US embassy cable - 05DARESSALAAM146

UNCLAS DAR ES SALAAM 000146 
 
SIPDIS 
 
USDOC FOR ROBERT TELCHIN 
NAIROBI FOR FCS 
 
SENSITIVE 
 
E.O. 12958:N/A 
TAGS: ECON, EINV, PREL, PGOV, TZ 
SUBJECT: Cargill Debt Dispute Resolved, First Payment Made 
 
REF: A) 04 DAR ES SALAAM 02297 B) 04 DAR ES SALAAM 01128 
 
     C) 04 DAR ES SALAAM 00159 
 
Sensitive but Unclassified (SBU).  Protect accordingly. 
 
1. (SBU) Representatives of the US company Cargill Cotton 
confirmed the company received the first payment from the 
Tanzanian government on 30 December 2004, as agreed in the 
resolution of the long-standing debt dispute (reported in 
reftels).  The government confirmed that each of the 
creditor companies involved in the dispute have been paid 
the first installment, which is half of the total agreed 
amount.  The second half will be paid by the end of June 
2005, according to the agreement. 
 
2. (SBU) The Cargill dispute began in the period of 
Tanzania's transition from a state-controlled economy to a 
market economy.  The dispute's resolution was complicated by 
the fact the debtor agency, the state-owned Tanzanian Cotton 
Marketing Board (TCMB), had been dissolved and a number of 
Tanzanian ministries had to be involved in sorting out the 
TCMB's liabilities.  For a number of years, post has made 
significant efforts to support Cargill in the resolution of 
this dispute.  Ambassador Royall met with Prime Minister 
Sumaye in 2002; subsequently, the Charge d'Affaires and 
Econoff met with GOT officials on numerous occasions, 
including an Embassy-hosted lunch with GOT officials, 
company representatives, and other interested diplomatic 
missions.  Post will continue to follow up on the next and 
final payment scheduled for June 2005. 
 
3. (SBU) Cargill representatives have reported that they are 
now ready to again pursue serious business in Tanzania.  In 
2004, Cargill was the largest purchaser of cotton from 
Tanzania, buying over 32 million kilograms.  Cargill also 
owns ginning factories in the country and has expressed an 
interest in investing in commercial farming in Tanzania. 
 
4. (SBU) Comment: While dispute settlement in Tanzania 
remains inefficient and time-consuming, the GOT has now 
shown a greater willingness to keep its commitments. 
Cargill's renewed interest in expanding its business ties 
with Tanzania reflects the new business environment in the 
country, in which government plays a limited role in a more 
transparent and reliable manner. End comment. 
 
STILLMAN