Improving port governance and EAC-wide expectations

WITH the government measure to ban the importation of sugar in favour of selling local sugar without an explicit price control mechanism in place, it is now clear where the thrust of economic policy is directed.

It is an indigenisation policy where locals are given first priority, and measures are being beefed up in various areas to eliminate informal tax breaks that made imports cheaper or otherwise marketable with ease, at the expense of ailing local products.

It is a policy that meets the expectations of the local private sector. The fact that competition with foreign goods is diminishing in some areas implies that a faster pace of price rises is in the offing.

But it has the potential to take limited proportions because the shilling itself isn't in difficulties, as the balance of payments problem is being straightened out more rapidly than was the case before, in which case the shilling is expected to remain healthy, even with a minimum of food inflation arising from sugar imports ban.

So far petroleum prices have remained relatively low while diesel has gone abruptly much lower. One stark contrast between the previous regime and the present thrust in economic policy is a shift from laissez-faire to regulation and planning, where the old regime failed to enforce many of its own regulations owing to discretion on the part of top officials.

Aware that there was no one to follow up on such decisions and the public authorities often asked the same officials to bend the rules when the need arose, they did as they wished - or were induced to. Much of that is now out of question, but for how long?

Rwanda is one neighbouring country which has expressed satisfaction with the current climate of using the port of Dar es Salaam, as the levels of risk with goods, especially exposed valuables such as car parts, were too high. As Rwanda is with Kenya and Uganda in the so-called coalition of the willing in the thrust towards East African Community integration, it is an open question whether improving port management is an all-round sign. Will Tanzania now inch closer to the other partners?

As the government begins or proceeds with settling the debts of myriad creditors, there is likely to be an impact in the EAC region as local firms will be in a position to make use of opportunities at the local level more efficiently. There are already intense efforts or operational thrusts to enhance market presence in the other EAC members on the part of major local firms, in which case greater reliability of the government meeting its debt obligations places these firms in a better position to invest.

It enhances the availability of funds and diminishes systematic reliance on current account liabilities, loans, etc. What is also on the table is how far the current measures to enhance the state of regulation and observance of tax obligations enhances the country's foreign direct investment flows in relation to the rest of the region.

While Burundi has a lot to do to stem the drive into chaos, Rwanda is constantly battling pressures towards chaos, with a particularly virulent bent on that corner of the Great Lakes region. Uganda has just completed an unsatisfactory poll that reaffirms stability, as chances of a Kampala Spring to remove the recycled regime of President Yoweri Museveni recede, the foes are familiar.

Even in the case of the more stable Kenya, bits and pieces of Magufuli thrust policies have been picked here and there and, in equal measure, we are now picking their sugar controversies between President Uhuru Kenyatta and opposition leader Raila Odinga.

The latter represents Big Sugar in his Nyanza fiefdom, while the president, like his Ugandan counterpart, believes in foreign sugar seeking its right market share as local sugar is inadequate. The same largely applies here, in which case the import ban imposed stands to be breached.

It boils down to a rather experimental situation where a twin objective of meeting the expectations of key groups fuses with actually battling sleaze and corruption in various guises, and finally the two will have to separate like oil and water.

When that has happens, chances are that the fourth term will at that time reclaim a bit of lost prestige, that maybe a measure of operational freedom at an institutional level wasn't too negative after all.

But no one expects that the current authorities will go back to the days when heads of institutions simply decided what they wanted to do and the price at which they would be offering services. As this is yet to be spelt out, could it be recycled?

Again, much of the public is still uneasy as to how far goods and services will be fetching a market after the government cut back on its leisure spending, which was a sort of subsidy for much of the hotel and entertainment industry.

In contrast, those who sell basic goods and other household needs may have some reason to smile as families can now afford to spend more on basic needs what they would otherwise be paying for school mistresses and other students’ items all the year round, and children would now have more to eat, for that reason.

While there is hence a greater inclination towards equality, the growth part is still unsettled...