Have we completely failed to successfully run our own companies that we have to sell everything? When we started reforms in the 90's it was only logical to privative state-run companies because as good as socialism was idealistically; it had proven to be futile; mainly due to the general feeling that everybody's property is nobody's property. Most of the investors who could afford to invest in the privatized companies were foreign companies, such as SAA who acquired 49% of ATCL shares in December, 2002.
We all know how the relationship with SAA turned out. To quote the TCAA Director General, Margaret Mungayi, "Air Tanzania was in a worse state than before it was taken over by SAA". (Apparently from the time SAA started running the company to March 31st, 2006, ATCL went TZS 24.7bn into the red). So finally, the government decided to dissolve the contract with SAA in 2007; they pumped money into the company and made some major reforms.
I don't have figures on ATC performance after that move, but I did get the chance to fly ATC from Dar-Mwz in August last year and I was impressed by the service. I had never flown ATC during the SAA era or any other time before, so I didn't really have any experience to compare it with. But from what I had heard, ATC had been some major improvements.
Now, I just came across this article from The Guardian, Govt negotiates ATCL privatization. ``Information about the ATC privatisation process is currently at government level. We are now holding talks with the Chinese firm on the possibility of taking over. We are yet to reach agreement. Members of the public will be informed of the outcome``, Infrastructure Development deputy minister Hezekiah Chibulunje said of the negotiations.
I can only hope that whoever the investor will be this time, Tanzania will benefit from this venture. It was my hope that we would learn from the SAA experience that privatization is not always the solution; and in fact, sometimes it can even make things worse. I understand that as part of the Economic Reforms, the Government decided to have minimal participation in running a lot of major corporations; however, I believe there is an alternative to outright privatization. We have had some very impressive success with letting some companies and government agencies operate in a semi-autonomous manner. With the government retaining 100% interest, but letting the management and board make a lot of the major decisions independently; including decisions on income and expenditure; with the Government only receiving some percentage of the revenue as dividend.
In my opinion, if this can be done, it is a far better option than letting foreign investors, who usually come in with interests to profit only themselves and whatever country they came from. What do you think?
Posts
