Remarks by January Makamba at CEO Roundtable Dinner - 13 September, 2011

Remarks by January Makamba at CEO Roundtable Dinner - 13 September, 2011

Friends, Ladies and Gentlemen,

I would like to thank the membership of CEO Roundtable for your kind invitation to join you for this dinner and speak before you.

I thank you Ali – for your stewardship of this important forum, and as one of thought leaders in business and society.

You have asked me to speak on two very important issues. Electricity and Fuel. These two issues are complex and multifaceted – and greatly implicate the wellbeing of our country.

It is therefore always a challenge, given the time we have, to exhaust all facets of any of these issues, let alone all. So, I will focus on just a few dimensions that are relevant to as many of us as possible.

I will spend more time on energy – as I know that is of particular interest to most of you. And in this respect I would like to recognise your statement made in July, which not only delivered concrete ideas on how to deal with the crisis but also improved the quality of the energy debate – quality which hitherto had been so wanting.

I would hope that these kinds of dialogue – between government and private sector, between Members of Parliament and business community will continue – as we strive to make our country better.

First, what is the situation now? I don’t need to tell you this, but for many years now, the electricity that is generated has not been meeting the demand. In addition, we have not been able to ascertain and plan for the actual demand for power in this country. Still, not being able to meet the demand for only 14 percent of households, for these many years, speaks for the challenge we have in the sector. Anyway, this is another debate, but if we are talking about power shortage as a crisis, then we have really been in a permanent crisis.

According to the Energy Minister’s report in Parliament last month, the installed generation capacity in the country is 1,102MW. For a country of 43 million people, this is a very small amount. As of last month, according to the same report, production at all sources was 623MW. Therefore, as we speak, 479MW that we previously had in the grid is now off grid. This is about 40 percent of the capacity. The current crisis is deeper perhaps because this is a record amount of power to go off the grid. For there to be no load-shedding, we need to add at least 300MW back to the grid.

You obviously have read about what transpired in Parliament last month that led to the initiation of the current emergency measures to deal with the current crisis. My assessment of the plan here tonight is with clear understanding that some of the measures promised are ongoing, but also I recognize that there were milestones to be met before December, including statements made by the Minister last week that there will be movements and relief this week, relief that has so far not materialized. And indeed some of us are duty bound to speak up when we see the public losing trust and confidence in public officials.

So, what entails in the current Emergency Plan?

In short, there are two phases of the Plan. First phase: between July – December, where a total of 572MW is aimed to be added into the grid through additional generation from existing Symbion (37MW) and IPTL (80MW) plants, and introduction of 100MW from Aggreko, 205MW from new Symbion contract, 150MW from NSSF.

Aiming to add 572MW in a matter of four months is quite bold and ambitious. I was excited when it was presented in the Parliament because this kind of ambition and boldness is what I have been calling for. But I was – and I remain – cautiously optimistic. We have seen many broken promises before, most recently the one to generate 260MW by July – a plan that was approved in the cabinet in February but has not materialized up to today.

Nevertheless, we know that the 37MW Symbion generation will be done. We know that Aggreko is already here – because they started the process early during the year (although they were supposed to deliver on August 15). And we all know the story of IPTL – running out of fuel every so often. So, what we are guaranteed by December is at least 137MW.

The 205MW from Symbion is still a “story” as contract has not been signed yet as we speak. Story goes that it is at EWURA waiting for approval. And here lies another question: as a regulator of utility, at what point exactly does EWURA supposed to be involved in power projects? From contract negotiations – as an enforcer of good contracts? Or, during tariff application process – as an enforcer of tariff generated from “prudently incurred costs”? So, while people in government are mentioning Symbion as a solution, Symbion has not yet shipped the plant because I don’t think any businessman would mobilize a $300m equipment without a contract. I still retain confidence that this, in the end, will be done – not so much as a result of urgency in the government bureaucracy, but for the sheer persistence and need for certainty from equipment supplier and contractor.

The 150MW from NSSF – I know I will be unpopular for saying this: but you can forget about it, at least during this year. They promised to deliver 150MW by December with foggy idea of where they are going to get the plant, and where in Dar es Salaam they are going to install it. They relied on word from people who didn’t have even offices, and I heard that a team of 9 people from NSSF and other government institutions went to the United States (why 9 people? I really don’t know) and found nothing. Now, there is yet another word that there is a plant in France – and a team of people is going there again tomorrow to have a look – and do “due diligence”. But this Paris plant is, first, of less than 150MW and, secondly, of Frame Six type – which is technically complex and takes minimally eight months to install. So, it will not be here before Christmas – if in fact that is what they choose to go with. In any case, one expects that NSSF, as a public institution, will procure this plant through a tender process, which again complicates the matter.

So, again this is phase one of emergency plan. What is the cost? 523 billion shillings. What will be TANESCO’s revenues? 115 billion. Deficit: 408 billion. How will it be funded? Through commercial loans. But who will be willing to lend money to TANESCO? None that I know. Therefore, we will most certainly rely on a government guarantee. Now, we just have to be honest with ourselves. This is not just a loan guarantee for TANESCO. This is straight loan to the government. And it will be serviced through taxpayers’ money. And there is an injustice here. 86 percent of households do not have electricity, but through the taxes they also pay, they are in effect subsidizing those 14 percent of us who enjoy it.

Another feature of the financing of this plan is that the payments will be in foreign currency. Power producers are paid in foreign currency and fuel to run these generators are imported by foreign currency. Given the magnitude of the payment – if you add phase two of the Plan, which comes to 1.2 trillion shillings – the plan will have implications on balance of payment, foreign currency reserves and strength of the shilling. So, measures will have to be taken so that these expensive emergency power plans do not come at the expense of the stability of the economy.

For the Second Phase of Emergency Plan – running from January to December 2012, there are three projects, which will aim to bring additional 460MW into the grid. Jacobsen Gas Plant in Ubungo, Semco HFO Plant in Nyakato Mwanza, and another Jacobsen Plant of 150MW in Dar es Salaam as well. The interesting thing about these projects is that the first two were supposed to be finished this year – but they are now termed as emergency plans for next year.

And secondly, there are serious issues of fuel to run these plants. As it is today, there is no enough gas to run the existing gas plants. The earliest time that you can deliver gas to Dar, given the existing gas infrastructure upgrade plans, will be the first quarter of 2013. So, in essence, you will have 250MW of plants sitting idle as white elephants.

I think that it is scandalous to have ordered this Jacobsen gas plant for $124m almost two years ago, and not plan for the gas to run it. There is a talk that once it arrives, the gas currently used by Symbion to produce 75MW will be diverted to this plant and Symbion will run on Jet A1. That is fine, but it does not, and should not, absolve some people at TANESCO and the Ministry for poor planning – and compelling the nation into an expensive proposition.

Of course, they may have ordered dual-fuel plants – meaning that they can fire them using liquid fuel as well as gas. But, if you consider that the entire 572MW of generation between now and December is supposed to use expensive imported liquid fuels, this will mean for more than a year, our country will be generating a total of 1,032MW using imported liquid fuels. This is next to impossible to sustain.
To conclude on the emergency plans, my general view about the emergency plans is that while they are necessary at times, they cannot be something we resort to every time. You can’t be in an emergency for five years – as five years is enough time to sort out a permanent solution. Emergency power should be a bridging power, a temporary solution to give you space to find a permanent solution. My hope, which I expressed in the Parliament, is that this will be the last emergency plan.

And ideas on permanent solutions are plenty. This is a country blessed with almost all sources of energy in plentiful: gas, coal, hydro sources, wind, solar, and geothermal. It is scandalous for a country such as ours to generate grid electricity using expensive imported liquid fuels. The question to ask is why, for instance, we don’t have a single coal plant despite massive amounts of coal in the country. I am sure you have read about these many plans, some in the books since 1980s. I do not intend to review them here.

But I want to say that the main issue is planning. In energy, nothing is more important than planning. And, in energy planning, 10 years is short term. I just hope that our planners have thoroughly thought beyond December 2012, and 2014 when some of these rental contracts will expire and generation will go off the grid.

So, what do I propose as way forward?


1. Sort out TANESCO –

For better or for worse, TANESCO sits squarely at the centre of energy problems or solutions in this country. It is a massive utility that is very impressive on paper. Last year, it booked 500bn revenue. It has operating capital of more than $1bn, and assets worth more than a couple of billion dollars. And it has the capacity to triple its revenue and assets in just five years. Few companies in Tanzania, both private and public, can match these numbers. But TANESCO is not performing as it should – constantly in the red, and having to be subsidised by government. In many other countries, utility companies are blue chips – whose stocks are hot. I remain confident that TANESCO can be the same.

If we can transform TANESCO to what it can be, we may start to see light at the end of the tunnel. But the government will have to figure out what it wants to do with TANESCO. All of us can help to put pressure for the right structure and role for TANESCO.

There have been so many ideas – and so many studies - about the right structure and role for TANESCO. The most popular one is splitting it into three functional and business units.

But the question is: split it and then what? Do you split it but still keep the units in government hands? Or do you privatise all the units or not? Perhaps only one or two? And if so, which ones exactly?

