Author: Dr Antipas Massawe/massaweantipas@hotmail.com
Potentials Tanzania is gifted with in agriculture, fisheries, forestry, power generation and geographical location right on the interface of trade exchange between markets in Tanzania and the other landlocked countries of the Southern African Development Community (SADC), East and Central Africa and markets in the other countries sharing the Indian Ocean and its coastlines in Africa, Middle East and Asia makes it the most prospective base of manufacturing in the region.
Tanzania could realize its growth potentials in manufacturing by ensuring that the most favourable sites are provided with the foundation economic infrastructures and policies are in place to enable locally manufactured goods to be cheaper and more competitive than the imported alternatives in the local and regional markets.
Basing Tanzanian manufacturing where it is cheapest to mobilize raw materials, manufacture and deliver goods to
Potentials Tanzania is gifted with in agriculture, fisheries, forestry, power generation and geographical location right on the interface of trade exchange between markets in Tanzania and the other landlocked countries of the Southern African Development Community (SADC), East and Central Africa and markets in the other countries sharing the Indian Ocean and its coastlines in Africa, Middle East and Asia makes it the most prospective base of manufacturing in the region.
Tanzania could realize its growth potentials in manufacturing by ensuring that the most favourable sites are provided with the foundation economic infrastructures and policies are in place to enable locally manufactured goods to be cheaper and more competitive than the imported alternatives in the local and regional markets.
Basing Tanzanian manufacturing where it is cheapest to mobilize raw materials, manufacture and deliver goods to
customers is also essential in the development of growth potentials by enabling locally manufactured goods to sell at competitive prices within the local and regional markets.
For example, the frontline cum shield towns and cities of Mtwara, Songea, Mbeya, Kigoma, Mwanza, Musoma, Arusha, Moshi and Tanga should be given priority in the enabling of the country to attract more and more investments in manufacturing because their geographical locations close to the borders with neighbouring (mostly landlocked) countries, allow to minimize costs in raw materials and manufacturing goods handling and locally made goods to sell at competitive prices within the local and regional markets. This is enabling to consolidate the dependence of the local and regional markets on the goods manufactured in Tanzania and minimize Tanzania's dependence on imported goods.
The city of Dar es Salaam is the least favourable for further investing in manufacturing of goods other than processed fish, cement and for local consumption within and around Dar es Salaam because it is one of the most distanced faraway from power and water sources and markets within Tanzania and in its neighbouring countries and therefore, one of those where it is most costly to produce due to high costs of power and in the mobilization of raw materials and delivery of manufactured goods to customers within the local and regional markets due long distance.
In Tanzania, the town of Mtwara is top priority in manufacturing because it is underexploited port nearest to unexploited markets in Southern Tanzania, Northern Mozambique, Malawi, Zambia and Angola and having huge unexploited potentials in fisheries and natural gas based power generation, railway development from Mtwara through Songea to Makambako and in manufacturing. The advantages make Mtwara the cheapest to manufacture in due to its low costs in power sourcing and mobilization of raw materials and delivery of manufactured goods in the local and regional markets.
The city of Mbeya is also a high priority in manufacturing because it has several unexploited power generation potentials nearby and already equipped with almost all infrastructures required to enable cheapest production and mobilization of raw materials and delivery of manufactured goods to customers within its local and regional markets.
The cities of Arusha and Moshi are also a high priority in manufacturing because of the need to reverse trend in which most manufactured goods consumed here are Kenyan made when Tanzanian made goods are nowhere to be seen in our neighbouring Kenyan markets.
Cities and towns like Mwanza, Musoma, Geita and Kahama which are located within major mining districts should also be given high priority in manufacturing because it is enabling sharing of values between manufacturers and miners and manufacturing to dominate and continue exploitation of mining infrastructures and sites when mining comes to an end.
Inland towns and cities along the central railway line are also a high manufacturing priority because mobilization of raw materials and delivery of manufactured goods to local and regional markets is well enabled by the railway line; it stimulates generation and consumption of raw materials right there along the railway line; and it maximizes utilization of the railway line.
To initiate development in the huge manufacturing based economic growth potentials Tanzania is gifted with, the foundation economic infrastructures required to make the country one of the most competitive worldwide in terms of power and materials handling availability, reliability and cost should be created where it is a national priority for investing in manufacturing .
From source, power should be supplied to the nearest priority sites for manufacturing, preferably where the foundation infrastructures required to enable cost effective mobilization of raw materials and delivery of manufactured to customers in the local and regional markets are already in place or easily and not costly to create.
For example, in the enabling of Tanzania for investments in manufacturing, Mtwara natural gas should have been developed for use as raw material for manufacturing and power generation in Mtwara instead of for power generation in Dar es Salaam in order to avoid costs in the laying and management of natural gas pipeline from Mtwara to Dar es Salaam and minimize costs in the delivery of locally manufactured goods to customers in the local and regional markets.
