Art of Competition

Last week my brother Emanuel Tayari  called to say hello and we ended up discussing a socio-political and economic issues that are taking place in Tanzania. He started asking my experience and view of the capitals markets in Tanzania. My response  was that the equity market is good but the only bad thing is that’s many people are apprehensive of investing  because of bad experience from investing in domestic corporations that went public. For instance a lot of citizen were persuaded to invest on NICOL and Precision on the ground of patriotism. The expectation of people who invested weren’t met and they were highly discouraged.

Then I preceded to explain why Precision was a wrong investment. I perceive airline industry as a very competitive industry and any profit gained from the company will be retained to sustain the corporation in the industry or it will be defeated by rivals. In the case of precision, it had a certain degree of monopoly in Tanzania therefore many people expected it to provide dividends but any entry of a new company would be a threat to investors. And it was a case when Fastjet arrived.

Afterwards, our discussion moved on to our national carrier the Air Tanzania ATCL. I expressed my disgrace of the company. First, I hate the idea of government operating a business. I think the government has many other responsibilities and adding the headache of running a business isn’t a good idea. Secondly, the government should not compete with private sector but rather complement it by ensuring fair ground and good business environment. This will help both investors and customers. Thirdly, the airline industry is very volatile that it needs quick decision to survive, with the bureaucracy and politics a government corporation will be a sinkhole for taxpayers money.

Finally, I think the government should learn the art of competition if it has decided to embrace the market policy. The problem with Tanzania we still have the sentiments of socialism which I think they are good but we shouldn’t let them hinder us from being competitive. I know the market isn’t perfect in all cases but were its inefficient the government should chip in. For instance, if the government thinks that private companies won’t serve certain routes because they are not economical viable, the government can chip in by subsidizing those routes. Lastly, I think the art of competition can be introduced by bring back sports in schools and our communities. See one of my previous article ‘new look on sports’.