BUILDING
Government crackdowns on corruption seem to have reversed Tanzania's construction slump, and the private sector is revamping industrial construction to match the country's industrialization plans.
How has the so-called soft patch affected the construction sector in Tanzania?
DHRUV JOG The construction sector has seen a slump over the last 12 months, with fewer projects being launched, especially compared to the rate at which we have seen construction projects launched over the past 10 years. There has been a cooling down of investments, with many people waiting to see what happens, especially in the private sector, because there is uncertainty in what to expect from the government. The public sector, on the other hand, has been aggressive in pushing new projects, but these are taking a relatively long time to get off the ground. They are just now nearing the end of the tendering stage and gearing up to commence execution.
HAMISH HAMILTON The country lost a number of large companies initially, with many struggling to comply with the emphasis being placed on transparency and disclosure. Nabaki Afrika has not suffered too much, mainly because we are small, flexible, and transparent. In January 2017, a large number of foreigners without valid work permits had to leave Tanzania. That abuse has now stopped, with work permits becoming more stringent in their application. In a way, this is a positive development because it forces companies not just to think and act locally, but also to employ locally. Out of 120 people, Nabaki Afrika only employs three expatriates. In this area, we are also proud of our Mtaalam Program, which encourages our suppliers to train local installers and applicators to apply their products correctly. Under this program, over 200 people have been trained so far. We have developed an app for these installers, allowing them to market their services nationwide, and have built up a real loyalty base through that.
How have these changes affected your business?
DJ The procurement policies in Tanzania are governed by the Public Procurement Regulatory Act (PPRA). However, PPRA has been slow to listen to what the private sector is saying. We have been lobbying hard to make these changes and are at a point where we will probably start seeing some movement in the near future. Elsewhere, there has been a lot of improvement in terms of combating corruption and improving transparency in the tendering and evaluation process. The current government's stance on anti-corruption has trickled down through the economy and has had a welcome impact. On the other hand, we are still waiting to see how the government's ambitions to move 100% of its departments into the digital sphere will come into play. Certainly, this will also have a huge effect on how projects can be rolled out efficiently and smoothly.
HH On the whole, we have been making certain adjustments in order to keep our heads above water in this environment. We have suffered a little in the current climate and are probably down by about 9%; however, performance YoY is still strong. We have just opened a brand-new, 600sqm branch outside Boko, Dar es Salaam, which is right on the main road. We have also revamped our Oyster Bay premises in Dar es Salaam, increasing from 50sqm to 250sqm. In fact, we have recently revamped all our branches. One of our other main achievements has been to maintain our flexibility and independence as a company.
In line with this, how has your project portfolio developed?
DJ We are working on more infrastructure-related projects like water distribution, power generation, and satellite cities. There is some of that ongoing, but, as always, the biggest part of our order book is industrial construction. We have seen the government place more emphasis on industrialization and driving the manufacturing sector. However, the building sector has seen a slowdown with private investors not very keen on investing in the Tanzanian real estate sector at the moment. Furthermore, with the industrial growth that is being experienced, we will see a knock-on impact in the large-scale infrastructure space and vice versa, in order to support this industrial growth.
HH For the first time ever we are receiving large civil inquiries, including government tenders that we have never been able to do before. There are large civil projects in the pipeline in every sector, including roads and ports. Nabaki Afrika supplies a number of quality products, such as geo-membranes, that are required at the start of any large construction project. We have seen a large increase in our sales of quality construction chemicals as well. Our growth has been completely self-funded, and we have not had to rely on any loans to support our business.
BUILDING
TABLE OF CONTENTS
Guest Speaker
Hon. Patricia Scotland, Secretary General, Commonwealth of Nations
TBY talks to Hon. Patricia Scotland, Secretary General of the Commonwealth of Nations, on the advantages of being a member of the Commonwealth, the need to celebrate diversity, and Tanzania's war against corruption.
read articleGuest Speaker
Libérat Mfumukeko, Secretary-General, East African Community (EAC)
TBY talks to Libérat Mfumukeko, Secretary-General of the East African Community (EAC), on Tanzania's importance to the EAC, the major achievements of regional integration, and obstacles ahead of a monetary union.
read articleInterview
Raymond P. Mbilinyi, Executive Secretary , Tanzania National Business Council (TNBC)
TBY talks to Raymond P. Mbilinyi, Executive Secretary of Tanzania National Business Council (TNBC), on its work to support the private sector in the country, tackling challenges in the economy, and clamping down on corruption.
