Tanzania

As I mentioned in a previous post, ‘What to Expect in 2006 ?’ , Tanzania , along with India and China will be one off the few countries that are growing at close to ten percent, infact the only African nation that might be close to those levels. What is it that makes Tanzania so special? Does it have the right infrastructure? A strong economic backing? The right minds?

Tanzania is a beautiful country in East Africa; Tanzania is bordered on the south by Mozambique, Malawi, and Zambia; on the west by Zaire, Burundi, and Rwanda; on the north by Uganda and Kenya; and on the east by the Indian Ocean. Tanzania is the largest of the East African nations. The mountains, Mt. Meru (14,979 ft/4,566 m) and Mount Kilimanjaro (19,340 ft./5,895 m), the latter of which is the highest point in Africa and possibly the most breathtaking mountain imaginable. Serengeti National Park , one off Africa’s largest nature reserves with the highest number off migratory game animals. Serengeti National Park also houses the Olduvai Gorge, the place where the first fossils off Homo sapiens was found. West off the Serengeti is Lake Victoria, the largest lake on the continent and one of the primary headwater reservoirs of the Nile. Southwest of Lake Victoria, and forming Tanzania's border with Zaire, is Lake Tanganyika, the longest and deepest freshwater lake in the world. Tanzania has the highest and lowest points on the African continent. The mystic Zanzibar is also a part off Tanzania.

Tanzania has always been a trading country, one with a rich history and diversity. As early as 900 AD, the people off Tanzania have been known to be engaging in overseas trading. Around the time, they also attracted immigrants from India and other parts off southwest Asia. There are known links of direct trade with countries as far as China. The Portuguese arrived in Tanzania around the 15th century and further developed trade, they were eventually chased out by the Omani Arabs around 1700 and they proceeded to further develop trade. It was during this time that Zanzibar gained its legendary status as a center for the ivory and slave trade, becoming in 1841 the capital city of the Sultanate of Oman. Tanzania fell under German control in 1886, but was handed over to Britain after WWI. Present day Tanzania is the result of a merger between the mainland Tanganyika and Zanzibar in 1964. Tanzania, like any other African country went through a lot off strife after independence.

Tanzania has a total are off just under one million sq.km, and a long coastline off about 1500 sq.km. It’s a country that is rich in natural resources like Hydropower, tin, phosphates, iron ore, coal, diamonds, gemstones, gold, natural gas and nickel. Its arable land is only 5%, as against India’s 55% and China’s 16%. Tanzania has irrigated land off only 1500 sq.km. The population off Tanzania is about forty million people, 46% off who are dependent on the other 54%. The net migration rate is –3.11 and the average life expectancy is 45 years. The country has one off the highest fertility rates, nearly five children per woman. Nearly 9% off the population is infected with HIV / AIDS which is one off the largest problems in the country. The literacy rate is about 80%. Literacy in Tanzania is defined as “someone with age 15 and over can read and write Kiswahili (Swahili), English, or Arabic”.

The capital city is Dar es Salaam; note - legislative offices have been transferred to Dodoma, which is planned as the new national capital; the National Assembly now meets there on regular basis.
Tanzania is one of the poorest countries in the world. The economy depends heavily on agriculture, which accounts for almost half of GDP, provides 85% of exports, and employs 80% of the work force. Topography and climatic conditions, however, limit cultivated crops to only 4% of the land area. Industry traditionally featured the processing of agricultural products and light consumer goods. The World Bank, the International Monetary Fund, and bilateral donors have provided funds to rehabilitate Tanzania's out-of-date economic infrastructure and to alleviate poverty. Long-term growth through 2005 featured a pickup in industrial production and a substantial increase in output of minerals, led by gold. Recent banking reforms have helped increase private sector growth and investment. Continued donor assistance and solid macroeconomic policies supported real GDP growth of more than 6% in 2005

