THE MANAGER MAGAZINE ISSUE NO. 5

THEMANAGER

ISSUE NO. 5 JULY / SEPTEMBER 2013A publication of the University of Dar es Salaam Business School Alumni Association

INFORMATIVE ANALYTICAL EDUCATIVE ISSN 1821-7184

Prof.Lettice Kinunda Rutashobya:An Epitome of Entrepreneurship

FREE COPY

Alumni Updates

ECONOMY China waivers taxes on Tanzanian goods

Taxation in the Tanzanian Gold Sector: Overview of Impacts and Possible Solutions

PROMOTION

The great migrationThe SerengeTi iS famed for iTS annual

migration, when more than 1,500,000 wildebeest

follow some 200,000 zebra in a 2,000km

pilgrimage in search of fresh grazing and water.

it’s ‘The greatest wildlife show on earth’!

Wildebeest feed only on new shoots and very

short grass, but also eat longer grass once it has

been ‘trimmed’ by zebras or buffalos (which is why

they follow the zebras). elands and Thomson’s

gazelles also migrate, but alternate between the

plains and the woodlands. grant’s gazelles move

only locally and, in many cases, in the opposite

direction to the migratory species.

Predation is rife during the migration, as

lions, leopards, cheetahs, hyenas and a host of

smaller predators – watched by the ever-present

vultures – feast on the grazers. The best time to

see the migration is usually between June and

august when the wildebeest congregate and

prepare to cross the grumeti river.

during the early wet season (december to april)

the animals are found on the short grass plains

around lake ndutu, the moru Kopjes, the gol

mountains and Seronera in the south of the park.

february is the main month for wildebeest calving.

during the late wet season (april to June) vast

herds, in columns over 40km long, head towards

Kirawira, mbalageti and grumeti in the Western

corridor. Then, in June, with the rains coming to

an end they face the death-defying crossing of the

crocodile-infested grumeti river into the ikorongo

Controlled area. during the early dry season (July

to october) all migratory herds head north. finally,

in the late dry season (october to december) the

herds start their trek back south to the Serengeti to

give birth to their young (december being the peak

month for zebra births).

and then the cycle starts again – as it has for

over a million years!

Tanzania’s annual migration is one of nature’s most spectacular experiences

For further information contact:

The Director General, Tanzania National Parks

PO Box 3134, Arusha, Tanzania

Tel: +255 27 250 3471, fax: +255 27 250 8216

E-mail: [email protected]

www.tanzaniaparks.com

1 A Publication of UDBS Alumni Association THE MANAGER

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2 THE MANAGER A Publication of UDBS Alumni Association

THE MANAGER

CONTENTSFifth Edition SEPTEMBER 2013

EDITORIAL CHIEF EDITOR Celestine Mushi

ASSISTANT EDITOR Mary Damian

LAYOUT DESIGN & PRINTED BY

HMK Graphics Ltd Tel:0653 82 02 19 0765 72 79 08

ADVERTISEMENTS Francis Chocks Chokala

Joseph Temba

ADMINISTRATIONCHAIRPERSON

Nehemia Kyando Mchechu

VICE CHAIRPERSONEphraim B.Mafuru

DIRECTORSSaid NassoroJonathan Njau

Christine MavulaDr.Diana Mwiru

Itandula GambalagiDavid Shambwe

Natu RingoTobias Swai

Rebeca MunaGoodluck Mmari

EDTORIAL COMMITTEEMohamed Kamilangwa

Emilian RwejunaDavid Shambwe

Abdallah Singano

COUNTRY CORDINATORDeogratias Mbona

Copyright 2012.This Publication is a prop-erty of the University of Dar es Salaam Business School Alumni Association. All rights reserved.No section of this publication may be reproduced,stored in a retrieval system or transmitted in any form or by any means mechanical,electronic,photocopy,recording or otherwise without the written permis-sion of the publisher and copyright owner.

our cover page

33

37UDBS GETS A NEW PARTNER IN

THE NETHERLANDS

Prof. Lettice Kinunda Rutashobya: An Epitome of Entrepreneurship........................................................................................................................5Taxation in the Tanzanian Gold Sector: Overview of Impacts and Possible Solutions.......................................................................................12China waivers taxes on Tanzanian goods...............................................18TPB includes all people in the banking services....................................20MIB Training Tour to South Africa.........................................................23MIB & MIT programmes give birth to IBUTTI.........................................30UDEC and NEEC conducts the fi rst ever Young Graduate Entrepreneurship Clinic............................................................................38Being a success, building a business: What top leaders have to say....................................................................41Th ree Rules for Making a Company Truly Great..................................42

THEMANAGER

ISSUE NO. 5 JULY / SEPTEMBER 2013A publication of the University of Dar es Salaam Business School Alumni Association

INFORMATIVE ANALYTICAL EDUCATIVE ISSN 1821-7184

Prof.Lettice Kinunda Rutashobya:An Epitome of Entrepreneurship

FREE COPY

Alumni Updates

ECONOMY China waivers taxes on Tanzanian goods

Taxation in the Tanzanian Gold Sector: Overview of Impacts and Possible Solutions

Vice Chancellor commends UDBS for establishing Career Counseling Centre


Dr. Ulingeta MbambaDean of the University of

Dar es Salaam

Business School (UDBS)

EDITORIAL

The 5th edition of “The Manager” is now with us. I heartly welcome you to reading and enjoying it as it is an important forum and

platform of communication between our School and her alumni.

The current Edition carries a cover story about one of the most prominent and respected alumnus, the former Dean of UDBS (then Faculty of Commerce and Management-FCM) Prof. Lettice Rutashobya). The article features some of her struggles and aspirations as well as revelations on how she ascended to her successes and achievements. She is indeed a role model for all of us.

This edition also features articles of economic importance, especially the article that gives an overview of impacts and possible solutions on the problem of taxation in the Tanzanian mining sector. It is my hope that this article, which is an extract from a full article that has been published in an international Journal called “Development Southern Africa”, will specifi cally give you an insight into the actual situation pertaining to taxation in the gold sector.

Moreover, the Magazine highlights on the various short courses offered by the School for members and non members alike addressing the contemporary business challenges facing Tanzanians today.

In the Magazine you will also fi nd highlights on an academic study visit made by our students in the Master of International Business (MIB) programme when they visited South Africa early this year. The tour exposed the 40 students who participated to the cultural aspects of businesses in South Africa, Africa’s largest economy.

As it has always been the norm, the UDBS continues to work very closely with the corporate world. In this regard, I am very pleased to note the interesting article on the Tanzania Postal Bank (TPB) as featured in this Edition. The TPB’s article talks about the launching of one of their very innovative services (TPB Popote, and Popote Account), an innovative product that ensures inclusion in the banking and fi nancial services for all Tanzanians, regardless of their levels of education, income and location. It is my hope that the readers will fi nd the article to be very informative and educative on

these newly launched products.

It is indeed my pleasure to note that despite a large number of magazines and newspapers that are in the market today, the corporate world continuously view “The Manager” as the right platform to be used to communicate on their products and other information to their customers and potential customers. It is my expectation that this tripartite relationship between the corporate world, the UDBS and our Alumni Association will continue to thrive to even greater heights.

Several other life aspects have been covered in this magazine. Interestingly some of these are on the old cultures within the University of Dar es Salaam, health matters, technological developments in the fi nancial services sector and their impact on your fi nances, your pump prices, nutritional issues and others

Knowing that this magazine will be informative, inspirational and entertaining to anyone who reads it, I welcome its publication and urge readers to make good use of it. The current issue of “The Manager” will surely be an important addition to your book shelf if not your living room table.


COVER STORY


Prof. Lettice Kinunda Rutashobya:

An Epitome of Entrepreneurship

DREAMS have a place in human achievement--when coupled with commitment of course! This is proved especially true in the twin history of the University of Dar es Salaam Business School (UDBS) and that of Professor Lettice Kinunda Rutashobya of the University of Dar es Salaam.

By The Manager Reporters

A gifted human being allows the imagination to dream of something useful to others.

The challenge is usually the commitment to see that dream come true-- something only true entrepreneurs are capable of.

In this article, we celebrate the entrepreneurial spirit in the daughter of a carpenter/farmer, Professor Lettice Kinunda Rutashobya. Through her story, we discover that the grandeur of the University of Dar es Salaam Business School is actually the outcome of a commitment to realize a dream. A dream was envisioned in the past to build a reputable Business School in Tanzania.

This dream, incepted by many at the University of Dar es Salaam, who include the founding dean, the late Professor Joshua Mkhululi, a Jamaican national, was handed over to the right manager in Prof. Rutashobya in 1994. The word ‘right’ is used here to represent Professor Rutashobya’s innovative, creative mind during her tenure as dean of the Faculty of Commerce and Management (FCM) which gave birth to

UDBS.