I am in favour of the Kenyan model. TANESCO has too many functions. It generates power, it runs the grid, buys power from IPPs, it owns and operates transmission and distribution system, and it supplies electricity. These are complex functions for one organisation at this point in time. And with the law permitting IPPs and competition in the industry, one can conclude that there is anti-competition environment in the industry. TANESCO should not be negotiating tenders with firms it is by law supposed to compete with – and may one day compete with.

Henceforth, I would say split TANESCO into three functional and business units and issue IPOs for its units. I can guarantee that they will be oversubscribed and you will get all the money you need to invest in energy. Transmission unit will have to be largely owned by government initially – given the big differential between investment and margins. Of course, this is not panacea because the principles of running a business will still have to be adhered to whether you have one or three units, or whether it is a publicly traded company or a parastatal. But at least you will guarantee focus on each business and functional unit. You will also guarantee pressure from shareholders for transparency, better management, better business decisions and accountability for failure – critical elements that are missing at the moment in TANESCO.

In the end, the maturity of business culture and environment will be critical in the success of this idea. The quality of service of each unit will depend on the efficiency of the other unit. Therefore, there ought to exist commercial discipline that ensures that all three units of the industry – generation, distribution and transmission – are legally bound to honour their obligations to each other. The beauty though is that once you get to a level where you have multiple firms in each unit, competition for high performance will arise and end-users will be able to choose who to do business with.

In the meantime, as it is today, TANESCO can and should be able to make sound business and management decisions – only if politicians stop to be its manager and spokesperson.

A lot of us – and even TANESCO – has been talking a lot about putting new power plants to ease the crisis. But electricity is beyond generators. What about repairing transmission and distribution systems that are currently not in good shape?

For instance, last year alone, mainly because of poor transmission and distribution infrastructure, TANESCO lost 21 percent of power it produced and/or bought. This lost electricity amounted to more than 1,200 GWhr – which is more than all electricity used in factories and businessplaces for the entire year, and amounted to about 75 percent of all electricity bought from Songas in the entire year. These are massive losses – which, if curbed, in themselves would have helped with the power situation. But TANESCO will need to invest in Repair and Maintenance for this to be possible. And we know that this is not happening. While it is required by best [utility] industry practice to spend 12 percent of revenue on Repair and Maintenance, TANESCO spent only 2.8 percent of its revenue on R and M between 2005-2008 – and result is lots of broken transformers and service lines and a huge amount of lost electricity.

2. Make it easy for private investment in energy sector

One of the things I hear the most when I talk to businesspeople is how difficult it is to do business in Tanzania – particularly to invest in energy sector. I am told of people who had come here keen on investing on energy but simply could not bear the red tape and the uncertainty. But what I don’t understand is why and how we make it so difficult for people to come in and invest in a sector we so desperately need. The last non-rental private investment in energy in Tanzania was in 2004 – seven years ago. And the last three plants to be built in Tanzania were by the government.
Now, if electricity generation pays – both for private investors and for TANESCO – as it surely does when gas is the fuel, why should the government spend billions of shillings in taxpayer’s money to buy generators?

As it is now, there is no power investment guideline – both in terms of process and basis for PPA negotiations – for investors to rely on. Energy deals are structured so differently depending on how desperate the energy situation is at the time, and permits and approvals depends on the depth of your contacts and the kind of pressure or incentives you are able to put.

This must change. Power projects are complex. Private investors commit a big number of people – some up to 30, lawyers and financial people and so on – in a single project just to get the project to take off. And over here, you have few people who are so scattered across government – TIC, BRELA, NEMC, TRA, EWURA, TANESCO, and Ministry of Energy – and who have so many other things to deal with such that these projects do not receive the needed attention.

I believe that planning and overseeing fast execution of power projects should be coordinated at the very top level of leadership of the country, with absolutely no tolerance for delays and excuses. In Nigeria, President Goodluck Jonathan has formed, and chairs, the Presidential Action Committee on Power (PACP) which consists of Ministers and Heads of Agencies that have a critical role to play in Nigeria’s power sector. It acts like a “War Cabinet” for Nigeria’s power sector, setting policy and granting expedited approvals for critical decisions. The PACP meets every Tuesday, yes, every week! This ensures that issues connected to the power sector enjoy priority attention at the highest level of government. I think we ought to do something like that here given the gravity of the situation – and importance of energy to the economy.

3. Sort out gas issue

Gas, which we have plenty of – and plenty more onshore for the future, is critical for the permanent solution to the power crisis.
So, it is critically important that we sort the fuel question. Why? Because, even if you are able to airlift a 300MW gas power plant to Dar today, you will get Zero power as there is simply no gas. It is not that there isn’t enough natural gas in the country. It is just that we haven’t planned well to extract and get it to where the generators are at critical moment.

As it is today, in this coming year, we will produce more power from very expensive imported fuel than from cheap gas which we already have in the country.
If you consider when gas was discovered and wells we dug in Songosongo, we are 20 years behind in gas utilisation. If we had planned better in terms of gas infrastructure, today 70 percent of our power generation would have been coming from gas. Given the desperate situation we are in today, everyone is talking about gas infrastructure project or a gas power plant. This is good but it requires better planning and coordination. There ought to be coordination on who is doing what and when, and at the same time analysing the implications of all these efforts on price and availability of power. A Gas Master Plan is badly needed.

4. Sort out tariff issue

We seriously need to look at the electricity tariff structure. No doubt that TANESCO could do better to manage its cost of service. But we need to decide in this country whether electricity is a business or a subsidized service. The current tariff is not commercially viable. The government recognizes that the current tariff does not work. That is the reason it is subsidizing to the tune of 5bn shillings per year a private company in Mtwara to sell electricity at a price equal to TANESCO’s.

Not only does the current tariff hurt TANESCO’s balance sheet and its repair and maintenance capabilities, it also discourages private investment in energy sector, particularly in alternative energy. For instance, for solar generation to be commercially viable, the tariff has to be in the upwards of 20 cents (mostly because of the heavy initial investment).

Some may say that it is impossible for the majority of people to afford higher tariff. I don’t believe so. Look at how much Tanzanians are spending on phone airtime. The current tariff structure is such that TANESCO sells power at the more or less the same rate to end-users, regardless of whether it is to a barber shop in Namanga or to a Barrick Gold Mine in North Mara. The tariff should be dynamic and flexible given the volatility in the fuel prices and different capacities of TANESCO customers. There are those who will be willing to pay higher tariff as long as power is steady and reliable. For instance, with industries, power, even at higher price, features insignificantly to the cost of production; but when it is NOT available it is a very significant contribution to losses.

4. Coal, Wind, Solar and Geothermal

Ambition and innovation can – and should – be brought to fore to exploit the four critical sources of energy (coal, wind, solar, and geothermal) that we have in plenty, and which other countries are producing huge amounts of electricity from. There is absolutely no excuse that, as it stands today, all these sources – cheap and plentiful – are not being used to produce electricity.

Coal powered industrial revolution in many developed countries. We have it in plenty – in Ngaka, Mchuchuma, Kiwira and other places. Coal is so cheap that, even if you ferry it in ships from South Africa to generate electricity in Dar es Salaam, that electricity may still be cheaper than the one we are going to produce using diesel.

I am happy that at least there are two companies in Tanzania exploring the possibility of producing electricity through wind. We need to move fast the approval processes.

On solar, few companies have come in to express interest in putting up solar farms – and produce up to 300MW. The issue, of course, with renewable has always been the high tariff. But one company that has such big solar projects in different parts of the world presented a proposal to sell solar power to TANESCO at 25 cents per KW. But we said it is too expensive – which is true because TANESCO sells power at about 10 cents. But then again, we are now buying power from some companies at about 37 cents, power generated from fuels which we import through foreign currency!

Geothermal energy is generated from steam resulting from underground volcanic activity – steam that run turbines to produce power. Many countries with underground volcanic fields – Iceland being the leading one – are producing electricity. Kenya is. There is no reason we shouldn’t. We have more volcanic fields, the Rift Valley, a case in point – and therefore higher potential – than Kenya, but Kenya decided that, by 2018, 50 percent of its electricity will be produced through geothermal. And 25 percent of this year’s Kenya’s energy budget has been set for development of geothermal power. Of course there is a huge initial cost of exploration of fields that discourages the private sector investment. What Kenya has done, and what we ought to do, is establish geothermal authority, in which government funds exploration, and put proven fields to tender. The outcome is that those who win tender even reimburse the government for exploration costs. This we must do.

I want to end up here on energy issue, as there are simply too many things to talk about – things that we may take up as we interact later.

Fuel Crisis:

Very briefly on fuel crisis: The nation almost went to a standstill weeks ago when a new price announcement by EWURA resulted into protest by OMCs. It was embarrassing both for the government and for EWURA, causing great inconvenience to the people and businesses. This is what I know:

1. In a new indicative price formula that EWURA used, the platts (base) price for diesel that EWURA used was for a cheaper, high-in-sulphur diesel type that we don’t import anymore (5000ppm). So, that led to an arrival in lower indicative price.

2. The exchange rate that EWURA used was BOT’s with a margin of 20-25 shillings against the actual rate used by importers.

