Tanzania: rufiji, ruvu and wami

Foreign Private Investment Capital

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Foreign Private Investment Capital

Foreign investment is looked upon as important in facilitating economic growth through transfer of modern technology for efficient production that would not otherwise be available to the country, given the shortage of capital. Today, foreign investors are particularly important for the networking advantage they have in the world market, which is critical in Tanzania. Its position in the world market has, like most developing countries, been chronically weak because the prices of its primary products are dictated by buyers and characterized by instability and stiff competition. Tanzania has few industrial exports. In 1996, the value of industrial exports was only 16 percent of total exports compared to 55 percent for agricultural products, including coffee, cotton, cashew nuts, tobacco, sisal, and tea. Mineral exports are rising and promise to do so for a long time. In 1996, mineral exports constituted 7 percent of total exports, but had risen to 13 percent by 1997, almost double the previous year. The important point is that economic growth is desirable for the betterment of the country’s population. However, we have to be careful about the nature of development for which we strive. We must avoid development that provides short-term benefits but diminishes long-term sustainability, as well as development that benefits a few but leaves the majority bearing the cost of environmental degradation.

The tourism industry is expanding rapidly in Bagamoyo. With the promised construction of a tarmac road from Dar es Salaam to Bagamoyo, a distance of about 65 km, more investment and therefore growth is expected. This expansion in Bagamoyo promises the government substantial revenue. However, it should be done in a sustainable way so as to benefit all the people concerned while maintaining the ecological balance which, to a large extent, provides the touristic value of Bagamoyo. Destruction of the ecological fundamentals will eventually boomerang on the industry itself. Investors who clear mangroves to create sandy beaches and pour untreated effluent from their hotels into the ocean destabilize the ecological balance and endanger the sustainability of their businesses and development of the country in general. Likewise, the prawn-farming project in Rufiji poses the same potential benefits and costs for various actors and stakeholders.
These costs and benefits should be balanced through a well-rounded analysis that integrates all sectors and stakeholders to determine the social, economic, and environmental costs and benefits before any major decision is made. Environmental policy states the need for Environmental Impact Assessments (EIAs), but the relevant act is currently being rewritten and EIA guidelines are in the process of being formulated. A few organizations insist on an EIA as a condition for engaging in activities in their areas. The Tanzania National Parks Authority, the Tanzania Electric Company, and the Ngorongoro Conservation Area Authority all impose such conditions on investors. Also, some big investors are forced to undertake EIAs when they are looking for project funds.

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