How local companies lose bids on high interest rates

Held under the theme, 'The Role of Universities, Industry, and Public-Private Partnerships in Realising Tanzania Vision 2050,' the public lecture brought together students, academics and industry leaders to debate the country's path towards Vision 2050.

Delivering a keynote address on the economic transformation required to achieve Tanzania Vision 2050, the Public-Private Partnership Centre (PPPC) executive director, Mr David Kafulila, said the playing field in public procurement remains far from level.

“It comes down to the cost of capital. A Chinese company gets a loan at one percent interest. A Tanzanian company pays 18 percent at a local bank.

If a Chinese firm bids Sh10 billion and a local firm bids Sh14 billion, the government must choose the lower cost to protect the taxpayers' money,” Mr Kafulila told a well-packed hall of students and academics.

He emphasised that while the country must strengthen its local private sector through partnerships, it cannot shut out foreign investment, noting that even a global hub like Dubai was built through 80 percent foreign investment.

This tendering disparity is just one of several obstacles Tanzania must overcome to achieve its ambitious goal of becoming a $1 trillion economy by 2050.

Mr Kafulila said reaching this target requires a "massive leap" from the current gross domestic product (GDP) of approximately $94 billion.

“To reach a trillion-dollar economy by 2050, the production of goods and services in Tanzania must reach a value of $1 trillion annually,” he said.

“Now, we want our annual production in 2050 to be nearly what we produced in the entire 25-year span previously,” he added.

This journey requires an estimated $3.7 trillion in total investment, with Mr Kafulila arguing that because taxes and loans alone cannot sustain this, the role of Public-Private Partnerships (PPP) is non-negotiable.

He cited the Dar es Salaam Port as a success story, where cargo throughput tripled after private operators were engaged.

“This is not 'selling the country'; it is bringing in brains and systems that work,” he insisted.

Beyond finance, the PPPC chief highlighted a critical human capital deficit, citing World Bank data showing Tanzania’s Human Capital Index stands at 40 percent, meaning a child born today will achieve only 40 percent of their potential productivity.

“Nations today do not compete based on the number of mountains, minerals, or forests they have. They compete on the quality of their people,” Mr Kafulila asserted, stressing that people without quality can turn a forest into a desert; but people with quality can turn a desert into a forest.

Addressing Tanzania's geographical advantage, he noted that the country’s 1,400km coastline along the Indian Ocean places it at the centre of 90 percent of global trade transported by sea.

However, he warned that geography remains an untapped advantage without "massive improvements" in ports and logistics.

On the university's infrastructure challenges, Mr Kafulila proposed the "Rotana Hotel" model.

He urged universities to invite private investors to build hostels on campus land, noting that “if you wait for the government budget, you might wait seven years. With a PPP, you get the building now.”

Finally, he stressed the importance of institutional efficiency, which he said contributes 25 percent to national wealth.

He called for a "total turnaround" in national thinking to avoid falling short of the 2050 target by only 50 or 60 percent.

Speaking during the event, the Principal of Mzumbe University, Mbeya Campus College (MCC), Prof Henry Mollel, announced that the university would introduce Diploma and Bachelor's degree programmes in PPP to professionalise the sector.

“Our research must help the private sector run business models that reflect the actual needs of the country,” said Prof Mollel.

A Human Resource Business Partner at NMB Bank, Mr Enok Nyange, warned that the future workforce must embrace AI (artificial intelligence) and ICT (information and communication technology).

“You must manage your own emotions and those of others... I see many graduates who lose focus because of 'stress.’

A finance lecturer at MCC, Dr Adrian Barongo, said that although 60 percent of the road network is now tarmacked, the new era is defined by services and technology.

“Innovation is an intangible asset. Don't just study for an assignment; think outside the box,” he urged.

However, student leader Ms Teresia Wunja warned that research conducted on campus showed that 49.7 percent of students do not understand Vision 2050.

“If we, the scholars, don't know the vision, how will the youth in the streets know it?” she asked, suggesting the use of popular artists as "vision ambassadors".