Monday, October 28, 2013

For God’s sake, we are not corrupt, nor are we retailers: Private sector roundtable

A policy forum known as ‘CEO Roundtable-Tanzania’ (CEOrt) has strongly protested against remarks by the Minister for Minerals and Energy, Professor Sospeter Muhongo, that local businessmen are merely traders who cannot afford to buy blocks for gas or oil exploration. The organization’s members have noted that the remarks uttered by Prof. Muhongo on Wednesday that “private sectors companies are corrupt and unable to run bigger projects in the country” are likely to disintegrate the private sector in the country. They have said that, such statements were diminishing their development efforts towards nation building, bearing the fact that the sector employs about 80 percent of the country’s population. Professor Muhongo had said in his speech during the 2nd Tanzanian Oil and Gas Conference and Exhibitions which was held in Dar es Salaam for two days, and which brought together both local and foreign oil business companies to deliberate on the major prospects challenging the energy sector, that the local companies were unable to get into that serious business. One of the group’s directors, Ali Mufuruki told a press conference yesterday in Dar es Salaam that, their organization has dismissed such claims by the government leveled against private companies, and said do not bear any truth in it. In view of this they are pointing an accusing finger to the government on its negative attitude towards handling oil and gas issue in the country. He said the remarks by the minister has tarnished a good image of the private sector companies operating in the country, as some investors who works with these companies in other sectors are likely to lose and confidence with the local firms. “This is a great shame to private companies in the country which to a certain extent such remarks have tarnished a good reputation of the private companies” he said adding that, it is a disgrace indeed bearing the fact that the government has to bear all the risks to let the sector survive. However, he further noted that, Professor Muhongo delivered a statement affirming that the local private sector would not play a role in the gas block auction but instead their position would be represented through the Tanzania Petroleum Development Corporation (TPDC). He was also worried by the President’s clarification which he issued on Friday when launching the fourth Tanzania deep offshore and Lake Tanganyika North Licensing Round 2013 to signify invitation of companies to compete in the biding process of the gas and oil exploration in the country.  During the launch, the President also insisted none involvement of the private sector companies in the bidding process for being so expensive that the local companies would not afford.  In view of this, however, he said their organization doubts of the government’s intention as this implies that, it doesn’t have any help either to empower the locals in oil and gas business. 

CEO's founding Chairman Ali Mufuruki

He said the organization is gravely concerned and dismayed by the government’s move to proceed with the gas block auction without having a clear gas policy in place. He queried and noted that, what the government is doing is not right bearing the fact that, the country does not have a clear policy to address gas and oil management. Surprisingly he further noted these announcements were made despite requests from the private sector to postpone the auction until a suitable gas policy was in place in order to ensure acceptable local inclusion. Mufuruki is on the view of the fact that, the government should practice the deal just like what other countries are doing in the world whereby the private sector companies are involved by 50 percent. He gave an example of what is happening in USA where he said, no any company from outside the USA could be allowed to venture in business and dominate a lion share in the local market. He said adding that, this is contrary to what is being done here in Tanzania as many foreign companies are given priority of ownership. However, he said that Tanzania should emulate Malaysia, Indonesia and other countries which allows 50 percent involvements of their local companies in any joint venture business, as this is one way to empower the locals.  He said none of these countries has ever segregated their private companies from getting directly involved in the exploration of their natural resources. He has however, asked the government to allow the participation of the private companies so as to play a level playing economy. “We must also be willing to learn from the numerous countries around the world that have successfully implemented policies which guarantee control the country’s natural wealth remains with the nationals”, he said adding that this is a critical to ensure that Tanzania builds a stable economy that will benefit all Tanzanians. He queried incase the TPDC which is tasked to incorporate with the private sector over the gas issue, what of if it fails like other government parastatal organizations which proved failure during the past, how will it be and yet the government also complains of having no enough expatriates to run the entire sector. However, he noted that, a sector which does not have qualified experts to run business in the newly established industry like gas and oil sector does not have a smart economy, he said adding that, the decision of the government is totally discriminative. Analyzing the government’s call that, the private sectors are not able to afford the huge expenses of the gas exploration he noted that, the issue here is not lack of money but get experience and knowledge when collaborating with the foreign companies is an added value to empower them.  CEO Roundtable-Tanzania consists of 90 members who are Chief Executive Officers (CEOs) of some private companies in the country who brings together a group of organizations engaged in providing policy forum and dialogue to see what is challenging in private sector development.

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