3. We know that ships waits for an average of 30 days to offload fuel at the port – and each day a ship is charged $20,000 – $22,000, and these charges are reflected in the cost of fuel import, and eventually pump price. But EWURA provisioned for 3 days at a cost of $18,000 per day – something against reality.

4. On wharfage (port) cost on diesel, EWURA’s indicative price formula put it at $7 per metric ton, while Tanzania Port Authority charges at $10.4 per metric ton. In Mombasa and Beira, the same is charged at $3 per metric ton. More interestingly, fuel for neighbouring countries that passes through the port of Dar is charged at $3 per metric ton. Now, why would you charge your people $10.4 while neighbours who don’t have ports charge $3? And why would EWURA put wharfage at $7 while it is clear that importers are charged at $10?

5. Then there is an issue of conversion from metric tonnes (used for importation) to litres (used for setting indicative price). The conversion was not realistic.

6. Also, again on exchange rate: the basis that EWURA uses is the rate of first day of the following 14 days that the indicative price is applicable. This would have been okay if fuel importers were paying cash. But we know that most of importers import on credit, and also do not finish their stock in 14 days, and so when the shilling is falling it implicates on their margins.

7. Now, we know that EWURA has been issuing indicative prices since January 2009, and there hasn’t been a crisis like this one despite some of these imperfections. This is because some of these imperfections were taken care by a cushion of 7.5% that EWURA had been featuring in the pricing formula. But EWURA immediately removed it – saying that importers are making too much money.

And then there is a folly of EWURA suspending BP, a company which government has 50 percent stake in. Now, if you could not force a company you partly own – and which you have access to all its books and costs – to abide to your new price, then something must be very wrong. The result of BP suspension is that you also share the loss as a shareholder; and as a big importer TRA suffers in revenues.

A debate in necessity for price setting is one we should have. More importantly, I would think that the relationship, the understanding and communication between the regulator and regulated entities is very critical in the functioning of the industry. There is absolutely no need for public fights and show of machismo. And there is absolutely no need to sow divisions among oil importers and treat them differently and isolate others so that industry regulation can prevail.

So, as Government you can force oil companies to sell fuels at the pumps and deliver it from depots – since you control instruments of order. But you can’t force an importer to place an order from the refineries overseas. From what I hear, and I hope it is not true, some companies have reduced their fuel orders to Tanzania, and some have turned around ships that were heading this way.

The biggest impact of the crisis was not just that weeklong of inconvenience – but the deterioration of confidence in EWURA as a regulator, and more so on Tanzania as a market and reliable place to do business.

In concluding

Finally, I would like to challenge you to look at the power situation in Tanzania from a different perspective. I think most in business community have looked at it as constant bottleneck to business progress – and rightly so. But we need to broaden that outlook. With our economic growth expected to hit double digits within this decade, infrastructure investment, especially in power, is obviously the next big thing. Seven years from now, conservative estimates show that Tanzania power demands will hit around 10,000 GWh, and triple that by 2030 at 30,000 GWh. Within the next 20 years, the power sector will attract investments of well over $30 billion. Generation costs per kWh are projected to drop substantially to 10 cents from current 15.3 cents, and still by 2020, revenues to power providers are expected to hit $3 billion annually, while their expenditure around $2 billion. At current values of power to the economy, the power sector will contribute well over $11 billion to our national GDP by 2030.

This opens up an array of extraordinarily impressive business opportunities for you. And it will be a shame if you stay on the sidelines.

Time is now.

I thank you for your kind attention!

What is Holding Africa from Prosperity?

The late Prof Abdulrahman Mohamed Babu had pointed out these facts in his important book, An Economic Strategy for the Second Liberation of Africa (1994).

1. Dependence on the developed world for Africa’s own development

2. Excessive use of socially necessary labor time in the production of useless goods for export, instead of useful goods for our own human development

3. Unequal trade terms, about which, position of economic weakness arise from export of primary commodities only.

4. Unproductive use of the foreign debts incurred (and the corruption that goes with it), and debt service obligations at extremely unjustified high cost

5. Poor energy policies that make us heavily dependent on external sources of energy and the depletion of our meager foreign exchange earnings in paying for the rising cost of oil imports

6. An irrational world economic order as a whole which, again cannot be changed from a position of economic weakness.

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South Africa's Proposed Health Care Reform

South Africa is spending 8.5% of her GDP on healthcare expenditures and continue to have inequity health system, plagued with inefficiency. Their health care system has been described as "unsustainable, destructive, very costly, and highly curative". They are expected to live seven years shorter than Tanzanians, despite the fact that Tanzania's expenditures in healthcare is much less comparable to SA's. This is not a surprise; the legacy of Apartheid is the creation of one of the most en-equal society in the world.

To that end, it seems like folks in SA Ministry of Health are parting ways with donors influenced disease control programs and are overhauling the entire system. Their plan is ambitious, with some unanswered questions--but it is a bold and much welcomed change. Details of the proposed reforms are outlined in this 59 pager policy paper released by SA-MOH. Quick reforms that stands out--

• Creation of National Health Insurance (NHI) modelled from UK's NIH (what Americans call socialism ). NHI will be the sole provider and payer of health expenditure in SA. It will make sure everybody has access to a defined "comprehensive package of healthcare services'". NHI will definitely help control the escalation of cost and there will be rationing of care as well. NHI eventually will transform the way health services are provided, managed, and increase priority towards primary health care.
• Ideally, NIH being the sole funder--will be able to pool and reallocate the funds in a more egalitarian fashion, and revitalize public health sector that will vastly improve access, and will regulate for the higher quality of care.
• Foreign students, tourists, and visitors will be required to show health insurance prior to entry in SA. (potential impact on tourism industry?)
• Re-engineered primary healthcare system focusing on community outreach with an eye on health promotion and preventive measures. They need to look at Ethiopia's Health Extension Workers, who are attributed to a revolutionized rural health in Ethiopia.
• School health services. This is a simple and effective way to improve child hood health.
• Over 14-year implementation period, the overhaul will cost $17 billion (Same price US spend in Afghanistan in 8 months). It will be funded by taxes--which raise concerns for a country with 24% unemployment. It might be regressive to bombard the tiny middle class with extra taxes. I wonder how rich folks feel about that.

You can check out the rest of the proposal on the link above. I think it is the right direction towards improving health systems in low-mid income countries. We have to get away from the PEPFARs and the Global Funds and tackle the problem at its core--which is the messed up system. Tanzania should pay close attention on how this thing is being implemented, we need our own reform. Besides, healthcare is one of the few industries that continue to add jobs in this economic climate. It makes sense to reform now.

Another Edition of Good Reads

It has been the culture of this blog to post what we think might be good reads (books) for the readers of this space. In this edition we have one book that might challenge the dogmatists view economics of poverty (Easterly-Moyo Vs. Sachs-ProBonos). And the other book has enabled liberals and conservative to embrace "libertarian paternalism" view and argue that we are all choice architects at one point. The contents of these books are valuable for public policy makers who are bold and are looking for different ways to achieve their causes. The reviews that are posted below have been borrowed (without permission) from various credible book reviewers. Enjoy!

Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty. By Abhijit Banerjee and Esther Duflo. PublicAffairs; 336 pages; $26.99. (The Economist Review)--One of the Author (Esther Dufflo) was also featured in this blog sometime in the past.

“Poor Economics” should appease some of their critics. It draws on a variety of evidence, not limiting itself to the results of randomised trials, as if they are the only route to truth. And the authors’ interest is not confined to “what works”, but also to how and why it works. Indeed, Ms Duflo and Mr Banerjee, perhaps more than some of their disciples, are able theorists as well as thoroughgoing empiricists.

They are fascinated by the way the poor think and make decisions. Poor people are not stupid, but they can be misinformed or overwhelmed by circumstance, struggling to do what even they recognise is in their best interests. The authors recount (with grudging admiration) how nurses in rural Rajasthan outwitted the two professors’ efforts to stop them skiving off work. They also describe how borrowers in south India exploited a contractual loophole to avoid taking out health insurance, which their microlender insisted they buy for their own good.

The poor, like anyone else, can also succumb to inertia, procrastination and self-sabotage. The authors discovered it was quite normal for poor women in the Indian city of Hyderabad to take out a microloan charging 24% interest only to deposit it in a savings account that paid 4%. This seems mad, except that the obligation to repay the loan ensured the women did not squander the money. Farmers in western Kenya miss out on the benefits of fertiliser because, by the time the planting season arrives they have often spent their earnings from the previous harvest. But farmers far-sighted enough to buy the fertiliser straight after the harvest, when they do have money, do not sell it, despite facing all the same demands on their resources. In other words, farmers cannot save the money to buy fertiliser, but they can save the physical fertiliser itself.

Poverty is often linked in the public mind with dependency. But, as the authors point out, the poor bear more responsibility for their lives than the rich, who coast along, enjoying chlorinated water, drawing a regular salary, paid directly into a bank account, perhaps with contributions to their pension and health care automatically deducted. The rich can indulge their weakness for cigarettes and alcohol without fear of financial ruin. The poor, in contrast, have to watch every cup of sugary tea. Mr Banerjee and Ms Duflo recommend a variety of nudges, props and subsidies that will make it as easy for poor people to make the right decisions as it is already for the rich.

