By Daniel Dickinson in Dar es Salaam

Criticism from the Tanzania Labour Party follows a number of high profile sales of former state-owned companies to South African investors.

The latest is the sale of a 49% stake Air Tanzania to South African Airways.

Others include the National Bank of Commerce, Tanzania Breweries and Kilombero Sugar Limited.

Opportunities

Opposition MP Thomas Ngawaiya, an outspoken critic of the influx of South African companies, said the tendency for some companies to import their raw materials is harming the economy.

"If South Africans make business in Tanzania and they start exporting, I think our economy will grow, then our country will become rich," he said.

"But if they bring in all the materials from South Africa our farmers will not earn anything from that end.

"At the end of the day maybe we are going to be another slave to South Africa."

And South Africa is not only making its presence felt in the newly privatised sector.

It has opened the most successful mobile telephone operation in Vodacom.

And South African companies have also moved into tourism, healthcare and the supermarket business.

Learning lessons

Samuel Sitta, executive director of the Tanzania Investment Centre, said South African companies have been a positive force for change.

"We find that they've improved management methods and skills... in these organisations and this has a rub on effect because people employed there go to other sectors and therefore you have a ripple effect on the economy," he said.

"Other organisations copy those methods, our own people have been able to upgrade their skills and knowledge in terms of managing organisations, it's very positive."

The number of South African companies that have invested in Tanzania is still less than the leading country the UK, but if the recent acquisition trend continues then opposition voices are expected to grow more vociferous.