Friday, December 5, 2008

REGIONAL INTEGRATION

1.0 Introduction

The majority of African countries are members of one or more regional or sub-regional arrangements that seek to promote economic coordination, cooperation or integration among the member countries concerned. The majority of these groupings are found in the Sub-African countries. The various African regional economic blocs, and indeed the individual countries that comprise their membership, are at varying stages of development and implementation of their regional arrangements. The blocs’ scope covers various socio-economic, developmental and political considerations, including the promotion of intra-regional trade, socio-economic policy coordination, and management or development of shared physical infrastructure and environment. Some of the African regional arrangements also cover issues of common interest in the areas of public governance, defense and security, among other socio-economic and political dimensions.

It is the intention of this paper to examine the “Economic Benefits of Regional Economic Integration” (EAC, SADCC, ECOWAS, etc.
In the course of the discussion the paper will explore the historical background of Economic integration, benefits, challenges, recommendations and conclusion to see whether, the economic integration resulted in poverty-reducing in poor African countries.
2.0 Background of economic integration
Although regional integration is not a very new concept, it has gained more popularity in the last two decades. Neighboring countries in different parts of the world have converged in joint pursuit of all macroeconomic functions to promote intra-regional trade of goods and services.
By so doing, the countries anticipate a more efficient use of resources, faster transformation of their economies, and reduction/eradication of poverty as well as creating prosperity for their people.
In Africa, the idea of regional integration was conceptualized in the 1960s and took shape at the Lagos Plan of Action of 1980 and its update, the Abuja Agreement of 1991. Today there are four major regional groupings in the continent and these are the Southern African Development Community (SADC); the Economic Community of West African States (ECOWAS), the East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA).
Some of the many African sub-regional arrangements have a long history of existence, dating back to the pre-independence era, which has been punctuated by occasional stagnations or reversals in a few cases, and only modest achievements at best in others. Some African countries have only recently rekindled their interests in economic integration, but for different reasons from initial decolonization agenda and the desire to overcome the colonially imposed artificial boundaries. They have been inspired by the success of integration efforts in Europe and the Americas. They also need post-independence economic integration to gain power and survive economically against the threat of marginalization in the globalization process.
Countries in the region have also pursued regional integration in the context of South-South cooperation, which was necessitated partly by the declining terms of trade and disappointment with the rejection of the New International Economic Order (NIEO) proposal in the 1970-80s

3.0 Theoretical review of Integration
In its everyday usage the word “integration” denotes the bringing together of parts into a whole. Integration in the sense of the transfer of authority and legitimacy to a new-supranational set of institutions, is one response to the condition of inter-dependence- a condition in which actors in the international system are sensitive and vulnerable to the acts of other entities, whether these be governments or trans-national actors such as multinational corporations or terrorist groups.
There are different approaches to integration. According to Belassa there are five ideal types of integration:
First, at the lowest level is the free trade area in which tariffs and quotas (quantitative restrictions) are eliminated between the participating countries, but each country retains its own tariffs against non-members.
The second level involves the establishment of a customs union in which besides the suppression of discrimination in the field of commodity movements within the union, there is the equalization of tariffs in trade with non member states.
The third level involves attaining a common market, where not only trade restrictions but also restrictions on the movement of factors of production are eliminated.
The fourth level combines the suppression of restrictions on commodity and factors of production movement with some degree of harmonization of national economic policies, in order to remove discrimination that was due to disparities in these policies.
Finally is the Political Union, which is the highest form of integration involving unified structures and political institutions.
Mukandala draws a distinction between political union, political federation, political integration and political cooperation. According to him a political union is the ultimate goal of cooperating parties and entails a shared political jurisdiction in which the parties to the union agree to surrender either all or part of their sovereignty to a central political unit.
A political federation is a union of groups, united by one or more common objectives, but retaining their distinct group character for other purposes. In a political federation, each member state is sovereign in its own sphere. Nevertheless, even in their loosest form, federations require a certain degree of direct surrender of political jurisdiction to the federal authority.
Political integration is the process whereby political actors in several distinct national settings are persuaded to shift their loyalties, expectations and political activities toward a new centre, whose institutions possess or demand jurisdiction over the pre-existing nation states.
Political integration permits member states to retain their identity and yet join the organization that transcends nationality. Political cooperation involves mutual policy arrangements among member states aimed at attaining common interests and objectives. Unlike political union or federation, political cooperation does not necessarily require surrendering one’s jurisdiction to the central unit.
In the final analysis, whilst political cooperation among states may set out to ensure peaceful co-existence, friendship and solidarity as well as mutual respect for national sovereignty, political integration towards federation, may involve issues like establishment of collective institutions, development and implementation of common defense/foreign policy etc. Suffice it to note that political cooperation among member states is a pre-requisite for a federation or union.
For Nkwame Nkrumah, integration was to take the form of a political union first as a necessary prelude to the creation of an extended field for which integrated economic and social development could be worked out.
4.0 The meaning of Regional Economic Integration
Regional Integration is the unification of neighboring states working within a framework to promote free movement of goods, services and factors of production and co-ordinate and harmonize the policies. This might involve convergence of trade, fiscal and monetary policies as a prelude to integration.
It can also be defined as a process and a means by which a group of countries strive to increase their levels of welfare-reduction of poverty, indebtedness and economic malaise. It recognizes that partnership between countries can achieve this goal in a more efficient way than unilateral or independent pursuance of policy in each country.
In Africa, it can be postulated that regional unification through meaningful co-operation will help arrest poverty and Debt levels in these nations.
It can also be defined as the economic convergence of neighboring states working jointly in pursuit of all macroeconomic functions to promote intra-regional trade of goods and services. Common goals are usually economic transformation, development and eradication of poverty.
The rationale behind regional integration is that partnership between countries can achieve these goals in a more efficient way than unilaterally.
Sometimes is called Regional cooperation which can be defined as the move to establish linkages between and among a group of countries within a given geographical space, motivated by common and shared interests to cooperate in the areas of trade and other economic sectors, with a view to achieve a Free Trade Area and subsequently to establish a Customs Union.
Economic Integration follows the underlined main processes:
Ø Establishment of a Free Trade Area involving the removal of tariff and non-tariff barriers to trade;
Ø Establishment of a Customs Union whereby all restrictions to trade and factor movements within the area are completely eliminated, and of a common external tariff;
Ø Achievement of an Economic Union among the member States, which implies the harmonization, to some extent, of economic, monetary, fiscal, social and other sectoral policies;
Ø Attainment of a supra-national union where the respective governments completely subordinate their sovereignty over policies to a supra-national authority, and which may ultimately lead to the alignment of the countries involved into a single state.
The underlying motivations may also include the desire for the member countries to promote a common defense and security front or strengthen their economic independence and empowerment vis a vis the rest of the world.
5.0 History and Background of EAC:
The East African Community (EAC) is an intergovernmental organization comprising five east African countries. Currently, members of EAC are Kenya, Tanzania, Uganda, Burundi, and Rwanda
The East African region covers an area of 1.8 million square kilometers with a combined population of about 100 million (July 2005 est.) and has a vast potential in mineral, water, energy, and forestry and wildlife resources. It also has agricultural, livestock, industry and tourism development. Its people have a common history, language (Kiswahili), culture and infrastructure.
The Permanent Tripartite Commission for East African Co-operation was first formed in 1967 as the East African Community. It collapsed in 1977 due to political differences. Following the dissolution of the organisation, former Member States negotiated a Mediation Agreement for the Division of Assets and Liabilities, which they signed in 1984.
However, as one of the provisions of the Mediation Agreement, the three States agreed to explore areas of future co-operation and to make concrete arrangements forsuch co-operation.
Subsequent meetings of the three Heads of State led to the signing of the Agreement for the Establishment of the Permanent Tripartite Commission for East African Co-operation on November 30, 1993.
Full East African Co-operation efforts began on March 14, 1996 when the Secretariat of the Permanent Tripartite Commission was launched at the Headquarters of the EAC in Arusha, Tanzania.
Considering the need to consolidate regional co-operation, the East African Heads of State, at their second Summit in Arusha on 29 April 1997, directed the Permanent Tripartite Commission to start the process of upgrading the Agreement establishing the Permanent Tripartite Commission for East African Co-operation into a Treaty.
During a one-day summit in Arusha, Tanzania on 22 January 1999, the Heads of State of Tanzania, Kenya and Uganda resolved to sign the Treaty re-establishing the East African Community (EAC) by the end of July 1999.
The community was to take over from the Permanent Tripartite Commission for East African Co-operation.
In addition to a decision to re-establish the East African Community by the end of 1999, other issues raised at the EAC Summit of January 1999 included the signing of a Memorandum of Understanding on Foreign Policy Co-ordination; Zero tariff rates to be adopted by 1 July 1999 and the implementation of COMESA's 80% tariff reduction objective at the same time; setting up of a mechanism to deal with terrorism in the region; and postponement in admitting Rwanda and Burundi to the EAC.
{Apparently, the inclusion in the agenda on the question whether Rwanda should be admitted to the EAC caused a heated debate during a preparatory meeting attended by the three Foreign Ministers on 21 January 1999. The Ugandan delegation wanted Rwanda to be admitted, but Tanzania disagreed arguing that it was not possible to admit new members at this stage, as the procedure for doing so was still being debated. The proposal by Uganda was defeated when the Tanzanian and Kenyan delegates voted against it.}
The Memorandum on Foreign Policy Co-ordination, signed by Foreign Ministers from the three countries, involves the three member states taking a common stand at international fora in assisting each other in countries where they do not have Missions. This entails that any of the three member states can appoint one Mission to represent their interests abroad. Nationals from the three countries will also be able to have visa applications processed in any of the Missions representing the region.
President Moi suggested that the countries of the region might even form a political federation and suggested in this regard the creation of a regional assembly with limited powers.
The East African passport was officially launched on 1 April 1999. At the same time, it was confirmed that the EAC planned to establish a free trade area in July 1999 and a common external tariff by the year 2000. In May 1999 a high level EAC task force met in Arusha and recommended a delay in the elimination of tariffs (to 1 July

