Mkapa says privatisation 'worst mistake' of his presidency

15Jun 2016
Our Reporter
The Guardian
Mkapa says privatisation 'worst mistake' of his presidency

FORMER president Benjamin Mkapa said yesterday that failing to monitor previously state-owned enterprises after they were sold off to the private sector during his government's much-criticised privatisation exercise was one of the biggest regrets of his presidency.

Former President Benjamin Mkapa(r) with Former Prime Minister, Joseph Warioba

In a rare public admission of error, Mkapa said his administration overlooked the importance of closely monitoring the former parastatals to ensure they did not die in the hands of private owners as was largely the case.

"Our preoccupation shouldn't just have been in privatisation, but there should have also been a monitoring instrument," Mkapa said in a candid address at the 8th Mwalimu Julius Nyerere Intellectual Festival held at the University of Dar es Salaam (UDSM).

"We established an instrument to carry out privatisation, but at that time it did not have the mandate ... of monitoring the development of privatised companied. We admit this mistake."

However, Mkapa defended the privatisation process, saying it was an unavoidable exercise after it was realised that the majority of state-owned enterprises had accumulated massive debts and could not sustain themselves while others had completely shut down.

Parastatal sector reforms began in Tanzania in the 1980s under president Ali Hassan Mwinyi's government, which established the Presidential Parastatal Sector Reform Commission (PSRC) in 1995.

However, most of the privatisation exercise was carried out during Mkapa's administration (1995-2005) as part of wider economic liberalisation measures.

By 1990, the state owned over 400 parastatals, but most of them were loss making and relied on government subsidy, hence the decision to subsidise them.

Mkapa admitted that mistakes were made by his government in the privatisation exercise, but said Tanzanian businessmen who bought the majority of the public enterprises, shared blame for failing to revive the companies.

The ex-president cited sugar factories as success stories of the privatisation exercise.

According to Mkapa, even founding President Mwalimu Julius Nyerere, who was known as a fierce critic of capitalism and the privatisation process, came to realise the necessity of the exercise.

Nyerere was a vocal opponent of the privatisation of the formerly state-owned National Bank of Commerce (NBC), which was sold by Mkapa's government to South Africa's Absa Group Limited under controversial circumstances.

"Like it would have been for anyone, Mwalimu was disheartened to witness the privatisation process for enterprises he had nationalised or built," said Mkapa to a standing ovation.

"But he too realised that most of them could not sustain themselves and some had completely shut down. To a large extent, he (Mwalimu) saw merit in privatisation. Even for NBC, what he opposed was not whether but how NBC would be restructured during privatisation to safeguard the interests of the citizens."

Speaking at the same gathering, Jenerali Ulimwengu, a veteran journalist and political commentator, generated heated discussion in social media platforms yesterday with his sharp criticism of the leadership of Tanzania - past and present.

Giving his verdict of President John Magufuli's government, Ulimwengu accused the government of the day of undermining democracy.

"There is a rearguard action to reverse the progress we have made thus far. Despite the actions that President Magufuli is taking and has been commended for, if you look at the bigger picture we have now gone back 50 years in democracy issues," he said.

On Kikwete, Ulimwengu blasted the former president for 'squandering' public funds on the failed constitution review process.

"He (Kikwete) should come and explain ... if former ministers were taken to court for causing a loss to the government, honourable Jakaya Kikwete should also be taken to court to answer charges of occasioning a huge loss to the government and destroying the hopes of citizens ... by the failure to get a new constitution."

The Kikwete government spent over 116 billion/- on the constitutional review process.

Ulimwengu also criticised Mkapa for seemingly speaking words of wisdon now that he was a retired president.

Responding to some of the criticism, Mkapa agreed that freedom of expression and democracy are important, but said serious discussion was lacking in Tanzania on issues of national importance.

"We talk too much ... We complain and point fingers at each other, but we have not really adhered by the principle of development by self reliance," he said.

Mkapa also hit back at activists and opposition leaders, saying a new constitution would not be a silver bullet to solve all of Tanzania's problems.

"Where does this attitude come from where some people think there is a holy grail to sort out all our problems. Let’s have some serious analysis on why the constitutional review process failed," he said.