China, Pakistan sign 10-plus deals as Zardari makes first Beijing trip

BEIJING, Oct. 15 (Xinhua) -- China and Pakistan on Wednesday signed more than 10 deals ranging from trade and minerals to agriculture and satellites.
The package of agreements came out of a two-hour summit at Beijing's Great Hall of the People as China rolled out the red carpet for Pakistan President Asif Ali Zardari, who is on his first state visit to the country since taking office in September.

Zardari was welcomed by President Hu Jintao and received a 21-gun military salute at the Tian'anmen Square, festooned with the national flags of China and Pakistan.
During the meeting, Hu reviewed the close bilateral ties, particularly the days of the Bhutto family.
"Your entire family are old friends of the Chinese people," Hu told Zardari. "We will never forget the outstanding contribution Benazir Bhutto and Zulfikar Ali Bhutto had made to boosting ties with China."
Zardari's late wife, Benazir Bhutto, was assassinated in December 2007, and her late father, Zulfikar Ali Bhutto, had also served as Pakistan president.
While reviewing the 57-year-old diplomatic ties, Hu attributed its sound and smooth growth to the leadership of the two nations, among others.
He said China had always given priority to its relation with Pakistan, an important neighbor and strategic partner.
Zardari said he was grateful for "the warm welcome that you have shown us and the love and affection that I can feel from across the aisle."
"The only way I could do justice to the memory of my late wife and father-in-law was to make sure that I made my first presidential trip to China," the 53-year-old said.
"I am hoping to assist the Pakistan-China relationship and take it further along. It's a duty history has bestowed upon me."
On the economic front, Hu said the two countries were enjoying robust cooperation in economy and trade. They should continue to implement their free-trade pact, five-year trade program and other joint deals.
He also proposed the two nations create new areas and explore new ways of cooperation. "China and Pakistan should vigorously boost border trade so as to bring more substantive benefits to their citizens."
Zardari said the two should carry out big projects and work more closely in infrastructure, transport, environmental protection and finance, among others.
The two leaders agreed to step up people-to-people exchanges and cooperation in culture, education, health and journalism.
Hu thanked Pakistan for its support on issues concerning Taiwan and Tibet. He also appreciated Pakistani efforts in backing Beijing's hosting of the Olympic Games.
Zardari reaffirmed Pakistan's adherence to the one-China policy and support of China's peaceful reunification,
They also agreed on enhancing coordination and collaboration on international and regional issues, cooperating on addressing global challenges and ensuring peace, stability and development in the world.
As part of his four-day trip, Zardari is also scheduled to meet with other Chinese leaders, including top legislator Wu Bangguo, Premier Wen Jiabao and top advisor Jia Qinglin on Thursday.

Angry Teachers Clash With Police Over Stoppage Order

Riot police yesterday fired in the air to rescue Tanzania Teachers Union officials who came under attack by angry colleagues protesting against the cancellation of their strike that was scheduled to start today. TTU president Gratian Mukoba and the secretary general Yahya Msulwa were whisked away to safety in a police Land Rover amid a hail of missiles including stones and water bottles thrown at them. But efforts by the law enforcers could not stop hundreds of angry teachers from causing extensive damage by smashing furniture at the Diamond Jubilee Hall, the venue of the acrimonious meeting. "Why the heavy police presence. We are not criminals," shouted a sobbing woman teacher. She said teachers in the country have been marginalised, insulted and exploited for many years and were now fed up. "Enough is enough," she shouted. They also vandalised vehicles belonging to the union officials that were packed outside the meeting venue that was turned into a war zone. Some teachers pelted police officers with water bottles. Some teachers lay in the middle of the street to show their anger. Teachers' officials drawn form all over the country had met to plan today's strike. They arrived in the city before the Government won an urgent court injunction barring the strike action. But teachers vowed to press on with the strike despite the court order. The fracas started when Mr Mukoba attempted to persuade the teachers to obey the court order that stopped their strike. Chanting teachers jeered him and one snatched the microphone from the master of ceremony to declare they will not turn back. The TTU officials were branded traitors before a rain of bottles and chairs began flying around. The police arrived immediately to bring the situation under control. The teachers are demanding payment of Sh16 billion in allowance arrears and want the Government to implement a host of other demands. But Judge William Mandia of the Labour Division of the High Court on Monday halting the planned strike. TTU have lodged a counter appeal which comes up for hearing later this week. Meanwhile, teachers in Mwanza said they would proceed with the strike action today irrespective of the court order. Meeting in Shinyanga yesterday, the teachers said they will not be cowed by threats of sacking from education or regional government authorities. They said they will stay out of classrooms and suffer the consequences until the State addressed their plight, urging union leaders not to turn back. The said the strike could only be called off after a vote by the more than 2,500 teachers. "Teachers in Mwanza are set to strike today and expects their leaders to be in the frontline," a male teacher who wished not to be named said. Mwanza TTU chairman John Kafimbi who addressed the angry teachers, said the union agreed with them. He asked the teachers to meet today at Ghand Hall in the morning to chart the way forward. "The Government owes public servants about Sh23 billion out of which Sh16 billion is for teachers alone. This shows how insensitive our leaders are," the TTU official said. Lake zone Research and Academic Workers Union (Raawu) secretary general Ramadhan Mwendwa said teachers' demands will not come easily and asked members to be ready to suffer for it. Additional reporting by Paulina David in Mwanza.