Dates to the Establishment of East Africa Federation

April 2005 - Appointment of an additional Deputy Secretary General (in charge of fast tracking federation

July 2005 - The Constitutional Commission appointed

December 2005 - Appointment of the east African Federation Advisory Council

June 2006 - Protocol on the Free Movement of Persons, Labor, Services and Right of Establishment and Residence concluded

December 2006 - The East African Identity Cards identifying the citizens of partner States of the EAC issued

July 2007 - Protocol on the Common Market concluded

December 2007 - Preliminary Draft of the Constitution of the Federation of East Africa finalized

2008 - Debates, consultations and sensitization on the Preliminary Draft Constitution for the east African Federation
- Constitutional Forum consisting of the members of the National Assemblies of the Partner States of EAC and the Members of the EALA approves the Preliminary Draft with or without amendments
- Arising out of the Constitutional Forum, the Commission of the Federation of East Africa finalized

January 2009 - The Constitution approved by the Summit of East African Community

May/June 2009 - Approval of the Constitution of the east African Federation by the National Parliaments of the Partner States

September 2009 - Referendum

Oct. /Dec. 2009- President of the Transitional Federation elected or identified in accordance with the procedure set out in the Constitution
- Election of the Federal Parliament in accordance with the procedure set out in the Constitution

January 2010 - President sworn in and the Federation of East Africa launched

2010-2012 - Transitional Federal Parliament sworn in
- Judges of the East Africa Supreme Court sworn in
- Constituencies delineated
- Election laws enacted
- Defense put in place
- Federal Police put in place
- Other Federal Institutions as provided for under the Constitution put in place

January 2013 - Election of the President and Federal Parliament held and sworn into office

Comparison with other regional blocs
African Economic Community
Pillarsregionalblocs (REC)
Area (km²)
Population
GDP (PPP) ($US)
Memberstates
in millions
per capita
AEC
29,910,442
853,520,010
2,053,706
2,406
53
ECOWAS
5,112,903
251,646,263
342,519
1,361
15
ECCAS
6,667,421
121,245,958
175,928
1,451
11
SADC
9,882,959
233,944,179
737,335
3,152
15
EAC
1,817,945
124,858,568
104,239
1,065
5
COMESA
12,873,957
406,102,471
735,599
1,811
20
IGAD
5,233,604
187,969,775
225,049
1,197
7
WesternSahara 1
266,000
273,008
?
?
N/A 2
OtherAfricanblocs
Area (km²)
Population
GDP (PPP) ($US)
Memberstates
in millions
per capita
CEMAC 3
3,020,142
34,970,529
85,136
2,435
6
SACU 3
2,693,418
51,055,878
541,433
10,605
5
UEMOA 3
3,505,375
80,865,222
101,640
1,257
8
UMA 4
5,782,140
84,185,073
491,276
5,836
5
GAFTA 5
5,876,960
166,259,603
635,450
3,822
5

Source; http://en.wikipedia.org (cited on 7/10/08)
6.0 Economic benefits of regional integration
Before looking into the economic benefits of regional integration it is prudent to quote the following:
“We have everything to gain in the East African Federation in terms of political stability, greater feeling in safety in numbers and as an economic entity better able to fight poverty,” Former Tanzania President Benjamin Mkapa.

“I firmly believe that regional integration is not a choice but a necessary strategy for sustainable development … On a cultural level, regional integration solidifies the unity of communities with personal ties and common history, language and culture,” President Mwai Kibaki.

Among the problems facing the less developed countries (LDCs) is heavy financial, technical and entrepreneurial dependence on the industrialized world. These exploitative dependency relationships are deepened by the LDC’s limited internal market, coupled with low effective demand, both of which partly account for slow, if any industrialization. This somewhat “vicious circle” is exacerbated by non-revolutionized economic structures, whereby nations produce what they do not consume and consume what they do not produce. In 1974, Thomas argued for a reversal of this situation in which case Africa economies would produce what they consume.
One of the options out of this predicament has been regional economic integration. This is what hoped, would facilitate the attainment of economies of scale, rationalize location and relocation of production units, encourage specialization in production and enhance industrial efficiency.
For developing countries in general, economic considerations appear to loom high on the integration agenda. Through this process, the countries aim at establishing a wider economic and market space which allows them to: diversify production and reduce or minimize their dependence on the export of a few primary commodities which is overwhelming for countries; improve economic growth rates, and thereby raise employment and living standards; modernize the production sector; and fully exploit natural resource endowments
The following are the economic benefits of regional integration:
Ø Liberalizing intra-regional trade in goods on the basis of mutual beneficial trade arrangements among the Partner States.
Ø Promoting efficiency in production.
Ø Enhancing domestic, cross border trade and foreign investment.
Ø Promoting economic development and diversification as well as industrialization.
Ø Liberalizing intra-regional trade in goods on the basis of mutually beneficial trade arrangements among the Partner States.
Ø Promoting efficiency in production.
Ø Enhancing domestic, cross border trade and foreign investment.
Ø Promoting economic development and diversification as well as industrialization2.
On the other hand, the economic development needs to be strengthened between EAC countries on mutual foundation based on their indigenous social and economic environment. EAC trade promotion under Article 6 mentions that the Partner States shall initiate trade facilitation by:
Ø Reducing the number and volume of documentation required in respect of trade among the Partner States.
Ø Adopting common standards of trade documentation and procedures within the community where international requirements do not suit the conditions prevailing among the Partner States.
Ø Ensuring adequate co-ordination and facilitation of trade and transport activities within the Community.
Ø Regularly reviewing the procedures adopted in international trade and transport facilitation with a view to simplifying and adopting them for use by the Partner States.
Ø Collecting and disseminating information on trade and trade documentation.
Ø Promoting the development and adoption of common solutions to problems in trade facilitation among the Partner States and
Ø Establishing joint training programmes on trade.

