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Tag: Tanzania

  • Dollar Shortage Delays Payments

    Dollar Shortage Delays Payments

    Image: Tobacco Reporter archive

    Tanzanian tobacco farmers are receiving delayed payments due to a shortage of U.S. dollars, reports BNN.

    Stanley Mnozya, director general of the Tanzania Tobacco Board, acknowledged that the shortage of U.S. dollars has made paying farmers difficult. Higher than anticipated tobacco production surpassing market demand has exacerbated the situation.

    To address the situation, Hussein Bashe, minister for agriculture, held a meeting involving farmers, tobacco buyers and banks. The minister said farmers’ payments will be finalized by the end of July. The government is making efforts to ensure the funds are available in U.S. dollars. 

    Alliance One Tobacco Tanzania Limited (AOTTL), however, has successfully paid more than $71.9 million to over 12,000 contracted tobacco growers this season. AOTTL made direct payments of $1.72 million as crop cess to various districts and aims to expedite payments to contracted farmers, surpassing the required 14-day payment period set by law.

    Delayed payments are causing financial difficulties and affecting farmers’ preparations for the upcoming season. 

  • Tanzania Bank Pledges to Support Farmers

    Tanzania Bank Pledges to Support Farmers

    Image: Tobacco Reporter archive

    Tanzania’s CRDB Bank promised to continue improving agriculture financing, reports The Citizen.

    The bank has loaned TZS129 billion ($53.6 million) to tobacco farming from January 2023 to June 2023.

    “We recognize that agriculture is the backbone of our national economy, and we have dedicated significant efforts to support it, including our successful Fahari Kilimo account with numerous benefits,” said Xavery Makwi, CRDB’s director of credit, at the opening ceremony of the bank’s new branch in Igunga. “This branch will be the gateway to economic opportunities for the people of Igunga, helping them improve their income.”

    “Many residents of this district depend on agriculture, so the opening of this branch will enhance productivity if more people can access loans with low interest rates below 10 percent provided by CRDB Bank,” said Ambassador Batilda Burian, Tabora regional commissioner.  

  • BAT Prevails in Tanzania Distributor Dispute

    BAT Prevails in Tanzania Distributor Dispute

    Photo: somemeans

    British American Tobacco Kenya has prevailed in an eight-year legal battle against a distributor in Tanzania, sparing it from paying a TZS3.2 billion ($1.4 million) court award, reports The East African.

    The Tanzania Court of Appeal annulled a 2016 decision by a lower court awarding the money to Mohans Oysterbay Drinks as damages after it sued BAT Kenya over the termination of a cigarette supply contract.

    Mohans claimed it had the exclusive rights to sell BAT products in Tanzania, which the cigarette maker disputed.

    “In our view, there was no evidence to prove the existence of a distributorship agreement between the parties nor its breach,” said the appellant court.

    Mohans started importing and supplying BAT cigarettes in Tanzania in 2000. However, in 2014, BAT awarded an exclusive distribution contract to another firm after a review of the cigarette maker’s business model.

    Mohans challenged the decision in Tanzania’s high court, saying that BAT had unlawfully terminated a contract. BAT said there was no such contract.

    In September 2016, the high court held that an implied contract between the parties existed in their 14 years of engagement and awarded Mohans damages for loss of goodwill and money invested in the business.

    In overturning that ruling, the Court of Appeal ruled that the parties’ business relationship was “neither express nor implied agreement.”

    Further, the judges said the high court had erred in its decision given that Mohans had rebuffed an attempt by BAT to formalize the distributorship agreement.