UDBS, formerly FCM is currently ‘a forest’ of huge lecture halls-- halls fi lled with cushioned chairs, shining tables, spacious air conditioned offi ces and hallways, giant glass windows decorated with expensive white curtains and fl ower gardens.

Perched on a hillside, next to a little forest west of University Hill, the University of Dar es Salaam Business School looks magnifi cent. Two giant high rise buildings plus a new one under construction make up UDBS. The School employs 82 lecturers, with an student enrolment of 1945 students at the time of writing this article.

“The University of Dar es Salaam Business School was not what you see now,” Professor Rutashobya said during an interview with The Manager Magazine. “I took over the school deanship when it was least known and therefore invisible. There were too many challenges to address. It needed a visionary, committed and unselfi sh leader to manage the challenges. I believe I was.”

On the day of the interview, we learned a project management success story has an architect


who constructed the plan on paper, and an overseer. How entrepreneurial the plan is, and how entrepreneurial the overseer is makes or breaks the project. Many people have contributed toward ‘building’ UDBS, but Prof. Rutashobya’s contribution is noteworthy in that she combined both qualities as UDBS dean.

The University of Dar es Salaam celebrated her contribution and achievements during last year’s UDSM 50th Anniversary. Why? her achievements are really the achievements of the University. She was given a Golden Award for her contribution in starting entrepreneurship programmes, and for pioneering the mobilization of resources to build structures for UDBS. Well, there may be another reason why the University is so proud of her. She has done wonders for the University. Like other UDSM graduates doing wonders outside the university, she was made right here from her fi rst degree to the Doctorate of Philosophy, with only occasional stints at Universities outside the country in the UK, Kenya, Germany, and elsewhere.

On the day of the interview, The manager Team had arrived at her offi ce before she arrived. When she fi nally came at her offi ce on the third fl oor of the old UDBS old building, she was accompanied by an assistant. The professor gave us a warm greeting while on her heels. She then swiftly entered her offi ce. Soon, her clear voice rang as she called us over to get in. As we settled in her offi ce, she quickly sidelined formalities, substituting them with charming pleasantry.

She told us “I like to climb the stairs as a way of doing Prof. Lettice Kinunda Rutashobya:


exercises,” she said as she started the air conditioning machine to cool her spacious offi ce on the third fl oor.

Professor Rutashobya is brown, about 5’6”. Her searching eyes sparkle with life. For a woman who got her Bachelors’s Degree in Business administration/Commerce) at the University of Dar Es Salaam in 1976, she is keeping herself quite fi t. “I am fi t for my age,” she said freely, letting a broad, elastic smile fan across her radiant, calm face. She then walked on to her seat.

A master of simplicity, she did not sit behind the Professor’s magnifi cent table, but walked on to a modest, straight-backed offi ce chair close to the low table reserved for visitors-- where the two of us sat. She relaxed in her chair. The mood in the room signaled it was time for the interview.

Prof. Rutashobya graduated from the University of Dar es Salaam with a Bachelor of Arts in Business Administration and Management in 1976 and fi nished her Masters in Management and Administration in 1978.

She is one of the founding members of the Faculty of Commerce and Management (FCM) when it was launched at the University in 1979. Before turning into a Faculty, it was formerly the Department of Management and Administration in the then Faculty of Arts and Social Sciences. FCM is what later turned into the University of Dar es Salaam Business School.

She recalls obtaining her Doctor of Philosophy (PhD) degree at an extra-ordinarily fast pace ; registering in 1988 and being

conferred in 1992 despite taking care of four children in addition to her routine faculty workload. Prof. Rutashobya married Mr. Datius Rutashobya in 1976, with whom she has four children. But she told us she actually fi nished her doctorate degree in 1991 and was subsequently picked Dean of the Faculty of Commerce and Management in 1994. She held that position until 2000. Much of what has become UDBS was incepted during this period.

“At fi rst I called my bosses to decline the appointment but was asked to continue. I prayed to God to give me strength and courage to manage the challenges. There was no research capacity (only 3 members of staff including myself had PhD degree at the time, one was an expatriate),“ she recalled when talking about her management role as Dean.

“We had no building of our own so offi ce space was a serious problem. We were squatters. I would beg for offi ce space from my fellow deans. So my staff were scattered all over the university

“We had very few equipments/ facilities (no computers although the Faculty was teaching a computer course, No external linkages and had dwindling resources from Government budget.

“As a strong believer in human resource capacity, one of my fi rst challenges and dream was to build research and teaching capacity through PhD training. The University was then transforming, so the environment was conducive to management of change,” she said

The Professor teaches and writes about entrepreneurship

and international business. What she did as dean of the Faculty of Commerce and Management and later UDBS proves she practices what she preaches. Entrepreneurs are never deterred by challenges.

“I believe problems/challenges bring opportunities,” she said. “Since not much in terms of resources was coming from Government I initially started looking for development assistance and support through design of projects.

“I started writing project proposals, thanks to an ILO course I had attended earlier before I became Dean, at the ILO Training Centre in Turin, Italy, which was sponsored by UNDP. The course was on management of development which included modules on project formulation, monitoring and evaluation, and negotiation skills.

“My vision to build research and teaching capacity enabled me to design several donor funded projects focusing on entrepreneurship and small and medium enterprise Development.

“I believed the School had to be relevant to the business Community while at the same time addressing the issue of its visibility. I must admit it is our focus on Entrepreneurship and SME development that has helped raise the visibility of the School. The SME policy was then being developed.

“I initiated the following capacity building programmes focusing on Entrepreneurship and SME development:

Research capacity building through PhD training-I designed one of the most successful


Sida funded research capacity programme to train staff to PhD level jointly with University of Umea School of Business and economics, Sweden. The programme has so far graduated 17 PhDs, which is more than a half of all PhD holders in the School. The collaboration and the programme has been sustained todate

Collaborative programme on entrepreneurship with University of Twente funded by NUFFIC, Netherlands (FAME project)-graduated 3 masters and 2 PhDs.

In 1999 I founded the University of Dar es Salaam Entrepreneurship Centre initially with support from NUFFIC, Netherlands.

Through NORAD support, we managed to train 1 PhD student.

The School’s annual International Conference on African Entrepreneurship and Small Business Development (ICAESB) was pioneered in 1997.

To address the long standing problem of offi ce space for those in the business school, Professor Rutashobya recalls praying for God’s intervention to enable her realize her vision.“As a strong believer in God, honestly, I knelt down on my knees in the Dean’s offi ce and asked God to give me energy to work towards building our own offi ce block,” she told us. “I am so glad God has answered my prayer.

“An opportunity came and I was able to design a successful project for NORAD funding on infrastructural development for the school. Through NORAD funding and coupled with Government support phase one of the School Building was built. This has also been one of

my biggest contributions to the school. The School was to be built in three phases.

We learned the University of Dar es Salaam as well as others recognize the value of her contribution. In October 2012 the University of Dar es Salaam awarded her a Golden award during the closing ceremony of the 50th anniversary celebrations for initiating entrepreneurship programmes and for pioneering infrastructural development for the University.

In October 2004, the University Of Umea in Sweden, awarded her an Honorary doctorate (doctor honoris causa) in applied economics for her contribution to Business education in Africa.

She became the fi rst female ( second African) recipient of such an honor at the University of Umea. In 2011, she won a University of Umea Vice Chancellor’s award as Guest Professor at the University’s School of Business and Economics.

Professor Rutashobya also prides herself in the result of her plan to create evening classes for the Master of Business Administration (MBA) degree at the University of Dar es Salaam Business school. “We learnt that we needed to offer fl exibility to our prospective clients to pursue life long education. The evening programmes therefore enabled our clients to combine work and study“. This plan has worked very well, she says. Other institutions are imitating this program across the country. The best side of the program, however, is that it is a money spiner for UDBS.

The University is making a lot of money through this program.

The funds are helping fi nance construction of new UDBS buildings as well as paying off a huge Bank loan incured during construction of the second and third phase of UDBS building. It was also under her leadership that the evening Bachelor of Business Administration (BBA) programme was established in 1999.

She is a strong believer in collaboration and linkages with similar institutions, especially foreign universities. During her university service she established for the UDBS successful linkages with the Umea University School of Business and Economics, and Chalmers University of Technology, Sweden, University of Twente, the Netherlands, University of Lancaster, U.K, University of Antwerp, Belgium and several others. These ;linkages greatly helped to support research and teaching capacity at the School.

A famous adage says behind every successful man, there is always a woman. Others have found the opposite to also be true: behind every successful woman, there just might be a man! Prof. Rutashobya speaks highly of her father, whom she admits inspired her to be aggressive as a student at primary school level all the way to University. Her father who loved school so much could not proceed to secondary school because of only one reason: the prohibitive school fees charged back then before Tanzania got independence. Prof Rutashobya says her father attended Peramiho Boys upper primary school in Songea district and ‘was very intelligent.” Unfortunately, his father (Lettice’s grandfather) was too poor and could not afford to pay school fees. He then joined the


Peramiho Mission Trade School to study carpentry, a course he did very well.