7.0 Positive sign of EAC economic Integration
The issue of East African Federation has firmly been put on the agenda of East African countries. In fact, this one of the positive signs itself. Whilst the Treaty of EAC had broadly spelt out the desire of the Partner States to politically federate, the process to bring the federation about had not been spelled out. The process of fast tracking the federation has corrected this anomaly. At least there is now a timetable (roadmap) to achieve the federation.
A Customs Union has been put in place; this is another positive sign of the integration of East Africa. Whilst it continues to encounter difficulties, for example the traders strike in Uganda against the new customs taxes, the signing of the Customs Union Protocol was a step in the positive direction of the integration of the region.
The establishment of the East African Court of Justice (EACJ), East African Legislative Assembly (EALA), East African Business Council (EABC) and the introduction of the East African Passport are all remarkable event as we march towards the federation.
I have raised a number of questions above. Some of these questions have immediate answers while others do not. For example, I have failed to answer the question whether the date of 2013 for the ultimate establishment of the Federation is a realistic date! The other issue that I have not discussed is the exclusion in Uganda, of the opposition members of the EALA from the National Committee on Fast Tracking the East African Federation and the entire consultation exercise. The Wako Committee Report was supposed to be debated in the national parliaments, a thing that was done in Kenya and Tanzania, but not Uganda. In case of the latter, it is reported that the Wako report was discussed by the NRM party! In Uganda it appears the issue of the federation is a one party affair, which does not augur well for the process.
8.0 Challenges of economic Integration (EAC)
Financing the EAC has been an endemic problem. There has been a reliance on donor funding for its activities. In fact the donor community has become like the ‘Fourth Partner’ in the integration process. Donor funding of the integration processes in Africa is unsustainable. For example, in the financial year 2003/2004 the Partner States were only able to raise a paltry 41.2% of the EAC budget. The rest came from donors. In the same financial year, from the figures available, Uganda was the most indebted Partner State to the tune of over one million dollars. Thus, serious thinking must be done on how to finance the process leading to the federation and the federation itself.
Africa’s integration cannot be funded solely by the traditionally unreliable financial contributions of Partner States or outside support. Relying principally on assessed contributions has proven unsustainable for regional economic communities. They require more innovative and sustainable approaches to achieve and autonomous and self-dependent integration process.

The issue of democracy is also alarming, as pointed out at the time when the debate on changing the Uganda constitution to allow for open ended presidential term limits was raging; the issue also came on the floor of Tanzania’s parliament. Moshi Urban Member of Parliament (MP) Philemon Ndesamburo, had argued that Tanzania should withdraw from the EAC to protect its credibility. Ndesamburo argued that, “Tanzania should not cooperate with an undemocratic country that wants to have a president for life.” He added, “we (Tanzanians) are respected the world over as a democratic country that upholds the principles of democracy and good governance. We should protect this honor at all costs even if it means quitting the EAC.” The MP was dismissed as a lonely voice. Nevertheless, his arguments were echoed by other people
President Museveni is a fervent supporter of an East African Federation, to some he could be one of its biggest impeder. His changing the constitution to run for a third term did not go down well in some partner states.
It is difficulty to have a federation where one of constituents has a life-presidency while others have term limits. Either we have a timeless presidency in Uganda and a dictatorship that is implied, or the people of East Africa will through a referendum, reject the dictatorship, which is now being put in place in Uganda.
Connected to the above point is the issue of the internal political processes within the Partner States. Despite their shared history, the Partner States not only have constitutional arrangements that are unique to each of them, but also, have in recent years, been engaged in a review of their constitutions based on their separate internal concerns. The possibility that a Political Federation might be established in the near future has not been part of the discourses leading to those processes. Indeed this was the case in the Constitutional review process in Uganda and the Constitutional Referendum in Kenya.
As we observed above, one of the arguments were for introducing a federation is that it will promote political stability and eliminate tribalism in the region. At this juncture Uganda is the only partner state of EAC where there is an open conflict with ethnic undertones in Northern Uganda.
As Rwanda and Burundi joined the federation, then partner states having ethnicity problems will increase. But we need to interrogate the view that the federation will eliminate conflict in the partner states.
An interesting debate on the EAC and political federation has been taking place on the internet involving Tanzanians. As it has been reported, “most Tanzanians are afraid that their country risks being infected with ethnicity problems that characterize politics in Kenya, Uganda, Rwanda and Burundi.” Many of those participating in the debate have argued that “people from the four enemy countries who they deride to be “nincompoops” should be kept out of the Tanzanian territory at whatever cost”! Although the numbers of people involved in the debate is not big, it is nevertheless instructive to note that there are these fears/sentiments expressed.
Further, there are the challenges of sovereignty and nationalism. One of the fundamental principles of EAC is sovereign equality. The issue of sovereignty has generally handicapped the integration processes in Africa. It handicapped the Organization of African Unity (OAU) and now the African Union. How the Partner states are going to overcome this issue, no one knows. In fact, this is the biggest the concerns. The fear is that as a Federation, the nation states would cease to have any meaningful powers and would be relegated to mere provinces within the Federation. The fear is manifested in a number of ways including; loss of power at political level, loss of decision making, and loss of flexibility in exercising powers at the national level. The Zanzibar saga can be cited as an example.
Attempts by the colonial administration to establish a political federation in East Africa was vociferously opposed by Buganda Kingdom in the mid 1950’s. Even today, the Kingdom of Buganda has been demanding for Federal. No one knows how this federal will fit in the East Africa Political Federation enterprise.
There is another issue of land; any form of integration that would undermine the unique form of land tenure system in EAC
The is a need to put Tanzanians’ fears that the envisaged Common Market and eventual Federation, particularly provisions relating to Right of Property and Residence, will not open the floodgates to Kenyans who might be more advantaged to migrate to Tanzania and take up legal rights. Many Tanzanians were of the view that Kenya and Uganda should first reform their land laws to enable people in lower income bracket to acquire land before they join the regional federation.
There is the issue of multiple memberships to different regional integration groups. Whilst Uganda and Kenya belong to the Common Market of East and Southern Africa (COMESA), Tanzania is not a member. Uganda and Kenya are not members of the Southern Africa Development Community (SADC) while Tanzania is a member.
There is likelihood that the Partner States may commit themselves differently with the possibility of creating tension within the Customs Union and other economic and political commitments binding the EAC Partner States. The issue of creating tension within the Customs Union is very germane for Tanzania.
The SADC countries recently resolved to establish their customs union by 2010. The COMESA countries will establish theirs in 2008. The EAC established its own Customs Union in 2004, which prohibits member states from acceding or joining Unions with conflicting objectives. As a member of SADC, Tanzania will also be covered under the SADC Customs Union.
According to Tanzania’s Deputy Minister for EAC, Diodorus Kamara, Tanzania will stay in both Customs Unions. However, the Executive Secretary of SADC Tomaz Augusto has stated that, “legally, no country can belong to more than one Customs Union.” In fact, even under the World Trade Organization (WTO) rules, countries are prohibited from joining multiple Customs Unions. This issue was presented to the EALA, which in turn gave the governments of the EAC up to December 2006 to come out with a resolution. The EALA suggested that if member states of the EAC want to join other customs unions, they should do it as EAC and not individual member states. The governments are yet to come out with their decision on the matter.
The question that needs to be asked is: what if the people reject the Federation project, what next? The recent rejection of the European Constitution (The Treaty of Nice) by the people of France and Netherlands should be an eye opener. The rejection has resulted in the death of the Treaty of Nice despite the fact that 15 countries of the EU had already ratified it. Are the East African leaders ready to be defeated in the mooted referendum? Or will they manipulate the referendum results (just as they do in their national elections) in favor of the Federation? What will this manipulation portend for the yet to be established/established Federation? All these questions need answers, which as of now are not forthcoming
Recommendations
One of the reasons advanced for the collapse of the EAC in 1977, is that it was not people centered. According to Simba, civil society has several roles to play in the integration process. First, for any stage of regional integration to be successful, it must incorporate full ownership and participation of the people, especially through their institutions of choice. Secondly, civil society organizations have a role in order to ensure that the previous mistakes of the community are not repeated. Lastly, the active participation of civil society in the activities of the community will provide the necessary impetus in the development of the community.

Conclusion
Perceptions by some member States, that they are not reaping equal benefits or balanced development from the integration arrangements is a causative factor. For instance, the groups of less developed countries involved in the integration process may feel that others are benefiting more from trade liberalization programmes by virtue of their relatively developed industrial capacities. Therefore, the need for a balanced development and a fair share of the benefits of integration among the member countries becomes an important consideration, especially if the integration process involves countries with significant disparities in their levels of development. In this context, appropriate mechanisms need to be put in place to ensure that, to a large extent, the lesser-developed members are given special considerations.
Despite enormous trade impediments facing Africa, there is growing evidence that interregional trade in most of these regional groupings is rising. It is however disturbing to note that poverty levels in the continent continue to grow, a major problem which regional Integration is expected to address. Critiques to regional integration in Africa highlight the non-involvement of non-state actors as a major factor contributing to non-achievement of goals. The process is limited to state - state co-operation and this severely curtails proper identification of peoples’ needs.

