GETTING POLISHED
Despite some problems, Tanzania has everything it needs to power its industries and increase GDP. With new international investments and government policies, Tanzanian industry is on its way to prominence in the region.
Despite being the second-largest economy in the East African Community, Tanzania's economy has recently gone through a relatively tumultuous period. In 2014, the country was able to move on and make considerable improvements to its GDP. Today, while much of the country's GDP relates to the nearly 50% of its workforce in agriculture, the Tanzanian industrial sector is quickly gaining steam. Tanzania is estimated to have nearly 2 billion tons of coal reserves, of which at least 25% are proven reserves. Following a survey led by the National Energy Policy of Tanzania, Tanzania's potential reserves could be as high as 5 billion tons, giving the country the potential to be a major regional coal exporter. According to the most recent information from Tanzania Invest, the country imports as much as 86% of the coal it uses to run its coal fired power plants. Of the country's total energy capacity from coal-fired power plants, equal to 1,754MW, it provides less than 1% of coal.
The country currently has three primary coal mining operations: the Rukwa Coalfields Project, the Kiwira Coal Mine, and the Ngaka Coal Project, all of which are located in the south and eastern regions of the country, all of which have the potential to produce much greater quantities, giving Tanzania the opportunity for greater energy independence. The Kiwira Coal Mine, a state mining corporation (STAMICO) operation, holds an estimated 35 million tons of reserves. STAMICO has a development plan that will increase output to 1.2 million tons per year in an opencast coal mine, increase underground mining production from 150,000 tons to 300,000 tons, and to build a 200MW thermal power plant. The Ngaka Coal Project is a joint venture between Intra Energy Tanzania Limited and the National Development Corporation of Tanzania, and is operated by Tancoal Energy. The project is anticipated to have a maximum production rate of 5 million tons per year for export and has enough proven reserves to remain profitable for 50 years.
Tanzania's cement sector has transformed recently, taking a turn from a seller's to a buyer's market. According to Global Cement, a monthly industry research publication, Tanzanian cement company Tanga Cement saw a decline in revenue by an impressive 20% YoY, falling to USD75 million in 2016 from USD94 million in 2015. The decline was largely attributed to lowered government spending on infrastructure. Cost cutting, however, allowed the country to actually increase operating earnings despite the decline in revenue, increasing to USD17 million from USD13 million. As of August 2016, the company's yearly production capacity sat at 1.25 million.
In March 2017, the Chinese Sinoma International Engineering Co. announced plans to build a USD1-billion cement plant in the northern coastal city of Tanga, with a special emphasis on exports. The project will include building a wharf to help increase exports; the plant is hoped to export 70% of the cement it produces to regional countries such as Sudan, Mozambique, Kenya, and Somalia. Tanzania's mining industry saw serious changes in July 2017, when President John Magufuli signed into law several new bills regarding the industry. The new laws stipulate that government must now own at least 16% in all mining projects, and they also increase the royalties tax from 4 to 6% on silver, platinum, copper, gold, and other minerals. During the announcement, the president also stated Tanzania would not be issuing any new licenses until the country “puts things in order" and said that all existing licenses with foreign investors would be reviewed by the government. In addition, the government now has the power to renegotiate or end contracts for natural resources, without an option for international arbitration.
The mining industry is a major one in the country, employing more than 1 million people. Mining makes a significant impact on the country's GDP, primarily by extracting copper, silver, and gold, as well as gemstones and some industrial minerals. Tanzania is the continent's fourth-largest gold miner, behind South Africa, Mali, and Ghana. The country's gold exports are thought to account for over 2% of global production.
GETTING POLISHED
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.
read article