Interview with Hon. Basil Pesambili Mramba, former Minister of Infrastructure Development of Tanzania

TANZANIAINVEST has been interviewing Hon. Basil Pesambili Mramba, former Minister of Infrastructure Development, to learn about the Tanzania transport and telecom sectors.

TI: Why did the Tanzania government merge two formerly independent ministries, namely the Ministry of Works and the Ministry of Transport and Communications, into the Ministry of Infrastructure Development?

Hon. Mramba – Tanzania Ministry of Infrastructure: The President’s [Kikwete] key intention was to get better coordination of the key elements of infrastructure.

The Ministry of Works dealt mainly with roads and the road networks in Tanzania remained very backward and very problematic.

A lot of work has been done in the recent past and a lot more remains to be done.

This is a sector that is very important for the growth of the Tanzanian economy.

The President wanted to link the roads to the railways and ports.

He wanted to ease off with better communication in the Information and Communication Technologies infrastructure.

He also sought to improve the performance of the ports and marine transport, generally because we have three big lakes that could play a big role in the Tanzanian economy.

Finally, the airports and airlines are very important because Tanzania is now becoming an important tourist destination.

All of these predicated to the fact that we want the economy to grow much faster.

At present, it has been growing at 7% per annum and our target rate is 10% per annum.

We would like to increase the growth rate so as to be able to address poverty issues, thereby attaining the Millennium Development Goals through the infrastructure sector.

We are also involved in constructing public houses for civil servants.

We replace decaying public houses with news ones and construct public houses for newly created districts and regions.

We also have a program for personal housing for employees [because] when they retire we want them to retire in their own houses.

This is a form of the ownership program by the government for its employees.

TI: How are these objectives going to be financed?

BPM: There was a program that was being financed through the budget, but this has proved to be  unattainable.

We are trying to finance it privately through partnerships with the private sector. {xtypo_quote_left}We are trying to finance [houses for civil servants] privately through partnerships with the private sector.{/xtypo_quote_left}

There are legal handicaps which we have to work on, but we want to invite private sectors from Tanzania and abroad who have experience with the construction of housing estates for both low cost people and for medium and very few high cost people.

The idea is that the public servant will have their salaries deducted until they finish the housing installments.

Then, the houses will belong to them.

So, we require two things from the private sector: capital and expertise.

The government will provide the land, labour and whatever else can be easily marshalled through government channels.

Tanzania Infrastructure Investment Opportunities

TI: It is evident that there are a lot of Tanzania investment opportunities that have been established within the infrastructure sector in Tanzania. What are your expectations from the donor community in providing funding to meet your budget needs in order to facilitate the development of this infrastructure?

BPM: In the infrastructure sector, we welcome donors.

The donor communities tend to step up their support to the infrastructure sector in Tanzania mainly in roads.

To my understanding, it will be not be more than 10% of the quantum of support that they used to provide to this sector in the past.

That is good enough.

The donors have problems in terms of delivery and delays in disbursements.

In the last 5 years, we have relied very much on our own budget so that donor money is an addition to our own allocated budget.

In the past six months, I have made two trips abroad to look for investors in the USA and in the Middle East.

We are also seeking funding from South Africa.

This is specific for infrastructure.

Generally, Tanzania has been organizing investor conferences in the past including the UK.

The problem with these conferences is that they arouse interest, but converting the interests into action takes a lot of effort.

TI: How do you seek to convert these interests into action?

BPM: I think one-on-one discussion forums work well.

I spent 5 days in the USA speaking to an average of 2-3 investors per day.

To date, I have had very good responses; so far we have had individuals seeking to invest in agriculture and palm oil cultivation, energy sector, airports, build-on-transfer (BOT) roads.{xtypo_quote_right}We provide prospective investors with the requisite information and link them to the Tanzania Investment Centre on what it takes to invest in Tanzania.{/xtypo_quote_right}

We are getting specific inquiries on specific investments and I am encouraged.

There has been an influx of Chinese companies wanting to invest in the information and communication technology (ICT) sector and inquiries from South Korea wanting to construct bridges.

We have South African investors seeking to engage in joint ventures with the government on infrastructure development.

We are receiving a lot of enquiries; some materialize and some do not.

We provide prospective investors with the requisite information and link them to the Tanzania Investment Centre on what it takes to invest in Tanzania.

TI: Do you think private investment could take over the funding that is currently coming in from donors?

BPM: No, they will complement each other.

There is room for both the donors and the private sector.

There is so much to do and very little [already] done.

The sky is the limit; we need to grow and attain our 10% growth rate.

The donors are supplementing the governments’ effort.

Of this year’s national budget, 40% is donor money.

From our own resources we cannot cough up the quantum required in order to enable us to do away with donors.

We have progressively been reducing dependency on donors.

However, we are not able to reduce our dependency on donors fast enough.

TI: What is the unique selling point of Tanzania as an investment hub?

BPM: Tanzania is stable country, with a population comprised of over 30 million people.

Tanzania has a lot of agricultural activity in the countryside, which needs all sorts of transportation facilities.

Because of the remoteness of Tanzania and the difficulty of reaching these remote areas, cell phone use has increased dramatically.

{xtypo_quote_left}Tanzania has a lot of agricultural activity in the countryside, which needs all sorts of transportation facilities.{/xtypo_quote_left}We are working on terrestrial optic fibre programs and the South Africa project that links North Africa to southern Africa.

There are a lot of mobile phone companies, about 6 now.

The result is people will use mobile phones to communicate with ease especially in the rural areas so as to facilitate their business needs.

Fish fillet is being exported internationally from Mwanza Lake Victoria.

We export vegetables and flowers from Kilimanjaro airport via air.

We have a lot of horticultural products in the southwest and we are constructing an airport in Mbeya to accommodate their transport and export needs in the south.