WE ARE THE ONES

Markets surge as govts unveil crisis packages

WASHINGTON (AFP) - Governments around the world launched multi-pronged attacks on the financial crisis Monday, sparking record gains on stock markets amid hopes of recovery in the humbled banking sector.
After spiralling relentlessly downwards in the last few weeks, stocks reacted to trillion-dollar rescue packages in Europe and news that the US would soon buy stakes in banks as part of its 700-billion-dollar bailout plan.
Frenetic meetings by world powers in Washington over the weekend, where finance chiefs pledged to protect the financial system and work together, had also helped restore confidence, dealers said.
"The market was encouraged by financial news on a number of fronts," said Al Goldman, an analyst at US brokerage Wachovia Securities.
The rescue package announced by Germany alone included 400 billion euros (545 dollars) in loan guarantees and 80 billion euros in fresh capital, while France said it would guarantee up to 320 billion euros of lending between banks.
Austria, the Netherlands, Italy and Spain also announced measures to help their lenders.
Australia's central bank pumped more money into the country's financial system and the Japanese government said it was considering guaranteeing all bank deposits.
Stock markets, which had failed to rally after the US announced its bailout plan last month, soared amid the deluge of announcements which included more details from Britain on its part-nationalisation of several leading banks.
On Wall Street, the leading Dow Jones Industrial Average closed with a gain of some 11 percent London FTSE 100 index of leading shares jumped 8.26 percent.
Markets in Paris, Frankfurt and Hong Kong posted gains of more than 10 percent, while the Saudi market, the largest in the Arab world, closed up 9.5 percent.
"We have had our first significant bounce in the markets for some time now," City Index market strategist Joshua Raymond said in London. "(But) it's a dangerous time to start believing we have hit a bottom in the markets."
Over the weekend, finance ministers from G7 rich countries and G20 emerging powers held emergency meetings in Washington in a bid to find a solution to the financial crisis.
The International Monetary Fund head had issued a chilling warning on Saturday that global financial system had been brought "to the brink of systemic meltdown."
Leaders from the 15 eurozone nations agreed the outline of the measures at the emergency summit in Paris on Sunday.
In addition to setting up funds to buy into banks, the model foresees money being set aside to guarantee interbank lending and free up credit markets that have been left reeling by the US subprime mortgage crisis.
In Washington on Monday, US President George W. Bush vowed to pursue "responsible, decisive action to restore credit and stability and return to vigorous growth" as he met Italian Prime Minister Silvio Berlusconi.
Meanwhile Neel Kashkari, the US Treasury's pointman on the massive bailout, said Washington was ready to buy equity in a "broad array" of financial institutions in a further bid to restore confidence.
"As with the other programs, the equity purchase program will be voluntary and designed with attractive terms to encourage participation from healthy institutions," he added.
Announcing details of the German rescue package Monday, Chancellor Angela Merkel said the measures being taken would only work if they were accompanied by improved international regulation that would end "market excesses."
"Today's measures are the first element of a new financial market charter ... but it can only be worthy of the name if it is followed by a second element, namely a change in international rules," she said after her cabinet approved the package.
French President Nicolas Sarkozy, who hosted a weekend summit for leaders of the 15-nation single currency eurozone, announced a 360-billion-euro rescue plan to pump capital into banks and underwrite loans between them.
France would guarantee up to 320 billion euros of interbank loans taken out until December 2009 and set aside up to 40 billion euros to recapitalize French banks, Sarkozy said.
"Money is not circulating anymore. We have to create the conditions to get it moving again," he said. "The greatest danger is not to take risks, it is to do nothing."
US economist Paul Krugman, who was awarded the Nobel Economics Prize on Monday, said he was "extremely terrified" by the crisis but his fears had been at least slightly allayed.
"I'm happier about it now than I was five days ago," said the Princeton University professor and New York Times columnist, a fierce critic of Bush's economic policy.

