The Consolidated Holding Corporation was established as NBC Holding Corporation necessitated by the government move to re-organise the National Bank of Commerce but later new tasks were added to the Corporation and its tenure extended.
As part of celebrations marking Tanzania Mainland’s 50th Independence Anniversary, MANGENGESA MDIMI conducted the following interview with the Acting Director General of Consolidated Holding Corporation (CHC), Mr Dome P. Malosha on the Corporation’s functions and challenges…
Question: What is the historical background to the Corporation’s establishment? Answer: The Corporation was established on 1st October 1997 as the NBC Holding Corporation (NBHC)
under the National Bank of Commerce (Re-organisation and Vesting of Assets and Liabilities) Act No. 23 of 1997 or Cap. 404 (R. E. 2002).
The move resulted from the Government decision to re-organise the then National Bank of Commerce. In year 2002 the Corporation was granted an extension of its tenure for another five years up to September 30, 2007 under a Parliamentary Resolution No. 20 of 2002 that was passed on 31st July, 2002 by virtue of Section 5 (1) of the establishing Act.
However, before this tenure elapsed, CHC experienced two other changes through Act No. 10 of 2007. In the first place it was vested with additional tasks that remained after the tenures of the Loans and Advances Realisation Trust (LART), Air Tanzania Holding Company (ATHCO) and SIMU 2000 Limited came to an end.
Following this important development, the Corporation’s life span was accordingly extended to June 30th 2011. In November 2007 all the remaining tasks of the Presidential Parastatal Sector Reform Commission (PSRC) were also vested to CHC when the Commission’s mandate expired on 31st December, 2007.
And when CHC’s tenure came to an end on 30th June 2011, the Parliament passed a resolution to extend its tenure for another three years up to June 30th 2014. The various amendments of the establishing law have also brought about major developments in the nature and scope of the Corporation’s operations, especially judging from the impact it had on its overall performance from year 1997 to 2011.
A notable feature in these changes is that the CHC has legally been entrusted with the task of undertaking monitoring and evaluation of all privatised public enterprises to determine their performance as per the respective divestiture agreements.
It is also worth noting here that in performing the tasks it inherited from the defunct Presidential Parastatal Reform Commission (PSRC), the Corporation has been exposed to more risks and challenges than before.
Q: The Corporation appears to have changed its original name, that is NBCHC to CHC. What happened?
A: Following the privatisation of the National Bank of Commerce (NBC 1997 Ltd), the Corporation was given the name of Consolidated Holding Corporation (CHC) through the Written Laws (Miscellaneous Amendments) Act No. 10 of 2001, in order to avoid confusion in the eyes of the public on the application of the word/name “NBC” as the same was being used by the bank.
Q: How much have you achieved in meeting the set objectives?
A: The Corporation has, to a greater extent, managed to perform its duties and responsibilities successfully. The achievements are mainly in debt collection relating to the ex-NBC and divestiture transactions; sale of landed properties as well as finalisation of about 1,496 cases out of 1,928 cases which the Corporation has been handling.
Also conducting monitoring and evaluation of 180 entities out of 330 privatised public entities. Another achievement refers to benefits accrued to the nation from privatisation of parastatals which include increased production of goods for local consumption and for the export market; creation of more employment opportunities within the entities themselves and in the economy as a whole; introduction of new and modern technologies in production and service delivery; and increased Government revenue through taxes paid by the privatised parastatals which, prior to privatisation, heavily depended on subsidies from the Government. CHC has also been making remittances to the Treasury since its inception.
Q: What are the challenges your Corporation has faced?
A: Despite the achievements we have realised over the years, the Corporation has faced several challenges which are being tackled on a case by case basis to ensure that they do not undermine the laid down objectives.
Some of the challenges include:
(i) Loan recovery: Some investors delaying to pay balances of the purchase prices of divested entities; some debts are not easily collectable because they are linked with court cases or do not have collaterals; other debts are tied to procurement of title deeds; ex-NBC debts are scattered all over the country, making the debt collection exercise difficult/ cumbersome and costly.
(ii) Liquidation: Endless claims for retrenchment/ retirement benefits from exemployees of either privatised or liquidated parastatals.
(iii) Litigation: Endless filing of court cases makes it difficult to discharge or reduce the number of pending cases at any given time.
