US embassy cable - 05DARESSALAAM1268

UNCLAS DAR ES SALAAM 001268 
 
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, Final Payment Made 
 
REF: A) 04 DAR ES SALAAM 02297 B) 04 DAR ES SALAAM 01128 
 
     C) 04 DAR ES SALAAM 00159 D) DAR ES SALAAM 00146 
 
Sensitive but Unclassified (SBU).  Protect accordingly. 
 
1. (SBU) Representatives of the U.S. company Cargill Cotton 
confirmed that the company received the final payment from 
the Tanzanian government on 27 June 2005, as agreed in the 
resolution of the long-standing debt dispute (reported in 
reftels).  The companies involved, including Cargill, 
submitted last week all required documents to drop any and 
all legal actions related to the dispute, and the dispute is 
now finally resolved. 
 
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 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.  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.  Cargill 
representatives met econoff last week to express thanks to 
post for its ongoing support. 
 
3. (SBU) Cargill representatives have reported that they are 
again seriously engaged in business in Tanzania.  In 2004, 
Cargill was the largest purchaser of cotton from Tanzania, 
buying over 32 million kilograms.  In 2005, Cargill has 
continued to aggressively pursue the local cotton market. 
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.  As 
noted in recent reftels, 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. 
 
OWEN