Bush critic Krugman wins 2008 Nobel for economics

STOCKHOLM (Reuters) - U.S. economist Paul Krugman, a fierce critic of the Bush administration for policies that he argues led to the current financial crisis, won the 2008 Nobel prize for economics on Monday.
The Nobel committee said the award was for Krugman's work that helps explain why some countries dominate international trade, starting with research published nearly 30 years ago.
A well-known economist who writes columns for the New York Times, Krugman has long featured among the favorites to win a Nobel. He is a professor of economics and international affairs at Princeton University in the United States.
Krugman, speaking by telephone to a news conference, was caught on the hop by the news.
"I rushed to take a shower so that I could take part in the press conference. I called my wife and I called my parents. I've not yet managed to get myself a cup of coffee," he said.
But lack of caffeine did not stop him offering an ad hoc diagnosis of how the world economy was faring.
"We are now witnessing a crisis that is as severe as the crisis that hit Asia in the 90's. This crisis bears some resemblance to the Great Depression."
Praising world leaders' efforts to staunch the financial bleeding, he added: "I'm slightly less terrified today than I was on Friday."
World policy makers met at the weekend, after a black Friday on financial markets, to agree radical measures to rescue banks, revive liquidity and tackle the risk of a global recession.
The prize committee dismissed any suggestion its choice was influenced by the current crisis or political considerations.
"I don't think the committee has ever taken a political stance," committee secretary Peter Englund told Reuters. "The real, dramatic crisis is an event of the last month or so, which is in practice after the committee took its decision."
Englund said Krugman was more than a great economist.
"Not only is he a stellar researcher ... but also he is an excellent expositor and that is clear both from textbooks but also, as many of you know, from his columns."
Krugman's latest column in the New York Times, published on Monday, praised Britain for thinking clearly and acting quickly to address the crisis, unlike the United States. He mused: Did British leader Gordon Brown just save world markets?
Britain unveiled a plan last week to bolster ailing banks and on Monday it waded in with 37 billion pounds ($64 billion) of capital, a move that could make the state their main owner.
TAKING BUSH TO TASK
Krugman has been heavily critical of U.S. President George W. Bush's administration, arguing its zeal for deregulation and loose fiscal policies helped spark the current banking meltdown.
The Royal Swedish Academy of Sciences said the prestigious 10 million crown ($1.4 million) award recognized Krugman's formulation of a new theory that addresses what drives worldwide urbanization.
"He has thereby integrated the previously disparate research fields of international trade and economic geography," the committee said.
"Krugman's approach is based on the premise that many goods and services can be produced more cheaply in a long series, a concept generally known as economies of scale," it said.
Krugman's theory clarifies why trade is dominated by countries that not only have similar conditions but also trade in similar products. The committee cited Sweden as an example as it both exports and imports cars.
Born in New York City in 1953, Krugman received a PhD at the Massachusetts Institute of Technology (MIT). He has taught at Princeton since 2000.
As well as writing for the New York Times, Krugman is the author of 20 books and more than 200 papers. He has taught at Yale, MIT and Stanford University. His current work centers on economic and currency crises.
The economics prize, officially called the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, was established in the late 1960s and is not part of the original group of awards set out in Alfred Nobel's 1895 will.

Indian firm shelves $500m soda ash project in Tanzania

THISDAY REPORTER & AGENCIES Dar es Salaam INDIA’S Tata Chemicals, which had planned to set up a controversial soda ash manufacturing plant, in joint venture with the Tanzanian government with an investment of around $500m, has decided to put the project on hold in the face of fierce opposition from environmentalists. ’’As far as we (Tata Chemicals) are concerned until they (Tanzania government) come back to us, we are not coming (to Tanzania),’’ Tata Chemicals Vice-Chairman R Gopalakrishnan is quoted as saying in latest media reports from India. Tata Chemicals had formed a joint venture ’Lake Natron Resources Ltd’ with the Tanzanian government for exploring the possibility of setting up a Soda-Ash manufacturing plant there which was opposed by environmentalists, who argued that the proposed plant may affect flamingos bird population there and affect the mineral balance of the Lake Natron. The Tanzanian government responded to it by shifting the location of the plant 35 kilometres away from the lake shore but the move was again opposed by the environmentalists as it comes under the Ramsar wetland area. ’’Tanzanian government invited us to come and prospect for soda ash in their Lake Norton Valley. So the joint venture was formed to investigate the possibility of doing so,’’ he said. Gopalakrishnan said Tata Chemicals would wait for the Tanzanian government to work on the opposition raised by environmentalists and get a clearance. ’’Otherwise we are not coming,’’ he added. The plant was put on hold last year and the government asked the Natron Resources to produce an environment management plan and consider other sites for soda ash extraction. The company has appointed Norconsult AS (Norway) to carry out a environmental and social impact study. According to Tata Chemicals Ltd together with officials of the state-run National Development Corporation (NDC), the initial environmental and social impact assessment (ESIA) report for the project had been discarded to pave way for a new assessment of the designated site. Lake Natron Resources Limited, a company jointly owned by the government of Tanzania and Tata Chemicals Limited of India, had proposed to develop a facility at Lake Natron to extract and process soda ash. But according to the chief executive officer and coordinator of the Wildlife Conservation Society of Tanzania (WCST), Lota Melamari, the project has the potential to damage and destroy the East African lesser Flamingo population through disrupting the birds� breeding at the lake. Located within the Longido and Ngorongoro Districts in Arusha Region and south of Kajiado District in Kenya, Lake Natron is the world’s most important breeding site for lesser Flamingos, accounting for 75 per cent of the global population. Globally there are between 2.2 to 3.3 million flamingos, with between 1.5 and 2.5 million located on East Africa�s Rift Valley lakes, said the WCST’s Melamari.

