed similar sentiments last week when they met with Minister of Industry and Trade, Professor Kitila Mkumbo. They seek to provide 134,250 tonnes of cement for the construction of 15,000 classrooms; 1.71 million pieces of sheet metal and 795,000 pieces of reinforced bars (12 mm).
Ando Roofing Company general manager Ado Maimu said his company was orienting its production plan towards the materials required for the projects.
However, to get local manufacturers out of this, he called on the government to consider giving them tax incentives to reduce operating costs fueled by high raw material costs.
The Tanzanian Assistant Secretary General of the Association of Private Investors in Education, Mr. Albert Katagira, said they were well prepared to raise capital and come up with competitive bidding documents to enable them to seize opportunities.
However, he called on the government to increase advance payments to suppliers from the current 10 percent to 50 percent so that they can implement projects in a timely and efficient manner.
Jitin Singh, Managing Director of Simba Pipe Industries, said they were “well equipped, excited and waiting for the action to start on the ground” so they could do their best to take a piece of the pie.
However, he said, he is confident that the success of the time-limited program will primarily depend on how quickly the government and private actors come together to address the likely challenges that could derail any plans, s ‘they are not treated well.
Hanspaul Automechs Limited CEO Satbir Hanspaul said, “We are able to provide locally manufactured ambulances, special vaccination vehicles and water drilling trucks.
He said that, on a monthly basis, his company could modify 100 vehicles, making them suitable for tourist and ambulance uses, among others.
Tanzania Private Sector Foundation (TPSF) vice chairman of the board, Mr. Paul Makanza, said they are urging their members to increase their production capacities to align with current needs.
“We have been and urge our members not only to increase production, but also to respect business ethics,” said Makanza, who is also the chairman of the Confederation of Tanzania Industries (CTI).
KGG Investment Limited Managing Director Richard Mlay called on banks to relax lending terms so that they can have enough working capital.
TPSF board director Susan Mashibe said tourism stakeholders, especially tour operators, are calling on financial institutions to reduce cumulative interest rates and prolong low interest rates.
The president of the Tanzanian Bankers Association, Mr. Abdulmajid Nsekela, said the banks were ready to provide short-term loans to those who won the tenders for the implementation of part of the projects. 1,300 billion shillings.
Lodhia Group of Companies chief executive Sailesh Pandit called on the government to streamline the process of importing scrap metal used as a raw material in steelmaking.
Mega Woodcraft Products Limited Marketing Director Jonathan Kibona said that with a traditional convention building system, it would be difficult to build 15,000 classrooms in just nine months. “If the projects are to be completed in a very short time, the government needs to think about mega-panel technology,” Kibona recommended. Minister Mwambe and Mkumbo pledged to work on the challenges raised as soon as possible.