Even Footing

What policies is the ministry pursuing to demonstrate policy continuity under the country’s new government?

Our government promotes industrialization and in doing so we look for sectors that can employ a good number of people. One area is agri-processing. We want to ensure that we produce enough food and that we come up with the industries to process that food to reduce the post-harvest loss. This will also create employment for people working in farms, factories, and the transportation sector. We aim to create employment for at least 40% of the able workforce in Tanzania. As part of this, we focus on the modernization of agriculture and achieving high productivity. We want to ensure we can produce sufficient goods and services to meet local demand, as well as specialized goods for export abroad. We want to achieve import substitution and export promotion. We want our products to be of an international standard. We have some major flagship projects planned. We want to ensure that in this phase we start up the long-time Mchuchuma coal and Liganga iron-ore mining projects. These projects have been on the books and the government’s budgets for over 30 years. We want to deliver 600MW from Mchuchuma, with 250MW being used for iron smelting and the rest being fed into the national grid to supply power nationwide. We also have a fertilizer project in Lindi starting in 2016. It involves an international consortium led by German company Ferrostaal Industrial Projects GmbH and will produce around 1.3 million tons of fertilizer per year. The production of fertilizer in Tanzania will be a game-changer as agricultural yields will increase. With higher productivity in farming, we will have cotton and food available at reasonable prices. In other areas, we look to set up a tire manufacturing to service the car industry. This would start as a state-owned company and then be sold to the private sector.

Moving forward, how will you manage imports of fertilizers and cotton, as well as prices, to protect investors in these local industries?

The protection mechanism we intend to use will ensure that whatever we import is of a high quality and is taxed according to existing laws. With this, our companies will be strong enough to compete. Some companies currently dump substandard and counterfeit products on the Tanzanian market and do not pay duties and taxes. Furthermore, with our new consortium we will have players coming into the market that are competent in their industries, so we do not expect to give subsidies.

What is the ministry’s view on public ownership and will there be a greater role for the state in the national economy in the coming years?

Under our government, there is no such nationalization vocabulary. During the privatization processes, businesses were allocated industries and factories to operate at a profit. They were sold assets at a token price on the condition that they produce goods and services, create employment, and pay taxes. In cases where they have failed to meet these conditions, we ask them to find someone else to run the business. However, there are many genuine reasons why these businesses do not perform. We are working through the reasons and providing guidance. A good number are back on the right track now. For example, some businesses were failing because there was no power; however, we now produce around 1,400MW from gas, hydro, and renewable sources so there is enough electricity available today. Nationalization is not taking place. The government is not taking industry back; if we want to become involved in a sector we will start our own businesses or factories. We want private-sector assets to be profitable because they are strategically located and they support the country’s basic infrastructure. The best way to protect our local industries is to work on enforcing existing tax and importation regulations, which we oversee.