THE MERGER OF 26 NATIONS INEAC,SADC AND COMESA.
This was agreed in the summit of heads of states and Governments in EAC,SADC and COMESA which conducted in October 22/2008.
The merger of the East African Community ( EAC ),Southern African Development Community ( SADC) and Common Market for Eastern and Southern Africa ( COMESA) could create one regional bloc with a market of over 757 million people.
The proposal was floated by president Jakaya Mrisho Kikwete when he addressed the first summit at Munyonyo common wealth resort in the environs of kampala. He said that a new bloc will be stronger and larger community replacing weaker, separate regional communities. The proposal was seconded by Mauritius and the Host, Uganda.
The summit directed secretariats of the three communities to prepare joint proposals on how to achieve the merger. The Proposals will be presented before the next summit two years from now.
The leaders agreed to establish a free trade area in the 26 countries and jointly to look for funds to finance infrastructure in the proposed bloc. The meeting also endorsed the idea of granting greater freedom to citizens of the countries within the bloc to conduct their activities.
President kikwete said the proposal merger would be an important step towards the formation of the African union government step by step.
He said ,he personally saw yesterday’s summit as the first important step towards merging the three communities.
The President also called on the 26 nations to negotiate as asingle bloc with the European Union issues relating to Economic partnership Agreements ( EPA)

Kenya’s president Mwai Kibaki current chairman of COMESA and south Africas president Kgalema Montlanthe,the chairman of the SADC also addressed the Summit.
THE ADVANTAGES OF INTEGRATION
1.By permitting the free movement of goods produced within the area of the cooperating countries, a customs union permits specialization along the lines of comparative advantages, implying in turn more effective use of resources, this is referred to as the trade creation’ effect of the customs union, since the absence of internal tariffs permits additional specialization and trade.
2. From a larger market, even if the national market is large enough to sustain one plant at full capacity. This is the benefit from increased competition in an enlarged market in which there are two or more competitive plants, assuming that these do actually compete with each other. There are thus three types of potential benefit within the industrial sector: ( 1)advantages from specialization on the basis of comparative costs; Advantages derived from economies of scale, including fuller utilization of existing plant and increased incentive to invest in new plants which require a market larger than the current national one;and












References
1. Booth, David and Lucas, Henry (2001) ‘Initial Review of PRSP Documentation’. Report commissioned by DFID for the Strategic Partnership with Africa. London:Overseas Development Institute. (Also available at www.odi.org.uk/pppg/monitoring_report.pdf.)
2. Cline, William R. (1997) ‘Debt Relief for Heavily Indebted Poor Countries: Lessons from the Debt Crisis of the 1980s’, in Z. Iqbal and R. Kanbur (eds), External
3. Peter Blair Henry Konosu, (April 24, 2008) Stanford University Graduate School of Business
4. http://is.muni,cz/th/g4029/fss-b/3-has-the-situation-improvement.pdf accessed 2th August 2008
5. http://swapec.hhs.sa/lunewp/paper/un; accessed 31st August 2008
6. http://un.org/ecosocdev/geninfo; accessed 31st August 2008
7. http://www3.interscience.willey.com/ccgi-bin; accessed 2nd Sept 2008
8. http://www.worldbank.org/oed pdf accesses 23rd August 2008
9. Bela Belassa, the Theory of Economic Integration, London: George Allen & Unwin Ltd.,
10. Ted Taylor, Approaches and Theory in International Relations, London: Longman, 1961,
11. Belassa, op. cit., p. 2. See also Kasaija Phillip Apuuli, ‘The Challenges Facing the Establishment of the African Union: Reflections on the Organization of African Unity (OAU) and the Constitutive Act 2001 of the AU,’ in African Historians and http://www.mof.go.mofdocument accessed 11Sept 2008

12. S. K. Simba, The Role of Civil Society in Regional Integration, paper presented at the Induction Workshop for New Members of the East African Legislative Assembly (EALA) and Members of the Pan-African Parliament (PAP), Entebbe, November 2006.

ASSESSMENT OF AVAILABILITY OF FINANCIAL SERVICES AT KIMARA WARD

1.0 Introduction

The purpose of this paper is to examine the availability of financial services in Kimara Ward. And to propose different ways that will ensure Kimara Community have access to reliable financial services as it is understood that financial services are crucial in investment growth hence poverty alleviation. The paper is divided in eight parts trying to come up with different issues in relation to financial services. Establishment of financial institutions, capacity building and strengthening of capital formation are the priority area that proposed for intervention.

2.0 Definition of Terms

Financial services are particular types of work that are provided by financial intermediaries/instruments to customers ranging from. Savings, Credit, payment of transfers, leasing and insurance just to mention few (Wangwe, S, et al, (2004),

Investment is defined also as the expenditure of wealth to enable future production or other advantageous economic yield which depend on economic agent. For an individual or household, investment might comprise mainly the purchase of financial assets (stock or bonds) or durable goods like buildings, machinery, and vehicles and such like (Dixons, 1994)

3. Experiences of Micro finance and Tanzania
In Tanzania, Microfinance began with NGOs (Non-Government Organizations) and SACCOS (Savings and Loans Cooperatives) in 1995. However during this time microfinance was mainly linked to women and poverty alleviation. In 2001 the government formulated new policy in Microfinance institutions in 2001. New microfinance policy contributes recognize them as a tool for poverty eradication and with its increased use and exposure to the country. Therefore National Micro Finance banks took an interest in offering microfinance services to the bank such as The National Microfinance Bank, AKIBA Commercial Bank and Tanzania Postal Bank. as well as CRDB bank are also among the big supporters of microfinance. Also there are Non Governmental Organizations involving in microfinance services in Tanzania, including FINCA, PRIDE and SEDA (MOF, 2005).

Never the less there are cooperative financial institutions developed as alternative to other commercial banking systems which again are the source of loans to cooperative members such Kilimanjaro Cooperative Bank (KBC) and Kagera Farmers Cooperative Bank(KFCB). These two banks are still small and still struggling to meet demands of their clients. Moreover Savings and Credit Cooperative Societies (SACCOS) and Agricultural and Marketing Cooperative Societies (AMCOS) are grass root based financial institutions aimed to build the financial sustainability to cooperative members and community at large (MCM, 2001).

4.0 Situation Analysis at Kimara Ward
Kimara ward is one of the 27 wards which make Kinondoni Municipal Council in Dar es salaam City. The Ward has 5 Mitaa including Baruti, Kimara Baruti, Kimara Mtangini, Mavurunza and Kimara B.According to 2002 national census, Kimara was estimated to have 66,288 people and now it is expected to have more than 80,000 people with an increase of 4.1%. The ward covers the area of 42.05 square kilometers.

People living in this word are engaged in both formal and informal sector. There are small and medium enterprises such as garages, small household shops, genges pubs poultry, gardening, cattle keeping and brick factories. There are 7 Community Based Organization (see the table below) and eleven registered SACCOS. According to Opportunities and Obstacles to Development (O & OD) of Kinondoni Municipal, the income of the people of low class in Kimara ward is less than one US dollar per day.

5.0 Financial Services Available at Kimara Ward

Besides the information mentioned under historical back ground above, this ward has no any other financial institution apart from existing 4 SACCOS out of eleven. Majority of the community members complains that, it costs them too much in terms of time and fare to reach the financial services located in City centre or near by City center. Kimara ward seems to be a completely forgotten area. It is true that in urban areas there is an opportunity of getting investors, however for the case of Kimara it has been different in the sense that, although the ward is located in municipal Council still there is no big investment, no banks neither financial institutions. This has contributed to the limited of capital formation and income generating activities.

Existing financial service available in Kimara Ward is SACCO’s services. Out of eleven registered SACCOS only four are active with deceasing members. Very few members of community declared to benefit from SACCOS where by different needs have been fulfilled such as paying school fees, health services and poultry and cattle keeping.