Experts: Oil discovery remains distant dream

Experts: Oil discovery remains distant dream
ALVAR MWAKYUSA Dar es Salaam SEVERAL months after Canada’s Artumas Group and the state-run Tanzania Petroleum Development Corporation (TPDC) publicly announced a significant discovery of high quality crude oil at Mnazi Bay area in Mtwara Region, there remains a mystery on whether or not actual commercial oil drilling will begin in the country. Artumas last year announced the discovery of hydrocarbons at Mnazi Bay, where it had drilled about 50 barrels for testing. According to exploration geologists, hydrocarbons are a good sign of the existence of oil. What is more, laboratory test results of the liquid hydrocarbons extracted by the company in the area last year established that there was high-quality crude oil in the area. The company said in a statement earlier this year that substantial crude oil potential has been observed in the Ruvuma basin lying midway between Tanzania and Mozambique. According to the announcement by Artumas Group Energy & Power, the Canadian-based parent company of Artumas Tanzania Limited, 50 barrels of liquid hydrocarbons from Mtwara Region had been sent abroad for evaluation. ’’In November (last year), Artumas successfully completed a $170m (over 170.025bn/-) financing enabling the next stage of exploration and development over the upcoming two years, with a proposed capital spending of $124m (approx. 124.018bn/-) on its upstream work programme for both Mozambique and Tanzania,’’ the company said. Artumas Tanzania Managing Director, Salvator Ntomola, told THISDAY in Dar es Salaam yesterday that his company was still carrying analysis by conducting seismic surveys of the area by drilling more wells to establish the amount of oil deposits. ’’The amount we discovered was of small quantities...the hydrocarbons are by-products of gas which is drilled at the area. Drilling oil is not like mining gold...there is heavy investment needed to drill the wells where it costs an average of $15m for a single well,’’ he said. Yet, Commissioner for Energy and Petroleum Affairs in the Ministry of Energy and Minerals, Eng. Bashir Mrindoko, made it clear yesterday that there are no traces of oil at the area so far. ’’There isn’t any discovery of oil for commercial value at present but more wells are still being drilled,’’ he told THISDAY in an interview. TPDC Managing Director, Yona Killagane, said during a news conference held at the Ministry of Energy and Minerals offices in Dar es Salaam late March, this year, that Artumas was studying whether there were enough reserves to warrant commercial exploitation. He was supported by the firm’s Chief Exploration Geologist, Herry Kajato, who said the company was still drilling more wells in the area to determine whether the oil deposits justify large investments required to commercially extract the commodity. ’’Hydrocarbons results from wells number 2, 3 and 4, which are licensed to Artumas, have showed positive results. However, in order to determine if the project is viable for commercial purposes, the company is currently undertaking further surveys and assessments,’’ said Kajato. He stated that after two months of assessment, the viability of the project for commercial purposes will be known. However, almost seven months after the announcement, the company is still said to be carrying analysis to establish commercial feasibility of the project. Artumas Group Chief Executive Officer, Stephen Mason, was quoted last year as saying that the 25,000-square kilometre land position that the company is operating in the Ruvuma basin is recognized as a ’highly potential deltaic basin’ and gives Artumas substantial room to run in growing its resource base. Artumas has also announced significant progress in power sales from its 12-megawatt Mtwara energy project increasing by 8.7 per cent over the second quarter average this year. An ’arranger agreement’ with Dutch FMO was completed to facilitate the financing of Artumas planned 300MW integrated power project also in Mtwara Region. FMO will act as arranger for two structured finance facilities for the power generation plant and the high-voltage transmission interconnect to the Tanzania grid, estimated at $225m and $400m respectively. Other Tanzanians, however, say it is perhaps a blessing in disguise that commercial oil drilling has not started in the country because of the fear of the so-called ’oil curse.’