After graduating, he got married and gave his life to modern carpentry to earn money for his family and his children’s fi nancial support. He used to win many district tenders/contracts as his workshop had modern machinery. Thanks to her mother

also, her parents were good coffee farmers. Lettice Kinunda was born among nine other children and became a star—leading her classes everywhere from Primary School in Mbinga, to High School at Tabora Girls, all the way to the University of Dar es Salaam.

Fathers play a very critical role in molding daughters

for a successful life, Prof. Rutashobya concedes. And that is done by inculcating a sense of confi dence in your daughter-- something you do by loving her, and encouraging her to be achievement oriented.

Prof. Rutashobya has written numerous technical/research reports for government departments, local and

Prof. Lettice Kinunda Rutashobya:


international organizations, and symposium presentations. She is the author or co-author of several books, chapters in books and over 30 scientifi c articles, and technical papers published locally and internationally.

She is co-author of a chapter in a recently published book on Aid for Trade: From Policies to Practice, The cases of Mozambique, Tanzania, Vietnam and Zambia together with the University of Helsinki (published in Finland. This work was sponsored by the Finnish Ministry of Foreign Affairs).

She is the chief editor/author of the book on African Entrepreneurship and Small Business Development, and the book on Female Entrepreneurship in Tanzania. She has also been Guest Editor of a special issues of reputable international journals.

Some of her articles have appeared in internationally respected journals, including papers published in the International Journal of Social Economics, Management Decision, Journal of African Business, etc, mainly in the area of entrepreneurship and enterprise development, gender and entrepreneurship, internationalization, international trade, Foreign Direct Investment, public fi nance, public procurement, etc. She has also written numerous technical reports for the World Bank, ILO, UNDP, DFID, IFAD, NORAD, Foreign Affairs Ministry of Finland, etc.

“The role of a professor is to generate knowledge,” she says. “ The good thing about publishing globally is that you become known by many people.” But the transcontinental exposure in her case has caused so many people to seek her for research collaboration and consultancy that she can’t

meet the demand?.

Her main engine for generating knowledge has been that indispensable tool for all prolifi c academics and writers- - research.

“I am very passionate about research,” she said during the interview

“That (carpentry and coffee farming) is what really helped to bring us up in the family,” says Prof. Rutashobya. She says that on her graduation day for her PhD, her late father proudly attended.

In addition to academic superiority, Prof Rutashobya says she is ‘very disciplined’ in her life. That, she points out, could be a result of the upbringing at home under his father and mother who were also very disciplined. She said also revering of the power of dreams.

“I am very passionate with what I do. I always make sure that I achieve my dreams, ” she said. Dreams! Dreams are the power sources that visionaries and discoverers and innovators rely on.

The French dramatist, novelist and poet, Victor Hugo, moved and perhaps even mesmerized by the power of dreaming, once said: “ There is nothing like a dream to create the future. Utopia today, fl esh and blood tomorrow.”

This article is about the daughter of a Tanzanian man who dreamed there should one day be a University of Dar es Salam Business School in skyrise buildings, churning out entrepreneurial First Degree Holders, Masters and PhD holders for Tanzania. And its happening!

“I am always dreaming, dreaming!” the don says, her face beaming, super-charged with the combined magic of inner satisfaction and her

robust visionary power. “ I never cease to dream and I always have a lot of dreams which I want to see come true.”

Her prayer now is to see entrepreneurship courses at UDBS taking Tanzania to a point in the future where our graduates will be able to walk out of the university campus ripe for self employment. “There are so many opportunities in this country which should be utilized,” she notes.

“That is the type of situation we should be targeting to create, because jobs are not there always. And that was basically my dream when I started the entrepreneurship programme -- to train graduates who can join the business community as entrepreneurs, as well as graduates who can transform organizations.”

She may not be dean of anything at the moment, but her ‘plate’ is full. She still lectures at the university but also holds a number of board membership positions in government and private organizations. She is, for instance, Board Chairperson of the Tanzania Postal Bank. At the recommendation of Government, she recalls going through a rigorous and successful interview to become SADC deputy executive secretary in 2010 but somehow Tanzania lost the opportunity to the Democratic Republic of Congo (DRC) which was then under- represented at the SADC secretariat.

She also fi nally acknowledges the enduring support of Mr. Datius Rutashobya, her husband, who for the past 10 years now has been working at the World Meteorological Organization (WMO) in Geneva.

T M


ECONOMY


Taxation in the Tanzanian Gold Sector Overview of Impacts and Possible Solutions*

Petro Sauti Magai

By Petro Sauti Magai1 & Alejandro Márquez-Velázquez2

Introduction

Over the course of the 1980s and 1990s, the Tanzanian government undertook signifi cant economic policy reforms, which included the National Economic Survival Program in 1981, the Structural Adjustment Program in 1983, and a donor-sponsored Economic Recovery Program (ERP) in 1986. In 1989, the ERP Program was modifi ed to create the Economic and Social Action Program. The overall objective of these reforms was to increase the role of the private sector in the economic and social development of the country. Hence, many existing policies were reviewed so as to provide room for the private sector to make a contribution, especially through investments in production activities. With respect mineral sector, the government began its attempts to capture revenues from it by

licensing private companies to buy, cut and export gemstones being produced by small-scale miners. However, full recognition of the potential of the country’s mineral sector would not come until the next decade.

The 1990s brought with it an increasing awareness of the economic potential of Tanzania’s mining industry, and it was during this time that the country began liberalizing and privatizing its minerals sector. In the late-1990s, Tanzania experienced a gold boom that is still continuing. According to Phillips et al. (2001, p.5), a key policy decision that set off the boom was the dismantlement of the state-owned mineral monopoly, STAMICO1, 1 Acronym for State Mining Coorporation which is a public corporation formed in 1972 with the aim of conducting exploration, mining, production, processing, sorting, cutting, distribution and

which allowed any Tanzanian individual to register claims and sell minerals. Since the onset of the boom, Tanzania has risen to a position of importance in African mineral production and exportation. In 2007, it was the third largest gold exporter in sub-Saharan Africa, behind Ghana and Mali, and in front of South Africa, the fourth largest exporter of the region that year. In terms of gold production, Tanzania was the third largest sub-Saharan producer in 2010, behind South Africa, the region’s top producer, and Ghana, as evidenced below in Table 1. selling of minerals in the county, among others. For several years, STAMICO has been facing a lot of challenges in the implementation of its activities due to receiving a limited amount of funds from the government budget. Changes in economic policies like privatization led to STAMICO being added in a list of public corporations for privatization.

Since the onset of the boom, Tanzania has risen to a position of importance in African mineral production and exportation. In 2007, it was the third largest gold exporter in sub-Saharan Africa, behind Ghana and Mali, and in front of South Africa, the fourth largest exporter of the region that year.


As pointed out in Curtis & Lissu (2008, p.13), there are six major gold mines in Tanzania. The majority of these mines are operated by foreign companies like Barrick Gold Corporation from Canada, and AngloGold Ashanti (AGA) from South Africa. According to Curtis & Lissu (2008, p.8):

Country(world rank)

Golda exportsb in US$ millions

Share of world exports (%)

Country(world rank)

Gold production in tonnes

Share of world production (%)

United States (1) 13,404 18.03 China (1) 340 13.39

Australia (2) 9,402 12.65 Australia (2) 260 10.24

Canada (3) 6,035 8.12 United States (3) 228 8.98

South Africa (4) 5,240 7.05 South Africa (5) 189 7.44

Ghana (13) 1,459 1.96 Ghana (9) 92 3.62

Mali (14) 1,082 1.46 Tanzania (17) 39 1.54

Tanzania (25) 554 0.74 Mali (38) 39 1.54

Worldc 74,344 100 World 2,540 100

Source: prepared by authors using UN Comtrade data for exports, except for South Africa (Kohler, 2011); and Brown et al. (2012) for production fi gures.

Taking all this into consideration, and based in data and legal framework analysis of the Tanzanian mineral sector, we will make the case for the need of reforms that will allow the government revenues to increase.

Macroeconomic impacts of minerals in Tanzania

Foreign direct investment

In the past decade, Tanzania has seen an important increase in FDI infl ows. UNCTAD data place Tanzania in the upper-middle

“AGA has paid taxes and royalties totalling US$144m in 2000-07 and over the same period has sold around $1.55bn worth of gold, meaning that it has paid the equivalent of around 9 per cent of its exports in remittances to the government. Barrick, meanwhile, does not state on its website how much in taxes and

royalties it pays to the Tanzanian government – our calculations show that it is paying a fi gure equivalent to around 13% of its export sales in remittances to the government”

Table 1: Gold exports (2007) and production (2010), selected countries

ranking of African countries in terms of FDI, with its FDI stock rising from US$2.78 billion in 2000 to US$5.94 billion in 2007 (UNCTAD, 2008). With the exception of South Africa, all of the African countries that received more FDI than Tanzania in 2007 were oil and gas exporters (Roe & Essex, 2009, p. 16).