6.0 Obstacles to Financial Services
Majority of the community fails to join SACCOS because they are over ambitious and they fail to have a clearly articulated business plans and objectives as a standard of performance measures hence fail to match between member’s expectations and cooperatives. Moreover lack of skills and knowledge (ignorance) on loan payment, unsustainable interest rate, and financial management. Hence results to small membership and small penetration to the community.

Level of shares in the existing SACCOS have weak capital base due to the size of share to be paid and partial share payment by majority members. Still the SACCOS have weak loan base for members due to heavy dependence in member’s deposits for issuance of loans.

Another factor that contributes to hinder community to access financial services is lack of collaterals. This is due to fact that, the area of Kimara Ward is not surveyed hence community have no license of houses which act as bond/collaterals during borrowing from banks and other financial institutions

Moreover there are high interest rates charged by the existing financial services located at city centre. Again, rate of interest charged does not match with the level of income generated by community (See the table below). Based on that table, most of small entrepreneurs fail to manage the borrowing from financial institutions. This system is not enabling good environment of borrowing particularly vulnerable in the community.

Institution
Interest rate charged
Period of loan
SACCOS
15%
Within a year
NMB
9%
Short term, medium and long term
CRDB
17%
Short term, medium and long term
PRIDE Tanzania
15%
Within a year
Postal Bank
18%
Within a year
President Funds
6%
Within a year

Never the less, community lack the general understanding of the potentials and other forms of microfinance and micro credit that are reliable and accessible to financial services.

7.0 Proposals to Ensure Reliable Access to Financial Services at Kimara Ward

Capacity building is a necessary area to speed up and effect the envisaged transformation at Kimara Ward. Priority areas for capacity building include. human resources development, strengthening training on book keeping, strategic planning, management and supervision of members projects as well as training leaders and management in skills and ethics of contracts. Moreover awareness creation and sensitization about SACCOS is very important and will contribute to increase members and attract external capital to strengthen loan base, also members will be able to distinguish fees and share deposits and savings.

Furthermore, we have seen that, income generated is very low that constrain saving capacity as well as capital generation. Due to that reason, there is a need to strengthen capital formation through sensitization to community on the necessary entrepreneurial skills. Income generating activities and other economic programs if well managed will enable communities access more loans and savings to generate income, improve their lives and reduce poverty.

Regarding the situation of Kimara community I propose that there is a need establish the microfinance institutional and banking services to Kimara Ward to to facilitate the access of financial services to the majority of the community. Regarding the population size (more than 80,000) in relation to the Local Government Act of 1980, the Kimara Ward is supposed to be a District. This is to emphasize that, financial institutions and banks are urgently needed to enable community access the financial services to meet community needs.


8. Conclusion
To conclude I can say that, although there has been some initiatives which have resulted in an increased number of banks and non-bank financial institutions and increased efficiency of the financial system, there has not been a corresponding increase in access of financial services by the rural population that make up the majority of the Tanzanians. Thus, a need to enhance accessibility of financial services to the rural poor in Tanzania is, therefore, a priority item on the agenda of the on-going financial sector reforms.




Reference:
Dions, R. (1994), Investment Appraisal, CIMA.

Kinondoni Municipal Council. (2007), Kinondoni Municipal Profile

Microfinance Banana Skins. (2008), Risk in a Booming Industry, Centre for the Study of Finance Innovvation.

Wangwe, S& Lwakatare, M, (2004), Innovation in Rural Finance In Tanzania: Paper prepared for The Third Annual Conference on Micro finance held From 15th to 17th March 2004 at the AICC, Arusha, Tanzania.

United Republic f Tanzania. (2001), Ministry of Cooperative and Marketing, The Cooperative Development Policy. Government Printer.

United Republic f Tanzania. (2001), Report of the Presidential Committee on the Revival, Strengthening and Development of Cooperative.

United Republic of Tanzania. (2005), Ministry of Finance (MOF), Budget speech, Government Printer.

http://www.tanzania.go.tz/vision.htm

http://www.ifad.org/english/operations/pf/tza/i550tz/index.htm

http://en.wikipedia.org/wiki/Microfinance

CAUSES OF ENVIRONMENTAL PROBLEMS IN TANZANIA

Introduction

This paper is all about the environmental crisis as related to population growth, Poverty and rapid urbanization in Tanzanian contents. Major environmental crisis in Tanzania includes Land degradation, Pollution management and Urbanization, Agricultural and Range Land Resource Management, Management of forest Resources, Management of Wildlife resources, Management of mineral Resources , Excessive voice and Hazardous wastes.

THEORETICAL LITERATURE REVIEW
Major Environmental Problems in Tanzania
1 Land Degradation
Human impacts on deforestation, soil erosion, overgrazing, and degradation of water resources and loss of biodiversity have all resulted into land degradation. Poor agricultural practices such as shifting cultivation, lack of crop rotation practices, lack of agricultural technology and land husbandry techniques exacerbate the problem.
Liviga (1999), contends that the effects of overstocking, which are localized, give rise to serious degradation in places such as Shinyanga and Mbulu where livestock units have exceeded the carrying capacity. This situation is seen as a good indicator of each of capacity for the decentralized institutions at the local level to enforce laws and instruments which are meant to ensure sound environmental management.
2 Pollution Management and Urbanization
Pollution is a major problem in urban areas of Tanzania. Improper treatment and disposal of solid and liquid wastes are the major contributors to urban area pollution. The combined results of these problems are that both air and water have been contaminated with pollutants, which are detrimental to human health. In Dar es Salaam, for example, less than 5% of the population is connected to a sewage system. Where a sewage system exists, raw sewage is discharged directly into the Indian Ocean without prior treatment. Thus a workable water supply and sewage treatment is needed for the urban areas.
3 Agricultural and Range Land Resources Management
Agriculture and rangeland resources are the backbone of Tanzania's economy. It is estimated that about 55% of the land could be used for agriculture and over 51% for pastoral lands. However, only about six percent of the agricultural land is cultivated with the practice of shifting cultivation which causes deforestation and land degradation on the pastoral land. Lake Manyara basin, Geita Gold Mines, Usangu Wetlands and Ngorongoro.
The main cause for these problems is due to lack of proper instruments of enforcement of the existing legislation, policy and by-laws by local authorities. Again where the mandates of central and local institutions on environmental management are weak, conflicting and confusing; enforcement of laws and implementation plans becomes difficult if not impossible.
4 Management of Forest Resources
Forest resources provide both direct products and by -products. The forest reserves are also linked with agriculture, beekeeping, energy, water uses and biodiversity. It is estimated that fuel wood and agricultural residues account for 92% of the total energy consumption in the country. As a result, the mismanagement of fuel resources significantly contributes to deforestation and environmental degradation. Hence, highlighting the central and local governmental institutions inability o solve the problem.
5 Management of Wildlife Resources
Tanzania is one of the few countries with vast number of wildlife resources. For example, Tanzania's "protected areas" cover about 25% of the total land (Nshala: 1999). The protected land is comprised of national parks, game reserves, game controlled areas and the Ngorongoro Conservation Area.Unfortunately, communities living around these protected areas do not benefit from the wildlife industry. They live in uncertain conditions visited by persistent attacks by the wild animals and destruction of their crops. This has resulted in an antagonistic relationship between the wildlife authorities and the local populace. Local communities resort to activities like poaching to gain access to and benefits from the wildlife and other natural resources. This is a direct result of the central government excluding local communities from wildlife management.
6 Management of Mineral Resources
With respect to mineral resources, a Joint Appraisal Mission Report (1999) noted conflicting authorities on matters regarding mineral prospecting and mining. Additionally, local authorities have a minimal role in the mineral resource management process, despite the fact that mineral depletion is occurring in the local communities area. Any attempts made by local authorities to make by-laws imposing mineral levy such kind of by-laws have been met with an "outcry of double taxation" by mineral concessionaires against both the central government and the local authorities. The Tanzanian economy depends upon mineral resources for a major source of its revenues. However, mineral exploitation is often done without regard to environmental and social impacts. Thus the Mining Act of 1998 addressed this problem and required mining companies to conduct environmental impact assessments. Mining activities a major cause of environmental degradation by deforestation, destruction of habitat, loss of biodiversity and general damage to the land.


