Tanzania Foreign Investment News (Page 35)

Temeke Municipal Counci Mayor, Abdallah Mtinika (in black coat) handing over a gas cylinder to one of the beneficiaries of gas cylinders donated by Tanzania Cigarette Public Limited Company ( TCC Plc) to women entreprenuers from Temeke.

The donation, is part of TCC’s countrywide campaign to distribute over 2000 gas cylinders to women entrepreneurs as a way of encouraging the use of clean cooking energy.

At the centre is TCC’s Corporate Affairs and Communications Director, Patricia Mhondo and other dignitaries.

Source: allafrica.com

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The Rufiji River, which drains into Tanzania’s south-east coast, experienced a major wave of flooding in April 2024. The flooding caused tragic loss of life and affected at least 88,000 individuals. More than 28,000 hectares of crops were damaged.

There has been much debate in Tanzania on the causes of this disaster, particularly the presumed role of the new Julius Nyerere Dam, which is built on the river. Barnaby Dye has studied the development and funding of dams, including those in Tanzania. He provides some insights into the potential risks and solutions.

What are the large dams in Tanzania and what were they built for?

Tanzania has a long history of dam building, from its early independence days in 1961. The country’s founding leader, Julius Nyerere, inaugurated the small Nyumba Ya Mungu hydroelectric plant in 1968. A steady programme of large dams followed. These included the dual Kidatu and Mtera dams completed between 1975 and 1988. The New Pangani Falls dam and Kihansi were completed in the mid to late 1990s.

The primary goal for all these dams was hydropower, which has historically dominated Tanzania’s electricity mix.

The 20th century also saw the dominance of an ideology trumpeting the power of these dams – and their electricity – to transform Tanzania’s economy into an industrialised society. The long-planned Stiegler’s Gorge Dam, in particular, which was recently renamed the Julius Nyerere Hydropower Project, captured these development dreams. They were part of Nyerere’s socialist vision for creating a so-called modern developed country.

However, a reliance on hydropower in the 21st century has plunged the country into repeated power cuts during droughts. Hydropower is also being questioned, given long build times, and environmental and social costs. There was a fall in dam building as the government prioritised quicker-win, and sometimes deeply corrupt, gas and oil plants.

This changed with the arrival of President John Magufuli (2015-2021), who decided that the Julius Nyerere 2.1 gigawatt megadam was the answer to Tanzania’s development and electricity needs. He refocused stagnant planning efforts and construction started in 2018.

Six years later, the dam is nearing completion, with the main dam wall and reservoir in place and first turbines operational.

Do any of these dams pose particular risks in the event of flooding?

Dams can prevent floods, storing water in large reservoirs and slowly releasing it downstream. But they can also make flooding worse, or trigger a disaster.

Dam collapses caused by poor maintenance, incorrect operation, or inadequate planning and construction quality are among the worst human-made disasters. The 2019 collapse of a Brazilian dam, for example, killed at least 250 people. China’s 1975 dam disaster killed 240,000 people after heavy rainfall overwhelmed a series of dam walls.

None of Tanzania’s dams have been built primarily for flood control. Most 20th Century dams operate more like run-of-river projects, meaning that they are built to constantly produce electricity and not to store significant volumes of water from the rainy season for drier spells. Therefore, with the exception of Mtera Dam, Tanzania has not historically had the storage reservoirs to prevent significant flooding.

The Julius Nyerere Dam could be different given its large reservoir. However, some media reports blamed the Julius Nyerere Dam for the 2024 floods,, as the new hydropower project sits directly upstream of the area that flooded in April. Other reports argued that it prevented a worse flood. It’s difficult to judge as little has been released about the current design and operation of the nearly-complete dam.

Earlier versions of the design envisaged a large storage dam. So it’s plausible that the dam is benign, as the government has claimed. Official spokespeople insisted that it prevented flooding in 2023 when the reservoir was being filled.

