Tanzania government loses key minister

Over 500,000 tourists visited Tanzania in 2000

Tanzania's trade and industry minister, Iddi Simba, has left the government, in what could prove to be a setback for the country's programme of economic reforms.

He has lost the confidence of backbench MPs in Dar Es Salaam - despite being a party stalwart and a champion of the country's economic reforms.

Technically, a row over cheap sugar imports brought him down. Mr Simba is accused of overstepping his authority to licence importers of cheap sugar.

But much of the criticism levelled against him relates to the broader issue of his role in opening up the country's economy.

Mistakes

Mr Simba told the BBC's World Business Report that Tanzania had liberalised more than any other country in the region.

"But perhaps we are paying too high a cost for our liberalising policy", he said.

"Right now we are unable to exercise our rights to sell to external markets although we have allowed them to sell their products to us," he added.

There is speculation about who will take over.

But one thing has become clear - the government is not about to change the direction of economic policy.

It does appear, however, to recognise that some mistakes have been made and that they correcting.

Ambitious plans

According to the BBC's Christine Otieno in Dar es Salaam, the government has an ambitious 10 year plan to revitalise the sugar industry.

First, it has to ensure that enough sugar is grown and that factories are working at full capacity.

Mr Simba had been criticised for licensing sugar imports while the country's own crop rotted in the fields.

His decision was partly motivated by the fact that it was a quicker way to get raw sugar onto the market - rather than having to invest in upgrading the country's processing facilities.

Until now, traders did not always pay the duty imposed on imports, so the government wants to tighten its tax collection system, Ms Otieno told the BBC's World Business Report.

The government appreciates that is must open up its industries - especially those that are government-owned, so they can be viable and bring money into the country.

What they want to ensure is that workers are protected when their business is liberalised.

There is no obvious successor to Mr Simba, and nobody is likely to volunteer for the job, Ms Otieno said.

But whoever takes over will have to make some painful decisions on the future of Tanzania's economy.