If it is a mistake to equate poverty and dependency, it is equally mistaken to believe the poor will lift themselves up by their bootstraps. The book crosses swords with the business gurus and philanthropists who project their own enthusiasm for Promethean entrepreneurship onto the poor. Yes, the poor are more likely to run their own business than the rest of us. But that is because they have no other choice. When asked, most of them aspire to a government post or a factory job. Developing countries are not full of billions of budding entrepreneurs; they are full of billions of budding salarymen. Read the rest here.

Improving Decisions About Health, Wealth, and Happiness By Richard H. Thaler and Cass R. Sunstein. 293 pp. Yale University Press. $26

As a result, Thaler and Sunstein argue, many of the familiar arguments for why people should simply be left to make choices on their own, and especially for why government should stay strictly out of the way, have little practical force. In many important areas of choice that matter both to the individual and to the rest of us (for example, when overuse of medical care drives up our insurance premiums and our taxes), the operative question is not whether to bias people’s decisions, but in which direction.

Thaler, a professor of economics at the University of Chicago, and Sunstein, a law professor formerly at Chicago but now at Harvard, apply this line of argument to a wide array of familiar areas: saving, borrowing, energy consumption,smoking, teenage pregnancy and many others. Along the way they present fascinating findings about how people actually make decisions, together with lots of personal advice: save more, diversify your investments, don’t invest much in your employer’s stock, don’t pay points on mortgages, buy insurance with the biggest deductible you can afford, don’t pay for extended warranties. But their main objective is to reshape public policy (Sunstein is an informal adviser to Barack Obama, who has advanced some “Nudge”-like policy ideas), and it’s clear that the suggestions they care most about apply to ways in which governments can do a better job of guiding the choices made by their citizens. The goal, in part, is to nudge people toward healthier, safer, more prosperous lives while also addressing pressing issues like environmental damage and the rising cost of health care.

If all this sounds paternalistic, that’s because it is. Thaler and Sunstein adopt the deliberately oxymoronic label “libertarian paternalism” to describe their general approach. It’s libertarian in that people retain the right to make their own choices: they’re free to select the savings plan with the lowest projected return if that’s what they really want. But the govern­ment — or an employer, or the person in charge of laying out the food in the cafeteria — is nonetheless nudging people in the direction that somebody thinks will make them better off.

The conceptual argument is powerful, and most of the authors’ suggestions are common sense at its best: Set up 401(k) programs so that employees have to opt out if they want, rather than making them opt in. (At present, roughly 30 percent of employees eligible for 401(k)’s don’t sign up, despite the enticement of employer matching contributions.) Do the same for organ donation. Make credit card companies offer an automatic full-payment option. Offer investment vehicles that provide automatic portfolio rebalancing. Most of these ideas work because of the human tendency, widely documented, toward what Thaler and Sunstein call “inertia.” Most of us just call it laziness.

In the end, however, “Nudge” is somewhat thin on practical ideas for public policy that follow from the authors’ core insight. Many of the suggestions Thaler and Sunstein make, in contexts like savings and mortgages and credit cards, amount to calls for greater disclosure (what did all of those credit card fees total last year?) or for presenting information in a clearer way (to make price comparisons for mortgages easier). Surely no one except the companies making the profits would oppose more disclosure and clearer information. But we don’t need behavioral economics, or libertarian paternalism, to think such proposals might be helpful.

And the authors occasionally strike a false note. Their recommendation to allow patients to sign away the right to sue doctors for malpractice, for example — presumably in return for lower medical bills — doesn’t resemble the argumentation elsewhere in the book. The threat of lawsuits, they reason, gives doctors little incentive to be more careful because malpractice insurance isn’t “experience rated”; in other words, the premium charged doesn’t depend on the doctor’s past record as it does for, say, drivers. (Oddly, they accept the seemingly conflicting view that the threat of lawsuit is expensive because it leads doctors to prescribe unnecessary tests.) Why don’t they suggest that malpractice insurance be experience rated too? Read The Rest Here.

The Legacy of Jakaya and Beyond 2015

I should start by declaring that two of my family members were directly appointees of Jakaya in his first term of presidency. To that end, I have indirectly become a benefactor of his presidency, and this fact might persuade some readers to delegitimize the contents of this document. Also, I have spent not more than 90 days in Tanzania throughout his presidency; education and work assignments have kept me outside of my homeland for a long time. I might not be the best judge of his performance. But as every other African will tell you, Tanzanians love their country—and I have been keeping tabs of the state of our politics throughout my adulthood.

We have had 4 presidents so far in our infant country, and these gentlemen brought different style of leadership. But Jakaya is probably the most criticized for rather deserving or undeserving reasons. You see, we Tanzanians are luckly. Nyerere presided a nation with a clear vision to empower and create independent thinkers out of Tanzanians. He pushed education in its empowering version—not to accumulate knowledge, but to become the means of livelihoods. This foundation had enabled our transition towards democracy much easier and more meaningful. Democracy is useless, and can be an authoritative tool if the mass is misinformed. However, during Benjamin’s (who I regard as an intellectual) presidency he did treat Tanzanians as children. There was a free press that was fearful of the state and you can say that Benjamin was not comfortable enough to be ripped (or his government) in the press daily. This had resulted into fewer leaks and fewer scandals being presented to the press. It doesn’t mean that there were no scandals.

Jakaya is massively criticized because Tanzanians are being aware of how the government is functioning, and we do have an awful ineffective bureaucracy (this is not new). Contrary to Benjamin, Jakaya truly believe that Tanzanians deserve to know everything. He is comfortable enough to be ridiculed in the press because he understands that is how a democratic system should work. Nowadays, we complain about the press being too free that they write upuuzi. From Tanzania Daima, MwanaHalisi, Raia Mwema, to name few dailies and weeklies that make a living ripping this government. To me this is one of his biggest achievements, trusting the people to know everything, and make their decisions on the ballot accordingly. He has had his disappointments (umeme & corruption), and his triumphs (hardcore part of education and infrastructure) but I do commend him for allowing us to talk sh!t about him freely.

Moving forward, Tanzania is on the cusp of taking off. We have this great foundation in place, we just need a reformer and visionary at helm to steer us the right way. Unfortunately (or fortunately), this is our generation challenge. Anybody who was alive during independence shall not attempt to run for presidency in 2015. You have the wrong mentality. We are free already. We just need a leader who is blind of 1961 euphoria, who understand the global dynamics and can negotiate with global leaders without feeling inferior to them. In mean time, let us scrutinize these politicians regardless of their party affiliations—and question the authenticity of the dubious journalism, because the well-being of our republic depends on an informed citizen. At our inner core, Tanzanians are independent and moderate, it is the way we have been engineered. We cannot afford to lose this trait now, as the future has never been so bright.

Random Rant: Classless Barcelona

If Barcelona wants a player who is under contract--then they should pay up. These guys want to buy a world class mid-fielder at only 24 for peanut price. Just because Cesc has loyalty with them, does not make his price any cheaper. Now, they are holding Arsenal hostage because of the unwillingness to pay up. And if the deal doesn't fall through, Arsenal can't count on Fabregas because his loyalty in in Barca. You would expect Barcelona to have more class than what they are doing now.

Looking forward to another season of Gunners football. Competition just got a whole lot tougher, but I think this is a year we can finally win something. Before all that, Barca need to show a little class and pay up the right price for Fabregas.

Waiting on South Sudan's Big Day

I have been in South Sudan for the last 3 weeks (my second stint) now in different areas of the country. It has hard to be here and not being inspired by the magnitude of the events that will take place on July 9th. This is the place where the forgotten war was fought for decades and only World War II killed more people than the Sudan civil war in the modern era. The devastation of that conflict can be seen on daily activities here, you might spend 4 hours driving 50 KMs or stumble into healthcare facility that has neither skilled workers nor essential medicines. There sheer amount of poverty and suffering is unprecedented-- while the acres and acres of virgin land that is stuffed with landmines reminds one that this was once a battle-field. As it is, the entire population is divided into two halves, you are either a former soldier or a former refugee.

But South Sudanese are beaming with unspeakable joy right now. Either you are a Nuer, or a Dinka. A Madi or Acholi. Whether you are a former refugee or a former soldier--the people here seems to put all their bitter ethnic rivalry on the side and celebrate on the big day. There are parties arranged in almost every household, some are planning to slaughter a bull, some a goat, some a chicken--but it is clear that July 9th is shaped up to be the biggest day for this neonatal country. The have all the rights to celebrate, the sacrifices that they took for the right to be a free people are immeasurable. That is why July 9th will be a somber celebration, so many South Sudanese have perished during the fight for freedom. John Garang's name will be echoed throughout the next coming days. This new nation would have used his leadership skills now more than ever--It is unfortunate that he never lived to see this day, but his presence will truly be felt.