Without the necessary information, though, it’s impossible to reject arguments that the dam caused the destructive flooding. Tanzania has endured painful and constant power cuts. Thus, it is plausible that the government sought to maximise electricity generation from the new dam. Such a strategy would involve keeping the reservoir at its highest level over time. This could leave authorities ill prepared to store water from abnormally heavy rains like those experienced across east Africa in 2024.

As the reservoir approached dangerously high levels, dam operators would need to suddenly release as much water as possible to prevent it from overflowing and breaking the dam wall. Such actions, while preventing a worse dam collapse, would have caused severe flooding. Indeed, officials from the state-owned electricity utility reportedly stated that a release from the Julius Nyerere Dam caused April’s floods.

Thus, Tanzania’s dams, like others around the world, constitute a flood risk whose likelihood depends on how the dams are planned and operated.

What are some solutions to the flood risk?

Climate change models predict increased rainfall variability, and therefore more floods, in Tanzania’s future. Given the inherent risk of emergency dam releases in the short term, the government needs an effective early warning system to alert those downstream when water releases occur. Such a system seems to have failed this year.

Longer-term solutions should focus on slowing water and addressing the ultimate cause of flooding: having too much water in too short a time.

The government’s proposal involves construction of more dams. In my view, this approach to flood control seems shortsighted. These dams could worsen, rather than solve, extreme floods. And planned dams are designed only for hydropower – they leave little storage for flood prevention.

New dams on the Rufiji River come with major trade-offs as they pose a risk for other economic mainstays:

Natural infrastructure that slows water movement, like wetland or groundwater capture, holds the best potential. It is a cheaper, more effective solution, with economic opportunities for livelihood diversification. Equally, adaptation may hold the key, as researchers Stéphanie Duvail, Olivier Hamerlynck and colleagues found in thier participatory study. Changing housing and agriculture to cope with periodic flooding would allow Tanzania to enjoy the economic benefits that natural river floods bring.

Barnaby Joseph Dye, Lecturer, University of York

Source: allafrica.com

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LESS than two years remain before President Hussein Ali Mwinyi concludes his initial five-year term in office, leading up to another general election for Zanzibaris in late 2025.

When he started his term on November 3, 2020, he was tasked by his political party, Chama Cha Mapinduzi (CCM), among other assignments, to generate at least 300,000 job opportunities for the youth, as outlined in the party’s 2020/2025 election manifesto.

Preliminary results following a study about employment status, for both formal and informal sectors, show that the total number of jobs generated from November 2020 to September 2023 is 187,651, with women grabbing the biggest share – 94,622 (50.4 percent) while men 93,029 (49.6 percent).

Briefing journalists about the development of his office since Dr. Mwinyi assumed office, the Minister of State – Office of the President (Labour, Economy, and Investments), Mr Sharif Ali Sharif, said the President is almost beating the job creation target.

The Minister commended Dr. Samia Suluhu Hassan, President of the United Republic of Tanzania, and Dr Mwinyi for their efforts in creating an enabling environment to increase job opportunities that contribute to building the country’s economy and uplifting people’s lives by promoting Tanzania internationally, leading to job creation.

“I urge my fellow Tanzanians to maintain the existing peace and stability, prerequisites in achieving all development goals,” he said, adding that having a new Zanzibar Investment Law No. 10 of 2023, as well as the amendment of the labor law No. 11 of 2005, has also helped promote investment and create a conducive working environment on the isles.

Mr Sharif explained that Dr. Mwinyi has been sparing no effort in finding opportunities for his citizens and that the people of Zanzibar have witnessed great progress, especially in strengthening investment and economic empowerment, which also leads to economic growth of Zanzibar, which has grown from 6.8 per cent in 2022 to 7.1 per cent in 2023.

Improving the ability of entrepreneurship, promoting internal and external investment, and promoting access to decent jobs, along with empowering young people to be self-employed by providing loans, training, and connecting them with markets, has helped many youths,” Sharif said.