Tanzania sees Eurobond next year after rating

LONDON (Reuters) - Tanzania expects a sovereign rating by March and will aim to issue a Eurobond but also fears a slight financial hit from the global economic crisis, a senior finance ministry official said on Wednesday.
Finance Ministry Commissioner for Policy Analysis Mugisha Kamugisha told Reuters the money borrowed would be used for infrastructure projects including transport, power and port facilities -- but that the Eurobond issue would be dependent on an improvement in global market conditions.
Ghana and Gabon last year became the first African countries outside South Africa to issue Eurobonds but issuance has been much reduced this year against the backdrop of the credit crunch, drying up completely in recent weeks as credit markets froze and economic turmoil worsened.
"We expect our rating by March next year," Kamugisha said on the sidelines of an investment conference in London. "The plan is then to have the bond issuance in the course of next year. We hope by then there will be calm in the markets. We have not yet decided how much it will be but probably more than $500 million."
Tanzania is among Africa's largest recipients of aid and received $336 million in debt relief from the International Monetary Fund under the Highly Indebted Poor Countries programme, helping it reached the point where it has been touted as one of Africa's more appealing frontier markets.
But with interest in emerging markets collapsing as Western investors dump any perceived risk from their portfolios and with Western governments forced to spend billions bailing out their own banks, Tanzania would feel a pinch from the economic crisis, he said.
"We think there will be an impact on overseas development aid, foreign direct investment and I'm also worried about tourism," he said. "We know that foreign governments will be using more of their own resources to stabilise their own financial systems."
Foreign aid made up 20 percent of Tanzania's budget and 10 percent of gross domestic product, he said, but still expected donors such as Britain's Department for International Development to meet existing commitments covering the next few years.
Tanzania still foresaw economic growth of more than 7 percent this year, he said, but now expected to not quite meet its previous prediction of 9.2 percent in 2009.
"But I would have thought we should still see maybe 8.7 percent," he said. "Certainly more than 8 percent. And we still hope for double digit growth in 2010."
Investor demand for gold as other assets crumbled in value would help support that part of the mining sector, he said, although it was only a small part of the wider economy.

TANESCO’S POWER SHEDDING BLUES: Songas to install new turbines

Two gas turbines capable of producing 35MW of electricity each could arrive today – and could be ready for on-site delivery tomorrow, in efforts to avert creeping power shedding in the city, it has been learnt. Messrs Songas placed an import order for the two gas turbines to replace defective ones shut down last month and the two new ones will get connected to the national grid by the end of this month, reliable sources told the 'Daily News' yesterday. Installation of the two gas turbine acquired on lease could take at least two weeks and a further week of commissioning, the sources said, adding that the utility firm, Tanesco, had been duly informed about these arrangements. The sources -- which declined to disclose costs of leasing the gas turbines – only said that one of them was from the Netherlands and the other from the United States. Songas was forced to import the two turbines because it does not know when two out of its three turbines which were grounded on September 22, this year, will return to service. The company grounded three gas turbines with a total capacity of 106MW last month, forcing the Tanzania Electric Supply Company Limited (Tanesco), to introduce power rationing last month -- before one of the 40-MW Songas turbines returned to service five days later. The sources said that the two defective gas turbines would be airlifted to yet an undisclosed destination and it was not immediately clear whether the two turbines would be repaired and later flown back to Dar es Salaam. Meanwhile, the Aggreko 20MW plant which developed some technical hiccups was resuscitated back to life last Tuesday night. According to a Tanesco statement yesterday, resumed power generation reduce the firm’s power deficit by at least 20MW. Tanesco announced earlier this week (Tuesday), that it was slapping back power rationing country-wide, following a sudden breakdown of the firm’s 100MW transformer at its Ubungo gas powered plant – causing a loss of 40MW. The 20MW Aggreko facility had also failed -- causing a further 60MW power deficit

Well done Tanzania

Last week, Tanzania eased restrictions on East African Community nationals working in that country. Tanzania has agreed that regional residents can stay in the country if they are employed or engaged in economically worthwhile activities. A high level task force from the partner states hammered out some of these concessions in an eight day meeting that ended last week in Bujumbura, Burundi. However, negotiations continue on issues of land acquisition, freedom of movement and establishment of business. Uganda and Rwanda lead the way in easing the movement of labour, goods and services through the region, which should be the case because both countries are only emerging out of conflict situations and recognise that they need help to reconstruct their economies. In Kenya and Tanzania, entrenched interests are keen to encourage protectionist policies to protect their turf. However, economic history shows that protectionist policies only work during the initial stages of building national industries but then become detrimental, dooming nationals of those protectionist states to expensive products produced by inefficient industries. Lowering of barriers is a useful weeding process and focuses nations on industries or enterprises in which they can build competitive advantage. Easing restrictions on movement and ownership of property between states encourages technology transfer and increases regional security. The opposition to this opening up — a knee jerk reaction born of worries that the richer nations will get a disproportionate benefit — are shortsighted and based on narrow self-interest. Freedom of movement across Europe has increased productivity, rationalised businesses and increased innovation. Fighting the natural course of things is like bashing ones head against a wall — it is injurious to the individual but leaves the wall largely undented. Tanzania has done the right thing and should be supported along with the other member countries in the region in overcoming the teething problems that will come with this transition.