Urbanization
Dubey (1990:17) defines urbanization as a community consisting of a large concentration of population in a relatively limited geographical area. This is activated by the production of manufactured goods and distribution of various types of goods and services involving high degree of specialization and complicated technology
Pollution Management and Urbanization
Pollution is a major problem in urban areas of Tanzania. Improper treatment and disposal of solid and liquid wastes are the major contributors to urban area pollution. The combined results of these problems are that both air and water have been contaminated with pollutants, which are detrimental to human health. In Dar es Salaam, for example, less than 5% of the population is connected to a sewage system. Where a sewage system exists, raw sewage is discharged directly into the Indian Ocean without prior treatment. Thus a workable water supply and sewage treatment is needed for the urban areas.
Population Increase
Population refers to number of people residing in a certain geographical area over a specific period of time. In the recent years, human population increase has made it necessary to increase the rate of production of materials such as manufactured goods to sustain human life. This has increase the rate of resource utilization. Both renewable and non renewable resources are being exploited to the maximum. For example, forests and wildlife are being used without limit in order to meet human needs for food production, manufacturing and processing of finished goods and packaging. All these increased rates of use have raised the rates of waste generation and regrettably the present technologies can not cope with the increased rates of disposal.
Population and Environment
The Tanzanian population increased from about 7 million people in 1948 to 34 million in
2002 (Madulu, 2004). The present annual growth rate of the population is 2,8%, and the
population is expected to further increase to about 44 million people in 2015 (World Bank,2003). Although linkages are complex, the population increase increases pressure on the natural resources in Tanzania. The population issues are not explicitly assessed in
MKUKUTA.
The rural-urban migration in Tanzania is high. The urban population increased from 15 % of the total population in 1980 to 33% in 2001(World Bank, 2003) and it has been estimated that by 2025 more than half of the population in Tanzania will live in urban areas. Today the urban planning is inadequate. Consequently, the urban expansion lacks consideration of environmental issues (water quality and supply, sanitation and solid waste management) or urban-rural development effects. The poor are the most vulnerable since they are obliged to reside in the most marginal areas. The urban expansion put immense pressure on surrounding forests to support the need for charcoal. MKUKUTA recognizes the increasing problems related to urban poverty and include several operational targets related to integrated urban planning, water, sanitation, waste management15. Sustainable energy development is also mentioned, albeit in rather vaguely defined cluster strategies. The urban migration has its root cause in the inability of agriculture to sustain the livelihoods of a growing population. The MKUKUTA recognizes the growing rural-urban divide and the high levels of un- and underemployment as critical challenges. The strategy notes that “the opportunities for expanding and diversifying rural incomes, particularly for the vulnerable groups, from the sustainable use of natural resources is under-realized…” and that “…on and
off-farm earnings need to be supported both by a strong agricultural
Human impacts on deforestation, soil erosion, overgrazing, and degradation of water resources and loss of biodiversity have all resulted into land degradation. Poor agricultural practices such as shifting cultivation, lack of crop rotation practices, lack of agricultural technology and land husbandry techniques exacerbate the problem. Some environmentalists, from rich nations especially, also raise concerns about increasing populations placing excessive burdens on the world’s resources as the current major source of environmental problems.
Thus, putting emphasis on population growth in this way is perhaps over-simplistic. However, this does not mean we can be complacent about future population burdens. Sustainability is critical for the world’s majority to develop without following the environmentally damaging processes of the world’s currently industrialized nations. Also adding to the complexity is that resource usage is not necessarily fixed. That is, while there may be a finite amount of say oil in the ground, we may have not discovered it all, and further, overtime the use of those resources may increase in efficiency (or inefficiency). This means a planet could sustain a high population (probably within some limits) but it is a combination of things like how we use resources, for what purpose, how many, how the use of those resources change over time.
This makes for a worrying situation for third world development and poverty alleviation. However, an environment-only approach risks “blaming the victims.” While humans are largely responsible for many problems of the planet today, not all humans have the same impact on the environment. It is important to consider, for example, that the consumption of just the worlds wealthiest fifth of humanity is so much more than the rest of the world, as highlighted at the beginning.
Poverty
Refers to lack of physical necessities, assets and income it includes but is more than being income poor. Poverty can be distinguished from other dimensions of deprivation such as physical weakness, isolation, vulnerability and powerlessness.
Isolation refers to being peripheral and cut off. Poor people can be isolated geographically living in remote areas.




Empirical literature Review
Rural-Urban Migration: Migratory trends in Tanzania form a very interesting pattern. The 1978, 1988 and 2002 National censuses of Tanzania indicated that urban population was about 2.3 millions, 4.0 millions and 7.9 millions, respectively. The censuses indicate also that the urban population increased from 13.3 percent in year 1978 to 17.9 percent (1988) and further to 23.1 percent by year 2002. It is evidenced that Tanzania is experiencing rapid urbanization in the same manner as other Sub-Saharan countries and Africa in general. The big rush is for the Dar es Salaam City whose population has increases ten fold since independence in 1961. The census data for year 2002 reveals the trend that Dar es Salaam Region still continues to have positive net migration of 1,131,457 people, followed by Manyara Region (161,251 people), Tabora (129,965 people), Arusha (89,295 people), Rukwa (57,688 people) and Morogoro (49,990 people). Other regions that have positive net migration include Mbeya and Kagera (9,290). On the other hand, Kilimanjaro, Iringa, Tanga, Dodoma, Kigoma and Mowers regions are the six largest losers. Dar es Salaam is a primate city, endowed with the best services of any urban centre in Tanzania. As such living in Dar Es Salaam has become the dream of all who can afford to leave their ancestral homes. To many, it is the only place to earn a living. The development of urban centres in Tanzania, and Dar es Salaam City in particular, is driven by rural-urban migration that in turn is fuelled by the imbalance in lifestyles between rural and urban centres and between regional towns and the Dar es Salaam City. This dual migration syndrome has overburdened housing and all other services in the Cities and Towns of Tanzania. Jobs have dwindled fuelled by retrenchments of the same period, in the public service, shut downs in parastatal organizations and industries as well as marginal finance for emerging private sector of the novice market economy. Consequently, the population increase is far ahead of what the urban economies can afford on a narrow tax base and poverty of its taxpayers. Eastward Population Shift: On the other side of the process are migrations away from the central plateaux and similar agro-economic zones to the eastern coastal strip as reported by Prof. Mtatifikolo in a study conducted in 2004. The unfriendly drought conditions of the past post el-nino decade, has favored migrations to the higher rainfall and on into urban centers in the same areas. The net effect has been a population shift eastwards. Population shifts involving pastoralists moving away from ancestral areas in search of pasture has been a source of untold land-use conflicts as has been the refugee problem in the north western Tanzania The 2002 census shows that the highest average population growth rate in Tanzania by Region is in Kigoma Region at 4.8% per annum as a consequence of refugees. In a historical note it is seen that the four coastal urban centres, Dar es Salaam, Tanga, Lindi and Mtwara alone increased their share of population in Mainland Tanzania from 2.2% in 1957 to 7.4% in 1988. The picture would be more conspicuous if the other minor settlements on the coastal belt were included, as there is evidence that the growth rates of Kibaha and Bagamoyo in Pwani, Muheza and Korogwe in Tanga, are higher than average. Other Exogenous Challenges in a SPILL Perspective: The strategic plan, SPILL documents acknowledge the following to constitute other issues falling under the exogenous dynamics category: (i) Massive growth of irregular settlements. There are housing constructions springing up in unplanned, unsurveyed and unserviced areas of most urban areas including settlement in hazardous lands as well as open spaces and way leaves or for recreation and public land-use; (ii) land administration authority is far detached from land users and a call is therefore to decentralize down to the Districts so as to also give easy and prompt access to records, maintained at headquarters in Dar es Salaam, and to the various authorizations stated in law; (iii) Land administration system is part of Government that operates a dual system of services, i.e. in the lands sector Ministry and in local government. The latter often undertakes land delivery activities in a relatively weak institutional framework; (iv) The New Land Laws and supporting sub sector laws are not always in sync with other sectoral laws on minerals, water, agriculture, infrastructure developments, etc and need to be harmonized, bearing in mind the primacy of the former; (v) The market in land is not regulated and still operates as an informal activity. The wide spread sale of land without a framework to guide such sales and protecting the vulnerable, including regulation of real estate agents and making provision for leasing agricultural lands; (vi) continuing patronage and corruption in the procurement and delivery of services. This study paper was researched, developed and prepared by Dr. F. N. Lugoe for the Dar es Salaam Institute of Land Administration and Policy Studies, DILAPS.
Liviga (1999), contends that the effects of overstocking, which are localized, give rise to serious degradation in places such as Shinyanga and Mbulu where livestock units have exceeded the carrying capacity. This situation is seen as a good indicator of each of capacity for the decentralized institutions at the local level to enforce laws and instruments which are meant to ensure sound environmental management.
Agriculture and rangeland resources are the backbone of Tanzania's economy. It is estimated that about 55% of the land could be used for agriculture and over 51% for pastoral lands. However, only about six percent of the agricultural land is cultivated with the practice of shifting cultivation which causes deforestation and land degradation on the pastoral land. Lake Manyara basin, Geita Gold Mines, Usangu Wetlands and Ngorongoro Conservation areas have been affected the most by inadequate control and land management.

