Tanzanian President Samia Suluhu Hassan Signing Landmark Deal with DP World. Photo Credit: DP World.
TPA Dividends Spark Heated Debate: Record-Breaking Success or Evidence of Decline?
By Adonis Byemelwa
Members of the Chama cha Mapinduzi (CCM), who requested anonymity, asserted the legitimacy of the Tanzania Ports Authority (TPA) breaking its records annually. They emphasized the significance of TPA’s recent contribution of over Sh153.9 billion to the government as a dividend, derived from real revenue.
This marked a notable achievement for the third quarter from July 2023 to March 2024, with expectations of another dividend potentially doubling the current amount, as highlighted by President Dr. Samia Suluhu Hassan.
However, there is contention regarding TPA’s financial history. Critics argue that the claim of TPA paying a Sh480 billion dividend in 2019 is misinformation. The actual amount was a declaration of revenue rather than a dividend, with the largest true dividend being the recent Sh153.9 billion.
Martin Maranja, a member of Chama Cha Demokrasia na Maendeleo (Chadema), contended that the President should have expressed disappointment, not praise, for the TPA’s performance. He questioned the celebration of Sh153.9 billion, comparing it to the previous Sh480 billion under the directorship of Eng. Deusdedit Kakoko.
The historical context further complicates the narrative. In 2019, then-Minister of Works, Transport, and Communication, Isack Kamwelwe, demanded a Sh1 trillion dividend from TPA for 2019/20 after the alleged Sh480 billion payout in 2018/19.
This expectation starkly contrasts with the recent Sh153.9 billion dividend, leading to questions about the current state of the port’s financial health and management. President Samia Suluhu Hassan’s public praise of TPA’s recent dividend as a record-breaking achievement has sparked debate.
Critics argue that this amount, significantly lower than previous records, indicates a decline rather than progress. They speculate whether the President is fully informed or if there is an element of obfuscation involved.
The involvement of DP World has also been a point of contention. Maranja and other critics highlight that before DP World’s investment, TPA had paid significantly higher dividends. They question the benefits of DP World’s presence, given the lower dividends and the government’s celebratory stance over the Sh153.9 billion.
In response, President Samia emphasized the importance of the reforms implemented at the port, attributing the recent achievements to these changes. She called for continued efforts to increase dividends, expecting TPA to double its contributions in the coming year. The Registrar of Treasury, Nehemia Mchechu, also urged public institutions to enhance their revenue generation and contribute more significantly to the government’s general fund.
President Samia Suluhu Hassan may not be aware that TPA has previously paid dividends three times greater than this small amount when the Director General of TPA was Eng. Deusdedit Kakoko. On December 21, 2019, the Minister of Works, Transport, and Communication, Isack Kamwelwe, issued a stern warning to the TPA Director, Deusdedit Kakoko, after paying a dividend of Sh480 billion in 2018/19.
The involvement of DP World in operating the Dar Port has also been a point of contention. Photo: Courtesy
Minister Kamwelwe told the TPA Director to ensure that the 2019/20 dividend from TPA reaches Sh1 trillion. Minister Kamwelwe made these remarks on December 21, 2019, during the inauguration of the new TPA board chaired by Prof. Ignas Rubaratuka.
President Samia Suluhu Hassan rejoicing over the Sh153.9 billion dividend from TPA, claiming it broke records, clearly indicates that the port situation is more dire. The situation will be critical. Receiving Sh153.9 billion and celebrating publicly, while four years ago you received Sh480 billion from TPA (a drop of over Sh327 billion), suggests a problem.
From TPA’s goal of paying a Sh1 trillion dividend to receiving Sh153.9 billion and celebrating, this is more than a collapse. Or should we agree, that those who paid the Sh480 billion dividend in 2018/19 deceived us?
The President criticized those who said “mama sold the ocean, mama sold the port,” stating that the profit from those sales is Sh153.9 billion. Is the President unaware that TPA had previously paid a Sh480 billion dividend before DP WORLD? Without DP WORLD’s presence at the port, TPA paid a Sh480 billion dividend and set a goal of Sh1 trillion, so why, after DPW’s investment at the port, does TPA pay a Sh153.9 billion dividend?
What saddens me further is whether President Samia Suluhu Hassan is being hidden from this information. Is she not being given it? Or is she receiving it but not reading it? Or is she being deceived? What is the problem here?” said the former Executive Director at ForDIA Consulting.
On June 11, 2024, President Samia Suluhu Hassan said that she congratulated the Tanzania Ports Authority (TPA) for paying the government Sh153.9 billion as a dividend and that those who are making noise saying ‘mama sold the port’ have seen the benefit of the investment made at the port.
The President made these remarks today at the State House in Dar es Salaam during a ceremony to hand over dividends to the government from public and private institutions, with the theme ‘Reforming public institutions and the duty of contributing to the development of Tanzania.’
“Special congratulations to the companies that brought dividends to the government, including TPA, which I am sure last year was not your level, but with the changes that took place at the port, you have reached this level, and next year I am sure you can bring double what you gave today. “This is where we were heading, my friends, those who were making noise, mama sold the port, mama sold the port, mama sold what, the profit from those sales is this, and this is just the beginning; we expect to get bigger profits,” said President Samia.
For his part, the Registrar of Treasury, Nehemia Mchechu, urged the chief executives and directors of public institutions to be ready for changes that will enable them to change their ways of operating and provide dividends to the government.
He said these officials should ensure they increase creativity and boost the revenue of their institutions so that they can contribute to the government’s general fund and aid in the country’s development. “Dividends given by public institutions are less than three percent, so major changes must happen to achieve the government’s goal of receiving 100 percent dividends,” said Mchechu. He said institutions where the government has a small percentage contribute more funds to the government’s general fund compared to the small contribution given by institutions wholly owned by the government.
He added that his office intends to come up with a solid system to help the government make the right decisions when appointing leaders of various institutions and agencies. Mchechu said these systems will eliminate the challenge of appointing and removing leaders within a short period after their appointment.
In June of last year, seasoned columnist Charles Makakala of The Citizen Newspaper argued that private sector investment in Tanzania’s port had sparked significant opposition due to flaws in the country-to-country contract terms (IGA).
Key concerns include the lack of a contract term limit and the resolution of disputes in foreign courts. Makakala noted that the government’s initial response, including using comedians to control the narrative, was inadequate. Eventually, Prof. Kitila Mkumbo emerged as a key advocate, although his political motivations were unclear.
Makakala criticized the government’s stance that only Emiratis could manage the Dar Port, calling it a startling admission and political error. He argued that Tanzania is capable of investing in and managing the port independently.
He warned that DP World’s involvement, given its UAE interests, could jeopardize Tanzania’s strategic position as a gateway for seven countries and potentially cause significant revenue losses.
Highlighting everyday inefficiencies like bribery, lack of space, and poor coordination, Makakala referenced a 2013 World Bank report that attributed Dar’s inefficiency to corruption, costing Tanzania eight percent of its GDP annually. He concluded that political will, not foreign intervention, is essential for reforming the port, urging the government to avoid pushing the nation into a needless crisis.
The debate continues, with critics and supporters presenting divergent views on TPA’s performance and the implications of recent reforms and investments. The upcoming financial year will be crucial in determining whether the expected increase in dividends materializes, addressing the concerns raised by various stakeholders.
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