Tanzania tea output seen 13 percent up in 2008/09

DAR ES SALAAM (Reuters) - Tanzania expects its tea harvest to rise by 13 percent year on year to 37 million kg in the year to June 2009 due to good weather and more plantings, the head of the country's Tea Board said on Friday.
"In 2007/08 we produced 32,698 tonnes. For the coming year, we are forecasting about 37,000 tonnes," Mathias Assenga, director general of Tea Board of Tanzania, told Reuters.
Assenga said he expects the country will earn $41 million in 2008/09 from the export of about 29 million kg of tea, up from $37 million in 2007/08 from the export of 26.9 million kg.
The east African nation, a comparatively smaller tea producer than northern neighbour Kenya, produced close to 35 million kg in 2006/07.
Assenga said production will also rise once the rehabilitation of some 2,000 hectares on estates in southern and northeastern Tanzania has been completed and at least three factories have been restored.
"These are now being developed. If these things go well and the weather conditions do not change, we can achieve that production," he said.
The board had forecast 2007/08 production at 35 million kg, but it fell short because of little rain in some areas.
In 2005/06 drought hit production, which topped just over 28 million kg, while the year previous it was 32 million kg.
Assenga said about 50 percent of Tanzania's tea exports were sold through an auction at the Kenyan port of Mombasa in 2007/08, while the rest was sold directly to buyers in South Africa, the United Kingdom and the Netherlands.
The east African economy has about 22,700 ha under tea, of which 11,300 ha are estates and the rest belongs to about 32,000 small-hold farmers, most of them owning less than 1 ha of land.
Tanzania plans to boost tea harvests to 44 million kg by 2010/11 by hiking the annual yield to 1,500 kg per ha from 800 kg currently for smallholder farmers and to 2,500 kg per hectare from just over 2,000 kg per hectare for estate farmers.
CHALLENGES
Among the challenges smallholder farmers face are expensive inputs and rigorous phytosanitary requirements, such as Maximum Residue Levels, needed for export to Europe.
Assenga said poor infrastructure, including roads that are impassable during rainy seasons when tea production is at its peak, was a big obstacle.
"That is the time the crop cannot be brought to the factory. Some of the farmers are forced to carry it on their heads and bring it to the factory," Assenga said.
The Tea Board chief said inadequate labour was another major issue and that some estates had started trials on mechanised tea harvesting to help combat the problem.
The country has 23 processing factories, of which 22 are private.
Most of Tanzania's tea is grown in the Usambara region in the North, and in southern areas bordering the Great Rift Valley and Lake Malawi.
The farms are in altitudes of between 900 metres and 2,300 metres and get annual rainfall of between 1,400 mm and 3,000 mm.
Assenga said that in 2008/09, the government planned to produce 10 million tea seedlings to distribute to farmers, up from 6.3 million plants handed out in the previous year.

Africa Focus: IMF lauds Kenya's economic recovery

NAIROBI, Oct. 3 (Xinhua) -- The International Monetary Fund (IMF) has commended the Kenyan government for maintaining economic stability in wake of post-election turmoil in early 2008, and for its sound macroeconomic policies and progress with economic reform in recent years.
According to an assessment report issued by IMF late Thursday, policies and progress made in process have virtually contributed to strong economic growth and poverty reduction in the east African country.
The IMF Executive Directors regretted interruption of economic activity that resulted from post-election turmoil, but were however encouraged that recovery seems to be underway following return to political stability.
"The directors regretted the interruption of economic activity that resulted from the post-election turmoil, but were encouraged that a recovery seems to be under way following the return to political stability," said the IMF.
The fund, however, faulted the government's approach to reforms undertaken over the last decade, terming them overly reactive and overloaded.
"Directors noted, however, that downside risks remain, particularly from rising food and fuel prices and weakening global demand. They underscored that sound policies and continued structural and governance reforms are essential to maintain macroeconomic stability, restore strong growth, and advance toward MDGs," report said.
The directors, who met in Washington on Sept. 10, recommended far-reaching structural reforms and infrastructure improvements to achieve Vision 2030 growth objectives.
"Priority reforms should include those in the financial sector, public financial management and the regulatory and trade regimes," said the report.
Public and private sector partnerships were said to be vital in building Kenya's infrastructure. IMF noted that directors supported focus of 2008/09 budget on removing growth bottlenecks and improving social cohesion.
The IMF board stressed importance of fiscal restraint in light of strong recovery and inflationary pressures, and urged authorities to accommodate spending priorities within a smaller-than-budgeted deficit.
It added that directors encouraged Kenyan authorities to adopt a fiscal anchor based on ratio of total public debt to GDP in light of planned sovereign bond issue.
"They advised that size, timing, and modalities of planned international sovereign bond issue be carefully considered to safeguard debt sustainability, and that proceeds be used for high-return infrastructure projects. In this context, directors stressed importance of establishing a comprehensive debt management strategy, and advised authorities to continue to seek concessional financing as best source for public investment," it says.
The report further showed that directors welcomed recent tightening of monetary policy and authorities' readiness to tighten further to prevent second-round effect of rising food and fuel prices.
The IMF welcomed improved ownership and performance in recent years and believed that the fund should continue to play a key role in helping the authorities design and implement sound policies.
Kenya's economy had been under threat by post election conflict, which started early this year, resulting in formation of a coalition government.