He said that in addition, his ministry in 2023/2024 successfully increased jobs by 65.9 percent due to confirmed contracts from 6,348 jobs in 2022/2023 to 9,630 in 2023/2024 employed in private schools, hotels, and the industry sector.

The availability of employment abroad has also been increasing from 1,080 jobs in 2022/2023 to 3,078 jobs for the fiscal year 2023/2024. Youth are helped to acquire jobs abroad, particularly in Middle Eastern countries.

“This increase is due to growing good relations with foreign countries and also strengthening Public-Private Partnership (PPP) and economic diplomacy.

“The government also has provided loans to 9,123 beneficiaries in 2022/2023 worth about 15.8bn/- and 2,045 others worth more than 7.9bn/- in both Unguja and Pemba,” he said youth get self-employed by establishing projects and businesses of their choice.

He said another opportunity for job creation is by the implementation of distribution funds collected from Local Government Authorities (LGA) to women, youth, and people with disabilities at the ratio of 4:4:2.

Last year, a total of 2.1bn/- was collected, but it is not enough to meet the big demand for the youth to get loans, “Fortunately, the World Bank has agreed to top-up by providing funds for the youth support program.”

In additional development in increasing job opportunities for youths and women, the Ministry registered 1,822 cooperative associations in the year 2022/2023 and 1,560 associations for the year 2023/2024 with the aim of promoting efficiency so that they can operate well and contribute to the economic growth of the country.

He explained that they also provided training to entrepreneurial cooperatives engaged in beekeeping, fruit and vegetable farming, solar power equipment manufacturing, marketing, and bakery, and they have been getting training.

The entrepreneurs were connected with various markets through exhibitions including East African trade exhibitions, Sabasaba international trade fair, and Mapinduzi exhibitions, where the number of entrepreneurs connected to markets has increased from 148 entrepreneurs in 2022/2023 to 194 in 2023/2024.

The executive director of the Zanzibar Investment Promotion Agency (ZIPA), Mr. Saleh Saad Mohammed, said that the registration of 63 investment projects with capital worth US1,499 million dollars and expects to provide about 4,392 jobs.

In addition, he said that more projects are being registered and that 12 major investment projects were launched by laying the foundation stone during the celebration of the 60th anniversary of the Zanzibar Revolution.

He said his office has signed agreements for the establishment of huge projects in the Telecommunications, Transportation, and Infrastructure Sector worth US302 Million Dollars and also coordinated the signing of four Memorandum of Understanding (MoU) in the Energy Sector, Telecommunication Sector, and Banks including NMB and NBC.

The issuance of work permits to 2,960 foreign workers, which is 148 per cent of the target, has led to the collection of more than 2.6bn/- “This is due to changes made on both investment and immigration laws, extending the permit period from one year to two years, and other incentives.”

He said that in the 2024/2025 fiscal year, which starts in July this year, the office will coordinate the availability of 3,500 jobs abroad and 15,000 jobs in the local formal sector as well as developing skills for 110 young people to be self-employed.

Source: allafrica.com

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By REUTERS

China’s flagship economic cooperation programme is bouncing back after a lull during the global pandemic, with Africa a primary focus, according to a Reuters analysis of lending, investment and trade data.

Chinese leaders have been citing the billions of dollars committed to new construction projects and record two-way trade as evidence of their commitment to assist with the continent’s modernisation and foster “win-win” cooperation.

But the data reveals a more complex relationship, one that is still largely extractive and has so far failed to live up to some of Beijing’s rhetoric about the Belt and Road Initiative, President Xi Jinping’s strategy to build an infrastructure network connecting China to the world.

While new Chinese investment in Africa increased 114 percent last year, according to the Griffith Asia Institute at Australia’s Griffith University, it was heavily focused on minerals essential to the global energy transition and China’s plans to revive its own flagging economy.

Those minerals and oil also dominated trade. As efforts falter to boost other imports from Africa, including agricultural products and manufactured goods, the continent’s trade deficit with China has ballooned.

