KIKWETE'S CABINET SHUFFLE: OLD WINE, NEW BOTTLE

C O N F I D E N T I A L SECTION 01 OF 03 DAR ES SALAAM 001725

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DEPT FOR B YODER, AF/EPS FOR T HASTINGS
ALSO FOR MCC OFFICE FOR G BREVNOV
LONDON, PARIS FOR AFRICA WATCHERS

E.O. 12958: DECL: 10/18/2011
TAGS: PGOV PREL ECON ENRG EIND TZ
SUBJECT: KIKWETE'S CABINET SHUFFLE: OLD WINE, NEW BOTTLE

REF: DAR ES 0412

Classified By: D. Purnelly Delly, Charge d'Affaires, for reason 1.4(d)


1. (C) SUMMARY. Amid mounting public frustration over the
power crisis, rising inflation, high oil prices and
depreciation of the local currency, President Kikwete
re-shuffled his Cabinet on October 15 for the first time
since assuming office. Re-shuffling ten Ministers and eight
Deputy Ministers among different ministries, Kikwete retained
the same cast of characters but switched their portfolios.
While it is widely understood that the mishandling of the
energy crisis precipitated the shuffle and specifically the
transfer of Minister Ibrahim Msabaha out of the Ministry of
Energy and Minerals, complaints against other
"non-performing" ministers, including the Minister of
Infrastructure and the Minister of Agriculture, have also
emerged. Public reaction to the President's move has been
mixed, with some calling it a genuine "wake-up call" to his
Cabinet and others criticizing it as mere cosmetics. 2006
has been a trying year for the Kikwete administration and the
shuffle reflects this. To address the root causes of
Tanzania's chronic problems, however, Kikwete will have to do
more than re-arrange his deck. END SUMMARY.

President Kikwete's First Cabinet Shuffle
--------------

2. (U) On October 15, President Jakaya Kikwete reshuffled
his Cabinet for the first time since his election about a
year ago. According to a State House press statement,
President Kikwete transferred ten Ministers and eight Deputy
Ministers to new ministries primarily targeting
economic-related sectors such as Energy, Infrastructure,
Agriculture and Water. Kikwete has not dropped any member of
his Cabinet nor has he cited specific reasons for the
shake-up. Especially prominent moves were the transfers of
what the public and press have called the main
"under-performers" in Kikwete's Cabinet: the Minister of
Energy and Minerals, Ibrahim Msabaha; the Minister of
Infrastructure, Basil Mramba; the Minister of Agriculture,
Joseph Mungai; and the Minister of Water, Stephen Wassira.
(For a complete list of the Cabinet transfers, see para 11).

Power Crisis: Key Catalyst
--------------

3. (C) What were the main causes behind President Kikwete's
reshuffle? While Kikwete has not provided any justification
for his shuffle, both politicians and the general public
believe the power crisis is at the heart of the shake-up.
Since the crisis emerged in February, power cuts have not
only persisted but they have gotten worse. Despite promises
from the Ministry of Energy that power rationing would end in
August, and then from President Kikwete that power woes would
end in early October, rationing of unprecedented proportions
continues (12 hours daily across the national grid). And
there is no clear end in sight. Tanzania's Electricity
Supply Company (TANESCO) announced on October 18 that the
country's main hydro-power source, Mtera dam, shut down and
that a smaller dam, Kidatu, would also be forced to shut down
in a few days.


4. (C) Beyond the blackouts and bleak forecast for an end to
the rationing, the local press has increasingly questioned
the government's handling of the crisis over the last few
months. After the GOT awarded Richmond Development
Corporation (Richmond) a USD 120 million contract in June
2006 to establish a leasing facility for "emergency" power
generation (reftel),Richmond created a stir when it failed
to meet its first delivery deadline on October 8. Articles
in the Citizen, the African and the Guardian newspapers
alleged that the Bank of America denied Richmond a line of
credit and that it was not even a registered company filing
taxes in Texas, where it claimed to be a business. "As the
Richmond saga unfolded, people were increasingly dissatisfied
with the government's handling of the energy crisis. Kikwete
had to do something," Michael Wong, Private Sector Specialist
at the World Bank, told poloff on October 16.

Shuffle Also Reflects Parliamentary Complaints
-------------- --

5. (C) While the energy crisis provides an easy explanation
for the transfer of Minister Msabaha and his Deputy Minister,
Lawrence Masha, transfers of the other nine Ministers and

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seven Deputy Ministers are not quite as clear. Dr.
Mukandala, Head of Political Affairs at the University of Dar
es Salaam, called the shuffle a "performance evaluation,"
speculating that President Kikwete was realigning his Cabinet
based on the abilities which Ministers demonstrated during
their initial months in office. Mukandala believed, for
example, that Minister Jumanne Magembe was been underutilized
at the Ministry of Labor and Youth Development, so was
transferred to the Ministry of Tourism and Natural Resources
to showcase his skills.