read articleReview: Banking
The Quest for Depth
If Tanzania is to meet its 2025 vision of attaining middle-income status, it will need to corral its bank-centric financial and capital markets for greater depth by extending participation and rendering credit more accessible to SMEs, women, and the young to spur economic growth.
read articleInterview
Dr. Baghayo A. Saqware, Commissioner , Insurance, Tanzania Insurance Regulatory Authority (TIRA)
TBY talks to Dr. Baghayo A. Saqware, Commissioner of Insurance, Tanzania Insurance Regulatory Authority (TIRA), on achieving universal healthcare coverage, the brilliance of microinsurance, and how to partner with public and private entities to increase the industry's penetration.
read articleReview
Legal Thunder
With the stepping down of Minister of Energy and Minerals Sospeter Muhongo in May 2017 over transparency issues and the introduction of three new laws that give the government the right to renegotiate or revoke existing mining and oil and gas rights, private players in the country are unsure of what future lies ahead. On the other hand, project-specific developments bode well for a sector in need of a breakthrough.
read articleInterview
Kapuulya Musomba, Managing Director, Tanzania Petroleum Development Company (TPDC)
TBY talks to Kapuulya Musomba, Acting Managing Director of Tanzania Petroleum Development Company (TPDC), on the planned expansion of the Mtwara-Dar es Salaam natural gas pipeline, entering northern industrial hubs, and empowering nascent industries.
read articleInterview
Marc Den Hartog, Managing Director, Shell/BG Tanzania
TBY talks to Marc Den Hartog, Managing Director of Shell/BG Tanzania, on the critical need for economies of scale, the importance of developing LNG for export, and why renewables must be taken into account in any long-term plan.
read articleInterview
Hon. Charles Mwijage, Minister, Industry, Trade and Investment
TBY talks to Hon. Charles Mwijage, Minister of Industry, Trade and Investment, on how to reach middle-income status, employing the private sector toward this end, and what sets the country apart from the rest of East Africa.
read articleFocus: Helium
Discoveries of Magna-tude
Despite being the second most common element in the universe, helium is in short supply on earth. With global reserves of the gas steadily dwindling, and demand steadily increasing, the discovery of a whopping 1.53 billion cbm of helium in underground chambers in Tanzania could not have come at a better moment.
read articleInterview
Gilliard W. Ngewe, Director General, Surface and Marine Transport Regulatory Agency (SUMATRA)
TBY talks to Gilliard W. Ngewe, Director General of Surface and Marine Transport Regulatory Agency (SUMATRA), on transportation budget allocation and cross-sector dialog and partnerships.
read articleInterview
Jared H. Zerbe, CEO, Tanzania International Container Terminal Services Limited (TICTS)
TBY talks to Jared H. Zerbe, CEO of Tanzania International Container Terminal Services Limited (TICTS), on regional trade flows and Tanzania's potential to take a leading role in orchestrating cargo movement.
read articleFocus: Tanzania Strategic Cities Project (TSCP)
East Africa’s “Geneva”
If Rome wasn't built in a day, it is not surprising that Tanzania's project to revamp eight of its largest cities is entering its eighth year of implementation. A release of further funds from the World Bank has given the project a new lease of life.
read articleReview
Lost in the Maize
Agriculture accounts for 30% of Tanzania's GDP, and the sector has experienced above-average output in recent years compared to the rest of the African continent. However, the sector's development is held back by poor rural farming practices and general infrastructure bottlenecks.
read articleInterview
Fred Kafeero, Tanzania Representative, Food and Agriculture Organization (FAO)
TBY talks to Fred Kafeero, Tanzania Representative of the Food and Agriculture Organization (FAO), on the organization's long-term support for Tanzania's development, recent initiatives in agriculture, and financing.
read articleFocus: 2020 Irrigation Target
Reap What You Sow
In 2006, the Tanzanian Ministry of Water and Irrigation set a target for Tanzania's agriculture sector: to irrigate 1 million ha of land by 2020. More than 10 years on and moving ever closer to the deadline, this target has not yet been met, though the first seeds are being sown.
read articleFocus: Southern Circuit Tourism
Hidden Gems
Tourism is frequently described as the jewel in Tanzania's economic crown. In 2016 alone, the industry contributed over USD2 billion in revenues. However, for at least three years, the government has expressed concern that tourism is not well distributed across the country.
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