POVERTY
Refers to lack of physical necessities, assets and income it includes but is more than being income poor. Poverty can be distinguished from other dimensions of deprivation such as physical weakness, isolation, vulnerability and powerlessness.
Isolation refers to being peripheral and cut off. Poor people can be isolated geographically living in remote areas.


Forests in the country face increased pressures from timber companies, agricultural businesses, and local populations that use forest resources. Forest resources provide both direct products and by -products. The forest reserves are also linked with agriculture, beekeeping, energy, water uses and biodiversity. It is estimated that fuel wood and agricultural residues account for 92% of the total energy consumption in the country. As a result, the mismanagement of fuel resources significantly contributes to deforestation and environmental degradation. Hence, highlighting the central and local governmental institutions inability o solve the problem.
Both environmental degradation and poverty alleviation are urgent global issues that have a lot in common, but are often treated separately. Consider the following:
Human activities are resulting in mass species extinction rates higher than ever before, currently approaching 1000 times the normal rate;
Human-induced climate change is threatening an even bleaker future;
At the same time, the inequality of human societies is extreme:
However, there is often a mainstream belief that for poor countries to develop, environmental concerns have to be sacrificed, or is a luxury to address once poverty is alleviated.
Therefore, the approaches to such issues require rethinking. The overloaded phrase “sustainable development” must recognize the interconnectedness between human beings and the environment if true environmental and social justice is to be obtained.
POLICY REVIEW

The main cause for these problems is due to lack of proper instruments of enforcement of the existing legislation, policy and by-laws by local authorities. Again where the mandates of central and local institutions on environmental management are weak, conflicting and confusing; enforcement of laws and implementation plans becomes d 7.

Policy framework for Environment and Natural Resources Management
Tanzania is in many ways progressive and active with regard to environmentally sustainable development issues. The legislative and policy framework for environment and natural resources management is fairly well developed, and there are legal provisions for decentralized and local management of natural resources. Over the past decade the legal framework for environment and natural resources management has developed considerably in Tanzania.
The Environmental Management Act was finally passed (2005). Other key environmental policy documents are the National Environmental Action Plan (NEAP) the National Environmental Policy (NEP) (both from 1997), the National Conservation Strategy, the National Biodiversity Strategy and Action Plan (1999), and a National Action Plan to combat Desertification (NAP).
There is presently no separate national Strategy for Sustainable Development (NSSD) in
Tanzania.
Tanzania is party to the key international conventions on protection of biodiversity,
endangered species, the ozone layer, wetlands (Ramsar), and climate (Kyoto protocol),
combat desertification, and follow the international Law of the Sea. The Convention on
Biological Diversity (CBD) is a convention of major importance for Tanzania. Its main
objectives are conservation and sustainable use of biodiversity and equitable sharing of the benefits arising from the use of genetic resources.
At the national level, there is an institutional recognition of the relationship between poverty and environment, through the positioning of both the Division of Environment (DoE) and the Poverty Eradication Division (PED) in the Vice President’s Office (VPO). A cross-sectoral Government Environmental Working Group has also been established which is coordinated by the VPO.
However, implementation of this policy and legal framework is lagging far behind and is
being undermined in practice by the many cases of mismanagement of the natural resources sectors. Besides policy failures and corruption, lack of financial resources and capacity are also major obstacles to the implementation of the policy and legal framework for sustainable management of natural resources.
The Public Environmental Expenditure Review (PEER), conducted in 2004, concluded that“While environmental resources contribute significantly in terms of revenue collections and national income,…the environmental sectors are financially under resourced” (URT, 2004b).
The MKUKUTA may provide some leverage to increase government spending on
environment, but this remains to be seen.
There are potentials to increase the much needed national revenues from the natural resource sectors by for example introducing tendering and auctioning for highly valuable and marketable resources such as timber logs, black wood and hunting blocks. Economic
instruments such as market creation, safeguard of property rights, information and
government taxes are also important mechanisms to correct for imbalances in environmental resource utilizations and environmental degradation.
Local access to and sharing of benefits from natural resources are key issues for both poverty reduction and environmental protection. This point is strongly underscored in the
MKUKUTA and the policy and legal framework for promoting local and participatory
management of the environment and natural resources has been clearly developed in
Tanzania, with the Wildlife Act, the Village Forestry Act and the Land Act (devolving
management and decision making rights over village land and forest areas to villages) as
good examples. There is however very limited capacity at district, province and local levels to assume the responsibility of sustainable natural resources management. The Local Government Reform process entails a fairly far-reaching decentralization of planning and implementation to the Districts, Municipalities, Towns and Cities. However, at this level, no specific provision has yet been made to stimulate a pro-active and sustainable management of natural resources.
Moreover, PEER recommends that the VPO and NEMC18 formulate and implement
Environmental Training Programs for local governments and wards.
There is a need among other sectors (such as health, education, water, roads and energy) to (i) broaden the understanding of the role of the environment, and (ii) shoulder a larger
responsibility for environmental management. There is accordingly a need to promote
capacity building at the sector level. For this purpose PEER proposes that sector ministries should be allocated funds to facilitate establishments of Environmental Managements Units and recruitments of environmental coordinators. There is also a need for further understanding of how different crosscutting issues are linked (gender-environment)

1. Environmental Management and the NSGRP
The Tanzanian National Strategy for Growth and Reduction of Poverty (NSGRP), or
MKUKUTA1 in Kiswahili, clearly high-lights the important role of natural resources and
environment to combat poverty. Environment and natural resources management have been mainstreamed in the document, with strong emphasis on the role of natural resources for income generation, the importance of good governance, and the need to emphasize local involvement and participation. There are environmental targets under all three clusters2; 14%of the targets directly or indirectly relate to environment and natural resources management. There are further a considerable number of environmental interventions under no environment targets. This represents a significant improvement in relation the first PRS.
1 Mkakati wa Kukuza Uchumi na Kuondoa Umaskini TaifaEnsure. The MKUKUTA is organised around three main clusters:
a) Growth & Reduction of Income Poverty,
b)Quality of Life and Social Well-being, and
c) Governance & Accountability. Under each cluster a set of 5-6 goals are defined.
3)Under each goal there are operational targets, strategies to achieve targets, intervention
packages/s, sector or area/s of collaboration, and actor/s who will implement.
4)As part of the consultation process during the development of the MKUKUTA, CSOs,
natural resource sectors and the Environment Working Group made submissions related to environment and natural resources. Environment has also been addressed into the Public Expenditure Review (PER) and the Medium Term Expenditure Framework (MTEF), and the environment related indicators within the Poverty Monitoring System will be further developed.
The MKUKUTA clearly high-lights:
• the key role natural resources play for economic development and poverty alleviation,
• the need to address bad environmental governance and corruption in natural resources
sectors, and
• the importance of participatory and decentralized management of natural resources and
the environment.
The MKUKUTA hence strongly acknowledges the importance of poverty-environment
linkages, and also provides several important entry-points for how to address them. However,at the same time it is clear that most targets and interventions are very general (not only those related to environment). Operationalising the strategy is a key challenge. This includes (i)developing the Poverty Monitoring System, (ii) costing the strategy, (iii) strengthening the links to the budget process, and enhancing the (environmental) budgeting and planning Process at District level.