Contribution to national income and government revenues

Exports’ structure

The boom in the gold sector has changed Tanzania’s export structure. In the period that spans the winning of independence in 1961 to the late 1990s, its exports mainly consisted of agricultural

goods such as coffee, tea and cotton. However, gold has since displaced these goods from their prominent place (Roe & Essex, 2009, p. 17).

Figure 2 shows how gold exports have increased as a share of Tanzania’s total exports, increasing from 2% in the late 1990s to 27% in the late 2000s. This increase has also been accompanied by a decrease in traditional agricultural exports as a share of the total. Moreover, UN comtrade data confi rm that the change in Tanzania’s trade structure has occurred primarily because of a strong increase in gold exports and a slower increase of exports of coffee, tea and cotton.


Gross Domestic Product

Despite mining being one of the fastest growing sectors in the Tanzanian economy,

Year Mining Total GDP Share of Mining in total GDP (%)

yoy growth of mining (%)

yoy growth of GDP (%)

2000 140 8,585 1.632001 160 9,100 1.76 14.29 6.002002 187 9,752 1.92 16.88 7.162003 219 10,424 2.10 17.11 6.892004 254 11,240 2.26 15.98 7.832005 295 12,068 2.44 16.14 7.37

2006 341 12,881 2.64 15.59 6.74

2007 378 13,802 2.74 10.85 7.15

2008 387 14,828 2.61 2.38 7.43

2009 392 15,721 2.49 1.29 6.022010

(preliminary)402 16,829 2.39 2.55 7.05

Figure 2: Export share averages (over total)

Source: prepared by authors using UN Comtrade data.

contributions to GDP from gold production have remained low when compared to its importance to the exports sector. Table 3

present data on the contribution of the mining sector to GPD of the gold boom.

Table 3: Mining and total GDP (billion of 2011 TShs)


As the data presented in Table 3 indicate, mining activities grew steadily until 2007, both in absolute terms and as a share of GDP. Afterwards, mining activities continued to grow in absolute terms, but started to decline their share of GDP. In contrast, GDP growth during this period remained robust, almost immune to the global fi nancial crisis in 2008-2009.

Revenue collection through taxes and royalties

Tanzania’s mineral resource royalty rates have recently come under scrutiny. Curtis & Lissu (2008, p. 31) argue that the current rate of 3% is low by both African and global standards. They go on to argue that the World Bank is responsible for this low rate. According to the authors, the organization has rewritten mining laws in most African countries in order to make them “internationally competitive”. Tanzania’s relative weakness in comparison to some other African countries with respect to royalty rates is then compared with Ghana (sliding between 3 and 12%), Mozambique (between 3 and 8%), and Botswana (royalty on gold production at 5%). In terms of precedents for higher rates, there are further examples outside of the African context that went unmentioned by Curtis & Lissu (2008). Analysing his sample of 68 mineral or oil producing developing countries, Baunsgaard (2001, p.

Source: constructed from National Bureau of Statistics (2011)

26) argued that among countries that apply royalties, which are the majority, their level is usually between 5 and 10%. Despite its low royalty rates, the Tanzanian government has managed to increase its revenue from mineral extraction during the recent boom.

Estimates of the total amount of revenue that the mineral sector has generated for the government since the end of the 1990s and onwards are diffi cult to obtain with any degree of accuracy, as they vary considerably from source to source. As a point in case, Curtis & Lissu (2008, p. 18) offer an average annual revenue estimate between US$13 million and US$36 million for the 1997-2006 period. To put these numbers in perspective, another estimate states that the mineral sector accounted for only 4% of total government revenues in 2005 (UNCTAD, 2007, p. 137). The amount of revenue collected from the Tanzanian mineral sector is not only small when compared with other sectors, but it is also small in comparison to mineral revenues in similar countries. UNCTAD (2007, p. 137) reports that, “during 2004 - 2006, foreign mining companies in Peru paid $3.5 billion in income taxes, equivalent to 14% of their export revenues. While in the United Republic of Tanzania, out of earnings of $2.8 billion from mineral exports during 1999–2005, the Government

received some $252 million (9% of export revenues) in the form of various tax payments and royalties”.

However, it may be less diffi cult for the Peruvian government to collect these taxes for two reasons. First, its mineral sector has been established for a longer period than in Tanzania and, thus, it may be subject to lower production costs. Alternatively, its mineral export basket may be of higher value than Tanzania’s. This is refl ected by the fact that the mineral rent as % of GDP was 3.81 in 2005 for Peru. Meanwhile, in 2003, the value of this indicator was only 0.3% for Tanzania (World Bank, 2010). This indicator, published by the World Bank (2010), measures the difference between the market value of a stock of minerals and their cost of production.

Given its enormous mineral wealth reserves, there remains the question of why Tanzania has failed to benefi t from the mineral sector. Lambrechts (2009) examined this question with respect to Africa in general, assigning the cause of low revenues to two factors. First, mining companies have been granted too many tax subsidies and concessions. In Tanzania, for example, there’s an excise duty exemption in fuel, an exemption on fuel levy and production companies are given free custom duty (The United Republic of Tanzania, 2008). Second,


there is a high incidence of tax avoidance among companies in the minerals sector. Therefore, “mining companies believe they are entitled to special tax exemptions. It is therefore not surprising that they have largely opposed the changes proposed or made to mining tax regimes. In Tanzania, Barrick Gold has used the leverage of the Canadian government to try to stall tax regime reforms. The company has also publicly denounced the authors of a civil society report pushing for mining tax reforms” (Lambrechts 2009, p.

58). This is regarded as a direct consequence of secret mining contracts (The United Republic of Tanzania, 2008, p. 41) and the effi cacy of creative accounting mechanisms. As Shafi re (2009) points out, Tanzania is a country “seated atop a giant, 45 million ounce pot of gold, economically valued at US$39 billion”.

Conclusion and policy recommendations

Gold mining in Tanzania has quickly become a major part of the country’s economy and can

be considered responsible for the high growth rates seen recently. At the same time, the sector consistently fails to generate much-needed government revenue, which eventually undermines the development opportunities of the country in general.

Policymakers, specifi cally those within the Ministry of Minerals and Energy and in the parliament, are advised and cautioned that the development impact of mining is ultimately determined by how mining


royalties and other taxes are legislated, collected and used to help develop other economic activities and address social problems. The government should also assure that transnational mining companies integrate their activities into the development strategies of the country in order to have a clear link between the mining sector and the wider economy.

As this paper has shown, the government should design policies and decision processes, which should be accomplished

by mobilizing political support and by improving the governance of minerals. Further, it should enact policies and regulations that mining fi rms will be required to adhere to; enforcement of new and existing laws must also not be ignored. Indeed, this paper has shown that mining companies could increase their contribution in taxes and royalties. To ensure higher revenues, the government could complement its efforts not only by sophisticating its auditing skills and charging taxes and royalties on revenues

(and not on profi ts), but also by increasing its direct involvement in the production process.

Before any further mining contracts are signed, the government must take steps to ensure that agreements are made in the full light of public scrutiny, and that fi nal agreements cannot be made without the approval of parliament. By holding itself accountable to the parliament, and, therefore, to the public, the government can ensure that the public will be aware of how their national resources in this valuable sector are being managed. This greater democratic participation on the part of citizens will help to ensure that Tanzania’s great national wealth shall be applied wisely, as Cervantes once advised when he wrote that “the gratifi cation of wealth is not found in mere possession or in lavish expenditure, but in its wise application”.

1. Petro Sauti Magai; is a lecturer in International Trade – University of Dar es Salaam Business School

2. Márquez-Velázquez; is a PhD candidate at Free University – Germany

*The full article is in the Journal of “Development Southern Africa” published by Taylor & Francis Department © 2013 Routledge – United Kingdom (UK). To link to this article: http://dx.doi.org/10.1080/0376835X.2013.797225.

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AS part of the benefi ts of the historic visit by new Chinese President Xi

Jinping to the country recently, China has decided to waiver taxes on 95 per cent of all exports from Tanzania.

The Cultural Counsellor in the Chinese Embassy, Mr Liu

Dong, made the revelation in Dar es Salaam when addressing reporters on the success of the Chinese leader’s visit that also saw him travel to South Africa and the Democratic Republic of Congo. Without getting into details, Mr Dong also said that trade between Tanzania and China has been increasing despite global economic and fi nancial

trends, noting that Tanzania is to gain more from China.

“Tanzania ranks second in Africa in terms of countries that China has invested heavily and receives many loans with minimal interest compared to other countries,” he said.

Former Permanent Secretary in Ministry of Industry and Trade,

China waivers taxes on Tanzanian goods

President of the People’s Republic of China Xi Jinping with his host President Jakaya Kikwete when the Chinese President visited Tanzania in March 2013.


