ICT crucial to Tanzania growth

Tanzania’s economic potential is evident in its consistent recording of GDP growth above 6 per cent since 2001, its relative political and socio-economic stability, its opening up to foreign direct investments since the early 1990s and its significant gas and mineral reserves.

However, while growth in the short-term is almost guaranteed, worrying trends in education and human capital development threaten the ability of Tanzanians to capitalise on and access the benefits of economic growth.

A number of ambitious infrastructure projects have the potential to boost Tanzania’s ability to unlock significant domestic and regional opportunities and accelerate growth and foreign direct investments (FDIs) into key emerging sectors.

With clear plans in place to boost the country’s physical capital, there is an urgent need for the government to further invest in human capital from primary level up. Recent education indicators have been declining, causing concern that the next generation of workers will be unable to effectively plug into employment opportunities in the country’s emerging sectors, including oil and gas, manufacturing, finance and telecommunication.

Whilst recent contained episodes of violence and instability do not represent a serious threat to widespread stability in the short-term, failure by the government to address current policy and service-delivery inadequacies could undermine its prospects in the medium to long-term.

Tanzania’s infrastructure has been a constraint on economic growth for a number of years, characterised by poor road and railway networks, infamously unreliable power supply and inadequate drainage systems.

However, the number of large infrastructure projects currently in the pipeline is encouraging, not least since the president of China Xi Jinping’s visit to Tanzania last  April, in which low-interest loans were agreed to fund the building of Bagamoyo Port and develop information and communications network.

In recent years Tanzania has embarked upon several projects which stand to positively impact its economic prospects. For example, the construction of Dar es Salaam’s Kigamboni Bridge, launched in September 2012, is on schedule for completion in 2015. The connection of the National ICT Broadband Backbone to all regional headquarters in Tanzania mainland is another significant leap in the sector. The 7,560 km fibre optic cable built by the government has provided a network access for telecoms companies within the country and in the neighbouring landlocked countries enhancing communication across sectors.

Furthermore, the $2bn Stiegler’s Gorge power project, which is expected to produce over 2000 MW and at the same time support tourism and irrigation schemes in the area, should commence later this year.

However, efficient delivery of such projects has often eluded the government. Despite extensive  planning  and  signing  of numerous contracts and MoUs, completion is what concerns the public following past experience of  projects that  seem to be  indefinitely on  hold. Plans to expand terminal III of the Julius Nyerere International Airport have been on hold for more than a year.

In late April 2013, the government and a Dutch firm, BAM International, signed a new contract that showed progress was bound to start in the near future: most observers however,  indicate they will wait and see.

An early test for upcoming projects will be whether Parliament is able to pass a budget with   appropriate funding for   all   current projects this July. As 2015 looms large, the next elections, and the end of President Jakaya Kikwete’s time in power, could push Chama Cha Mapinduzi (CCM) politicians and the President to finally fast-track key projects.

The connection of the National ICT Broadband Backbone (NICTBB) to all regional headquarters in Tanzania mainland and several district headquarters represents a significant milestone for the country’s ICT industry.

The NICTBB commenced construction back in February 2009 with the government reportedly signing a $170 million contract with a Chinese vendor to deploy the fibre optic cable network over two   years   and   is   expected   to   enhance   usage   of   ICT applications for sustainable socio-economic development, providing affordable and efficient communication in financial,   agricultural,   education,   commerce   and   health sectors locally and at a global scale.

To date seven telecommunication companies in the country are connected to the NICTBB which has also presented an opportunity for cross border connectivity for telecommunication companies in neighbouring countries

Whilst many sectors have witnessed significant developments, education has been left dragging. The impact of government-led initiatives in the sector has been limited. Schools opened under the Ward Secondary Schools initiative, which sought to build secondary schools in every ward across the country, which have all recorded the worst performance in the last five years.

In early 2013 the education sector recorded its highest failure rate in the history of the country with 60 per cent of students in Form Four, generally aged 16 -18, failing their exams.  Prime Minister Mizengo Pinda formed a committee in March to investigate the matter, however, a number of factors are immediately obvious: frequent curriculum reviews, unqualified teachers, lack of equipment and teacher strikes or “go slows”.

Failure by political leaders to hold the ministry of Education and Vocational Training to account for poor performance is a concern that threatens to seriously undermine the country’s growth prospects, while stoking public frustration.

One industry with the capacity to make positive contributions to the education shortfall is oil and gas. The sector began the year on a high with further discoveries made by Statoil in mid-March. Total is expected to receive a licence to explore for oil and gas in Lake Tanganyika and BP Oil revealed its interest to be involved in Tanzania’s market once again. Whilst the emergence of the sector presents an opportunity for diversification, critics have warned the public that government returns from the sector will not be immediate.

Growth in the sector is assured but whether economic benefits will reach the majority Tanzanians is not guaranteed . The major concern of communities surrounding exploration areas is the degree at which the locals can benefit from the economic prospects the investments have to offer.

In a move to ensure the country benefits from the sector, the government embarked on a mission to develop the human resource, with the 2012/2013 budget for the ministry of Energy and Minerals including a “Marshall Plan on Capacity Building and Development in Oil and Gas industry programme.” The programme is a partnership between the ministry of Energy and Tanzania Petroleum Development Corporation.

Emmanuel Nyamajeje is a consultant at Africapractice. He can be reached on [email protected]