EXCLUSIVE: How Tanzania can transform Africa’s economy, food security

The Citizen’s managing editor Mpoki Thomson sat down with the new Vice President of the World Bank for eastern and southern Africa, Dr Victoria Kwakwa, to discuss key fiscal and monetary issues in Tanzania and around the region as economies grapple with crises and ongoing armed conflict in Europe. Interview transcribed by Josephine Christopher.

Question. You held discussions with President Samia Suluhu Hassan, Zanzibar President Hussein Ali Mwinyi as well as with other senior government officials. Tanzanians would like to know what major issues were discussed.

Answer. I’ve had very good discussions with the government and non-government actors such as civil society and others from the private sector. We discussed a lot of issues ranging from the government’s response to the current multifaceted crises, including Covid-19.

We discussed the private sector and the government’s intent to get more private sector into the economy. And, in Zanzibar, we talked with the President about the blue economy efforts and about empowering women as part of human capital.

So, we talked about agriculture and really trying to look at the opportunity to make Tanzania a bread basket, not just for the region but for Africa as a whole.

We are impressed with the fact that Tanzania is doing so well on the macroeconomic front. Given all the crises that the country is navigating while other countries are in much worse shape.

But there’s so much more to do, and as the World Bank, we’re standing ready, shoulder to shoulder with the government and the people of Tanzania to continue to bring the support the country needs to really cement its entry into lower-middle income country status and lay the foundations for becoming a successful upper middle income.

How is the World Bank supporting the recovery of the private sector in the region, considering the impacts of the pandemic in relation to business closures?

We were really worried about Covid-19 and what was happening, that it could really pull back the private sector. The IFC really moved forward quickly and globally established $8 billion in fast-track support to the private sector.

The World Bank also contributed as well in trying to provide financial fiscal support to the government so that they could reduce tax rates or delay tax payments so as the private sector didn’t have to worry for some time about paying taxes and giving them tax credits.

For employment, we ensured they kept the employees on their books so they didn’t have to fire everybody; for the informal private sector, which is also a big part of Tanzania’s private sector, and indeed in the broader region, we provided more traditional cash transfers, micro support to micro-enterprise, and so on. We worked particularly in the MSME space--in a range of sectors particularly in tourism which was partly hit. So, now we’re trying to look at the structural issues and the structural constraints.

Rising food prices are currently a major concern for the people of Tanzania, as indeed for many in this region, amidst soaring fuel prices resulting from factors that are external to the region. What is it that the World Bank is encouraging its clients to reflect on as a result of these circumstances?

Indeed, food security is a major issue across Africa. In the Horn of Africa alone, estimates suggest that over 60 million people are really at risk of food insecurity. And that’s a major concern. At the same time, we have countries like Tanzania that clearly have huge potential to feed themselves and feed others. Tanzania always produces in excess of what the country needs. But, you’re right, given what is happening globally, given the rise in fuel prices, and fertilizers, because a lot of it is originating in Ukraine and Russia, what’s happening is that the input costs have gone up, and so the price of food is going up.

So what can Tanzania do more?

When we had the discussion with the Minister of Agriculture, I was really impressed with the plans that the government has to shore up agriculture in Tanzania and draw its full potential. The government budget this year for agriculture has more than doubled. That’s already a very strong signal of the importance that the government is attaching to this. Things like irrigation infrastructure, particularly, are key because a lot of the acreage that is arable in Tanzania doesn’t have access to the needed irrigation infrastructure. So, a big part of the government’s efforts is to improve irrigation and also work on issues of food waste. A lot is lost from harvest to market. And so addressing that as well will raise the efficiency and the productivity of the sector.

There’s also huge potential for the private sector to be involved, finding ways to get produce to market, sending more, doing more, trading with the DRC where they need more through setting up warehouses and helping the private sector to be able to connect. So we’re excited about the programme that’s shaping up in agriculture in Tanzania. I think it really has potential to achieve what the government wants to see.