Now, Juba is bracing itself for hosting head of states and a lot of "important" global leaders. This is a town that was literally a village three years ago, and an airport that was just handled over yesterday (July 5th). There has been a massive crack-down on security this last week. We were waken up by SPLA soldiers conducting household weapons search, and stop and search check-points all over Juba. Nobody will be allowed to enter or exit Juba starting July 7th, and the airport will be closed from July 7 to 10. The boda boda are not even allowed to use the main roads and Juba will come to a complete shut down when the big day approach. The security crack-down is understandable, not everybody is happy with South Sudan independence. There have been "rebel" militia attacks in different areas of South Sudan who are rumoured to be bankrolled by the other Sudan government. And there is The Abyei showdown, and a crisis in South Khordofan . The situation here is getting tense as the big day is approaching, because nobody know what the other side will do. Interestingly, I just ran (July 5) in huge convoy of Uganda soldiers heading to Juba. It seems like South Sudan is starting to align itself with East Africa and M7 is making himself some friends.

The independence day will come and go, but South Sudan government face the huge task of building this country. It remains to be bitterly divided along tribal lines, and a lot of unanswered questions regarding the issue of oil and debt with the Khartoum government. For us who are working here, we are already aware of how difficult is it to achieve meaningful results. The government has to be assertive, and international community have to get away from short-term projects and invest in real people of this country. But many African countries have been free for about 50 years now, South Sudan has the luxury to look at how African leaders built their nations. I will urge them to copy Julius Nyerere's playbook on nation building.

In mean time, we will be partying comes on July 9th and it is a blessing to be a part of this whole thing, and we are looking forward towards helping these guys building their country. It won't be easy, but it is definitely exciting.

Politics and Power Cuts in Tanzania

Erick, a journalist in Dar, asked me "what is the source of power crisis in Tanzania, and how can it be resolved?". I thought, as simple as these questions were, they are the soberest a journalist has ever asked me. And, as such, they deserved reflection and detailed response. Here I write back:

................

Dear Erick,

Thank you for your email - and your good questions. I think the discussion on energy has taken an interesting tone and, as ever, characterized by finger pointing. For me, as an MP and the Chairman of Parliamentary Committee on Energy and Minerals, the most important question is how do we get out of current crisis. But, before that, we need to look at how we got here.

A bit of history.

All tragic stories begin with “once upon a time…”

So, once upon a time, there was no power cuts. Yes, those who were connected to the Grid were relatively few, but had power most the time. Today, those connected to the Grid do not get power most of the time. Question is: what happened? The simple answer is: we did not invest in power generation, and transmission and distribution system to keep up with increasing demand. This is the crux of the matter.

Why did we not invest? I will explain a bit. The critical period in the history of electricity in Tanzania was between 1996 and 2006. In 1996, at the height of privatization fever, we decided that TANESCO should also be privatized. So, it was “specified” i.e. put under the list of companies to be privatized. This meant that no investment was undertaken – in generation, in transmission and transmission systems and in human resource in TANESCO – except for a couple of donor-funded projects that were in the pipeline already.

So, while no major investment was undertaken, the following also took place between 1996-2006:

1. Faster growth of the economy – at an annual average of 7 percent. And the drivers of this growth were big energy consumers – mining, construction and telecoms.

2. Initiation and expansion of the donor-driven rural electrification program.

3. Growth of SME sector which relied on power – garages, salons, etc, and medium industry, including packaging and so forth.

So, by 2002, 5 years after the decision was made, TANESCO was still not ready to be privatized. It was therefore decided to bring a private management company to run TANESCO and prepare it for privatization. Enter NetGroup Solutions from South Africa. The management contract was (initially) to run for two years and was funded by the Swedish government. It was further expanded to two more years until 2006. Whether or not NetGroup delivered per contract, and whether or not the engagement was a good idea, are matters of debate until today. In the provision of the contract, there was a bonus (beyond management fee) to be paid to NetGroup if they improved the financial condition of TANESCO. Of course they did so (and got the bonus) by doing two things: they succeeded in collecting massive amounts of unpaid bills – even from the Army, and other notorious defaulters including many government agencies. They even went after Zanzibar! They also heavily relied on hydro (they went even below allowed Mtera depth) for generation so as to minimize the costs. As a result, TANESCO's balance sheet improved. But the decision to rely entirely on hydro had its costs - some of which we are seeing today.

So, in 2006, the decision on the fate of TANESCO was finally made: we will not privatize it. So, in essence, these were lost 8-9 years. Then, from 2006 – now, we entered a new phase: a phase of emergency power, and politicization of power sector. And this is entirely another story. But, it is worth remembering that, during the last five years (2006 – 2011), we have only managed to put up 145MW of our own generation while the new increased demand per annum is 100-120MW. So, while we need to catch up fast and close the gap, we are still falling behind even on the new demand.

So, this is where we are. A country of 43 million people, with meager 1,117MW installed capacity, and production of 630MW as of today. This is miserable, to say the least.

But, the critical question is: how do we get out of here? And, most importantly, beyond the question of power cuts, how do we bring electricity to majority of Tanzanians who have not had it since the beginning of the earth?

What to do end power cuts TODAY?

There are two components to producing electricity: generators and fuel. While we need and can do with more generators, TODAY the crisis is of fuel: not enough gas to run Symbion plant to capacity; in some cases, TANESCO is asked by gas suppliers to lower generation in its own two gas plants because of low gas pressure; no fuel to run IPTL plant; and no water to run hydro turbines.

So, the immediate solution is to sort the fuel issue. Why: because, even if you are able to airlift a 300MW gas power plant to Dar today, you will get Zero power as there is simply no gas. It is not that there is no gas in the country. It is just that we haven’t planned well to get it (from SongoSongo and Mtwara) to where the generators are at critical moment and/or those foreigners controlling our gas have not allowed for this to happen.

So, we should sort fuel issue. To start with, we need to buy fuel for the IPTL plant. While this is painful, it is necessary. The cost of producing one unit of electricity at IPTL is 32 cents, and TANESCO sells electricity for 10 cents. So, basically we are buying power from IPTL at loss. But then again, for one unit of electricity that is not produced, the cost to the economy is US$1.1. So, the costliest power is still cheaper than not having it at all.

In addition, the government should sort out the gas issue. The situation as it stands today is scandalous. The bottom line is that we have gas in Tanzania but we do not control its production, its transportation, its distribution and its price. We might as well be importing it via tankers from Qatar. If, for instance, today we have just enough gas to produce only 100MW of power, it will not be directed to TANESCO gas plants (where we do not pay capacity charges) but to Songas plant (where we buy power and pay capacity charges). I even worry if the upcoming TANESCO (Jacobsen) gas plant to be commissioned in December 2011 will have gas to run on. If it wont, then this will be a scandal because we contracted it and we knew of its arrival 18 months ago. We will deal with gas issue in detail in our Committee report to the Parliament later next month. We will have to make some bold proposals.

In the interim, to cover for the shortage of gas, the government should compel Songas and Symbion to invest in combine-cycle turbines to produce more power from steam coming out of the current gas turbines – and wasted in the air. In other countries, if you use jet engines (as in Symbion and Songas plants), you are compelled by regulation not to “waste steam” that can produce additional power. (TANESCO's Wartsilla gas plants use piston engines that do not produce sufficient steam/force to enable a combine-cycle system). This is just an issue of government being assertive and change the regulation given the current emergency situation.

In the medium term, we seriously need to look at the tariff structure. We need to decide in this country whether electricity is a business or service. The current tariff is not commercially viable. Full stop. EWURA sets the price of tariff after receiving request from TANESCO. Of course they do a diligent job of looking at the cost and whether they are "prudently incurred". But then they call a public meeting to ask people what they think of the tariff request. Then people and politicians go there and bully everyone into a lower tariff. Of course TANESCO could do better to cut some of its costs so as to produce electricity cheaply, but we have to realize that 36 percent of tariff is a result of capacity charges, which TANESCO can do nothing about (at least for now) and therefore the more we do away with these the better, and the more TANESCO gets power from its own sources the more it is able to sell it cheaply. Even the government knows that the current tariff does not work. That is the reason it is subsidizing to the tune of 5bn shillings per year a private company in Mtwara to sell electricity at a price equal to TANESCO!

Not only does the current tariff hurt TANESCO balance sheet, it also discourages private investment in energy sector, particularly in alternative energy. For instance, for a solar generation to be commercially viable, the tariff has to be in the upwards of 20 cents (mostly because of the heavy initial investment), likewise with wind power. No one will come here – only to sell power to TANESCO at price below 10 cents.

People may say that it is impossible for poor people to afford higher tariff. I don’t believe so. Look at how much poor people are spending on phone airtime. And the tariff structure is such that TANESCO sells power at the same rate be it to a barber shop in Namanga or Barrick Gold Mine in North Mara. The tariff should be dynamic and flexible given the volatility in the fuel prices and different capacities of TANESCO customers. There are those who will be willing to pay higher tariff as long as power is steady and reliable. With industries, power, even at higher price, feature very insignificantly to the cost of production but when it is NOT available it is a very significant contribution to losses. For me, for the poor, the prohibitive cost is the electricity connection cost – at 500,000 shillings at a go, most rural people can’t afford it. If the tariff will continue to not reflect the cost of producing power, TANESCO will continue to underperform and investors will be less inclined to come (recently TANESCO announced a tender and the most competitive bidder offered to sell power to TANESCO at 1,028 shillings while TANESCO sells power for 157 shillings!) or will seek to make money off capacity charges.

