Tanzania Daily News (Dar es Salaam)

11 September 2012

Tanzania: Mtwara Set to Become Economic Powerhouse

Mtwara — THAT Mtwara is hastily becoming Tanzania's economic powerhouse is no longer debatable. The question today is how well prepared are Mtwarans to not only adapt to but also benefit from the fast economic changes in the southern region.

The historically belittled and snubbed southern regions of Mtwara and Lindi have abruptly become the darling of everybody, entrepreneurs in particular, as thriving economic activities have resulted in business boom. The discoveries of oil and gas are the most attraction to multinational companies conducting deep sea exploration works in Mtwara and Lindi. According to Tanzania Petroleum Development Corporation (TPDC), there are eight firms from the UK, Brazil and Norway conducting deep sea explorations for oil and gas.

"Mtwara is truly undergoing economic transformation and if the current pace of development persists, chances are that the natives will soon find their own town unfriendly to live," says Mohamed Mwisime, a taxi driver in the coastal town of Mtwara. Mr Mwisime believes that Mtwara town is today among the country's most visited towns, "Most of the guests we get here, looking from the mode of transport and type of accommodation they check in, are high income earners."

The two airlines--Precision Air and Fly 540--that ply the Dar es Salaam-Mtwara route daily get sufficient customers, an indication that there is good business. And, according to the taxi driver, it's difficult for a guest arriving in Mtwara after 5 p.m without an advance booking to get accommodation. "Most of the good hotels and guests houses are fully booked by 4 p.m," he says, hinting that some gas and oil exploration companies have booked some of the hotels for full year.

Speaking at the Regional Consultative Council (RCC) here last week, Mtwara Regional Commissioner Joseph Simbakalia challenged the southerners to prepare for the sweeping economic changes by investing in their children's education. "We have to seriously take our children to school to fully enjoy the fruits of the coming social and economic development," said Mr Simbakalia who also chaired the RCC.

As a result of economic transformations in the southern region, Mtwara Port is undergoing major expansion to cope with expansive demand estimated at 25 million tonnes of cargo in the next 20 years. Tanzania Ports Authority (TPA) Acting Director General Madeni Kipande told the RCC that the first phase of the port improvement has started with construction of four berths and expansion of the supply base for oil and gas exploration activities.

But, he called for joint strategies to improve transport infrastructure connected to the port, warning that any improvement of the port without strong support of reliable railway network amounts to mere wastage of resources. "We as a country will hardly move if we rely on road transport...we have to put a reliable railway network in place to help us reap the fruits of our investment on expansion of Mtwara Port," Mr Kipande argued.

Lack of railway to haul cargo destined for other regions and neighbouring countries, Mozambique, Malawi and Zambia in particular, is among the impediments that cripple the port's efficiency. Mtwara Port, with 400,000 tonne capacity, is currently capable of handling all cargo but experts warn that given the pace at which investors are relocating to Mtwara and other southern regions, the facility will soon be overwhelmed.

The Export Processing Zones Authority (EPZA) has declared 110 hectares in Mtwara for a Freeport Zone to facilitate speedy handling of cargo for gas and oil exploration works. EPZA Research and Planning Manager James Maziku says out of the declared area, 10 hectares at the existing Mtwara port are scheduled for immediate development to serve service providers to oil and gas companies.

A combination of the influx of petroleum companies in the country, demand from suppliers and service providers of the petroleum firms as well as cost savings renders the Freeport Zone inevitable. TPA will develop and operate the Freeport through building onsite infrastructure--roads, water supply systems, sewage systems, fence and administrative blocks as well as creating plots within the zone as per the master plan.

Inadequate port facilities to match the upcoming demand remains a serious problem as of the existing only two berths, one is reserved exclusively for the drilling operations. Yet, cargo handled at Mtwara Port have almost doubled in six years from 143,072 metric tonnes in 2006/07 to 244,183 tonnes as a result of mainly bumper cashew nut harvests and oil rig supplies to oil and gas exploration companies.

A further drastic cargo increase is projected out of the multi-billion US dollar projects on the pipeline. Director of Heavy Industry with the National Development Corporation (NDC) Alley Mwakibolwa told the meeting that projects under the Mtwara Development Corridor (MtDC) alone can create about 34 million tonne cargo in mineral, forestry, agriculture, manufacturing, trade and tourism sectors.

Through Liganga iron ore and MtDC coal resources, Tanzania seeks to unlock 5.6 billion US dollar (about 9trn/-) investments, with potential of generating thousands of jobs and revenues. Engineer Mwakibolwa said through the Liganga-Mchuchuma and Ngaka cluster of the MtDC, there would be 18,000 direct and indirect jobs for Tanzanians, relocating to the southern regions.

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