'Shoot-out' aboard hijacked ship

Somali pirates on board a hijacked ship are reported to have been involved in a shoot-out over what to do with the vessel's cargo of tanks and weapons.
An East African maritime group, which is monitoring the situation, told the BBC that three men were shot but the extent of their injuries was unclear.
Pirates seized the Ukrainian ship last week, demanding a $20m (£11m) ransom.
They dismissed the claim of infighting as "cheap propaganda", in a phone call to the BBC Somali Service.
"There has been no exchange of fire at all. We're in good shape," spokesman Sugule Ali told the BBC.
"This is cheap propaganda being spread by people not aware of our situation."
He added that the pirates were participating in dialogue, without going into detail.
"I am optimistic this can be resolved peacefully," he said.
In a separate development, the state-owned Malaysian shipping firm, MISC Berhad, said two of its ships had been recovered after it paid a ransom to pirates.
A spokesman said paying ransoms was against company policy, but had been necessary to obtain the release of its crew.

S Africa's ANC 'will not split'

South Africa's Finance Minister Trevor Manuel has dismissed the possibility of a split within the governing party.
He told the BBC there would be continuity despite some government resignations following ex-President Thabo Mbeki's controversial ouster.
Earlier, the head of Gauteng province also resigned over the decision by the African National Congress to force Mr Mbeki to leave office last week.
New leader Kgalema Motlanthe has been trying to ensure a smooth transition.
Mr Mbeki quit after a court ruling suggested he had tried to influence the prosecution on corruption charges of Jacob Zuma, head of the ANC. He denies interfering in the case.
Mr Zuma, who is favourite to become president in elections due next year, has been locked in a power struggle with Mr Mbeki and there have been rumours of the ANC splitting.
Meanwhile, prosecutors say they have filed papers asking for the right to appeal against a ruling that dismissed the corruption charges against Mr Zuma.
'Shock'
Mr Manuel told the BBC's Hardtalk programme that he has had an "unequivocal assurance" from Mr Motlanthe that South Africa's economic strategy and policy would not change.

Private sector advocacy gets 13bn/- boost

BUSINESS Environment Strengthening for Tanzania-Advocacy Component (BEST-AC) has disbursed 12.5 million US dollars (over 13bn/-) for advocacy in improving private sector environment in the next five years with effect from July, this year. BEST-AC Team Leader, Mr Joseph Burke told reporters in Dar es Salaam over the weekend that the amount is a follow up to 5.7 million US dollars, that was released during implementation of the first phase of the programme. BEST-AC is managed by a Danish firm COWI A/S and its continued support for advocacy programmes is based on the good performance of its four year first phase which ran from November, 2004 to June 2008. During the first phase, 25 membership based organisations representing interests of businesses in Tanzania were supported and received support for 38 advocacy initiatives. Mr Burke said that Denmark, Sweden, Britain and Holland have allocated the funds through BEST-AC, to enable the private sector to advocate for their best interests. Mr Burke said despite growing co-operation between the government and private sector there were legal, regulatory and policy constraints. It is good, he said, for challenges to be brought to the government’s attention to be resolved for the benefit of the country’s economy. According to Mr Burke, BEST –AC is a programme that provides grants and technical assistance to private sector organisations (PSOs’) to help them engage more effectively in advocacy for better business and investment climate in Tanzania. “BEST-AC projects aim at supporting private entities to professionally advocate for their members' interests and improve business environment, that may enable businesses to flourish, create more jobs, increase peoples’ incomes and help reduce poverty,” he said. BEST-AC, he added, also assists business development service providers (BDSPs) training to enable them offer more support to private sector organizations. He said that the University of Dar es Salaam Entrepreneurship Centre (UDEC) has been working with BEST-AC, both as a training beneficiary and as a trainer of BDSPs and PSOs in various disciplines related to organizational capacity and advocacy techniques. Some of the organizations that have benefited include Tanzania Private Sector Foundation (TPSF), Zanzibar Chamber of Commerce, Industry and Agriculture (ZNCCIA) and Tanzania Horticulture Association (TAHA). Others are Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA), VIBINDO, Tanzania Association of Tour Operators (TATO), Tourism Confederation of Tanzania (TCT) and the CEO Roundtable. Other benefactors are Rulu Arts Promoters, Confederation of Tanzania Industry (CTI), Tanzania Milk Processors Association (TAMPA), Tanzania Women Miners Association (TAWOMA), Association of People with Disability (CHAWATA) and Tanzania Air Operators Association (TAOA).

US destroyer nears Somali pirates

A US Navy destroyer has made visual contact with a Ukrainian ship which was seized by pirates last week and is now moored off the Somali coast.

There is no indication that the USS Howard intends to approach the ship, which is carrying 72 battle tanks destined for Kenya's government.
The pirates' ransom demand for the ship and its 21 crew has fallen from $35m to $20m (£10.9m), their spokesman said.
A man on the ship also told the BBC that one of the crew members had died.
The man, who the pirates said was the captain of the MV Faina, was speaking via a satellite phone handed to him by one of the pirates.
He said the dead sailor was Russian and had died as the result of an illness. The report could not be confirmed by independent sources.
He also said the other crew members were fine and that he could see three ships about a mile away, including one carrying an US flag.
International concern
In an earlier interview with the BBC, a spokesman for the US Navy's 5th Fleet, Lt Nathan Christensen, said the USS Howard was within 8km (5 miles) from the Ukrainian vessel, but refused to say whether an intervention was likely.