Ms Joyce Mapunjo confi rmed the arrangement but declined to give further details, saying that the government will issue its statement at a later date. “It is true, they (Chinese government) have given us an exceptional waiver on 95 per cent of all exports to that country, but I am not in the offi ce to provide more details concerning the matter,” she said.

Finance and Economic Affairs Minister, Dr William Mgimwa said the government will provide a report concerning the information soon. “We will provide a report after discussions are fi nalized on the

arrangement,” he said.

According to the Bank of Tanzania’s Statistics, Tanzania’s exports to China increased from 101bn/- in 2005 to 908b/- in 2010. This is a 9-fold increase. Imports from China rose from a higher base of 245bn/-, 2005 to 1,213bn/- in 2010. The report says that there has been a win-win trade fl ow witnessed by a faster growth of Tanzania’s exports to China.

Mr Dong said the government of China has pledged to continue with the collaboration especially on investments from Chinese companies and by convincing

Chinese fi nancial organizations to gather more resources to Tanzania.

He also said the two countries will expand social information and improve the collaboration on various sectors such education, culture, technologies,health

and tourism among other lines of work. Commenting on Africa-China trade, Mr Dong said it has grown to 198.5 US dollars in 2012. “Over 2.9 billions US dollars was invested in African countries last year (2012),” he noted.

President Xi Jinping being greeted by a child at the Mwalimu JK Nyerere International Airport while President Jakaya Kikwete looks on. Also looking on are the Tanzania and

China First Ladies Mama Salma Kikwete (left) and Madam Peng Liyuan (right) respectively.

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Tanzania Postal Bank (TPB) has launched new services to its customers called TPB POPOTE

Mobile Banking and TPB POPOTE (POS) POPOTE Account. Through Mobile Banking and POPOTE Account, while customers enjoy higher

standards of service delivery whenever they are at a minimal affordable cost; customers also enjoy the convenience of accessing bank services in remote areas and purchase of various utilities through using mobile phones either at work, home, shamba, in cars, or anywhere, 24 hours a day and seven days a week.

Talking to “The Manager”, TPB Director of Marketing, Mr. Deo Kwiyukwa explained that through TPB POPOTE (Mobile banking and POPOTE Account), the Bank has been of great support to remote people by including all of them, who were somehow neglected by the banking industry either through their level of income or places of residence; they are now accessible to banking services either through TPB POPOTE agents at village level or phone company’s agents.

For the customers with POPOTE Account, apart from enjoying the low account opening cost which is TZS 2,000 and the ATM/POS card account given instantly, also they enjoy the conveniences and facilities offered by Mobile banking services including the

TPB includes all the banking services

MR. Deo Kwiyukwa

Director of Marketing

of TPB


branch-less services delivery using mobile phone companies. They are now able to transfer cash from their TPB bank accounts into their M-Pesa, Tigo Pesa and Airtel Money wallets, as well as depositing and making cash withdraw through POPOTE agents and mobile phone agents.

According to Kwiyukwa, TPB customers whose phone numbers have been registered to their accounts, they get instant SMS alert for whatever has been done to their accounts even a withdraw made from ATM, thus the Bank guarantees account tracking by the account owner as well as security since the SMS alert are being done automatically by the bank system and not done manual

As explained before, apart from enabling people living in remote areas and the low income earners, POPOTE Account offered by Tanzania Postal Bank also offers great fl exibility to urban customers who travel to remote areas where normally there are no banking services but mobile service agents and TPB POPOTE agents are greatly found. These customers do not need to travel with large sums

TPB includes all people in the banking services

of cash because they can still access their accounts any where, any time and at any place by transferring cash from their TPB accounts into their M-Pesa, Tigo Pesa and Airtel Money accounts. This also makes TPB POPOTE the best solution for anyone who has been seeking for a better way to send money to relatives or other persons who live in remote areas, for either social or business purposes.

The launch of TPB POPOTE added another innovative service into a list of many other new and innovative products and services which are offered by TPB, all of which all are aimed at maximizing customer satisfaction, activating economic activities by sending fi nancial services to remote areas as well as to ensure inclusion of all citizens into banking and fi nancial services.

Stressing the point of banking and fi nancial services inclusion, Kwiyukwa further explained that People can open POPOTE Account any where in the country without being required to visit any TPB Branch. TPB has recruited a large number

of agents, and provided them with POS machines to enable them to open new accounts for new customers. The minimum amount required in order to open POPOTE Account is a mere Tanzania Shillings two thousand only (TZS 2,000) at which the account holder is instantly given the bank account ATM/POS card for instant usage.

The product TPB POPOTE also allows customers to get their transaction balances, mini statements and full account statements. They would also be able to order cash transfers, as well as deposit and withdraw cash. Customers also can pay and purchase a range of utility services such as water bills, electricity bills, and pay for TV services on DSTV, Star Times and many more, as well as to top up their air time.

“The Manager” commends TPB for coming up with new innovate products and services which now make it possible for all Tanzanians, regardless of their levels of education, income as well as their location, to have access to fi nancial and banking services. T M


UDBS NEWS


MIB Training Tour to South Africa

The Tanzanian High Commissioner in South Africa Hon. Radhia Msuya (wearing glasses) in a group picture with Master of International Business (MIB) students when students visited

the Tanzanian High Commission in Pretoria, South Africa.


On 23th June 2013 at 10.50pm, a group of 40 students who are pursuing Master

of Interna onal Business (MIB) at the University of Dar es Salaam, accompanied by a Lecturer and an Assistant Lecturer, Dr. John Philemon and Winnie Nguni respec vely, arrived at the OR Tambo Interna onal Airport, Johannesburg. It was the start of their 6-day study tour in South Africa, the Africa’s biggest economy – “the Land of Nelson Mandela” .

The group was welcomed by a team of facilitators, led by Dr. Philip Guma, and were led to the Europime Guest House, a four-star rated guest house located at Bocksburg West, which would be their new home for the next six days.

Monday 24th June 2013, was the fi rst day of the training. The training started with an introduction from the facilitators about the main theme of the training, followed by a discussion on programme contents, mode of delivery, industrial visits,

assignments as well as visits to historical and cultural sites. The morning session was facilitated by Dr. Guma and Prof. Jama of Guma H. Cultural Leadership Development Organization. Also, a facilitator from International Business and Trade Tanzania Initiative (IBUTTI) who coordinated and organized the tour, Deogratias Mbona gave a brief overview of Tanzania’s export performance since 2001, focusing on the AGOA market, and about other regional and global markets.

MIB students posing for a group photograph with their host (far left standing at the back) when they visited the Johannesburg Stock Exchange


The afternoon session was facilitated by a visiting facilitator from the Department (Ministry) of Industry and Trade of the Republic of South Africa,

The second day of the training, Tuesday 25th June 2013, was a day for excursions and visits. The visits started in Pretoria at the Tanzanian High Commission in South Africa. At the High Commission, students, lecturers and facilitators were greeted by a warm Tanzanian hospitality from Tanzania’s High Commisioner to South Africa, Hon. Radhia Msuya. She was accompanied by

the Second Sectretary Mr. Habib Awesi Mohamed who played a key role in coordinating the visit, and other offi cials of the High Commission.

The visit to the High Commission will always be remembered by the students. Hon. Msuya explained about the various duties and roles of her offi ce, and how they are working tirelessly to implement economic diplomacy by linking Tanzanians with the various opportunities in South Africa, Lesotho, Swaziland, Botswana, Namibia, and SADC.

The next stop of the excursions was at an open textile, apparel and footwear retail market in Pretoria. Students were left to walk in the market and explore opporttunities and chances for Tanzanian products to penetrate into South African markets. This was an important segment of practical training whereas students were required to apply the knowledge they received in training to identify possible markets, modes of entry and approaches to such markets. The last part of the excursions was a visit to the Johannesburg Stock Exchange (JSE).

Students following up a presentation at the Johannesburg Stock Exchange, accompanied by the head of the delegation Dr. John Philemon (left) and Assistant Lecturer Winnie Nguni

(right)


On the third day, Wednesday 26th June, students participated in classroom training sessions at the Europrime Conference facility. This was facilitated by facilitators from GHCLD and IBUTTI, as well as two visiting facilitators. The fi rst was a prominent woman entrepreneur and scholar, Dudu Bogatsu, who has won various awards for her innovation and outstanding business management.

Dudu shared with the students her personal practical experience of managing a textile company in South Africa which sourced raw materials from different parts of

the world. Dudu also shared her ambitions and plans to make the African continent to become an exporter of fi nished and value added products rather than suplier of raw materials. The other visiting facilitator was a lawyer, Advocate S. Mjobi who shared with students on experiences of South African fi rms that are conducting businesses in Africa. He is working with a company that seeks to have subsidiaries in a number of African countries in transport and logistic businesses.