Now, as we look for solutions to the power crisis, we also need to look at TANESCO (as our sole power producer and distributor at the moment) itself. What do we need to do to it? What is its cost structure? On the ground, and given the assets it owns, this company should be the pride of Tanzania. Last year, it sold power worth about 500bn shillings. Few companies in Tanzania can match that kind of revenue. And it has assets worth $1bn (more than 1.5 trillion shillings) and more than 5,000 employee. It has the potential to triple the assets and revenue in 5 years if the right decisions are made. But, what are those and why aren’t they being made. I will not dwell much on this as this thing will be longer (and will go beyond the issue of power cuts) and I will let my friend Zitto whose Committee deal with parastatal finances to chip in on this. But, suffice it to say that, we have a sleeping giant in TANESCO, and people ought to be much more thoughtful in their calls for its split and/or privatization.

But I agree that TANESCO has to do better. At the moment, it spends 70 percent of its revenue buying electricity from Songas – which only has about 15 percent of installed capacity. This is painful, and needs to change. Also, while it is required by best [utility] industry practice to spend 12 percent of revenue on Repair and Maintenance, TANESCO spent only 2.8 percent of its revenue on R and M between 2005-2008 – and result is lots of broken transformers and service lines and a huge amount of lost electricity. TANESCO needs to invest in transmission and distribution system as part of the solution to the current power crisis. Last year, mainly because of poor transmission and distribution infrastructure, TANESCO lost 21 percent of power it produced and/or bought. This lost electricity amounted to more than 1,200 GWhr – which is more than all electricity used in factories and businessplaces for the entire year, and amounted to about 75 percent of all electricity bought from Songas in the entire year. These are massive losses – which, if curbed, in themselves would have helped with the power situation.

I want to wind up as I am just on a roll – and can’t seem to finish. But last point: we need to manage better private [prospective] investors in energy sector. There is a lot of bureaucracy and red tape within government where people come in with project plans and proposals and end up going in circles in government offices and end up being captured by middlemen and influence peddlers - and eventually corruption kicks in. There are projects that should have been in the pipeline now but were delayed because of bureaucracy and our incapacity to deal with their complexity. Also, we need to be serious on how we handle energy projects. Most energy investors dedicate a team of around 20 people in a single project – lawyers, finance people, etc. Power projects are very complex. I feel that we in government aren’t looking at them as such. We assign 4 or 5 people who already have other tasks in the Ministry to look at these projects and engage these guys. There ought to be a full time project management team at the Ministry that will live and breath power projects everyday and how to get them executed faster and to the benefit of the country. And I also think that there are many clever energy financing avenues that we haven’t explored thoroughly, and have been stuck in the traditional grants, loans and treasury guarantees.

Finally, the government has plans to do 2,780MW by 2015. This is quite an ambition, and will go long way towards covering the gap and catching up with the demand. I like it when we think big and attempt big things. But to achieve it, we need to do better than business as usual.

So, these are some of my thoughts. You also asked me clarify on my comment on Minister Ngeleja. I didn’t want to dwell on people and personalities. As you can see, there are enough issues to fill many paragraphs. As a Member of Parliament, I will continue to ask these questions and advice the government to make the right decisions and policies. As MPs, we will hold the government (via Minister responsible) accountable for its promises in the Parliament, and we will demand answers (including answer to my letter), and the appointing authority will have to judge on his Ministers' performance. But to say that the Minister is a source of power crisis in Tanzania is being simplistic. And I am not one to jump into simple answers. I have realized that part of my problem as a politician is that I am probably too nuanced, and should probably have chosen academia. But I believe that we can do better as a people to embrace nuance and complexity.

As Chairman of Parliamentary Committee on Energy and Minerals, people always ask me when will these power cuts end? In my PERSONAL view, intermittent power cuts will continue until 2013. And this is being optimistic. Leaders will have to be honest that it may be impossible to completely end the current phase of power cuts before the end of the year.

Call me if you have further questions,

Best regards,

January Makamba (MP)
Chairman of the Parliamentary Committee on Energy and Minerals
Dodoma
June 29th, 2011

PS: The views in this email are my own, not Committee's.

Paine's Perspectives on Religion.

From Thomas Paine's Age of Reason. I will put some snippets here and you can read the whole thing right here. In light of the religious squabbles that are brewing in Tanzania's internet blogs and from some of irresponsible media, we could all use some common sense!

I believe in one God, and no more; and I hope for happiness beyond this life.

I believe in the equality of man; and I believe that religious duties consist in doing justice, loving mercy, and endeavoring to make our fellow-creatures happy.

But, lest it should be supposed that I believe in many other things in addition to these, I shall, in the progress of this work, declare the things I do not believe, and my reasons for not believing them.

I do not believe in the creed professed by the Jewish church, by the Roman church, by the Greek church, by the Turkish church, by the Protestant church, nor by any church that I know of. My own mind is my own church.

All national institutions of churches, whether Jewish, Christian or Turkish, appear to me no other than human inventions, set up to terrify and enslave mankind, and monopolize power and profit.

I do not mean by this declaration to condemn those who believe otherwise; they have the same right to their belief as I have to mine. But it is necessary to the happiness of man, that he be mentally faithful to himself. Infidelity does not consist in believing, or in disbelieving; it consists in professing to believe what he does not believe................

Each of those churches show certain books, which they call revelation, or the word of God. The Jews say, that their word of God was given by God to Moses, face to face; the Christians say, that their word of God came by divine inspiration: and the Turks say, that their word of God (the Koran) was brought by an angel from Heaven. Each of those churches accuse the other of unbelief; and for my own part, I disbelieve them all...................................

When the Church Mythologists established their system, they collected all the writings they could find, and managed them as they pleased. It is a matter altogether of uncertainty to us whether such of the writings as now appear under the name of the Old and New Testament are in the same state in which those collectors say they found them, or whether they added, altered, abridged, or dressed them up.

Be this as it may, they decided by vote which of the books out of the collection they had made should be the WORD OF GOD, and which should not. They rejected several; they voted others to be doubtful, such as the books called the Apocrypha; and those books which had a majority of votes, were voted to be the word of God. Had they voted otherwise, all the people, since calling themselves Christians, had believed otherwise — for the belief of the one comes from the vote of the other. Who the people were that did all this, we know nothing of; they called themselves by the general name of the Church, and this is all we know of the matter.............................................

As to the theology that is now studied in its place, it is the study of human opinions and of human fancies concerning God. It is not the study of God himself in the works that he has made, but in the works or writings that man has made; and it is not among the least of the mischiefs that the Christian system has done to the world, that it has abandoned the original and beautiful system of theology, like a beautiful innocent, to distress and reproach, to make room for the hag of superstition.

The very nature and design of religion, if I may so express it, prove even to demonstration that it must be free from everything of mystery, and unencumbered with everything that is mysterious. Religion, considered as a duty, is incumbent upon every living soul alike, and, therefore, must be on a level with the understanding and comprehension of all. Man does not learn religion as he learns the secrets and mysteries of a trade. He learns the theory of religion by reflection. It arises out of the action of his own mind upon the things which he sees, or upon what he may happen to hear or to read, and the practice joins itself thereto.

When men, whether from policy or pious fraud, set up systems of religion incompatible with the word or works of God in the creation, and not only above, but repugnant to human comprehension, they were under the necessity of inventing or adopting a word that should serve as a bar to all questions, inquiries and speculation. The word mystery answered this purpose, and thus it has happened that religion, which is in itself without mystery, has been corrupted into a fog of mysteries....

On Tanzania's Growing Population

On Tanzania's Growing Population

By Thuwein Y. Makamba

This is where we are at today. Each woman in Tanzania is averaging 5.4 children during her lifetime, and that would project our population to grow up to 109 million by year 2050. Only 27% of Women have access to modern contraceptive methods.

Women in our country are forbidden the choice to abort their pregnancies, so they either throw the infants away (we often read of this in our news) or seeks unsafe abortions--which happens a lot on makeshift clinics. Now, 42% of under-5 yrs old have stunted growth which have implications on their intellectual abilities. Furthermore we have 88% of secondary school graduates virtually failed their examinations.

We are a nation of young, unemployed, and uneducated people in an economy growing in unequal way with non-existent middle class. But we continue to produce offsprings that we either do not need or we can not take care of (as a parent and as a nation). Our culture used to view children quantitatively, that a family needs a man power for farming and livestock keeping. But the mechanization of labor has changed that mentality. And Children are valued qualitatively. The parents with 2 children that have at least bachelor degree is better off than one with 6 children, half of them malnourished. The parents with 6 children in 20 years, are better off than the ones with 3 children in two years. The issue is not necessarily to limit the number of children, but to have a quality pool of offsprings. Moreover, the direction of global labor market is to favor only those skilled workers. Engineers, and ICT wonks. The companies will invest only to those countries that have wide pool of these kind of workers.

It is in everybody's interest to scale up Reproductive Health and Family Planning services to majority of Tanzanians, and should be included in the package for essential health services for every single health facility in our land. Obviously this will not be easy, and other will argue that development is the best contraceptive, but the pace of development is so slow that we can not wait. Currently we have 43 million folks, and only 15% households have rationed electricity. There is famine scare if we miss 3 months of rain, and we need USAID + Irish money to feed our own children. Now, imagine what would happen if there is 100 million of us. It would be a disaster.

