Government Awesomeness
I've not encountered any government more capable at shooting itself in the foot than the Tanzanian government. Any of you who are on FB may have seen me post links related to Tanzania's electricity woes. Essentially, the state-owned electricity company has been unable to produce enough electricity to meet the country's demands for the last 9 months. This is a result of a corrupt selection process years ago, poor investment since, and poor management now. As such, there has been extensive power rationing to the tune of 8-15 hours a day. This has had the effect of bringing businesses to their knees. Companies who want to continue operations have had to invest heavily in generators and diesel to run them, cutting deeply into profit margins. Of course, when businesses lose out on profit, the government loses out on tax-revenue, which makes it even less able to address infrastructure problems with electricity production. Vicious cycle.
To compound this problem, the government in a sheer stroke of genius decides to further cripple Tanzania's economy by meddling with petrol and diesel pricing. With inflation hitting double digits and the cost of living in the country soaring, the government is naturally pressured to make living a bit easier for its citizens. A desire to reduce fuel costs makes sense and is admirable, but it must be delicately executed. What the Tanzanian government did was decide that over night, all petrol stations in the country had to sell their petrol for less than 2004 tsh per liter, an instant decrease of 9.17%. Diesel prices would be instantly dropped by 8.31%. The government felt that at the new cost, the petrol companies could still cover their costs, including operational and transportation costs, and still make a modest profit. The petrol companies disagreed, saying that at the new price, they would be taking a loss, and over night, nearly all the petrol stations in the country stopped selling fuel, feeling it would be better to not sell than to realize their loss.
The Tanzanian economy was dealt another severe blow. One thing to note is that in Tanzania, when folks go to the petrol station, rarely do they fill up their tanks. Often, people will buy a few liters at a time, so when no gas stations are open, cars quickly run out of gas. Within a day or two, the streets were noticeably empty, even during commute hours. Dramatically fewer public buses were running, there were fewer taxis, and the ones that were running were charging astronomical prices. The people who were able to get their hands on some petrol were reselling at ridiculous rates - my regular driver was able to re-purchase petrol from a large pickup truck who siphoned gas out of his tank and sold 10 liters for the equivalent of $20USD. Ouch!! Without petrol, many of the safari tour companies also had to cancel their trips; and this during peak tourist season!
So, imagine a country whose citizens are now heavily dependent on petrol and diesel because there's no electricity, yet these poor people aren't able to buy petrol/diesel!! It's like a comedy of errors that's not actually funny at all.
Through a series of threats, including having the government re-enter the petrol business or perhaps enforcing martial law at the gas stations, the government strong-armed the gas stations into selling fuel after about a week of boycotting from the petrol companies. While at least the fuel situation seems to be solved for now, one can't help but wonder what genius the government is going to come up with next to again shoot themselves in the foot and to further bring businesses to their knees...