Economic and social research foundation (esrf)

2.2 Infrastructure

Underdeveloped infrastructure is often pointed out as one of the key constraints to exploiting Tanzania’s development potential. The infrastructure network needs to be upgraded to facilitate improved accessibility to productive locations. The following sections give an overview of the current state of the development infrastructure.

2.2.1 Transport

The transport network in Tanzania is geared towards serving an economy dependent on the outside world for output markets and imported inputs. This has left major gaps in terms of creating a relatively more cohesive network that would have fostered the development of a domestic market. Statistics show that Tanzania has a road network consisting of only 85,00 kilometres (kms) of roads of which only about 5 percent of roads are paved (World Bank & URT, 2001; URT 2001). Currently, road transport in Tanzania has been dominated by private companies whose services are delivered on competitive terms.

The railway system covers about 3,570kms with two public companies managing and owning the lines. Railways connect the port of Dar es Salaam with neighbouring countries.
In air transport, there in one national carrier –Air Tanzania Corporation (ATC) that is currently in the process of being privatised and a number of private companies providing domestic and international air services. There are four main private companies that provide this service domestically and several international carriers cater for international routes.

2.2.2 Communications

The communication systems in the country, especially the telephone system are fairly well developed. A number of bold institutional, legal and policy reform measures taken during the nineties to improve service provision in the sector paved way for this encouraging scenario. The reform and restructuring of the communications sector started with the separation of regulatory functions from operational activities on one hand and the separation of postal services from telecommunications operations on the other.

These reforms have been reinforced by the National Telecommunications Policy in 1997. In 2001, the Tanzania Communications Commission (TCC) was given more powers to efficiently manage the national frequency spectrums buttressed the reforms further. Tanzania has therefore shifted from state monopolised provision of main communication services to the current situation where the TCC has licensed 2 basic telecom operators, 5 cellular phone operators³, 6 providers of public data communication services⁴, 6 internet service providers (ISPs)⁵ and 4 radio paging services providers⁶. Currently, telecom network in the country is over 95 percent digitalised and the country’s tele-density has been significantly improved to 1 telephone per 100 inhabitants from 0.3 per 100 people, which existed for many years mainly as a result of vibrant cellular phone services. The challenge that has to be addressed is to increase coverage across the country especially in the rural areas and this constrains accessibility to the telecom networks.

2.2.3 Power Sector

The electricity supply system is mainly hydroelectric, with five hydro power plants⁷ supplying 85 percent of the total electricity. The remainder of the supply is thermal. There are high prospects to switch from diesel based to gas based generation of electricity. For most part, power generation, supply and distribution is managed by a state run utility company –Tanzania Electrical Supply Company (TANESCO) Ltd⁸.

As at the end of last year, Independent Power Tanzania Ltd (IPTL) became the first private company to generate electricity, following a protracted stand off it had with the government. However, they supply this electricity to TANESCO, which then supplies it to consumers through the national grid. Opportunities abound for private sector participation in the sector. Some of the expected gains include removal of the cost inefficiencies and low revenue collections, which are the main sources of high unit costs being lamented at by consumers.

2.2.4 Water

Tanzania is well endowed with abundant water resources, however, harnessing of these resources for irrigation and other economic and social development activities has not reached satisfactory levels. Current water supply covers only 68 percent of urban centres and 46 percent of rural areas (URT/World Bank, 2001). Urban water authorities are therefore being restructured to facilitate private participation. Efforts are also underway to rehabilitate and expand water infrastructure in a number of major towns (URT, 2001). This augurs well for investment endeavours both in creating opportunities for profitable private investment and also for much needed improvement in water infrastructure, which in turn perks up the investment environment.

2.3 Technology and Skill Level

2.3.1 Technology Level

Wangwe (1995) cited paucity of technological innovation, small output of scientific publications, low levels productivity in the almost all sectors of the economy and weak state of human resource development especially in scientific and technological fields as manifestations of low technological capability in the country. There is little evidence of any improvement in this situation. It is worth pointing out that Tanzania Investment Act has nullified the need for investors to make separate applications for transfer of technology (agreements, and requires that this agreement be registered with the Tanzania Investment Centre TIC) to be effected. It is not clear if there is any collaboration between the TIC and the technology agencies on critical policy issues concerning technology transfer, use of indigenous technical personnel or on the local production of parts and components for gradual replacement of imports. If the status quo remains the same, this is an anomaly that needs to be addressed.

2.3.2 Skills

A number of studies (ESRF, 2002; UNCTAD, 2001; World Bank, 2001; Wangwe, 1995) document skill inadequacies and shortages among the Tanzanian populace especially those required to cope with the challenges of and ensuring that benefits of rapid technological advances and the move towards market oriented economy are harnessed to the maximum. According to World Bank/URT 2001, only 67 percent of the labour force estimated at 25 million is functionally literate, 32.1 percent never had any formal education 21.4 percent went to primary school but did not finish, while 43.1 percent have finished primary education and only 3.2 percent went to secondary school and above. Skill shortages are apparent in managerial and technical areas-manifested by the significant amounts of their outsourcing of (especially the former) from the neighbouring country of Kenya and other countries. That this is happening amidst a situation where a number of graduates are facing difficulty in finding jobs where they can apply their training or any jobs at all, puts into question the relevancy of the curriculum to demands of the emerging private sector dominated economy.

Three key issues impinge on the skill and competencies of the Tanzania’s human resource.

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  Weakness in terms of the structure, access, relevancy and adequacy of the education system. Availability and affordability of education need to be improved especially at the post primary level where it has not been able to keep pace with neither the expansion of the population nor the demands of the modernising economy.
  
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  Brain drain. In search of higher benefits a significant number of highly trained personnel have left the country and gone to southern African countries especially Namibia and Botswana. Some have migrated to other eastern African Countries and some to even outside Africa. Indicative data from higher education institutions demonstrates large numbers of highly qualified staff leave the country.
  
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  AIDS/HIV pandemic. This threatens to erode gains that have so far been made in human development for the past four decades. The rate of HIV infection is estimated to have reached 8.1 percent in Tanzania (URT/World Bank, 2001) and is fast moving from being a purely health problem to an economical and social concern.