(iv) Privatisation: Some enterprises are sensitive to privatise thus requiring more time and resources to handle them judiciously and effectively. Also Lack of public awareness on the general public about the reforms that are taking place in the country.
(v) Monitoring and Evaluation: Some investors hesitate to cooperate with CHC officers who are responsible for undertaking the monitoring and evaluation task; some investors are reluctant to provide information pertaining to the operations of entities divested to them.
Q: What measures have you taken to deal with these challenges?
A: We wish to assure you and the general public that the Corporation is determined to undertake its responsibilities effectively, timely and transparently for the overall benefit of the nation.
Some of the measures the Corporation has taken to deal with the challenges are as follows:
(i) Making strategic and thorough follows ups on divested entities in close collaboration with the respective sector Ministries; recommending to the Government to repossess divested parastatals where investors have proved beyond doubt that they are incapable of fulfilling the divestiture agreements.
(ii) Strengthening the Corporation’s Publicity Unit to ensure public awareness education is imparted to the people so that they can properly understand and appreciate the benefits of the on-going economic reform programme within the context of the nation’s socio-economic plans.
(iii) Aggressive follow ups on procurement of title deeds.
(iv) Strategically strengthening the Litigation Department through recruitment of legal experts who are diligent and experienced advocates.
(v) Fully involving all key stakeholders including the Government in all divesture
transactions to ensure accountability and transparency.
(vi) Building a strategic relationship with the respective investors with a view to educating them on the importance of the monitoring and evaluation exercise to their companies and the economy as a whole.
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Julius K. Nyerere: The pacifier
Julius Kambarage Nyerere, son of a chief of one of the smallest tribes of Tanzania, the Zanaki, of Mara Region, started his career as a teacher – literally – at what was known as Pugu Secondary School, a Catholic institution in the suburbs of Dar es Salaam, after graduating from Edinburgh University in 1953.
Those he taught at Pugu, who include former President Benjamin Mkapa, are quick to point out that Nyerere had exceptional talents that were not being fully exploited. As widely expected, Mwalimu, the teacher, did not last long at Pugu, as the officials there realized that his future was not in the teaching profession but elsewhere.
Mwalimu was already at loggerheads with the colonial Government in what was then Tanganyika. The missionaries did not want any trouble with Britain, so they advised him to quit his job, which he did, and he became a full-time politician as President of the newly formed Tanganyika African National Union (TANU).
His leadership of TANU was vibrant. He confronted the colonialists head on. He was prosecuted and convicted of sedition for agitating for the independence of Tanganyika. His peaceful but powerful methods were such that within a period of about five years of active politics he managed to secure the independence of Tanganyika in December 1961, without shedding blood.
Nyerere, being a Pan-Africanist, was not content with the independence of Tanganyika. He believed in wider unity. He was even ready to delay the independence of Tanganyika if the result would be to expedite the independence of neighbouring Kenya and Uganda, so as to form a Federation of East Africa together.
However, noting some hesitation on the part of certain political circles in Kenya and Uganda he gave up the idea of delaying the independence of Tanganyika. Mwalimu probably spent as much time agitating for the independence of other African colonies as for Tanzania. The Pan-African Freedom Movement for East Central and Southern Africa (PAFMECSA) was launched in 1958 at a meeting in Mwanza, a town in northern Tanzania.
Mwalimu never turned his back on the question of independence for other African countries. Soon after the independence of Tanganyika he offered the country as a base for all movements fighting for the independence of their countries in Africa. Political movements and parties were offered facilities in Tanganyika.
These included the Afro Shirazi Party of Zanzibar (ASP), the Front for the Liberation of Mozambique (FRELI MO) of Mozambique, the Kenya African National Union (KANU) of Kenya, the Uganda Peoples Congress (UPC), of Uganda, the Peoples Movement for the Liberation of Angola (MPLA) of Angola, the African National Congress (ANC) of South Africa, the South Western African Peoples’ Organisation (SWAPO) of Namibia, the United National Independence Party (UNIP) of Zambia, the Zimbabwe African National Union (ZANU), the Zimbabwe African Peoples Union (ZAPU), both of Zimbabwe, to name but a few.