Economic development and the Environment
Tanzania’s rich natural resources constitute a major wealth asset which is fundamental for growth and economic development. Although natural resources are fundamental to the economy and the livelihoods of the rural population, their value and potential is frequently underestimated. This underestimation is partly based on missing markets in the case of public goods, imperfect competition in the case of distorting government interventions as well as pricing of natural resources below market value. Widespread market- and policy failures lead to sub-optimal economic decision making and loss of income to the country. As long as these weaknesses are not addressed, a substantial base of economic growth will be slowly eroded and poverty reduction objectives are unlikely to be achieved. All the main economic sectors - agriculture, mining, tourism, wildlife, forestry and fisheries –are based on natural resources. In all sectors there are important links between management
of the environment and natural resources, sustained growth and poverty reduction:
Agriculture has been described as “the back-bone” of the Tanzanian economy and accounts for about 45% of GDP, 60% of export earnings and 80% of the population’s livelihoods.
Increased productivity within the agricultural sector is key to achieving the 6-8 % annual
growth rate targeted in the MKUKUTA. The growth in the agricultural sector is targeted to increase from 5 % in 2003 to 10 % in 2010 – a target which may prove very difficult to
achieve. Modernizations and expansion of agriculture call for careful consideration of the
adverse affects that intensified irrigation, pesticides, fertilizers and changed crops may have on the environment (e.g. water pollution, reduced water flows, deforestation, land
Degradation) (URT, 2004c).

The MKUKUTA includes several measures to mitigate potential negative environmental
Impacts from increased agricultural growth. A failure to implement these and similar
Measures may aggravate poverty, environmental degradation and the prospects for long run economic growth.
The mining sector has experienced double digit growth during the last years, but only accounts for about 2 % of total GDP. Only 10 years ago the mining industry in Tanzania was still basically artisanal. Today Tanzania is Africa’s third largest exporter of gold, and produces a number of other valuable minerals for export. The description of the mining sector as a success growth story has however been questioned on: (i) the contribution of the sector to government revenues4, (ii) the effects on employment as technology intensive large scale mining replaces labor intensive small scale mining and (iii) the local impacts on poverty and environment (e.g. soil erosion, land degradation, deforestation, pollution of air, drinking water and water bodies).
The MKUKUTA notes that “serious poverty concerns [of mining] have been raised regarding the impacts on environment, tensions over land rights and labor relations in areas where these activities have risen dramatically. The challenge ahead is to ensure that investments benefit the wider economy giving particular attention to disadvantaged regions”. However, these concerns are not picked up in the targets and interventions for the mining sector in the MKUKUTA. The government has integrated several environmental safeguards in its policies, such as calls for Environmental Management Plans and Environmental Impact Assessments as a condition for Special Mining Licenses, but the implementation of these safeguards have been questioned. The
issues related to mining are complex and hence merit considerable more analysis than presently outlined5.
The tourism industry has grown at an average rate of more than 6% during last years and
Accounts for roughly 5% of GDP. To maintain growth in the sector, it is necessary to manage the natural environment sustainably. Moreover, future growth of the tourism sector may involve significant environment-poverty related trade-offs.
Since natural resource based tourism happens at the expense of other use of the resource, the sharing of benefits from tourism by local communities is a key issue. The MKUKUTA states that “barriers to communities gaining increased benefits from natural resources (e.g. wildlife) need to be removed”, but is not explicitly addressing how environmental safeguards will accompany tourism sector development.
The Wildlife sector has potential for increased growth and revenue generation and is important for the food security, nutrition and income of rural communities6. However, the sector suffers from mismanagement, under-pricing, over-use of resources, loss of revenues and limited sharing and participation of rural communities. Well managed, the game-hunting industry is one of the few non-farm industries with potential for economic development in remote rural areas of Tanzania. According to the follow-up regulations to the Wildlife Act (from 1998), local communities should receive at least 20% of hunting revenues, but this has not been implemented in practice.
Mining is connected with substantial tax breaks and relatively low royalties.
The impact of Extractive Industries (such as mining) on poverty and environment have been documented by the Extractive Industries Review by the World Bank Group (www.eireview.org)
Well over two-thirds of the population eats wild meat, and according to one source, 95 % of the rural population claim wild meat to be their most important source of protein.

The Tanzanian forests provide goods and services of crucial importance to poor households and the national economy. 95 % of the energy supply, 75 % of the construction materials and almost all indigenous medicinal products are estimated to be directly derived from forest biodiversity. In addition, eco-system services, such as soil conservation, watershed protection and carbon sequestration, have a large indirect economic value. However, since markets are poorly functioning or non-existent for many of these products and services, they are not accounted for in the national accounts. Consequently the forestry sector officially accounts for only 2-3 percent of GDP.
To increase the contribution from forestry to the incomes of rural communities, the MKUKUTA calls for (among other things) a scaling up of Participatory Forest Management, harmonized natural resource sector policies, and the development of a rural energy master plan including an extension of rural electrification7. A new framework for forestry management has also been developed and implementation is ongoing8. With sustainable management and good governance the potential for pro poor growth and revenue generation from the sector is considerable. There are also many good examples of agro forestry at the village level.
The rapid deforestation constitutes a serious threat to rural livelihoods as well as lost opportunities for growth and revenue generation. For example, turning the “illegally” operating charcoal industry into a major employment and income generating sub-sector in rural areas may have a huge potential, indicated by current annual incomes from charcoal amounting to 40% and more in rural households. It is also claimed that royalties within the sector are presently set arbitrarily and that only 5-10% of the potential revenue is actually collected.
Fisheries represent a significant source of revenue and foreign exchange, and sustain
Livelihoods, in the form of food security and employment and income, of poor people. The Tanzanian fisheries are at or near a state of full development, and sustainable and equitable management is a key challenge. While the inland fisheries, and specifically the Victoria Lake fisheries, are overexploited, the marine fisheries may have potential for growth. In both the inland and marine fisheries, there are conflicting interests between communities reliant on fish resources for their livelihoods and the export oriented commercial fisheries. Good governance which secures maximizing and equitably sharing of benefits, sustainability of extraction levels and maintaining productive marine and inland water ecosystems, is thus a key issue. Today potential revenues are not captured, and negative impacts for poor people are experienced. These developments call for a change in focus from attraction of foreign direct investment to a broad-based, equitable and environmentally sustainable fisheries development. Key policy reforms would include (i) developing the regulatory framework, (ii) strengthening the management capacity, and (iii) securing the livelihoods of the poor in the sector.
OWN PERSPECTIVE
There is a big relationship between environment and human activities in the world. The environment depends on man and the man also depends much on environment in order to survive and exist. There fore, despite of the environmental crisis facing Tanzania today, the Government should prepare a well implement able strategy for environmental Conservation to make sure that the current generation utilize it but with great caution to make sure that the future generation will also find the good environment for them to survive. This is to say that we have to make sure of the sustainable utilization of environmental resources such as land, wildlife animals, forests and water sources.
There should be policies and planning to conserve the environment although it seems to be challenging for Tanzania to reverse the loss of its environmental resources unless a significant progress is made in the reduction of poverty levels because poverty is the biggest source of environmental degradation in Tanzania. Lack of alternatives to fuel sources has made it difficult for people especially in rural areas to stop using fire wood.
However. both environmental degradation and poverty alleviation are urgent global issues that have a lot in common, but are often treated separately. There should be an integrated plan to deal with environment and poverty together.























REFERENCES
In: Dangerous intersections: feminist perspectives on population, environment, and development. A project of the Committee on Women, Population, and the Environment, edited by Jael Silliman and Ynestra King. Cambridge, Massachusetts, South End Press, 1999. :89-107.
© Centre for Science and Environment Campaign on Forests
Process Notes On The Stakeholders Feedback Meeting 13th May 2002.
Dr. F. N. Lugoe for the Dar es Salaam Institute of Land Administration and Policy Studies, DILAPS.
Vice Presidents Office ( VPO ):Poverty and Environment :Vol 1, December 2005