Public utilities generate interest
FOREIGN INVESTMENT IN SOON-TO-BE-PRIVATIZED STATE-OWNED COMPANIES IS AT THE ROOT OF TANZANIA'S EFFORTS TO SATISFY DEMAND FOR ELECTRICITY, WATER, AND IMPROVED COMMUNICATIONS

DAWASA is a prime target for investment, which will be used to update existing plants and improve rural coverage.

A major overhaul of the country’s existing infrastructure is seen by the Tanzanian government as a vital ingredient in its recipe for future economic development.
Without an improvement in communications, power generation and water supply, the government realizes that it cannot hope for success in its bid to reduce poverty in the country.
Although most of the funds that have been released by the granting of debt relief have been earmarked for education and health, part has also been allocated for use in improving the poor state of rural roads, a basic need in the impoverished rural areas.
However, the government feels that its program of privatization is one of the most effective ways of accelerating the drive towards the creation of a more up-to-date infrastructure that will stimulate the economy. “We have to improve our infrastructure,” says Finance Minister Basil Mramba. “Energy is still too expensive, much of the country is still not served by reliable roads, and our airports need to be improved if we are to develop our tourist industry. If we can deal with these problems we will have gone a long way to enhancing the prospects for economic growth and attracting new investors.”

Since its inception nearly ten years ago, the government’s privatization program has seen some 330 of the 400 parastatal enterprises transferred to private hands. There is little doubt that the policy has played a vital part in helping to bring about a resurgence in the country’s economic fortunes.
One major sector currently undergoing privatization is telecoms. “We are divesting our interest in the Tanzanian Telecommunications company,” explains Mark J. Mwandosya, Minister of Communications and Transport. “Our aim is to create an environment to enable a dynamic sector to function successfully and cope with the challenge of changing technology,” says Professor Mwandosya.

But the biggest challenges still remain as enterprises in the key sectors of electricity, water and transportation await their turn. It is hoped that the privatization of the giant state-run Tanzania Electric Supply Company (TANESCO) will be a catalyst for the country’s economic revival. At present power tariffs in Tanzania are some of the highest in Eastern Africa, affecting the competitiveness of local businesses in the regional market. The government is confident that transferring TANESCO to private hands will provide better and less costly services to consumers throughout Tanzania and have a positive knock-on effect on business activity.
Water and sewerage services are also in urgent need of attention as exemplified by the problems faced by the body that runs the operation in the capital city of Dar es Salaam.

ARCHARD R. MUTALEMWA Director General of DAWASA

DAWASA, the Dar es Salaam Water and Sewerage Authority, is a prime example of a state utility in dire need of new investment and rehabilitation. The water supply infrastructure has remained the same for over half a century and disruptions to the water supply are frequent as a result of the need to maintain ancient pipelines.
“Privatization will help us generate the funds needed for investment,” explains DAWASA Director General Archard Mutalemwa. “We are looking to update existing plants and to expand our cover into rural areas so a lot of investment is required, but the upside is that it will bring about a big improvement to the system.”

EDWARD LOWASSA Minister for Water and Livestock Development

Minister for Water and Livestock Development Edward Lowassa underlines his colleague’s arguments. “We have to ensure the provision of adequate, safe and clean water for domestic, livestock and industrial use. We also have to ensure that our water sources are environmentally, socially and economically sustainable.
“In spite of its problems, DAWASA has been improving in recent years, but now the time has come to bring in a foreign company that has the expertise and financial competence to ensure a more effective water supply.”
Both executives admit that the change in organization will not be without its difficulties, but they have little doubt that the move will be a further step in helping to unlock the country’s potential. “With external support, technology and a new attitude we can help exploit Tanzania’s potential much more rapidly than we would be able with just our own resources,” concludes Mr. Mutalemwa.