Thursday 27th June 2013 was the fi nal day for excursions and training. The day started with

a visit to a Chinese wholesale and retail market called China City, in Johannesburg. On this market, students and facilitators got an opportunity to purchase commodities at wholesale prices, which were well below the prices of same products in Tanzania. Lecturers and facilitators had to do extra efforts to call the students back to the bus for the next visit, as every one was so busy doing the shopping.

The next stop was at the Freedom Park in Pretoria. Students were shown around the Park while listening to tales about freedom struggles. They were treated

MIB students in a luxury coach heading to Pretoria to visit the Nissan South Africa plant. Students got an opportunity to see how Nissan cars are assembled and listened to a

presentation from an Export Manager - Africa Division who explained the company’s export strategy and future plans for Africa and the Tanzanian market


to traditional dances and many other attractions that are availabe in the Park.

The last visit was at the Nissan South Africa’s plant. In the plant students were shown around various departments, and listened to presentations from the Manager of Export Division for Africa. The most attactive part of the visit was at the main assembly area. Here students observed fi rst hand how Nissan cars are assembled from scratch up to fi nal products. They observed the testing process of the cars before they are sent into markets, an activity which

requires courage to look at.

The group left the Republic of South Africa on the morning of Friday 29th June, 2013 to Tanzania through Kigali, with plenty of lessons and good memories about South Africa, their markets, how they conduct business, cultural differences and many more. The study tour exposed students into so many opportunities, which made some students to promise to go back soon to South Africa to make good use of the opportunities which they managed to explore during their short stay in the country.

This is a very encouraging decision, bearing in mind that the two countries, Tanzania and South Africa, have decided to remove the visa requirement to citizens of these two countries when and if they decide to travel from one country to another. The Manager hopes MIB students not only to be a good source of information to Tanzanians about the various available business opportunities in South Africa, but also themselves to take initiatives and start business with South Africans.

Second Secretary of the High Commission of the United Republic of Tanzania in South Africa, Mr. Habibu Awesi Mohamed, (right) listening to the facilitator of the MIB training tour in South Africa, Dr. Philip Guma, while MIB student left takes a photograph of the High Commissioner.

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The High Commissioner Hon. Radhia Msuya (right) speaking to students. Hon. Msuya explained about various opportunities in South Africa for Tanzanians, and how the High

Commission implements economic diplomacy

The leading facilitator of the MIB students’ study tour in South Africa, Dr. Philip Guma “mbuzi chooma” (right) holding a handkerchief made in Tanzania, explaining to students how

the product can be marketed in South Africa


UDBS’ Management Development and Consultancy Bureau (MDCB)

MDCB is a consultancy unit of the University of Dar es Salaam Business School

(UDBS). The Unit offers:

• Executive Education Programmes in Various Areas in Management, Leadership, Banking, Finance, Tourism, Project Management

• Consultancy Services related to Human Resources Management, Recruitment Services, Corporate Restructuring, Market Surveys, Feasibility Studies, Baseline Studies, Business Planning, Personal Finance and Investment Analysis, Public Finance, Procurement, Enterprise Development various

The Manager presents, below, MDCB courses:

A: Management, Human Resource and Strategy

i. Consultancy Skills for Managers, Dec 02-04, Regency Hotel, Dar es Salaam, Fee TZS 700,000.

ii. Effective Leadership and

Management skills, Oct 01-04 at Landmark Hotel, Fee TZS 700,000.

iii. Research skills for Business Managers, Sept 23-25 at CCE-UDBS, Fee TZS 500,000.

iv. Strategic Management and Organizational Development for Senior Executives, Oct 29-31, at Regency Hotel, Fee TZS 1,000,000.

B: Project Management

i. Project Monitoring & Evaluation, Nov 04-08 at UDBS, Fee TZS 500,000.

ii. Financial and Investment Analysis in Local Government, Nov 26-29, at UDBS, Fee TZS 500,000.

iii.Financial Management in the Public Sector (LGAS, MDAs), Nov 11-14, at UDBS, Fee 500,000.

C: Accounting

i. Forensic Accounting and Fraud Awareness, Nov 04-08 at UDBS,

Fee TZS 600,000/

ii. Accounting for Local Government Authorities, Nov 18-22 at UDBS, Fee TZS 600,000.

iii. Procurement Management in Local Governments, Oct 29-31, Dec 02-05, at UDBS, Fee TZS 450,000.

D: Marketing

i. Customer Care for Service and Non Service Industries, Dec 02-04 at UDBS, Fee 400,000.

E: Finance

i. Financial and Investment Analysis in Local Government, Nov 26-29 at UDBS, Fee TZS 500,000.

ii. Assets and Liabilities Management in Financial Institutions, Oct 07-15 at UDBS, Fee TZS 600,000/

iii. Financial Management in the Public Sector (LGAS, MDAs), Nov 11-14, at UDBS, Fee TZS 500,000.

Dr. Omar Mbura facilitating during one of MDCB courses

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“If you offer fi sh to a poor man, you are giving him food for one day. But, if you train the poor man how to catch fi sh, you are giving

MIB & MIT programmes give birth to IBUTTI, an export promoting organisation

him food for his entire life.”

The above saying is the best explanation of what the sponsorship by the Danish

International Development Organisation (DANIDA) to students of Master of International Business (MIB) and Master

Eight IBUTTI experts in Groningen, the Netherlands. They were in the Netherlands under a sponsorship of Nuffi c as part of a nine-month Tailor-Made Training to build IBUTTI’s capacity to coach and train SMEs on

export and international business skills. Standing from left to right, Digna Mtana, Dismas Mwilenga, Elizabeth Joseph, Victoria Rimisho, Neema Washa, Deogratias Mbona (CEO), and Anna Lawere. At the front is Arthur

Makene. Nuffi c is an agency of the Ministry of Foreign Affairs of the Netherlands


of International Trade (MIT) programmes of the University of Dar es Salaam is doing to the students’ lives.

MIB and MIT are new programmes delivered under the Department of Marketing of the University of Dar es Salaam Business School (UDBS). The programmes, which are currently delivered in two modes - the private evening mode and modular mode are highly practical that allows students to interact with the real business environment and work with companies and institutions involved in export business, international business and trade facilitation.

MIB and MIT programmes refl ect well the Mission of UDBS, which seek to offer programmes whose graduates are more entrepreneurial, hence job creators rather than job seekers.

DANIDA is well known by many Tanzanians for its long support to our country’s education system. Its sponsorship to MIB and MIT students has changed, not only the students’ lives and careers, but also has contributed to the birth of an organisation which within a short period since its inception has proved that it will be a major catalyst in increasing Tanzania’s exports and improve the country’s trade performance.

This organization is,called International Business and Trade Tanzania Initiative (IBUTTI), a non-profi t, non-government organization (NGO) which was registered in September 2011. It was started in a classroom by the then students of MIB and MIT.

IBUTTI’s inception was a result of students’ exposure to international business and trade issues, brought by a combination of lecture sessions and business forums which served as eye-opener to students who could now look at and analyse Tanzania’s export and trade performance.

Founders of IBUTTI could clearly see the need for a very serious intervention that is required in order to improve our country’s export and trade performance, especially the kind of intervention which will focus directly in building the capacity of businesses to accesses and operate profi tably in regional and global markets.

IBUTTI founders also enjoyed a fi rm support of UDBS lecturers who constantly offered their guidance and advice, especially Dr. Winester Anderson, Dr. John Philemon, Mohamed Samkunde, Dr. Mwaipopo and Robert Suphian.

To date, Dr. Winester Anderson serves is a consultant to the organisation, but IBUTTI sees her role to be more than that of a consultant, but rather a matron, due to her unwaiverd support.

IBUTTI is a multi-sector organisation. In its fi rst activity in September 2011, the Organization accepted an invitation from Tanzania Textile Cluster Initiative to become the Cluster’s technical adviser. The Facilitator of the Cluster, Madam Flotea Massawe introduced IBUTTI to the Centre for the Promotion of Imports from developing countries (CBI), an agency of the Ministry of Foreign

Affairs of the Kingdom of the Netherlands.

Later, the two organisations, CBI and IBUTTI, organised a three-day workshop in Dar es Salaam which took place on 13th-15th December, 2011 which was aimed at introducing CBI’s Export Coaching Programme (ECP) Home Decorations and Home Textiles. Currently, four SMEs are participating in this 4-years ECP which was meant for ambitious manufacturers and exporters in the Home Decoration and Home Textile sector who are eager to expand their export activities in the European Union (EU).

In May 2012, the Government of the Netherlands through its agency, Nuffi c, granted IBUTTI sponsorship for a six-month capacity building Tailor-Made Training (TMT) to build capacity of its eight export trainers to serve Tanzanian exporters. The TMT which started in 23rd September 2012 was extended to September 2013. It has contributed greatly in building the capacity of the organisation to train exporters and potential exporters, and link them with regional and global markets.

