Tanzania: Waiting for that great leap forward
May 7th 2009 DAR ES SALAAM
From The Economist print edition
Worries about one of east Africa’s steadier economies
THE country already gets 40% of its government budget in aid, but now it wants even more foreign cash to help it through the economic downturn. How much is enough? Tanzania’s president, Jakaya Kikwete, smiles grimly. “We’re trying to bring down our dependency, but we’re grateful for what we receive.”
With 44m people, Tanzania has often been given the benefit of the doubt simply for being the gentler twin of harsher Kenya, which has 40m. What it lacks in dynamism it makes up for in placidity and a common national identity. It is unlikely to fall apart at elections or any other time.
Its founding party of independence, Chama Cha Mapinduzi (CCM, the Party of the Revolution), formerly the Tanzanian African National Union, known as TANU, still suffocates the country’s ragtag opposition parties with its size and ponderous propaganda.
Mr Kikwete is a CCM man; his breakthrough job was as the youthful head of political indoctrination for Tanzania’s armed forces. He will almost certainly be returned to office with a big majority in elections next year. He still charms would-be investors with his sales patter. Yet those who set up shop in the country are often disappointed.
Tanzania, many complain, is a “slow” or even “terrible” place to do business—and “ungrateful” for foreign aid or investment. Even its boosters admit it is wrapped in red tape and lacks skilled workers. Almost everyone says Mr Kikwete is spending too much time burnishing Tanzania’s image abroad and not enough fixing problems at home. Last year he chaired the African Union.
In any event, he hopes that aid will keep Tanzania afloat long enough for its economy eventually to make a great leap forward. Shiny new buildings even in provincial towns, along with new roads and water projects, signal optimism. Politics are stable. A rowdy separatist movement in the island of Zanzibar is quiet for now.
By Tanzanian standards there is a new sense of urgency. The energy ministry says it wants tenders “immediately” for a power station to cover a paralysing shortfall in electricity.
Mr Kikwete turns up unannounced at state-owned outfits such as the port and the railways to demand efficiency and rail against corruption. He has also lambasted the country’s “Wabenzi” (those who drive a Mercedes-Benz).
But Mr Kikwete turns mournful when he spells out the effects of the global recession: missed government revenue targets; a cancelled sovereign-bond issue; projects for a nickel plant and a vast aluminium smelter put on hold; revenue from coffee down; cotton hit even harder; tourism suffering as well. An exception is gold, with new finds still to be exploited and the price holding up fairly well.
Tanzania may already, in some respects, be falling behind. A recent Chinese state visit failed to bring much investment. The government in Beijing thinks Kenya, not Tanzania, is the gateway to the mineral wealth of Congo.
Tanzania’s two main railways are rickety. The port of Dar es Salaam failed to pinch business from Kenya’s port, Mombasa, when Kenya was in turmoil a year ago. No one seems to know how Tanzania’s main port will hit its target of a tenfold increase in goods traffic by 2030. Tanzania is not even spending all the aid it is given. Last year, $2.4 billion of pledged funds were not disbursed.
Tanzania must also decide whether to integrate more closely into the East African Community (EAC), which includes neighbouring Burundi, Kenya, Rwanda and Uganda. It has dragged its feet over opening its borders and moving towards a common currency, though it recently insisted that a common market would get going next year.
It suspects Kenya of using the EAC as a way of grabbing arable Tanzanian land on the cheap. And the country’s tiny middle class fears being swamped in a common market by better-qualified Kenyans and Ugandans.
Moreover, the world crisis may bolster old socialists in the CCM who want a return to ujamaa, a failed model of rural collectivisation propounded by Tanzania’s founding president, Julius Nyerere. That would set it back even further.