Chinese astronaut takes historic walk in space

BEIJING (Reuters) - Astronaut Zhai Zhigang became the first Chinese man to walk in space on Saturday, clambering out of China's Shenzhou VII spacecraft in a technological feat that Beijing wants the world to marvel at.
"I'm feeling quite well. I greet the Chinese people and the people of the world," Zhai said as he climbed out of the craft, his historic achievement carried live on state television.
Zhai, the 41-year-old son of a snack-seller, unveiled a small Chinese flag, helped by colleague Liu Boming, who also briefly popped his head out of the capsule.
Zhai re-entered the spacecraft safely after a walk of about 15 minutes, marking the high point of China's third manned space flight, which has received blanket media coverage.
He wore a $4.4 million Chinese-made suit weighing 120 kg (265lb). Liu wore a Russian-made suit and acted as a back-up.
Zhai, tethered to the ship, slowly made his way toward a chunk of solid lubricant outside the capsule, took a sample and handed it to Liu, the official Xinhua news agency said, in an experiment aimed at improving the durability of the materials.

Tanzania short of labour inspectors

Inadequacy of labour inspectors has been cited as a major reason behind the incessant worst forms of child labour in the country. Director of the International Labour Organisation (ILO) office for Kenya, Somalia, Tanzania and Uganda, Jurgen Schwettmann, told a press conference yesterday that child labour was still a problem in the region and remained the organisation’s priority. “Tanzania has one of the most up to date labour laws in the world but child labour continues to thrive because there are no means of enforcing the law and the fact that labour inspectors are not enough to cover the whole country. Mr Schwettmann said he was, however, commending the country for registering steady progress particularly through the National Time Bound Programme to eliminate the worst forms of child labour in the country by 2010, including child labour in commercial agriculture, domestic service, mining, and commercial sexual exploitation of children. The Deputy Minister for Labour, Employment and Youth Development, Dr Makongoro Mahanga, said lack of labour inspectors was one of the challenges facing the country. Dr Mahanga attributed the situation to unattractive salary packages and working environment but maintained that the creation of the Commission for Mediation and Arbitration (CMA) had motivated labour officers who left for greener pastures elsewhere to come back. “The challenge that lies ahead at the moment is to create favourable salary packages and better working environment to enable us get back all our officers,” he explained. He said that the ministry had put in place strategies for recruiting new employees as well as convincing the government to increase its budget to enable it expand its workforce. Mr Schwettmann said Tanzania’s political will and commitment in combating child labour provided greater chances of eliminating the problem. So far 17,000 children have been reached for withdrawal or prevention. He revealed that the Ministry of Labour, Employment and Youth Development in collaboration with ILo was preparing a National Action Plan to speed up efforts to combat the problem and that a direct monitoring and reporting system had already been established.

Round 1 in debates goes to Obama, poll says

OXFORD, Mississippi (CNN) -- A national poll of people who watched the first presidential debate suggests that Barack Obama came out on top, but there was overwhelming agreement that both Obama and John McCain would be able to handle the job of president if elected.

Most debate watchers agreed both McCain and Obama would be able to handle the job of president if elected.
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The CNN/Opinion Research Corp. survey is not a measurement of the views of all Americans, since only people who watched the debate were questioned and the audience included more Democrats than Republicans.
Fifty-one percent of those polled thought Obama did the better job in Friday night's debate, while 38 percent said John McCain did better.
Men were nearly evenly split between the two candidates, with 46 percent giving the win to McCain and 43 percent to Obama. But women voters tended to give Obama higher marks, with 59 percent calling him the night's winner, while just 31 percent said McCain won.
"It can be reasonably concluded, especially after accounting for the slight Democratic bias in the survey, that we witnessed a tie in Mississippi tonight," CNN Senior Political Researcher Alan Silverleib said. "But given the direction of the campaign over the last couple of weeks, a tie translates to a win for Obama."

Motlanthe sworn in as S African interim president

JOHANNESBURG, Sept 25 (Xinhua) -- Kgalema Motlanthe, deputy leader of the South African ruling African National Congress (ANC)was sworn in Thursday afternoon as the country's interim president.
The South African parliaemtn elected Motlanthe as president earlier in the day. The swearing-in came immediately after the election.
Motlanthe was elected by a majority of the votes of MPs in the National Assembly.
Accepting his election, he said he was humbled and honoured by the faith and confidence placed in him.
"I undertake this responsibility fully cognizant of the duties and responsibilities that are attached to this high office and the expectations the people of this nation rightly have of the head of state," he said.
The swearing-in was attended by a number of Cabinet ministers and VIP guests.
Motlanthe is to make a further statement in the House around 5 p.m. local time (1500GMT).
Motlanthe, 59, was elected as the general secretary of the National Union of Mine workers in 1992.
He was elected as secretary general of the ANC in 1997, and was named to cabinet in July this year.