PSIRU Africa Newsletter 3

Authors: 
Sandra Van Niekerk
Date published: 
Mar 2012

 

Contents

1.      Privatisation - Tanzania

2.      Corruption – Tanzania

3.      Sector – Kenya: water sector

4.      Labour disputes

4.1.        Pay cuts and job losses in the public sector: Swaziland and Zambia

4.2.        Zimbabwe: Civil servants strike

4.3.        Strikes in the Health Sector: South Sudan, Tanzania, Kenya

4.4.        Tunisia: attack on municipal workers

4.5.        Senegal: transport strike

  1. 1.      Privatisation - Tanzania 

In January 2012, a committee consisting of officials from the Treasury and Consolidated Holdings Corporation (CHC) (the state body responsible for seeing through the privatisation process) released its report investigating what went wrong with the privatisation of 74 state owned companies.  The committee found that of the 74 companies privatised, 17 have shut down completely, 15 are performing badly, and 42 are performing well.

The companies had been privatised in the early 1990s in an attempt to improve production. In many cases the private sector did not make the investments it was expected to, and did not bring the efficiency and other gains that it was presumed it would. Indeed, it seems that some of the companies shut down as soon as they were privatised. The committee found that in many cases the private companies that took over had failed to meet the terms and conditions of the contract signed with the government.

The Parliamentary Public Organizations Accounts Committee (POAC) will be looking at the possibility of restoring these companies in the interests of creating jobs. According to the chairman of the committee, Mr Zitto, “The restoration of industries that were privatized but remained dormant will enable the country to generate jobs”. (http://allafrica.com/stories/201201170169.html  See also http://www.thecitizen.co.tz/news/4-national-news/18947-how-17-industries-were-privatised-only-to-die.html  and http://www.thecitizen.co.tz/news/4-national-news/18643-non-ticking-firms-pose-big-headache.html)

This investigation echoes a similar investigation undertaken in Nigeria in 2011 and which was reported on in a previous newsletter. See http://www.psiru.org/publications?type=brief

  1. 2.      Corruption – Tanzania 

Tanzania has been facing ongoing power shortages, partly due to the drought and the impact this has on hydroelectric power. As a result, Tanesco, the state energy utility, has entered into a number of short-term agreements (Emergency Power Purchase Agreements) with various companies to supply energy. One of these agreements was signed in 2006 with a company called Richmond Development Corporation. Because of Richmond’s failure to supply the electricity it was contracted to supply, a parliamentary committee was set up to investigate the agreement and the company’s failure to implement it. The committee found that Richmond had neither the experience, nor the expertise, to deliver on the short-term agreement, and was in addition, financially incapacitated. It was argued that there was political interference from the government to make Tanesco sign the agreement with Richmond rather than any other company.

As a result of the political fallout from this investigation, Edward Lowassa, the Prime Minister of Tanzania, as well as Cabinet ministers Nazir Karamagi (Energy and Minerals Minister) and Dr Ibrahim Msabaha (East Africa Cooperation Minister, who was the Energy and Minerals Minister at the time when the contract was signed), resigned from government in 2008. This forced the President, Jakaya Kikwete, to dissolve the cabinet and form a new government.

Towards the end of 2008 the government, partly responding to public pressure, announced that it was cancelling the contract . By now Richmond had passed the contract on to another company, Dowans Holdings. Dowans then took Tanesco to the International Chamber of Commerce (ICC) for breach of contract. In its 15 November 2010 ruling the ICC co-arbitrators found in Dowans favour. The ruling states that “It is declared that Tanzania Electric Supply Company Limited was in repudiatory breach of the POA and that Dowans Tanzania Limited was entitled to and did validly terminate it”. The ICC arbitration tribunal ordered Tanesco to pay $123.6 (about Sh185.5 billion) to Dowans in settlement of its claim.

It is ironic that Tanesco, in attempting to deal with the alleged corruption in the first place, lands up in the ICC, and is penalised with a hefty fine. There has been strong opposition to Tanesco paying the fine in Tanzania from trade unions and other civil society organisations. Tanesco has attempted to challenge the ruling in the Tanzanian Hight Court but has not been successful so far.

Meanwhile, the Dowans plant in Tanzania has been sold to a USA-registered company, Symbion Power. Symbion Power now have an agreement with Tanesco to supply short-term emergency power.

A full report on this case will be available within the next month on the PSIRU webpage.