I would like Tanzanian rice to be exported to Ghana, which is where I’m from, and we don’t have as much or produce as much. So I think it’s on a good track. And we’ve assured the minister, the government, that we are bringing in the financing, not just financing, but knowledge and policy advice to support the implementation of this.

How would you center climate change in the region’s current challenges and its development outlook? Do you feel that key regional stakeholders are giving this matter its due attention?

I think African governments realise that climate change is real. We see it every day. We see it in the fact that livelihoods are being lost. We see that climate events or extreme weather events are more frequent. Droughts have increased three times over the last few years, storms are four times higher, and floods are ten times stronger.

And, so we see it daily, day in and day out, and they are more severe. All this leads to loss of livelihoods, urban habitats, and so on. So, I think it’s so visible what climate change is doing.

The challenge about climate is really around climate adaptation. And, I think that we should really support African countries to build more resilience to climate, whether it’s in terms of a more resilient agriculture and food systems, and more resilient urban approaches to urban development. We should also work with Africa to make sure that as they’re expanding access to energy, they’re tapping renewables to bring the technology for storage and the financing that will help them tap renewables more.

Tanzania’s retired Prime Minister Mizengo Pinda recently stated that Africa is under siege from illicit financial flows, adding that corruption is to blame for draining resources from the continent. How’s the WB scaling up its efforts to combat corruption which threatens your twin goals of ending extreme poverty by 2030 and boosting prosperity for the poorest 40 percent of people in developing countries?

I do agree with you that corruption is a problem. Corruption hits the poor the most because they are deprived of access to economic opportunities and to basic services. So, it’s something that needs to be tackled. From the point of view of the World Bank, for the longest time, we really didn’t even talk about corruption. And it’s not just the World Bank, it’s the international community, but over the last few decades, we have evolved and we talk about corruption, recognise the dangers to development and to our twin goals.

How do we make sure that the resources from the projects that the World Bank finances are not subject to fraud and abuse? First, we make sure that the procurement systems are fully transparent, and bring in competition. And then we also have a whole department--integrity--that investigates allegations of corruption on the projects we finance and with stiff penalties for firms that are caught to be corrupt in using these funds. And, then we’re also supporting the government to address this issue by working with them on public financial management and procurement systems that reduce the chances of corruption.

It has been said that Africa can save around $5 billion by using online means of payment. The Africa Continental Free Trade Area is now making trade a bit more robust in the region. Is the WB eyeing online means of transaction between African countries and the potential that it has in cutting costs?

Our sense is that even though there’s variation across countries, Africa is a real pioneer in using technology to really provide access to financial services, particularly mobile payments.

If you look globally, what is happening? Africa has the largest share of mobile payments, 1.2 billion mobile accounts. About 45 percent is in Africa, and about close to 800 billion that is transacted in mobile payments, 65 percent is from Africa.

We also see that fintech has made some improvements because of technological improvements and operational approaches that have been enhanced. But there are gaps, it’s not fully there yet. We can do a lot more as regards agriculture and digitalizing agricultural payments in a lot of the African countries, and trade in agriculture. So, whether it’s agricultural transfers within countries or across countries, a lot more can be done. And we can also do more to facilitate online payments.

World Bank is a key financier in the education sector in Tanzania. However, the quality of education remains a general concern for many citizens, with under-financing still cited as an issue. What is missing in this picture, what do you advise your clients about this?

This is not just a problem in Tanzania. I think globally we’re seeing a crisis in learning. We’re seeing across Africa, that even when progress is being made in enrollment and so on, quality remains a problem.

These gaps come from curriculums that are not appropriate or don’t meet the needs of current education. We are working with governments across the region and the government of Tanzania as well to address some of these challenges. The Ministry of Education is looking at how to bring more technology into education and also improve nutrition. So there’s a lot to be done, and we’re glad to be a partner in solving these issues.