Read: How Africa can deal with global rush for its minerals

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Chinese sovereign lending, once the main source of financing for Africa’s infrastructure, is at its lowest level in two decades. And public-private partnerships (PPPs), which China has touted as its new preferred investment vehicle globally, have yet to gain traction in Africa.

The result is a more one-sided relationship than China says it wants, one that is dominated by imports of Africa’s raw materials and that some analysts argue contains echoes of colonial-era Europe’s economic relations with the continent.

“This is something late-19th century Britain would recognise,” said Eric Olander, co-founder of the China-Global South Project website and podcast.

China rejects such assertions.

“Africa has the right, capacity and wisdom to develop its external relations and choose its partners,” China’s foreign ministry wrote in response to Reuters’ questions.

“China’s practical support for Africa’s path of modernisation in accordance with its own characteristics has been welcomed by an increasing number of African countries.”

Unprofitable projects

China’s engagement in Africa, a focus of the Belt and Road Initiative (BRI), grew rapidly in the two decades before the Covid-19 pandemic. Chinese companies built ports, hydropower plants and railways across the continent, financed mainly through sovereign loans. Annual lending commitments peaked at $28.4 billion in 2016, according to the Global China Initiative at Boston University.

But many projects proved unprofitable. As some governments struggled to repay loans, China cut lending. Covid-19 then pushed it to turn inward, and Chinese construction projects in Africa fell.

A rebound in sovereign lending is not expected.

Policymakers in Beijing have instead been pushing Chinese companies to take equity stakes and operate infrastructure they build for foreign governments. The aim, China analysts say, is to help companies win higher-value contracts and, by giving them skin in the game, ensure the projects are economically viable.

Lending to Special Purpose Vehicles (SPVs), perhaps the most common means of PPP infrastructure investment, has been growing as a proportion of China’s overseas loans, according to figures shared exclusively with Reuters by AidData, a research centre at U.S. university William & Mary.

Read: China: The ‘other player’ in 2024 Afcon tournament

The $668-million Nairobi Expressway, a public-private partnership built and run by the state-owned China Road and Bridge Corporation (CRBC), could be proof of concept for the model in Africa.

Since it opened in August 2022, the toll road has been allowing commuters to speed above the Kenyan capital’s notorious traffic snarls, beating revenue and usage targets.

Daily average use in March was already 57,000 vehicles, exceeding a 2049 target of around 55,000 set by CRBC in a 2019 presentation on the project’s economic viability seen by Reuters.

But few companies are following CRBC’s example in Africa. While globally some 45 per cent of Chinese non-emergency lending was to SPVs from 2018 to 2021, the most recent year for which AidData figures are available, the figure was only 27 per cent for Africa.

Analysts point to a number of likely reasons, including a lack of legal frameworks for PPPs in many African countries and the view among some Chinese companies – many of them relative newcomers to PPPs – that African markets are risky.

China’s foreign ministry did not directly address a request for comment on the lower SPV figures for Africa. But it said the government encourages Chinese companies to “actively develop new modes of cooperation” such as PPPs to bring more private investment to Africa.

Growing engagement

The Griffith Asia Institute put China’s total engagement in Africa – a combination of construction contracts and investment commitments – at $21.7 billion last year, making it the largest regional recipient.

Data from the American Enterprise Institute, a Washington-based think tank, showed investments hitting nearly $11 billion in 2023, the highest level since it began tracking Chinese economic activity in Africa in 2005.

Some $7.8 billion of that went to mining, like Botswana’s Khoemacau copper mine, which China’s MMG Ltd bought for $1.9 billion, and cobalt and lithium mines in countries including Namibia, Zambia and Zimbabwe.

The hunt for critical minerals is driving infrastructure construction as well. In January, for example, Chinese companies pledged up to $7 billion in infrastructure investment under a revision of their copper and cobalt joint venture agreement with Democratic Republic of Congo.

Western and Gulf powers are also racing to lead the world’s energy transition, with the United States and European governments backing the Lobito Corridor, a rail link to bring metals from Zambia and Congo to Africa’s Atlantic coast.