  1. 3.      Sector – Kenya: water sector 

Kenya recently adopted a new constitution in 2010, which enshrines the right to water. This is a big challenge in a water-scarce country, where per capita water availability is below 600 cubic meters. An International Conference on the Future Management and Development of the Water Sector under the new Constitution, was held in December 2011 to discuss the challenges in ensuring water for all.

Problems facing the water sector include:

  • Drought – currently there are severe water shortages in many parts of the country because of drought. While water shortages affect all communities, pastoralists are particularly vulnerable.  The government has announced that it will send an additional 18 water bowsers to particularly hard hit areas by the end of February. This will bring the number of tankers in these areas to 90 by the end of February – 53 government owned and 37 hired.
  • Even without the problems of drought, there are low levels of access (only 41%) to a reliable water supply – particularly in rural areas and informal settlements in the urban areas. Because of this lack of access, many residents in urban areas (about 56% of water users) have to buy water from informal sources, relying on water kiosks, local boreholes, well owners and water vendors. They pay up to 8 times more for this water than is paid for water obtained through household connections.
  • There are ongoing allegations of corruption. Kewasnet, the Kenya Water and Sanitation Civil Society Network noted problems with corruption in the water sector and has said “we also hope that the Kenya Anti-Corruption Commission (KACC) will pitch tent at the Ministry of Water and Irrigation and its parastatals to ensure that the suspicious deals in the sector are uncovered.”
  • The aging water supply network, environmental degradation and the impact of climate change all contribute to water shortages in the country.

At the December conference the government announced a number of interventions it is planning to make. These include:

  • The building of 30 dams over the next decade. For this, it needs $1 billion. The government hopes that by increasing the water storage capacity, Kenya won’t be so affected by drought in future years, and the government will no longer be required to deliver water by water trucks to particularly hard hit areas.
  • Improved water provision in rural areas and informal settlements.
  • Implementing renewable energy in the sector. The government It was recently announced that it plans to install 2 000 solar powered pumps in low rainfall areas. This will increase access to water, but avoid the use of diesel powered pumps which cause pollution. It will also be cheaper to operate as no fuel has to be bought. The government has entered into a partnership with Bola Associates (a Kenyan firm) and DACC Global (a US-based firm) to supply and install the systems.
  • Increasing irrigation in the rural areas.

These interventions, however, are made within a neo-liberal framework. As far back as in 1988, a centralised state body, the National Water Conservation and Pipeling Corporation (NWCPC) was established to operate the water supply systems. It was run along commercial lines. But this did not solve the water problems. In 2002, a new Water Act was promulgated which reformed the distribution system, again along neo-liberal lines – separating water providers from water authorities; separating policy making from day to day administration and regulation; and bringing in external bodies to provide water services. According to the water ministry only 22 out of the 120 water service providers make sufficient money to cover their expenditure. And yet the tariffs currently being charged are already high – among the highest in the region.

Recently, the government has announced plans to develop a new billing system which will increase water prices by allowing for monthly variations in inflation, the exchange rate, and the cost of energy. These adjustments can be made without having to go through the Water Services Regulatory Board (WRSB). Government’s intention in making the change is to allow for greater cost recovery. According to David Stower, the permanent secretary in the water ministry, "This will be with a view to improve the cost recovery performance of water service providers and promote sustainable use of water."  

For more information see:

  1. 4.      Labour disputes 

4.1.            Pay cuts and job losses in the public sector: Swaziland and Zambia 

In a number of countries civil servants are facing pay cuts and job losses.

In Swaziland, the Swaziland National Association of Teachers (SNAT) announced on 10 February 2012 that 1 200 teachers had been dismissed because of the country’s financial crisis. 3 000 teachers were employed on a one-year contract in 2011, with the promise of permanent jobs in the future. This promise has not materialised. Instead 1 200 teachers now find themselves without jobs.

In the Kitwe City Council in Zambia, municipal workers have not been paid for the last three months (since November 2011). Employees embarked on a go-slow in protest, and eventually on Thursday February 2 2012 they “evicted” the municipal management from their offices. The Zambia United Local Authorities Workers Union (ZALUWU) have finally reached agreement with management on a process for paying workers their arrears, with November salaries having now been paid to almost all the workers. Part of the problem facing the municipality is the failure by companies to pay the property rates they owe the municipality.

See: Swazi Media Commentary (11 February 2012) “Nation sacks 1 200 teachers”

Times of Zambia (7 February 2012) “KCC workers troop back to work”

4.2.            Zimbabwe: Civil servants strike 

The economic situation Zimbabwe is in has been made worse by the global financial crisis. Public sector workers have been struggling since 2007 around wages and working conditions.

