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By: Mark T Jones
The Tanzanian Journey

 

When anyone surveys the nations of East Africa it is evident that they have all taken quite different journeys over the last forty years. Tanzania has shown itself to be innovative and in the past has endeavoured to formulate its own economic model, with mixed success. Such have been the vicissitudes of the global economy over the years that external factors have often undermined laudable aims, whilst internal flaws have impeded implementation and reform. 

Recent events have elucidated some of the serious weaknesses in the Western Capitalism. Whilst unfettered capitalism has created fabulous wealth for some, its rapacious appetite has taken parts of the world economy to the brink of economic famine. Developing nations have been further left on the margins, whilst those on the economic top table engage in a period of angst and straw clutching. Now is certainly time to take stock.

So what direction should Tanzania take? There are three main areas for concern:

Aid Dependency – In common with a number of other developing nations Tanzania’s economy is skewed by its over reliance on overseas aid. This in itself stifles innovation and becomes a disincentive for successive governments to tackle underlying economic weaknesses with zeal. Corruption – Has become an insidious feature of society that is greeted with a degree of resignation by many people. This further impedes economic development. Excessive bureaucracy – Whilst Tanzania has managed to attract considerable foreign investment the climate for enterprise and entrepreneurship is still hampered by unnecessary red tape.

All governments by their very nature are reluctant to admit failings and so it was regrettable to see a slight deterioration in Tanzania’s standing in the Press Freedom Index (2008) compiled by Paris based NGO Reporters sans frontières (Reporters Without Borders). That said, Tanzania’s  70th position out of a 173 compared very favourably with its regional neighbours: Malawi (70th), Zambia (74th), Mozambique (90th), Burundi (94th), Kenya (97th), Uganda (107th), Rwanda (145) and the Democratic Republic of Congo (148th). A robust and independent media is vital to accountability and good governance.

Whilst the East African Community (EAC) continues to generate considerable hostility amongst many Tanzanians, there is a strong case for the country playing a pivotal role which could help co-ordinate policies that are beneficial to the whole region. It takes pragmatism and vision to rise above petty jealousies that for too long have dogged real progress. Few nation states can afford the luxury of standing alone, the harsh economic winds mean we need to huddle together with our neighbours and hopefully learn more about each other. No one doubt that this will be a difficult road, mutual suspicions will have to be put to one side and considerable pride swallowed. No one nation should have to subjugate its interests to that of another, but where possible, African solutions do need to found for African problems.

Closer examination of the climate for business in Tanzania reveals some worrying aspects which go some way to explaining the difficulties faced by local entrepreneurs and potential foreign investors. Whilst the country has already shown considerable resolve when it came to the Millennium Development Goals, such progress needs to be matched in areas such as literacy and numeracy, which are integral to economic enhancement. The current serious skills shortage means that Tanzania ranks 140th out of 181 when it comes to Employing workers and 100th out of 181 when it comes to the Difficulty of Hiring. The latter figure is all the more alarming as the regional average is 39. This data is particularly relevant for those planning secondary and higher education. Access to credit for those in the private sector is also extremely difficult to access. Tanzania is ranked a mere 172nd out of 181 when it comes to Dealing with Construction Permits*.  Such findings are a clarion call for action to ensure that the country becomes both enterprise and investment friendly.

One area that is generating considerable discussion in the light of fissures and weaknesses in the international economy is that of alternative economic models. In Malaysia and London an increasing number of economists and banking houses are adapting to meet the requirements of Islamic Finance. Certainly the core values that underpin such an ethos deserve exploration and could well provide solutions to current inherent weaknesses.

Tanzania has already shown itself capable of being one of the better performing economies in sub-Saharan Africa. Its relative stability, growing manufacturing and service sectors can help point the way forward. In these trouble times it is important to break out from our comfort zones. I find myself reminded of those wise words of that legendary Tanzanian  marathon runner, Juma Ikangaa; “To win means nothing without the will to prepare.” It is now up to the Government and people of Tanzania to ensure that plans are not only made, but properly executed for the good of all.

 

Mark T Jones,

Director of External Affairs,

The London College of Management Studies.

 (Mr Jones will be speaking at a number of venues throughout Tanzania from 9th – 20th July 2009)

 * Data supplied by the International Finance Corporation, OECD and the World Bank.  www.doingbusiness.org/ExploreEconomies/?economyid=185