THE SLOW MARCH
With the aim to reach middle-income status by 2025, Tanzania's second Five-Year Development Plan (FYDP II) prioritizes growing the industrial economy through partnering with the private sector.
In April 2016, President Magufuli launched FYDP II, a 103-page document that maps Tanzania's trajectory to middle income status by 2025. The FYDP II's overarching rhetoric of “industrialization for economic growth” is supported by detailed breakdowns of key initiatives to be implemented in each sector, flagship projects and their budgets, and steps for sourcing the necessary financing to complete these projects.
Indeed, sustainable growth through the establishment of an industrial economy is the plan's foremost priority, followed by the goal to combine this with human development through various labour, health, and education programs. Seven pages of proposed regulatory and policy reforms testify to the third priority: to create an enabling environment for business development. The fourth and final priority, tying in with the government's propensity for checks and balances, is to strengthen supervision, monitoring, and evaluation for better implementation of the plan. The bar is being set high across the board. Umbrella targets include an increase in GDP growth from 7% in 2015 to 10% by 2021, and a parallel increase in per capita income from previous recorded levels of USD1,043 to USD1,500. The FYDP II calls for a reduction of the poverty rate from 28.2% in 2011/12 to 16.7% by 2020, as well as an increase in the human development index from 0.52 in 2014 to 0.57. Inflation should remain at 5%, kept low through non-inflationary monetary policies, restriction of bank borrowing, and avoidance of budget deficits.
More specifically, the target in agriculture is to achievea real growth rate of 7.6%, with an emphasis on improving value chains, skills promotion, and technology solutions. Energy generation should more than triple, from 1,501MW in 2015 to 4,915MW in 2020, with electricity reaching 60% of the population, up from 36% in 2015. Renewables should contribute to 50% of this mix, with a target to reduce consumption of charcoal in urban areas by 60%.
Tourism should expect 6.2% growth, thanks to an aggressive promotion and marketing drive, as well as investments in infrastructure and skilled labor force, a focus on domestic tourism, and diversification of new resources.
The manufacturing sector is to experience 10% growth every year, increasing export capacity and making use of so-called “dormant assets,” including industries, expertise, and land. Developments continue on the various industrial corridors and zones to improve enterprise efficiency, creating “economies of conglomeration.” These include the central development corridor, the Special Economic Zone in Tanga, and the Southern Agriculture Growth Corridor of Tanzania. Other flagship projects comprise the much-reported revival of Air Tanzania, construction of Mloganzila and Dodoma medical schools as part of the boost given to science and technology, and the ongoing development of the coal and iron ore mines in the Mtwara region.
For the FYDP II, the government anticipates the need to mobilize TZS107 trillion (USD47.4 billion). The government will raise TZS59 trillion (USD26.1 billion), an average of TZS11.8 trillion (USD5.2 billion) a year, through tax collection. This leaves an average of TZS10 trillion (USD4.4 billion) per year to come through revenue collection, the private sector, and loans. An injection of non-tax revenue is expected following the change in requirements for companies to issue IPOs and list on the stock exchange. Indeed, the private sector is to play a number one role in investing in industrialization, with government facilitation via conducive policy frameworks. For this, the targets are also clear: to reach 100th of 189 countries in the ease of doing business rankings, reduce export time to 12-15 days, and reduce the number of documents needed to eight. All governmental agencies are to be connected to the e-network. As the President himself stated in the FYDP II's forward, the onus is on “strengthening the dialog mechanism with the private sector and other stakeholders, given that some of the reforms are likely to trigger trade-offs.”
THE SLOW MARCH
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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