Why new projects will drive Tanzania economy - Tanzania Business Leaders Air their views
Energy is undoubtedly one of the key drivers of sustainable socio-economic development and inclusive growth. Energy has the ability to accelerate the pace of economic transformation, unlock the potential of businesses and drive much needed industrialization to create jobs in Africa.
The bold and noble decision by the Ugandan and Tanzanian governments to exploit the natural resources on our sovereign territories unlocks a unique opportunity to accelerate the region’s economic development. It is a major chance for our businesses and our countries, which we should not dismiss.
Africa’s low contribution to global greenhouse gas emissions.
Africa has contributed negligibly to the changing climate. It is the continent that contributes the least to global warming in both absolute and per capita terms.
African countries account for 3% of global energy-related greenhouse gas emissions and 7% of total emissions, while 600 million people live without electricity on the continent and nearly 500 million live in extreme poverty.
However, despite these unequivocal figures, some voices are speaking up against African countries to exploit the natural resources required for Africa’s long-term development. This is particularly the case in Uganda and Tanzania, where oil reserves of nearly 1.5 billion barrels have been uncovered, paving the way for 25-30 years of exploitation from 2025 onwards.
Massive growth potential
Being the mainstay of most Tanzanians, Agriculture is a critical economic sector, representing approximately 30 percent of Tanzania’s Gross Domestic Product (GDP) and almost three quarters of the productive workforce, with half of which in subsistence farming. It has very significant upside potential going forward, considering its currently unemployed skilled workforce.
However, the country’s vast resources especially in the energy sector offers exciting prospects for transformative economic development moving forward. Moreover, the number of graduates has increased in the past 10 years and on average approximately 50,000 students graduate annually in various fields of education, however currently 25% of graduates are facing unemployment or cannot secure a position in accordance with their education degree.
In addition to the quality of local workforce and the youth of their populations - 70% of the population is under 30 years old - Uganda and Tanzania have access to a regional market of over 150 million consumers within East Africa. With their multiple economic opportunities, both countries need to take advantage of quality infrastructure to accelerate their growth.
Laudable efforts continue to be made in this area by the governments of both countries, and the global community could further strengthen mobilization and allocation of resources to accelerate resource development and necessary investments.
A “booster” effect
With nearly 2 billion dollars directly injected into the local economies during the construction phase, along with the creation of more than 78,000 direct and indirect jobs, the Tilenga and EACOP projects are contributing to the growth of Uganda and Tanzania and are a unique opportunity to provide a decisive contribution to local economic development. Today, thanks to the local impact of these projects, small and medium-sized enterprises have been created, particularly in the services and retail sectors. Uganda and Tanzania are committed to the energy transition and are working to build and maintain essential infrastructure, particularly in the transport and electricity sectors.
Tanzania Electricity generation capacity is 1608MW Per annum whereby 60% of generation is based on natural gas, 39% is based on hydro and 1% is based on renewable sources. The gap in access to electricity for urban areas is approximately at 73.5% while in rural areas is 24.5%. The overall country’s access to electricity is approximately at 38%.
One of our developments priorities is to build robust infrastructures, without which the potential of our economies will never be fully realized. In this respect, the revenues generated by the Tilenga and EACOP projects offer a unique opportunity. In line with the Countries’ Sustainability commitments, these projects will run in an exemplary manner in terms of transparency, shared prosperity, and sustainable development including environment and respect to human rights.
We are confident that the Projects together with the countries’ climate actions will have positive environmental and socioeconomic benefits in the long run. For all these reasons we fully support the project to develop Uganda’s oil resources and to carry them through Tanzania.
ENDORSED BY: AbdulMajid Nsekela, Ruth Zaipuna, Maharage Chande, Hon. Abdulsamad Abdulrahim, Silas Olan’g, Benoit Ducarme, Dhruv Jog, Seif Ally Seif, Peter Gathercole, Tahera Yusufali, Lily Massa, Imran Karmali, Mohammed Jariwalla, Alais Mwasha, Husamuddin M. Ghor, Joseph Waziri, Ali Dhanji, Salim Mbarouk, Annadurai Krishnasamy, Mariam FARIDAH, Elimringi Aminieli Elia Mtui, Jacqueline James, Redempta Chikoti, Michel Notte, Godfrey D. Simbeye, Rosemary Sway, Marty Dom, Donasia Justin Massambo, Eng. Gilbert Ndesamburo, Zuhura Sinare Muro, Emily Mwaisango, Mustafa Suluo, Kishor Shapriya.