Also, in the enabling of Tanzania for investments in manufacturing and handling of exports and imports for markets in Tanzania and Zambia, it should have been to minimize construction and transportation cost by building a railway line along the shortest path connecting Zambia with port service on the Tanzanian Indian Ocean coastline, that is, from Lusaka to Mtwara (the shortest path) instead of the already built Lusaka to Dar (the longest path) which is most costly.
Again, the enabling of Tanzania for investments in manufacturing requires the Tanzanian Government, through its National Companies responsible for power generation for the national grid and development of infrastructures for materials and goods handling within and through the country to ensure majority or whole State financing and shareholding in the power generation like hydro, coal, natural gas and nuclear based for the national grid and development of foundation economic infrastructures for raw materials and goods handling within and through the country like ports, airports, roads, railways and pipelines.
It should be the responsibility of Government to create and run her foundation economic infrastructures in order to ensure they are always operating for the most contributing in the stimulation of private sector investing for profits in the manufacturing based economic growth potentials Tanzania is gifted with instead of operating for the direct profits private sector presence is interested in.
Private sector operates for profits and the profits they make from their presence in the power generation for the national grid and development of foundation economic infrastructures for raw materials and goods handling within and through the country are extra costs which could be avoided by having the foundation economic infrastructures majority or whole owned by State.
Presence of private sector in the financing and shareholding of foundation economic infrastructures should be minimized or avoided completely because its focus is on the counterproductive direct profits arising from the services provided by the infrastructures, while national focus is on the most contributing in the stimulation of private sector investing for profits in the manufacturing based economic growth potentials Tanzania is gifted with.
Majority foreign private sector ownership in our sensitive foundation economic infrastructures like power generation or railways is also dangerous because it constitutes economic and security risks of scale as it is giving the majority foreign private sector shareholders the licence to decide and dictate course in the investing for economic growth in the manufacturing based economic growth potentials Tanzania is gifted with.
The observed trend in which the Tanzania Electric Power Supply Company (TANESCO) and other national foundation economic infrastructures are becoming more and more reliant on foreign private sector majority owned power generation for the national grid and raw material handling within and through the country should be reversed in order to enable the government to regulate and ensure power and raw material handling costs are sustainably competitive and enabling stimulation of private sector lead investing in the local manufacturing sector and handling of materials and manufactured goods within and through the country.
For example, to secure credit for raw materials like gypsum exporting to China or manufactured goods like gypsum powder importing from China is easier than to secure credit for a local manufacturing of the same imported gypsum powder from China based on the same exported local gypsum raw materials to China because the local power costs generating from the joint ventures between TANESCO and foreign private sector companies in power generation are prohibitive for any power intensive manufacturing to take and survive in the country.
Once the foundation economic infrastructures required to stimulate investments in the development of the manufacturing based economic growth potentials Tanzania is gifted with are already in place where it is most cost effective in the mobilization of raw materials, manufacturing and delivery of goods to customers in the local and regional markets, fiscal regimes which encourage investments in local production of raw materials and manufacturing using locally sourced raw materials should also be devised and put in place in order to enhance replacement of imported goods with Tanzanian raw material based Tanzanian made goods in the local and regional markets.
For example, the frontline cum shield towns and cities of Mtwara, Songea, Mbeya, Kigoma, Mwanza, Musoma, Arusha, Moshi and Tanga should be given priority in the enabling of the country to attract more and more investments in manufacturing because their geographical locations close to the borders with neighbouring (mostly landlocked) countries, allow to minimize costs in raw materials and manufacturing goods handling and locally made goods to sell at competitive prices within the local and regional markets. This is enabling to consolidate the dependence of the local and regional markets on the goods manufactured in Tanzania and minimize Tanzania's dependence on imported goods.
The city of Dar es Salaam is the least favourable for further investing in manufacturing of goods other than processed fish, cement and for local consumption within and around Dar es Salaam because it is one of the most distanced faraway from power and water sources and markets within Tanzania and in its neighbouring countries and therefore, one of those where it is most costly to produce due to high costs of power and in the mobilization of raw materials and delivery of manufactured goods to customers within the local and regional markets due long distance.
In Tanzania, the town of Mtwara is top priority in manufacturing because it is underexploited port nearest to unexploited markets in Southern Tanzania, Northern Mozambique, Malawi, Zambia and Angola and having huge unexploited potentials in fisheries and natural gas based power generation, railway development from Mtwara through Songea to Makambako and in manufacturing. The advantages make Mtwara the cheapest to manufacture in due to its low costs in power sourcing and mobilization of raw materials and delivery of manufactured goods in the local and regional markets.
The city of Mbeya is also a high priority in manufacturing because it has several unexploited power generation potentials nearby and already equipped with almost all infrastructures required to enable cheapest production and mobilization of raw materials and delivery of manufactured goods to customers within its local and regional markets.