African leaders have struggled, however, to raise financing for some other priority projects.

Despite the success of the Nairobi Expressway, for example, work on several Kenyan roads stalled when the government ran out of money to pay the Chinese construction firms.

During a visit to Beijing last October, President William Ruto asked for a $1 billion loan to complete the projects.

Read: US: Kenya pawn in China’s supremacy agenda

A Chinese foreign ministry spokesman, Wang Wenbin, said discussions about the request were ongoing. Kenya’s finance ministry did not respond to a request for comment.

The final phase of a railway line intended to traverse Kenya from its main port to the border with Uganda has been in similar limbo since Chinese financing dried up in 2019. Uganda cancelled the contract for its portion of the line in 2022, after Chinese backers pulled out.

When asked about the decline in lending for African infrastructure, Chinese officials point to a pivot to trade and investment, arguing that BRI-generated trade boosts Africa’s wealth and development.

Two-way trade reached a record $282 billion last year, according to Chinese customs data. But at the same time, the value of Africa’s exports to China fell 7 per cent, mainly due to a decline in oil prices, and its trade deficit widened 46 per cent.

Chinese officials have sought to assuage the concerns of some African leaders.

At a summit in Johannesburg last August, Xi said Beijing would launch initiatives to support the continent’s manufacturing and agricultural modernisation – sectors African policymakers consider key to closing trade gaps, diversifying their economies and creating jobs.

China has also pledged to increase agricultural imports from Africa.

Such efforts, for now, are coming up short.

Read: Why China is hesitant to finance Africa energy projects

With one of Africa’s largest trade deficits to China, Kenya has been pushing to increase access to the world’s second-largest consumer market, recently gaining it for avocados and seafood. But cumbersome health and hygiene regulations mean Chinese consumers remain out of reach for many producers.

“The Chinese market is a new one,” said Ernest Muthomi, CEO of the Avocado Society of Kenya. “It was a challenge because you have to install the equipment for fumigation.”

Of 20 billion shillings ($150.94 million) worth of avocados exported last year, just 10 per cent went to China.

Overall, Kenyan exports to China fell over 15 per cent to $228 million, Chinese customs data showed, as a decline in titanium production led to a drop in shipments of the metal – a key export to China.

But Chinese manufactured goods kept coming.

That’s not sustainable, said Francis Mangeni, an advisor at the Secretariat of the African Continental Free Trade Area.

Unless African nations can add value to their exports through increased processing and manufacturing, he said, “we are just exporting raw minerals to fuel their economy.”

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IN a continued move to support the government’s efforts of encouraging the use of clean cooking energy, the Oryx Gas Tanzania Ltd yesterday donated 800 gas cylinders and stoves to residents in Morogoro Rural constituency.

The handing over of the donation in collaboration with an MP for the area, Mr Hamisi Taletale, was done at the sideline of the CCM’s regional conference.

The meeting, graced by the party’s national vice chairman (mainland), Mr Abdulrahman Kinana, was attended by different leaders.

Speaking on behalf of the OGTL’s Managing Director Benoit Araman, company’s Head of Bulk Consumer Sales, Mr Richard Sawere said the donation was meant to support efforts by President Samia Suluhu Hassan who envisions that by the year 2030, she wants to see 80 per cent of Tanzanians use clean energy for cooking. Mr Sawere noted that their company donated the gas cylinders and stoves in order to save the environment and protect people’s health from the charcoal and firewood.

“Our wish is to ensure that all Tanzanians abandon the use of firewood and charcoal,” he said.

Initially, when providing education on safe use of gas, Sales Manager Peter Ndomba said the company recognizes the importance of using gas for cooking. “This is a national campaign which President Samia launched with the aim of making many Tanzanians use clean energy for cooking,” Mr Ndomba stated.

He appealed to citizens to ensure they follow instructions on proper use of the gas stoves to prevent fire accidents triggered by the cooking gas.

Source: allafrica.com

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