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Tanzania shuts the door to African expats

Tanzania shuts the door to African expats

While the East African region begins to open its borders to the free flow of skilled workers, Tanzania is slamming them shut on expatriate communities. Aamera Jiwaji asks: Is the country killing the geese that have been laying the golden eggs?

In a scenario where Africa is being touted as the continent which holds the greatest promise for tomorrow, it is easy to forget that Tanzania just entered its third decade of capitalism. Before then the economy was centrally planned and led by government and public parastatals.

“The private sector was almost nonexistent,” says Stephen Kirama, a public economist at the University of Dar es Salaam. “These public parastatals were not profit oriented. They relied on government subsidy and greatly operated on loss.”

And so it wasn’t a surprise that when the economy liberalised in the early 1990s, there was a mass influx of investment and skills from many countries including neighbouring Kenya which had a 30-year head start with private business. A number of Kenyan companies such as Jubilee Insurance, Kenya Commercial Bank and Nation Media Group opened subsidiaries in Tanzania – all three of which are now cross listed on the Dar es Salaam bourse. Kenyan company Jubilee Insurance was the first privately owned insurance company to be licensed in 1998, and in the 15 years since, all of its CEOs have been either Kenyan or Indian nationals. The current CEO is Kenyan George Alande.

The experience is mirrored across the financial sector. The CEO at Reliance Insurance is Rajaram Parameswaran, an Indian; at DTB (Diamond Trust Bank) Viju Cherian, an Indian; at Equity Bank Joseph Iha, a Kenyan; and at NIC Bank James Muchiri, also a Kenyan.

Dr Amit Thakker, Chairman of the East African Health Platform, can say the same about the Tanzanian health sector. “Tanzania has a much larger mix of professionals from India, Cuba, Europe and South Africa,” he said. Suresh Kumar, Principal Officer at APA Insurance, who worked in the Tanzanian insurance sector for five years, estimates that 90% of CEOs in the country come under the expatriate category, and Tanzanian economist Kirama concurs. “Yes, most of the companies in Tanzania are led by non-Tanzanian CEOs. This is a fact,” he said.

And both accept that the predicament is caused by a lack of sufficient local skills. Heri Bomani, former MD of the Tanzanian subsidiary of Kenya Commercial Bank, once attributed the bank’s inability to turn a profit to the lack of sufficient skills among the Tanzanian workforce.

Once it did in 2008, he remarked that the tide may be turning and attributed the change in fortunes to a combination of downsizing in the UK and US, increased opportunities in Tanzania that attracted skilled workers from the diaspora home and greater skill transfer spurred by the arrival of multinationals.

In terms of the insurance sector in particular, Kumar explains that only around 20 people in Tanzania have the UK-based ACII compared to between 600-700 people in Kenya. While the push today is more for a local qualification – from either the Insurance Institute of Kenya or of Tanzania – he feels these statistics still accurately reflect the skills set of the Tanzanian workforce.

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  • Protecting the local labor market against foreign influx may not be necessarily bad. After all TZ needs to develop its local capacity. However, if this policy goes against the attraction of foreign direct investment (DFI) then it may be worrying in the long term. As things go, this perspective does not seem a problem. TZ is still atracting DFI.

    What needs to done is actually to strike a balance between developing local labor market against the inflows of DFI.

    • floob

      If the education system in Tanzania wasn’t so awful it wouldn’t need protection.

  • pianki

    What Tanzania is doing is great. Yes protect your local work force, make foreigners deposit money in the country’s banks and require a majority Tanzanian ownership. Future maintenance of projects should be done by Tanzanians also. The Visa process should be as tough or tougher as it is to get a US Visa. Great work Tanzania, I hope other black African Countries follow suit.

    • Africa

      Racist comment

  • 1day1tweet

    Before trying to replace the 90% of non Tanzanian CEO, this country should rather try to reach 90% of enrollment in school and provide a decent educational system for the youngs.

    Stop to blame foreigners… A lot of Tanzanians prefer far so sure to see their company managed and run by foreigners (especially mzungu) than local dictators for many reasons… And I know very well the situation.

    This article is a nonsense… like the 2 last comments …

  • AMABO CANON

    Africa should stand for africa. Visit financiallbells.com for all you investing journal on Africa and emerging markets.

  • Tanzania immigration to Canada for Business owners and expats is booming . Investor visa applications for Canada are the options for africans wanting to immigrate to the best place possible http://www.vipbusinessimmigration.com/canada-business-immigration-canadian-immigrant-investor-program

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