Civil servants belonging to the union, Apex Council, went on a one day strike on January 19 2012 over wages and working conditions, followed by a five day strike from Monday 23 January. Support for the strike was patchy, varying from day to day as well as from service to service. In general, it was well supported in the education sector.

Workers were demanding a minimum salary of $538, up from the current salary of $250; medical insurance; improved pensions; and a special allowance for workers in rural areas. Government’s offer, which they have now implemented from February, backdated to January, is a $240million package to increase basic salary, housing and transport allowances. This falls far short of what workers were demanding, representing an average increase of $7 per month for the lowest paid worker.

While government argues that it does not have the money to pay the demanded wage increase, it was able to pay out $3 million in outstanding allowances to Members of Parliament at the end of 2011. For workers, the struggle to improve wages and working conditions has been going on for years.

Not only did workers not win their initial demands, but in February, the government announced that in future all civil servants will be paid wages and pension money about five days later than they are currently being paid. According to the government the reason for this was liquidity problems. The additional five days will allow it to mobilise funds, and prevent liquidity constraints developing in the market.

See: Institute for Security Studies (26 January 2012) “Zimbabwe: civil servants strike continues as swage talks reach an impasse”  and The Herald (9 February 2012) “Zimbabwe: New pay dates for civil service”

4.3.            Strikes in the Health Sector: South Sudan, Tanzania, Kenya 

Numerous strikes and worker actions have been taking place in the health sector of a number of countries in East Africa.

In South Sudan, doctors, registrars and house officers at the Juba Teaching Hospital went on strike for five days in February. The strike was in protest over the lack of a water supply in the doctors’ guest house for the last month, lack of electricity in the mess, and the lack of basic facilities in the hospital which would allow health workers to deliver a decent service to patients. A government spokesperson indicated that they were going to attempt to deal with all the doctors’ grievances, but it would take time. (See The Citizen (Juba) (23 February 2012) “South Sudan: doctors lift strike in Juba teaching hospital”)

At the beginning of  the year doctors in Tanzania went on a three week strike demanding their risk and on-call allowances, per diem and increment of eligibile payments – all of which the government has not paid since 2008. (See The East African (18 February 2012) “East Africa: Doctors in another round of strikes”)

In Kenya doctors went on strike in November 2011, but returned to work after agreeing with the government that they would receive a 30% increase on their allowance. However, when the state did not include senior medical offices in the raise, and gave nurses only a Sh7 000 increase in their extraneous allowances, compared to the Sh40 000 that doctors received, doctors, nurses and health officers  indicated in February that they were preparing to go on strike again. As the secretary-general of the union, KHPS, Wycliff Tomno, says “how does the government hope to create a conducive work environment when some health professionals are discriminated against?. (See Daily Nation on the Web (9 February 2012) “Nurses threaten fresh strikes over allowances”)

The Kenyatta Hospital in Kenya, in an attempt to cut costs and reduce its wage bill, announced in February that it was intending to lay off hundreds of workers. Many of these will be clerical workers at the hospital. According to the CEO of the hospital, the government is increasingly pressurising hospitals to be self-reliant. The hospital’s move to cut its wage bill must be seen in this light. (See Business Day Nairobi (14 February 2012) “KNH announces layoffs in plans to cut budget deficit”)

Clearly the health sector in East African countries is facing severe challenges. There are too few doctors, the health sector is not sufficiently funded by the government, and facilities need more money spent on them. In addition, patients pay a large portion of health costs from their own pockets, meaning that many poor people do not receive the healthcare that they need.

4.4.            Tunisia: attack on municipal workers 

The municipal workers’ union in Tunisia, Union Generale de Travailleurs Tunisiens (UGTT) , with a membership of over 500 000 workers, went on strike in February over working conditions. Among their demands are the payment of a bonus that workers say the government had promised them but had not paid out; improving working conditions; making temporary workers permanent; and the way promotions are implemented.

Municipal services, such as waste removal have been affected.

On Tuesday, February 21 2012, UGTT offices around the country were attacked, with the branch office in Feriana, in the governate of Kasserine, being ransacked and then set on fire.

See http://www.ghanamma.com/2012/02/tunisia-union-targeted-in-coordinated-attacks/

4.5.            Senegal: transport strike 

Senegal transport workers, members of the National Union of Senegalese Road Transporters, went on strike on January 24 in protest against high fuel prices and police harassment. This was a follow up to an earlier strike in January which was suspended after two days.

See: Radio Netherlands Worlwide (25 January 2012) “Locals stranded by fresh public transport strike” http://allafrica.com/stories/201201251136.html