057_G17_InFocus_Tanzania

Global_17

Tanzania puts its foot on the gas Recent discoveries of gas look set to give the country an economic boost, along with investment from Scandinavia and Nigeria that has helped to grow the industrial sector. Tanzania is fi nally drawing level with long-time rival Kenya A. H. Saleh In terms of regional rivalry, Tanzania has been the tortoise to Kenya’s hare. The country wasted decades pursuing a disastrous social policy that included collectivisation and wholesale nationalisation of virtually all productive processes. But bureaucrats, party offi cials and trade unionists had neither the knowledge nor the capacity to manage often complex industries and productivity practically ground to a halt, leading to severe shortages and widespread corruption. Emmanuel Ole Naiko, the former executive director of the Tanzania Investment Centre (TIC), says that private companies had been closed down in 1967 and “the private sector wasn’t allowed to participate in the economy prior to 1990”. TIC was established in 1990 to revive the private sector but, he says: “When we started, we met a lot of resistance because of various legislation that confl icted with the spirit of inviting the private sector to do business.” Following a national debate, a new, more business-friendly investment code was established, but it took another ten years before investors began moving in. As socialism was fi nally being laid to rest and a liberalised market economy beginning to take root, the economy began to pick up, thanks largely to improving gold prices – Tanzania is the third largest gold producer in Africa – increased private consumption and greater volumes of fi xed capital. Growth averaged seven per cent in the late 1990s and, after a dip in 2009 A shop in Arusha sells local produce. Four out of fi ve Tanzanians make their living in the agricultural sector global f i rst quar ter 2014 www.global -br ief ing.org l 57  In Focus Tanzania


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