Zanzibar to privatise clove industry

Reuters    Translate This Article
19 July 2007

ZANZIBAR, July 19 (Reuters) - Zanzibar will soon privatise its clove industry in a bid to revive what was once the Indian Ocean Islands' main foreign exchange earner, the archipelago's finance minister said on Thursday.

Cloves were once the main foreign exchange earner on the so called 'spice islands', but the industry collapsed in the 1980's after international prices tumbled.

The semi-autonomous island now depends on foreign exchange from tourists drawn to its pristine white beaches and historic stone town.

'No one should expect this to be rushed. We want to make a very important decision that would affect the Zanzibar economy forever,' Mwinyihaji Makame told the Zanzibar House of Representatives.

He did not give a timeframe for the privatisation process.

He said the government had instructed the state-owned Zanzibar State Corporation (ZSTC) to look into ways of liberalising the trade, which has been run by the government for 44 years.

Under Zanzibar's laws, farmers may only sell cloves to ZSTC which has typically offered lower then market prices. This has led to a thriving black market, with most of the farmers smuggling their crop to nearby Kenya, despite stringent laws.

The penalty for clove smuggling is 30 years in jail.

The Zanzibar archipelago joined mainland Tanganyika in 1964 to form present day Tanzania, but remains semi-autonomous with its own president and parliament.

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