6. (C) According to Louis Accaro, Director of the Tanzanian
Private Sector Foundation, many of the Ministers transferred
were not only under-performing but had been the subject of
Parliamentary criticism and/or other controversies. For
example, during the July Parliamentary session, Minister
Mramba of Infrastructure was accused of misappropriating
funds to build a tarmac road in his constituency
(Kilimanjaro) worth Tsh 17 billion or (USD 13.9 million).
(Note: Dr. Mukandala also cited this case as a reason for
Mramba's transfer). Similarly, Members of Parliament (MPs)
had accused Minister Wassira of allocating funds for water
projects in his own constituency (Bunda, Mara) and had blamed
him for the chronic water shortage in the country. MPs also
had accused Minister Karamagi of attempting to award a
contract for the development of the Kiriwa coal reserves to
an illegitimate or "shoddy" company in which he owned shares,
according to Accaro.


7. (C) Joseph Mungai, Minister of Agriculture, was also
recently the subject of both public and parliamentary
criticism due to his role in the sale of wheat farms in
Mbeya. According to both Accaro and Dr. Weggoro, Senior
Economist with the East African Secretariat, the sale of the
Mbeya wheat farms sparked a demonstration of small farmers
who marched all the way to Dodoma to lodge their complaints
with Prime Minister Lowassa. Accaro shared his view that
Mungai's handling of the import licenses for grain during the
food crisis in January 2006 had also angered President
Kikwete. He explained what he saw as a clear case of
corruption when Mungai suspended the duty on grain imports on
January 23 and then on January 26, a boat arrived in the Dar
es Salaam port carrying 50,000 tons of grain. Accaro said
that nobody in the Cabinet could believe this "coincidence."

Mixed Public Reaction
--------------

8. (C) Public reaction to President Kikwete's shuffle has
been surprisingly skeptical. While some have praised
Kikwete's move as a "wake up call" to non-performing
ministers, others have criticized the President for simply
recycling friends and not sacking inefficient ministers. On
October 17, just one day after Kikwete's shuffle, the press
ran articles raising the general public's doubt about the
effectiveness of the shake-up. The Guardian newspaper called
the public's reaction "mixed." The African newspaper ran a
front page article entitled, "Cabinet Shuffle Criticized,"
reporting the public's view that the President's action was
not in-line with his purported philosophy of "zeal, vigor,
and speed." Other analysts likened the move to putting the
same old wine in a new bottle.

Comment: Kikwete Re-arranges Hand and Gambles Again
-------------- --------------

9. (C) Speculation abounds on why President Kikwete shifted
so many members of his Cabinet. On a macro-level, the
shuffle appears to be a rather shrewd political move.
Kikwete not only signals to the public that he is acting to
address a range of problems, but he also deflects mounting
public frustration away from the Presidency and toward, what
the press have called, his "under-performing" ministers.
Despite the skepticism, there are positives aspects of the
shuffle. One is that the move sent a clear message to the
President's Cabinet that Ministers would be sidelined if they
did not deliver and that, unlike under former President
Mkapa, Ministerial assignments were not five year guarantees.
The shuffle has also earned political points with
Parliament; many MPs have aimed pointed criticism at some of
the "under-performers."


10. (C) While the power crisis and Richmond saga may have
been the driving forces behind the shuffle, a new Minister
alone will not solve the energy crisis. Problems in the

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energy sector are deeply ingrained, and stem from poor
contracts, poor management, and poor decision-making, going
down to the technical level and up to the highest reaches of
government including Prime Minister Edward Lowassa (who
ultimately presided over the Richmond deal). Solving the
energy crisis will take long-term, sustained commitment to
restructuring and reform of the sector. END COMMENT.


11. Below are the ten Ministers and eight Deputy Ministers
who were shifted:
-- Ibrahim Msabaha, Minister of Energy and Minerals, now
Minister of East African Cooperation.
-- Nazir Karamagi, Minister of Industry, Trade and Marketing,
now Minister of Energy and Minerals.
-- Basil Mramba, Minister of Infrastructure Development, now
Minister of Industry, Trade and Marketing.
-- Andrew Chenge, Minister of East African Cooperation, now
Minister of Infrastructure Development.
-- Anthony Diallo, Minister of Tourism and Natural Resources,
now Minister of Livestock Development.
-- Jumanne Maghembe, Minister of Labour, Employment, and
Youth Development, now Minister of Tourism and Natural
Resources.
-- John Chiligati, Minister of Home Affairs, now Minister of
Labour, Employment and Youth Development.
-- Joseph Mungai, Minister of Agriculture and Cooperatives,
now Minister of Home Affairs.
-- Stephen Wassira, Minister of Water, now Minister of
Agriculture and Cooperatives.
-- Shukuru Kawambwa, Minister of Livestock Development, now
Ministry of Water.
-- Lawrence Masha, Deputy Minister of Energy and Minerals,
swaps positions with Bernard Membe, Deputy Minister of Home
Affairs.
-- Batilda Buriani, Deputy Minister of Community Development,
Gender and Children swaps positions with Salome Mbatia,
Deputy Minister Planning, Economy and Empowerment.
-- Emmanuel Nchimbi, Deputy Minister of Information, Sports
and Culture, swaps positions with Daniel Nzanzugwanko, Deputy
Minister of Labour, Employment and Youth Development.
-- David Mathayo David, Deputy Minister of Industry, Trade
and Marketing, swaps positions with Hezekiah Chibulunje,
Deputy Minister of Agriculture and Food Security.

DELLY