Population issues are never without controversies, and currently we have religious leaders who think of themselves as bigger as ever. But RH/FP is about child spacing and empowering women more than anything, because development is synonymous with equality. Including gender equity, with a known fact that women are thee large, untapped resource that we have. So, this is not about "killing babies" it is about giving our children a chance to become a competent people. And allowing Women to use the magic of child rearing skills for other facets of our society.

That is why when Roe V. Wade (legalized abortion) was passed in 1973, it had effect with the significant reduction of crime in early America's 90s. This is because folks where given the chance to have children that they could take care of. And China's one child policy has created a generation of skilled pool of worker unrivalled by any country on earth. They all want to go back to China to build their nation.

Our time is now, and policy makers can can choose to ignore RH because it is not as popular as banning "posho" but the great law of neccesity is so obvious that warned the states from allowing increasing of population beyond the food it can produce or acquire.

An Insane Economic System

United States currently has a record number of homeless people, and a record number of foreclosures homes. In a way, there is bunch of folks sleeping outside staring at bunch of empty houses.

Isn't that crazy? Whatever happened to commonsense policy making? and maybe a little less greed from the elites.

Irresponsibility of Some of Tanzania's Media

In Tanzania we have been enjoying free of speech unparalleled by many countries in this planet. However, there has been a trend of gross irresponsibility by our journalists and the public have been constantly fed by ridiculously articles. I ran into this piece published by RAIA MWEMA on June 1st, 2010, that demonstrated the sheer negligence of professionalism and ethics of fine journalism. Somebody, should get Jenerali Ulimwengu (whom I greatly respect) to read the articles that his affiliated newspaper is publishing.

Here is the piece and some comments that I inserted.

Kikwete na Porojo za Kujivua Gamba

Na Mwandishi Maalumu (You can not publish article with this amount of allegations without revealing the author)

NI vigumu kuamini kwamba rais wa nchi anaweza kuhusika na mchezo mchafu kama huu wa kuwabagua wananchi wake kwa misingi ya dini zao, lakini matukio ya hivi karibuni yanathibitisha hilo.( How? Show us the causality)

Baada ya uchaguzi mwaka jana na hasa tukio la Arusha la Watanzania kupigwa na polisi kwenye maandamano ya Chama cha Demokrasia na Maendeleo (CHADEMA), na kisha harufu ya udini kuibuka, baadhi ya Waislamu wachache wenye mtazamo mkali walianza kuzunguka nchi nzima wakitoa mahubiri ya chuki. (Dates, Names, what exactly did they say? At least have a source)

Mkutano mmoja ulifanyika kwenye ukumbi wa Diamond Jubilee jijini Dar es Salaam na inadaiwa ulipata baraka za Kikwete (How can we believe u?). Baadhi ya mikutano hiyo ilijadili masuala tata, na baadhi ikaibuka hata na mapendekezo ya ajabu ukiachilia yale ya muda mrefu kama vile kudai Mahakama ya Kadhi na Tanzania kuingia kwenye Jumuiya ya Kiislamu Duniani (OIC).

Madai mengine yalihusu malalamiko kwamba Wakristo wamekuwa wakipendelewa tangu enzi za ukoloni na kwamba ingawa Waislamu ni wengi zaidi Tanzania, lakini hawana nafasi nyingi za madaraka.

Madai mengine yaliyotolewa ni kwamba Wakristo wana shule na mahospitali lakini Waislamu hawana, na kwamba serikali hutoa fedha kuzisaidia hospitali za Wakristo na walimu wa kufundisha shule za Wakristo, lakini Waislamu wanaachwa hivi hivi tu.

Baadhi walifikia hata hatua ya kumlaani Mwalimu Nyerere na kusema kwamba hastahili kuitwa Baba wa Taifa; bali anastahili kuitwa Baba wa Kanisa Katoliki. Baadhi yao, akiwemo kigogo wetu, hawamwiti Mwalimu Nyerere kwa hadhi yake iliyozoeleka ya Baba wa Taifa, na badala yake humwita Mzee Nyerere.( We need dates of the events, and names of attendees. At least a background interview. You can’t just throw allegations with NO evidence. WaTanzania sio wajinga hivyo).

Kwa ufupi, kuna imani kubwa miongoni mwa Watanzania kwamba utawala wa Rais Kikwete unalea udini (Do u have a scientific poll to back this up? ), na asipokuwa makini nyufa hii yenye msingi wa kidini inaweza kupanuka na kuutia dosari umoja wa kitaifa tulionao ambao misingi yake si udini.

Geresha ya kujivua gamba

Pamoja na kubadili safu ya uongozi mjini Dodoma, CCM pia ilitangaza kwamba wanachama wake watatu wanaotuhumiwa kwa ufisadi wajiondoe wenyewe; la sivyo wataondolewa kwa nguvu. Wanachama hao wanatajwa kuwa ni Waziri Mkuu aliyejiuzulu, Edward Lowassa, na wabunge wawili, Andrew Chenge na Rostam Aziz. Ni kweli matajiri hawa hawapendwi na Watanzania wengi isipokuwa pengine wa majimboni mwao tu.

Lakini pia watu hawa watatu wana sifa nyingine: Kwamba ndio tishio pekee na la kweli dhidi ya mpango wa Kikwete wa kusaka mgombea urais wa mwaka 2015 ambaye ni Mwislamu (This is unprecedented. You are accusing the head of state of being mdini, but you are not telling us readers how u have arrived to this conclusion?)Wanaotaka kumweka Lowassa kwenye urais mwaka 2015, si tu wanakwamishwa na tuhuma hizi zinazomwandama na hatihati hii ya kung’olewa CCM, lakini pia wanakwazwa na Kikwete mwenyewe. Inadaiwa kwamba, kwenye mbio za urais za 2015, tatizo la Kikwete kuhusu Lowassa si kwamba anakabiliwa na tuhuma za ufisadi; bali kwamba si Mwislamu. (You are supposed to quote your sources on this sentence. How can we believe u?)

Kundi hili la kina Lowassa inaaminika lina urafiki wa karibu na Makamba ambaye inadaiwa kuwa agenda yake kubwa kwa mwaka 2015 haikuwa udini; licha ya kuwa naye amesikika mara kadhaa akilumbana na maaskofu (Disagreeing with Maaskofu does not make one Mdini); bali yeye (Makamba) ana ndoto ya mwanae (January) aje kuachiwa urais mwaka 2025 na kundi hili(Now you can read people’s dreams too? How can a respectable news as Raia Mwema publish this nonsense?). Makamba hutamba kwamba mwanae anafaa kuwa kiongozi, na hakuna ubishi kwamba alihakikisha mwanae anapata ubunge, uenyekiti wa kamati ya Bunge, na kisha kuingia kwenye Sekretarieti ya CCM.

Aidha, mtoto huyo wa Makamba pia anaelezwa kuwemo kwenye kundi linalowaunga mkono watuhumiwa hawa wa ufisadi ambalo lina idadi kubwa ya wabunge na viongozi wa CCM wa ngazi za wilaya, mikoa na taifa. Hii ndiyo sababu tangu CCM ilipoanza kushambulia mafisadi hadharani, yeye amepotea jukwaani!( Have u reach to him and ask for him to comment? That is how professional journalists operates. You just made up your own reasons as if January do not exist.)

Kimsingi, kuna kutofautiana kati ya Makamba na Kikwete kuhusiana na nani awe rais mwaka 2015 na kuhusu nini wafanyiwe hawa watuhumiwa wa ufisadi. Hivyo; tangazo la kujivua gamba pamoja na kutajwa kwa watuhumiwa hao ambao Kikwete mwenyewe aliwapigia kampeni mwaka jana kwenye uchaguzi wa wabunge, ni geresha tu. Ukweli ni kwamba Kikwete alikuwa anaunda timu itakayomrithi mwaka 2015.

Kimsingi, hadi sasa Kikwete ameshawaacha ‘wabaya’ wake wote nje ya Kamati Kuu ambao ‘dhambi’ yao kuu ni kuutaka urais wa mwaka 2015. Watu hao ni pamoja na Membe na Andrew Chenge ambaye anamtaka Lowassa. Kwa ufupi, janja hii ya Mwenyekiti Kikwete ya “kujivua gamba” ililenga katika kuwaengua wale wote wanaoweza kumsumbua kwenye suala la urais wa mwaka 2015; ingawa pia ni kweli kwamba ukiuangalia juujuu utaona kuwa mpango huo wa “CCM kujivua gamba” unalenga katika kupunguza nguvu za CHADEMA kwa kuirejeshea CCM mvuto wake wa zamani.

Vyovyote vile; hakuna ushujaa wala maamuzi magumu yaliyofanyika Dodoma. Ulikuwa ni ‘usanii’ tu, na ndiyo sababu hakuna kiongozi wa CCM anayepigia kelele kung’olewa chamani mafisadi zaidi ya kijana Nape na Katibu Mkuu mpya, Wilson Mukama ambao, hata hivyo, nao wamefungwa “gavana” hivi karibuni kuhusu kulipigia debe suala hilo. Hata Chiligati aliyejitokeza mwanzoni kuhubiri nia ya kuwavua uongozi wa CCM kina Lowassa, Rostam Aziz na Andrew Chenge, sasa naye ameingia mitini!( Sources?)