All these political movements established bases in Tanganyika. So when most of the countries of these political movements achieved independence within a few years of Tanganyika’s independence, Mwalimu was extremely gratified. Believing in African unity, Mwalimu had worked hard for the Union of Tanganyika and its offshore neighbour of Zanzibar and unity was achieved in 1964, with the formation of the United Republic of Tanganyika and Zanzibar in 1964, whose name was later changed to the United Republic of Tanzania, a union which has survived to date.
That was Mwalimu the Pan-Africanist. Late in 1995 Mwalimu was asked by the Organisation of African Unity (OAU) and the United Nations if he would help mediate in the ethnic conflict of Burundi – a conflict that had lasted almost four decades and that had claimed the lives of more than two hundred thousand Burundi. Mwalimu’s reaction was cautious. He had met many Burundi leaders who had made him wonder whether they were really ready for reconciliation.
Sceptical though he was, he decided to accept the challenge but conditionally. He had two conditions: firstly, were the Burundi really ready for reconciliation? And secondly, did the Burundi accept him as their peace negotiator or facilitator? Mwalimu decided to go to Burundi to ascertain these factors. To assist him in this very tricky mission Mwalimu appointed me as his principal assistant (Facilitator’s Representative).
Together we assembled a team of advisers and assistants, including the incumbent President of Mozambique, Armando Guebuza, Father Mateo of St. Egidio in Rome, General Andrew Masondo (late) of the South African Defence Forces, Dr. Philips, Ambassador of Austria (representing the European Union), Professor Haysom, legal adviser to President Nelson Mandela of South Africa, Mr. Joseph Warioba – former Prime Minister of Tanzania, Minister Francisco Madeira of Mozambique, peace negotiator for the Comoros, Brigadier-General Hashim Mbita, former Secretary General of the OAU Liberation Committee, among others.
Mwalimu made two exploratory visits to Burundi at the end of which he was satisfied that the Burundi appeared to be ready for peace for their country, and secondly, that they appeared to accept him as peace facilitator. Mwalimu faced the problem of the deep bitterness and suspicion between the two main ethnic groups – the Hutus, who made up 85 per cent of the population, and the Tutsis, who made up 15 per cent of the population – as well as the ongoing struggle for power between them.
This had not been made easy by the tragic events of the genocide in Rwanda in 1994, in which about 800,000 people of the Tutsi ethnicity as well as moderate Hutus had been massacred. In Burundi Mwalimu met all segments of the Burundi leadership, who included religious leaders, political leaders, former presidents, military leaders, etc.
The last was a particularly sensitive group to talk to. Mwalimu wanted to extract from the military a promise that they would stay out of politics and that they would accept any of the political leaders elected by the people. Having satisfied himself that these essential elements of the peace negotiations seemed to exist, Mwalimu then embarked on the peace talks in earnest.
At first the talks involved only the Government and the two main political parties: FRODEBU and UPRONA. The talks started at Mwanza, a town in northern Tanzania. Mwalimu soon abandoned the restricted participation approach as he came to the conclusion that all political parties in Burundi needed to be involved – altogether more than 12 groups, to ensure longlasting peace.
The venue for the talks which had originally started at Mwanza was shifted to Arusha in order to accommodate the large number of delegates involved. Mwalimu’s technique was to give all the participants as much opportunity as possible to air their grievances and fears. Several rounds of talks were allowed for this, as a matter of fact from July 1996 to July 1998.
The second stage was structured talks according to thematic committees. The pace of the talks was extremely slow. However, by the time Mwalimu died in October 1999, the stage had been reached for detailed and focused negotiations. When former President Nelson Mandela took over the talks in December 1999, it was clear that a solution was on the horizon. President Mandela took a no nonsense approach.
He himself had been a victim of discrimination in apartheid South Africa, in spite of which he had pursued the South African negotiations without bitterness and with a spirit of give and take. He therefore held the moral high ground. He guided the talks with a firm hand and the approach worked. A peace agreement was finally signed at Arusha in August 2000.
This does not in anyway suggest that Mwalimu’s diplomatic approach would not have succeeded. It only means that with Mwalimu’s solid foundation it was easier for Mandela to clinch a deal much faster. Two things had given Mandela the clout in this endeavour.
First, he was a retired president with no political ambitions. Secondly, he had succeeded in uniting a range of hostile forces of South Africa. So he had the authority and the experience of bringing adversaries together. l Judge Bomani was the first indigenous Attorney General of Tanzania.
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