The GDP is approximately at 26 billion USD according to the PPP method. Agriculture contributes 44% to the GDP, Manufacturing 17% and the Service sector 39%. The labor force is roughly estimated to be twenty million people off whom sixteen million people are directly or indirectly employed in agriculture. 36% off the nation lives below the poverty line. Tanzania must be commended for keeping their inflation rate to a meager 4% per annum. Its public debt is only 5% off the GDP. Agricultural products include coffee, sisal, tea, cotton, pyrethrum (insecticide made from chrysanthemums), cashew nuts, tobacco, cloves, corn, wheat, cassava (tapioca), bananas, fruits, vegetables; cattle, sheep and goats while the major industries are agricultural processing (sugar, beer, cigarettes, sisal twine), diamond, gold and iron mining, soda ash, oil refining, shoes, cement, apparel, wood products, fertilizer and salt. Industrial Production is growing at close to 9% every year.

Tanzania must also be lauded for meeting their electricity requirements of about three billion K Wh per annum. Tanzania also focuses massively on hydropower. There are no known oil reserves and consumption is twenty two thousand barrels a day. Natural Gas reserves are about eleven billion cubic meters. Forex Reserves and gold are at about 2.4 billion USD but external debt is at 8 billion USD. Exports are at 1.58 billion and the major trading partners are India 8.9%, Spain 8.2%, Netherlands 6.3%, Japan 5.7%, UK 4.9%, China 4.7% and Kenya 4.7%. Imports amount too 2.39 billion USD and the major trading partners are South Africa 12.7%, China 7.8%, India 6.4%, Kenya 5.4%, UAE 5.3%, US 4.8%, UK 4.6%, Zambia 4%. Tanzania receives close to one billion USD in aid every year.

Telecommunications, something that really interests me, simply because for the lack off them running on full capacity. A very fair system operating below capacity and being modernized for better service. There are only 150,000 telephone users in Tanzania. Considering that the average family size is 7 , there’s are scope for the industry to grow another 3000 % ! Cellular phones though are close to one million in number, that’s about a 2.5% population coverage. A VSAT (very small aperture terminal) system is under construction as well. Open-wire, microwave radio relay, tropospheric scatter, and fiber-optic cable provide trunk services. They are working on making some links digital as well. They also have two satellite earth stations, one Indian Ocean and one Atlantic Ocean. There are about 25 radio stations including FM, AM and short distance but only three televisions broadcast stations. There are about 5000 internet hosts and half a million.

Infrastructure. The most important aspect off a country that will stimulate and facilitate economic growth. The country can boast off 123 airports, but only 11 with paved runways. Gas and Oil pipelines are about 1000 km in total. Railways lines are spread across the country and measure 3,690 km. Tanzania also has about 100,000 km off roadways. Lake Tanganyika, Lake Victoria, and Lake Nyasa principal avenues of commerce with neighboring countries, but the rivers that flow through Tanzania are not navigable. The main ports are Dar es Salaam, Mtwara, Zanzibar City.

Tanzania as a country, according to me, is placed for take-off. Over the next decade , it will grow at an average off 10% per annum. Infrastructure will grow, and so will Foreign Investment in the country because off the stable government that seems to be forming. Easy access to the country and an easy visa regime will also fuel the growth off tourism in the country. Overall, I forecast the growth off exports from the country and a ten-fold increase in their exports over the next decade.

What are the negatives? Well, a language barrier for one, secondly the territorial dispute with Malawi and growing role in transshipment of Southwest and Southeast Asian heroin and South American cocaine destined for South African, European, and US markets and of South Asian methaqualone bound for southern Africa. Money laundering is also a big problem; with the new economic reforms and privatization off banks, the problem should be easily countered.

It is a country that I would like to visit in the near future, The only constraint would be time, but hopefully we can sort that pretty soon, as the proverb from tanzania goes 'One who bathes willingly with cold water doesn't feel the cold.'