Kauli ya Joseph Butiku

Labda nigusie pia kidogo kuhusu malalamiko ya Joseph Butiku aliyoyatoa katika mahojiano na gazeti la Raia Mwema, hivi karibuni, kwamba viongozi wa CCM wamemwachia Mwenyekiti Kikwete mzigo wa kupambana na mafisadi.

Mimi nadhani madai hayo ya Butiku ameyatoa bila kujua ukweli wa mambo. CCM haiko kwenye mapambano na mafisadi; bali Mwenyekiti Kikwete ndiye anapambana na maadui zake kwenye kinyang’anyiro cha kutafuta mrithi wake kwenye Uchaguzi Mkuu wa mwaka 2015; ila tu amepata bahati kwamba watu hao hao ndio wanaolalamikiwa kwa ufisadi. Ni bahati tu ya mtende iliyotoa fursa ya ‘usanii’ huu kuchezwa! (Last election was a referendum on corruption more than anything. But you seem to disagree. You argument is “luck”. You know we can reach conclusion to every issue by attributing it on luck)

Aidha, kelele za CCM kupitia kwa Nape kwamba kuna vyombo vya habari, viongozi wa Upinzani na viongozi wa dini ambao wamepangwa kuwatetea mafisadi na kuishambulia familia ya Kikwete, ni janja ya kuwatangulia mbele ili wakisema jambo, wananchi waambiwe: “Si tulisema, mnaona sasa!?”

Hata hivyo, inafahamika kuwa makundi haya matatu ndiyo yako mstari wa mbele kupinga ufisadi na udini unaosambazwa na Kikwete na watu wake, hivyo lolote litakalosemwa halitakuwa geni; bali ni muendelezo unaofahamika. Pengine CCM haijui kuwa wananchi wanajua kinachoendelea. (WaTanzania are not stupid, ofcourse they know what is going on. You writing this piece betting on fact that WaTanzania hatujui kinachoendelea. You are betting on our ignorance)

Wagombea wa Kikwete 2015

Kwa kufuatilia mambo ya kisiasa yanavyokwenda na jinsi Rais Kikwete anavyoendesha mambo yake, kuna majina mawili ya watu wanaotajwa ambao angependa wachukue urais na umakamu wa rais wa Muungano mwaka 2015. Hii inatokana pia na imani yake kwamba Katiba mpya haitabadili mfumo wa sasa. (Now you can also predict people’s beliefs. Sources mzee, at least one source to come on the record. How can we believe u)

Sababu kubwa ni mbili: Kwanza, kutekeleza ahadi yake ya siri kwamba hawezi kuacha nchi kwa Mkristo (This is very dangerous. You are being irresponsible with your words throwing allegations like this one. SOURCES??) na pili, kuhakikisha uongozi mpya unamlinda yeye na familia yake dhidi ya misukosuko ya hapa na pale ambayo kawaida kote duniani hutokea mtu akishaacha urais. Hakika, naye hatapenda kushambuliwa kama inavyotokea kwa Mkapa.

Baada ya kufanikiwa kuwaengua pembeni Lowassa na Membe (Prof. Mwandosya kanusurika?) ni nani, basi, ambaye Kikwete anamtaka kwa urais wa 2015 na atachezaje karata zake kuhakikisha jina la mtu huyo linapeta?

Ili watu hao wawili anaowataka wakubalike, inaaminika kuwa Kikwete atatumia mtindo ule ule wa funika kombe mwanaharamu apite. Atawapendekeza kwa kutumia vigezo vinavyoficha ukweli (Now umekuwa Mnajimu. You can predict the future). Kutokana na hali ya kisiasa itakavyokuwa, anaweza kusema: “Jamani ni zamu ya wanawake sasa, tusitawale akina baba tu, nchi yetu wote.”

Iwapo wazo hili litakwama, basi, Kikwete anaweza kusema hivi: “Jamani sasa wenzetu wa Zanzibar nao, miaka 20 imepita, tuwape nao nafasi jamani.” Msemo huu, hata hivyo, hauna mashiko iwapo Katiba haitakuwa na agizo hilo; kwani upande wa Upinzani unaweza kuweka wagombea wote wa Bara.

Mbinu hiyo Kikwete ameshawahi kuitumia kwenye kujaza nafasi ya Mwenyekiti wa Umoja wa Vijana ambapo alimpendekeza kijana wa Visiwani, na pia aliitumia kwenye kupata jina la mgombea wa uspika. Anaamini kuwa mbinu hiyo itasaidia kufunika hoja yake ya udini isionekane, na hivyo kufanikisha kupata rais Mwislamu.

Asha-Rose Migiro na Dk. Mwinyi

Katika miaka ya karibuni Kikwete amekuwa na mahusiano ya karibu ya kikazi na mwanamama mmoja ambaye kila baada ya miezi michache hufika Ikulu, na kisha picha nyingi hupigwa kuonesha kwamba wawili hao wanaelewana na wanashirikiana kisiasa pia.

Huyu ni mwanamama ambaye ni mmoja wa wanasiasa wachanga waliofaidika na vyeo vya uwaziri wa Kikwete mwaka 2005. Aidha, pale Tanzania ilipopewa mwanya wa kutoa jina la mwanamke wa kushika nafasi ya juu kimataifa, Kikwete hakusita kumtaja mwanamama huyu.

Nafasi hii ilikuwa baada ya Tanzania kufanya kampeni kubwa barani Afrika kuunga mkono jina la Waziri wa Mambo ya Nje wa Korea Kusini, Ban ki-Moon, kwenye kugombea nafasi ya ukatibu mkuu wa Umoja wa Mataifa.

Mwanamama huyo pia ana kisomo kizuri kinachokubalika na kinachoweza kuwaaminisha watu wanaotaka kuuliza maswali kuhusu uwezo wake kiutendaji wa kuiongoza nchi yenye matatizo ya uchumi na yenye mipasuko kibao kama Tanzania. Mwanamama huyo ni Naibu Katibu Mkuu wa Umoja wa Mataifa, Dkt. Asha-Rose Migiro ambaye anaelezwa kuanza kujiandaa kurejea nyumbani Tanzania siku si nyingi.

Kwa upande wa Zanzibar, ni waziri mmoja kijana ambaye urafiki wake na Kikwete huwashangaza viongozi wengine wa Zanzibar; mathalani jinsi wanavyosalimiana kama watoto wa mjini. Katika mtandao wa YouTube Watanzania waliweka picha ya video ya Kikwete akisalimiana ‘kishkaji’ na waziri huyu kwenye Uwanja wa Amani, Zanzibar siku ya Januari 12, mwaka huu. Picha hiyo iliibua gumzo kubwa (What is your point?? What do u want us readers to take away from this useless paragraph? President and his minister wanasilimiana kishkaji, so what?)

Hivi karibuni Waziri huyu alipokabiliwa na msukosuko wa kutakiwa na wananchi kwamba ajiuzulu ambao kimsingi ulisababishwa na utendaji dhaifu wa Jeshi la Wananchi uliochukua maisha ya watu kwenye milipuko ya maghala ya silaha, alikataa na Kikwete hakusema kitu. Huyu ni Waziri wa Ulinzi, Dkt. Hussein Mwinyi.

Hitimisho langu

Inaaminika kuwa hao wawili ndio chaguo la Kikwete katika mbio za urais za 2015, na chaguo lake hilo linachagizwa zaidi na dini zao (How did you arrive to this conclusion? Throughout this piece, you have not convince us readers to buy on your accusation that our President is a religious fanatic) badala ya vigezo vya jumla vya sifa ambazo Watanzania wote tunataka mtu anayetaka kuwania urais kuwa nazo.

Hata hivyo, napenda nieleweke kwamba sina tatizo na rais ajaye kuwa Mwislamu au Mkristo; ilimradi tu awe ni kiongozi hodari, mchapakazi, mwadilifu na mwona mbali. Angalizo langu ni kwamba rais huyo ajaye asitafutwe kwa msingi wa dini yake; bali kwa vigezo hivyo vya ubora.

Nasisitiza hivyo; maana Watanzania katika ujumla wao hawajali dini ya mtu ila uadilifu na uchapakazi tu, lakini viongozi wetu ndio wenye matatizo ya udini. Na kwa hakika, Kikwete analo tatizo hilo.

Nihitimishe kwa kusisitiza kwamba wajibu wa wana-CCM ni kukisafisha chama chao kwa uaminifu na werevu, na kisha kuachia demokrasia iamue nani awe mgombea wa CCM mwaka 2015. CCM na Kikwete wawe waangalifu na dhana hii ya “sasa ni zamu yetu kutawala” ili Tanzania isitumbukie kwenye matatizo yanayosikika kwenye nchi zingine.

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The author and the publisher are being irresponsible and do not take their role in our society seriously. The piece has absolutely no standards to be published and consumed by our society. We are a democracy, but for democracy to work, a people have to be informed--otherwise we will continue to elect useless leaders. But our people can not be informed, if we keep on consuming garbage articles like this one.

Everybody can write, but to publish is a privilege that should be taken seriously.