Putting the lid on expatriates
And yet the Tanzanian government persists in instituting outright protectionist policies that make it difficult for foreign nationals to work in their country. In addition to dictating a company’s ownership structure – majority shareholding must be Tanzanian – the country’s investment laws specify that if the CEO is not Tanzanian, the deputy must be. The proportion of executive members also needs to be shared between Tanzanians and non Tanzanians. Non-Tanzanian executives are also given a period of time within which to train and prepare a Tanzanian to fill the CEO position.
Section 24 of the Tanzanian Investment Act 1997, for instance, specifies that every business enterprise will be granted an immigrant quota of five persons for the start-up period as an incentive, but that applications for additional persons will weigh the availability of qualified Tanzanians, complexity of technology employed and investor agreements.
The situation is somewhat similar in Uganda, where the Insurance Regulatory Authority specifies that each company cannot have more then two expatriates and that the finance director cannot be an expatriate.
In October 2012, Tanzania further enhanced its protectionist stance. It doubled work permit fees from $1,000 to $2,000, making it the highest in the region. The East African Business Council spoke out strongly, albeit unsuccessfully, on how this endangered the gains made by the East Africa Community in facilitating free movement of persons.
A year later, in October 2013, the government ordered over 1,500 foreign teachers to leave over expired work permits and illegal immigration. Tanzania charges $2,050 (TSh3.3m) for a two-year work permit for foreign teachers, and it is a fee that the Tanzanian teachers’ association has protested against for being too high. The dispute is especially interesting because of the high demand for English-medium schools in Tanzania in an attempt to bring the country’s language skills to par with the global economy.
In November 2013, Labour and Employment Minister Gaudensia Kabaka told a Tanzanian daily that a new Bill was to be tabled in Parliament which would centralise issuance of all work permits under the ambit of the Ministry and no longer involve the Immigration Department or the Tanzania Investment Centre. According to her, the new law will not only prohibit dubious employment of foreign experts, but will save 20%-30% of the employment opportunities that are being illegally taken by foreigners. It is unclear how far the legislative process has reached, but the move signifies an extension of the cold shoulder to expatriate workers, and is fuelling doubts about Tanzania’s commitment to the East African Community.
“The fear [on Tanzania’s part] is if we open up [to regional blocs], how are we going to build capacity in our next level of managers,” says Marcus Watson, Strategy Consultant at development advisory group Dalberg.
Tanzanians have long been wary of foreigners dominating their job market but, paradoxically, figures from Tanzania’s National Bureau of Statistics show that foreign workers in Tanzania make up just 0.9% of the labour force, with the majority concentrated in the education, manufacturing, construction, hotels and wholesale and retail trade sectors. Tanzanian citizens comprise 99.1% per cent of workers, and make up 97.6% of new workers hired in 2012.