The cities of Arusha and Moshi are also a high priority in manufacturing because of the need to reverse trend in which most manufactured goods consumed here are Kenyan made when Tanzanian made goods are nowhere to be seen in our neighbouring Kenyan markets.
Cities and towns like Mwanza, Musoma, Geita and Kahama which are located within major mining districts should also be given high priority in manufacturing because it is enabling sharing of values between manufacturers and miners and manufacturing to dominate and continue exploitation of mining infrastructures and sites when mining comes to an end.
Inland towns and cities along the central railway line are also a high manufacturing priority because mobilization of raw materials and delivery of manufactured goods to local and regional markets is well enabled by the railway line; it stimulates generation and consumption of raw materials right there along the railway line; and it maximizes utilization of the railway line.
To initiate development in the huge manufacturing based economic growth potentials Tanzania is gifted with, the foundation economic infrastructures required to make the country one of the most competitive worldwide in terms of power and materials handling availability, reliability and cost should be created where it is a national priority for investing in manufacturing .
From source, power should be supplied to the nearest priority sites for manufacturing, preferably where the foundation infrastructures required to enable cost effective mobilization of raw materials and delivery of manufactured to customers in the local and regional markets are already in place or easily and not costly to create.
For example, in the enabling of Tanzania for investments in manufacturing, Mtwara natural gas should have been developed for use as raw material for manufacturing and power generation in Mtwara instead of for power generation in Dar es Salaam in order to avoid costs in the laying and management of natural gas pipeline from Mtwara to Dar es Salaam and minimize costs in the delivery of locally manufactured goods to customers in the local and regional markets.
Also, in the enabling of Tanzania for investments in manufacturing and handling of exports and imports for markets in Tanzania and Zambia, it should have been to minimize construction and transportation cost by building a railway line along the shortest path connecting Zambia with port service on the Tanzanian Indian Ocean coastline, that is, from Lusaka to Mtwara (the shortest path) instead of the already built Lusaka to Dar (the longest path) which is most costly.
Again, the enabling of Tanzania for investments in manufacturing requires the Tanzanian Government, through its National Companies responsible for power generation for the national grid and development of infrastructures for materials and goods handling within and through the country to ensure majority or whole State financing and shareholding in the power generation like hydro, coal, natural gas and nuclear based for the national grid and development of foundation economic infrastructures for raw materials and goods handling within and through the country like ports, airports, roads, railways and pipelines.
It should be the responsibility of Government to create and run her foundation economic infrastructures in order to ensure they are always operating for the most contributing in the stimulation of private sector investing for profits in the manufacturing based economic growth potentials Tanzania is gifted with instead of operating for the direct profits private sector presence is interested in.
Private sector operates for profits and the profits they make from their presence in the power generation for the national grid and development of foundation economic infrastructures for raw materials and goods handling within and through the country are extra costs which could be avoided by having the foundation economic infrastructures majority or whole owned by State.
Presence of private sector in the financing and shareholding of foundation economic infrastructures should be minimized or avoided completely because its focus is on the counterproductive direct profits arising from the services provided by the infrastructures, while national focus is on the most contributing in the stimulation of private sector investing for profits in the manufacturing based economic growth potentials Tanzania is gifted with.
Majority foreign private sector ownership in our sensitive foundation economic infrastructures like power generation or railways is also dangerous because it constitutes economic and security risks of scale as it is giving the majority foreign private sector shareholders the licence to decide and dictate course in the investing for economic growth in the manufacturing based economic growth potentials Tanzania is gifted with.
The observed trend in which the Tanzania Electric Power Supply Company (TANESCO) and other national foundation economic infrastructures are becoming more and more reliant on foreign private sector majority owned power generation for the national grid and raw material handling within and through the country should be reversed in order to enable the government to regulate and ensure power and raw material handling costs are sustainably competitive and enabling stimulation of private sector lead investing in the local manufacturing sector and handling of materials and manufactured goods within and through the country.
For example, to secure credit for raw materials like gypsum exporting to China or manufactured goods like gypsum powder importing from China is easier than to secure credit for a local manufacturing of the same imported gypsum powder from China based on the same exported local gypsum raw materials to China because the local power costs generating from the joint ventures between TANESCO and foreign private sector companies in power generation are prohibitive for any power intensive manufacturing to take and survive in the country.
Once the foundation economic infrastructures required to stimulate investments in the development of the manufacturing based economic growth potentials Tanzania is gifted with are already in place where it is most cost effective in the mobilization of raw materials, manufacturing and delivery of goods to customers in the local and regional markets, fiscal regimes which encourage investments in local production of raw materials and manufacturing using locally sourced raw materials should also be devised and put in place in order to enhance replacement of imported goods with Tanzanian raw material based Tanzanian made goods in the local and regional markets.
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