Through the TMT, among other thing IBUTTI’s export trainers spent one month in the Netherlands where they got an opportunity to visit and meet with several importers of products from developing countries, and especially those who has experience with importing from Tanzania and Sub-Saharan Africa. These importers shared


CEO of IBUTTI (second left) in a group picture with exihibitors from Tanzania at The African Textile, Apparel and Footwear Trade Event, which took place 9th-12th April 2013, at CTICC, Cape Town, South Africa. IBUTTI collaborated

with the Ministry of Industry and Trade through Tanzania Trade Development Authority (TanTrade ) to coordinate participation of Tanzanian producers. Second right is Mr, Edwin Rutageruka, the Director of Internal Trade at TanTrade

some important information and overview of quality, regulatory and procedural issues which need to be addressed by Tanzanian producers in order for them to access European and other international markets.

IBUTTI’s successes to date

IBUTTI is now a member of the African Cotton and Textile Industries Federation (ACTIF) and the Tanzania Private Sector Foundation (TPSF). The Organisation has signed memorandum of understanding for working relationships with Hanze University of Applied Sciences (HUAS) of the Netherlands, and is an important member of Agri Hub Tanzania, a network that promotes farmer entrepreneurship. Agri Hub Tanzania is under the Netherlands Development Organisation (SNV).

In 4th March, 2013 IBUTTI was host to a very important meeting of stakeholders in the cotton, textile and apparel (CTA) value chain, which IBUTTI organised on behalf and in collaboration with ACTIF. In April IBUTTI and the Ministry of Industry and Trade (through Tanzania Trade Development Authority, TanTrade) organised and sent eight Tanzanian producers of textile, apparel and footwear products to participate in the African Textile, Apparel and Footwear Trade Event, popularly known as Source Africa, which took place in Cape Town - South Africa from 9th to 12th April 2013.

The Ministry hired a 36 square meters space and set a Tanzanian pavilion which housed the eight exhibitors from Tanzania, while IBUTTI was a country representative in organising and recruiting the exhibitors.

On June, 2013, IBUTTI was the coordinated of a study tour of MIB students to South Africa, which took place from 23rd to 28th.

The study tour was very successful. It offered students an exposure to practical issues related to international business and exports. Already two students have established a company that will be exporting Tanzanian products to South Africa.

The Manager believes that MIB and MIT programmes will keep on producing graduates who will transform our country’s export and international business performance, graduates who will be ready and able to explore and make the best use of many opportunities that are available through trade agreements which our country has signed with other countries, as well as the many resources available in Tanzania.T M


Recently the Vice Chancellor of UDSM Prof. R w e k a z a M u k a n d a l a

could not stop himself from commending UDBS for being fi rst in the Univesity in introducing the centre for counselling and guiding students on matters related to their careers.

Vice Chancellor commends UDBS for establishing Career Centre

The VC was speaking during his meeting with members of staff of UDBS, and he was accompanied by the DVC-Academic Prof. Makenya Maboko and the DVC-Administration Prof. Yunus Mgaya.

The Career Counseling Centre which was established in 2011 has assisted many graduates to identify their careers, and has prepared them through seminars and workshops to be ready for the job market. So far, the Centre, through Graduate Internship Provision Program (GRIP) has facilitated internship

placements of 200 students in various companies including banks, auditing fi rms, SMEs etc.

The Centre also does a tremendous job in creating a link that connects students with companies and organisations which offer placements for fi eld training. Before the Center was established, it was up to the students themselves to move around and search for organisations where they could be placed for their fi eld training, with the help of a Practical Training Coordinator.

Deputy Minister for Labour and Employment Dr. Makongoro Mahanga (centre, sitting) in a group picture with participants of GRIP stakeholders meeting at Blue Pearl Hotel, Dar es Salaam on 28th September,

2012. He is fl anked by the Deputy Vice Chancellor-Administration (UDSM), Prof. Yunus Mgaya (2nd right), Dean of UDBS Dr. Ulingeta Mbamba (2nd left), Prof. Marcellina Chijoriga (left), and Dr. Evelyn Richard

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3,500 Students have a ended CCC organized and/ collaborated events.

380 P T Placements secured through CCC link with companies and organiza ons.

200 Interns placed so far in diff erent companies through GRIP Program

37 UDBS staff and students taking part in Female Mentorship Program

30 Companies and organiza ons hosted GRIP interns todate.

4 Students interned abroad; 2 from Tanzania in Jamaica & 2 from Denmark in Tanzania

UDBS Career Centre By Numbers

UDBS Career Centre By Pictures

Dean Dr. Ulingeta Mbamba welcoming the Vice Chancellor Prof. Rwekaza Mukandala (2nd left) to speak to UDBS members of Staff. Looking on are Deputy Vice Chancellor-Academic Prof. Makenya Maboko (right) and Deputy Vice Chancellor-Administration Prof. Yunus Mgaya (2nd right).


Motivational Talk – Female Mentorship Program (April 20th 2013 by Mrs. Fatma Riyami – The chairperson of Tanzania Chamber of Commerce and Managing Director of Nature Ripe Kilimanjaro Ltd)

P r a c t i c a l T r a i n i n g Workshop – June 22nd 2013


Soft Skills Training – June 29th & 30th 2013

P r a c t i c a l T r a i n i n g Workshop – June 22nd 2013

Career Fair with PWC – April 13th 2013-07-12


UDBS gets a new partner in the Netherlands

The University of Dar es Salaam through its Business School (UDBS) in its continuos efforts to expand its

network of working relationships with other world-class universities across the world has established a working relationship with a new partner from the Netherlands. The new partner is Hanze University of Applied Sciences (HUAS) of the Netherlands.

HUAS is located in the northern city of the Netherlands called Groningen. The University offers a number of undergraduate and postgraduate studies, with an International Business School within its main campus at Groningen. HUAS International Business School offers International

Business and Management Studies programme! With students from over 40 nationalities, staff members with international business backgrounds, and a large network of international companies HUAS truly prepares business professionals for the global workplace.

HUAS has a long history of working with other universities in Africa, including the Univeristy of Limpompo in South Africa, The Zambeze University in Mozambique. In East Africa, HUAS has worked with the Ministry of Health and Social welfare in a four-year project which was handled to the Ministry on May last year and at this moment they are active in the development of the North Coast Meical Training College in Mombassa Kenya.

In this relationship, partners UDSM (through UDBS) and HUAS will promote a number of important areas including academic collaboration at school, undergraduate and graduate levels in research and study, institutional exchanges, professional development and any other appropriate activities on a basis as mutual agreement between the two institutions from time to time.

Other universities that UDBS has working relationships include Business Academy Aarhus - Denmark, UMEA - Sweden, University of Coppenhagen -Denmark, Columbia University Business School - USA. Just to mention a few, all of which has contributed into making UDBS one of the best business schools in Africa.

Campus of Hanze University in Groningen, The Netherlands

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To effectively prepare graduates to tackle the unemWployment challenge, the National Economic

Empowerment Council partnered with the University of Dar

es Salaam Entrepreneurship Centre (UDEC) to conduct the fi rst ever Young graduate entrepreneurship Clinic (YGEC) aiming at empowering young graduates with relevant knowledge, information;

UDEC and NEEC conducts the fi rst ever Young Graduate Entrepreneurship Clinic

A section of participantsof the fi rst ever Young Graduate Entrepreneurship Clinic


skills and capabilities so as to enable them identify available entrepreneurship opportunities and utilize them.

UDEC was also assigned a task of evaluating the business plans of applicants and mentoring successful applicants, which was conducted successfully from 13th to 31st May, 2013 at the University of Dar es Salaam, Mwalimu Nyerere campus.

To attain the project objectives, YGC was divided into two major parts, namely course delivery; where participants acquired basic skills on entrepreneurship and business planning. The areas covered under this session included entrepreneurship awareness, skills and attitudes, as well as development of business plan

The second part was coaching; where participants were facilitated to develop sound business plans. Each participant was supported (on one - one basis) to develop and refi ne the business plan.

As per the training programme, the assignment was conducted for about 3 weeks. In the fi rst week, besides the training sessions, the focus was to select 20 out of 40 participants who could qualify for an intensive fi ve days business plan preparation session. From the 20 participants, the 3 best business plans were awarded prizes, were linked to other fi nanciers.

During course delivery, facilitators used a combination of training methods; practical lectures, structured learning

exercises, participatory group discussions, working sessions etc. Guest speakers were invited to share their experiences. The guest speakers included a young Tanzanian entrepreneur who is amongst the 30 richest in Africa, and an Offi cer from the CRDB Bank.

During the fi rst week, a total of 40 graduates participated in the training, each with his/her business concept except for the two concepts which were written by two graduates each. On the fi rst day, graduates were exposed on entrepreneurship matters with an overall objective of enhancing their general entrepreneurial tendencies so that they can think entrepreneurially on all matters pertaining to their businesses.

From the second to the sixth day, the focus was on their business concepts, critical refl ections on their business ideas, motivation, ability to pursue the ideas and consideration of resources that are needed to actualize their business concepts. In addition, they were introduced to the whole process of business planning after which the concentration was on the market assessment and marketing planning. The students were asked to prepare their preliminary parts of their business plans, covering the introduction part, the focus was for them to discuss their products and how it can make money and an indication of fi nancial requirement showing their contribution. These are the areas upon which the screening and short listing of the participants from 40 to 20 focused.

The course was opened on 13th May 2013 by the Dr. Anaclet Kashuliza, the Executive Secretary of the NEEC. The Opening Ceremony was also attended by the NEEC’s Director of Empowerment Fund Mr. Mwakilasa and Director of Knowledge Exchange of the University of Dar es Salaam and other offi cials from NEEC as well as members from various media houses. From the UDEC side, the event was attended by the Dr. Mariam Nchimbi Director and YGEC programme coordinator, Dr. Allan Shimba who was one of the facilitators, with facilitators Elia Yobu and Richard Jackson.

The closing ceremony on 31ST May 2013 was offi ciated by the Hon Dr Mary Nagu (MP) Minister of State in the Prime Minister’s Offi ce (Investment and Empowerment). The Guest of Honour was very grateful for the event and commended the project team, the participants and facilitators for the work done. She was satisfi ed with the way the training was conducted and evaluation process. Participants were encouraged to submit their business plans to NEEC and maintain close contact with both NEEC and UDEC for future opportunities. The Guest of honour delivered a very inspiring speech with a lot of opportunities for the participants.

The Manager encourages participants of this fi rst YGC ever to make the best use of the training and coaching that they received during the three-week programme. T M


ENTREPRENEURSHIP


Success is a lousy teacher. It reduces smart people into thinking they can’t lose. Bill Gates, chairman of Microsoft, in “The Road Ahead”.

In looking for someone to hire, you look for three qualities: integrity, intelligence, and energy. But the most important is integrity, because if they don’t have that, the other two qualities, intelligence and energy, are going to kill you. Warren Buffet, CEO of Berkshire Hathaway, “The Tao of Warren Buffett”.

When luck is on your side it is not the time to be modest or timid. It is the time to go for the biggest success you can possibly achieve.

Donald Trump, Chairman of Trump Organization, “Think Big: Make it Happen in Business and Life”.

Early on I realized I had to hire smarter people and more qualifi ed than I was in a number of different fi elds, and I had to let go of a lot of decision-making. I can’t tell you how hard that is. But if you have imprinted your values on the people around you, you can dare to trust them to make the right moves. Howard Schultz, CEO of Starbucks, in “Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time”.

The price of inaction is far greater than the cost of a mistake. Meg Whitman, president and CEO of Hewlett-Packard, quoted at a talk at Stanford University, 2006.

Before you are a leader, success is all about growing yourself. When you become a leader, success is all about growing others. Jack Welch, former CEO of General Electric, in “Jack Welch Speaks: Wit and Wisdom from the World’s Greatest Business Leader”.

As much as you need a strong personality to build a business from scratch, you also must understand the art of delegation. I have to be good at helping people run the individual businesses, and I have to be willing to step back. Richard Branson, founder and chairman

of Virgin Group, quoted from a telecast by management fi rm Linkage, 2005.

Commitment. This is my favorite word because in some way people who are more committed are always much more interesting and much more reliable, and much more, I would say, deep than people who are not. Carlos Ghosn, chairman and CEO of Renault-Nissan.

There are people who are really good managers, people who can manage a big organization, and then there are people who are very analytic or focused on strategy. Those two types don’t usually tend to be in the same person. I would put myself in the later camp. Mark Zuckerberg, co-founder and CEO of Facebook, quoted in the New Yorker, July 11, 2011.

The most junior person in the company can win an argument with the most senior person with a fact-based decision. Unfortunately, there’s this whole other set of decisions that you can’t ultimately boil down to a math problem. Jeff Bezos, founder and CEO of Amazon.com, quoted in Fast Company, August 2004.

Manage as someone whom is designing and operating a machine to achieve the goal. Ray Dallo, founder of Bridgwater Associates, in “Principles”.

Being a success, building a business: What top leaders have to say

Donald Trump. Chairman

of Trump Organization

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By Michael E. Raynor and Mumtaz Ahmed (Harvard Business Review, April 2013 Magazine)

Much of the strategy and management advice that business leaders turn to is unreliable or impractical. That’s because those who would guide us underestimate the power of chance. Gurus draw pointed lessons from companies whose outstanding results may be nothing more than random fl uctuations. Executives speak proudly of corporate achievements that may be only lucky coincidences. Unfortunately, almost no one provides scientifi cally credible answers to every business leader’s basic questions about superior performance: Which companies are worth studying? What sets them apart? How can we follow their examples?

Frustrated by the lack of rigorous research, we undertook a statistical study of thousands of companies, and eventually identifi ed several hundred among them that have done well enough for a long enough period of time to qualify as truly exceptional. Then we discovered something startling: The many and diverse choices that made certain companies great were consistent with just three seemingly elementary rules:

1. Better before cheaper—in other words, compete on differentiators other than price.

2. Revenue before cost—that is, prioritize increasing revenue over reducing costs.

3. There are no other rules—so change anything you must to follow Rules 1 and 2.

The rules don’t dictate specifi c behaviors; nor are they even general strategies. They’re foundational concepts on which companies have built greatness over many years. How did these organizations’ leaders come to adopt them? We have no idea—nor do we know whether the executives even followed them consciously. Nevertheless, the rules can be used to help today’s and tomorrow’s leaders increase the chances that their companies, too, will deliver decades of exceptional performance.

Beyond Truisms

The impetus for our research was the increasing popularity over the past 30 years of “success study” business books and articles. Perhaps the most famous of these are Thomas Peters and Robert Waterman’s In Search of Excellence (1982) and Jim Collins’s Good to Great (2001), but there are many others. The problem with them is they don’t give us any way to judge whether the companies they hold up as examples are indeed exceptional. Randomness can crown an average company king for a year, two years,

even a decade, before performance reverts to the mean. If we can’t be sure that the performance of companies mentioned in success studies was caused by more than just luck, we can’t know whether to imitate their behaviors.

We tackled the randomness problem head-on. Finding what we assumed would be weak signals in noisy environments required a lot of data, so we began with the largest database we could fi nd—the more than 25,000 companies that have traded on U.S. exchanges at any time from 1966 to 2010. We measured performance using return on assets (ROA), a metric that refl ects strong, stable performance—unlike, say, total shareholder return, which may refl ect the vagaries of the stock market and changes in investor expectations rather than fundamental company performance. We defi ned two categories of superior results: Miracle Workers fell in the top 10% of ROA for all 25,000 companies often enough that their performance was highly unlikely to have been a fl uke; Long Runners fell in the top 20% to 40% and, again, did so consistently enough that luck was highly unlikely to have been the reason. We call the companies in both these categories exceptional performers. For comparison purposes, we also identifi ed companies that were Average Joes.

Three Rules for Making a Company Truly Great

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43 A Publication of UDBS Alumni Association THE MANAGER 43A Publication of UDBS Alumni Association THE MANAGER

Are you a graduate of the University of Dar es Salaam Business School - UDBS(former Faculty of Commerce and Management- FCM)?

P.O. Box 35046,Dar es Salaam. Mob ; + 255 765 604 172, Tel : 022 2410 006 Fax : 022 2410 119 E-mail: [email protected], [email protected] Website: www. udbsalumni.udsm.ac.tz

If yes, join and enjoy a network of more than 5000 graduates by joining in the University of Dar es Salaam Business SchoolAlimni Association.

Who are we?The UDBS Alumni Association is a consortium of memberswho have undergone their undergraduate degrees, masterdegrees, postgraduate studies and PhD at the University of Dar es Salaam Business School, or former formerly knownFaculty of Commerce and Management. We are proud to say we have members who are talented with immense experiences and competent graduates holding various potential senior positions in Tanzania and the world at large,world-class professors, ministers, chief executive officers,businessmen/women and politicians.

Our visionUDBS Alumni Association aims to be acclaimed as a mentoringtool of professional networks.

Our MissionUDBS Alumni Association’s Mission is to be the leading business development catalyst that impacts on economy, social and politicaldynamics, individually and community at large.

Our Core values- Networking: Connect people and moments.- Mentoring: Nurture and impact experiences shared among members.- Professionalism and Integrity: Maintain respectable distinguished values and ethical behaviour that identify members.- Business Development Catalyst: Provide guidance and facilitation to business development in the markets we pursue.- Change Agent: Derived opportunities. Provide analytical understanding of business and economic phenomena through steering community with business training and advocacy- Encourage and reward innovation: By awarding distinguished alumni and partners.


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THE MANAGER MAGAZINE ISSUE NO. 5

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Transcript of THE MANAGER MAGAZINE ISSUE NO. 5