12 June 2017

Tanzania: What Zanzibar Can Learn From Mauritius On Economic Reforms

interview

Former Finance Minister and Deputy Prime Minister of Mauritius DR RAMAKRISHNA SITHANEN, who is credited with helping to transform the Indian Ocean Island, visited Zanzibar last week and held talks with the business community. In this exclusive interview with The Citizen Reporter SYRIACUS BUGUZI, the business and political guru points out lessons that Zanzibar and other countries on the African continent can draw from Mauritius' economic progress. Excerpts:

Question: Hello and welcome to Zanzibar. I have read and heard a lot about you and how you helped to transform your country, Mauritius into an upper middle income country. Looking at Zanzibar, how do you compare it with Mauritius in terms of economic growth and potentials?

Answer: There are a lot of similarities between Zanzibar and Mauritius, both are Islands in the Indian Ocean, part of Africa, we are not big, with 1.2-1.3 million people. Mauritius does not have a lot of resources and we are very far from the market we serve. So, we tried to do a couple of things to ensure development in our country. Of course, the context and history is different from ours--it's up to you to decide.

At this juncture, what does Zanzibar have to do to progress more economically?

You (Zanzibar) have to transform the economy and create values, growth and generate jobs; you need to diversify the economic base of the country because if relying on one service is risky.

That if there is a problem in that one sector, then, it means the economy is in trouble. We have seen this happening with the oil in Nigeria. We had the same problem in Mauritus, with sugar. We used to rely significantly on sugar. But now we have diversified the economy and we have about eight or nine pillars of the economy.

But now, in your opinion and experience, what specific areas can Zanzibar diversify? And, how did Mauritius do it?

What we did in Mauritius is that we worked together, in a collaborative way with the private sector. Mauritius has done well on this. There has been robust, strong and enduring collaboration with the private sector to develop the country.

It doesn't mean the government and the private sector have to agree all the time. We must find a way to align the objectives, create jobs and to improve the quality of life of the people. I am also a great believer in the fact that development must be inclusive. The growth must be shared and the prosperity must be broad-based.

Specifically which areas of investment?

I don't know--the people of Zanzibar know better. Should it be tourism that you will diversify, should it be agriculture, ocean economy in fishing? There are many ways and the best way is for the government to work together with the private sector and identify what are the new drivers of growth. This goes hand in hand with creating a regulatory environment that can attract investment not only from the local but also from abroad.

Are there areas that you think Mauritius can partner with Zanzibar in driving economic development?

Both of them have got a strong tourism sector. So, there are areas of collaboration in terms of product development, in terms of services and learning from each other's' experiences. We speak about major pillars of economic, social as well as cultural sustainability and creating products that can help create identity and things that we can exchange. Zanzibar has got its expertise and Mauritius has made steps in skills development.

I am a great believer in the South to South Cooperation. Zanzibar can learn from Mauritius and Mauritius can learn from Zanzibar. South-south cooperation is vital, as there are strong commonalities. When you are a small island, especially very far from the big centers, you need to be alert on how you collaborate.

In terms of geographical location, do you see Zanzibar as being strategically located and that the Island can use that opportunity to boost economic growth?

Zanzibar is very well-located to serve the African Market. The Island could develop into a warehouse logistics and distribution center, and what it needs to do is to invest in its people, identify and develop competitive advantage and use that to serve products and services-not only to mainland Tanzania, but to the whole East African region.

Zanzibar is part of a huge bloc, the East African Community. It's up to the country now to decide , whether it should be part of the Global Value Chain, like manufacturing, in terms of assembly or trade volume and in terms of attracting world people to come and invest.

Here in Zanzibar, I have seen huge investment in tourism, such as what the Zanzibar Amber Resort. How are such projects handled in Mauritius--how does the government work with such private investors?

There has to be a win win situation--I mean, when such projects come up, the government must benefit from it, likewise the people and the private sector who comes up with the projects must be able to extract something from it-and the benefits must accrue to the people.

What factors enabled Mauritius to grow its tourism sector?

I think we've built a brand. That's very important. Mauritius is known for its tourism industry. The infrastructure is good, in terms of hotel facilities--we have some of the best golf facilities in the region.

We have invested in training our people and we have diversified our products. And it's sustainable. The air access policy is very important--a country needs a friendly air access policy to be able to attract investors. Then, a good marketing and promotion strategy.

I gather that you have advised countries such as Rwanda on how to develop a good economic trajectory. What other tips do you have for Tanzania and Zanzibar for that matter?

The context and circumstances of countries matter. The main lesson is that the country has to be open, to be able to do business. There must be no being inward looking. Countries have to produce for export and this is what Mauritius has done. And this Rwanda is trying to do--openness to the markets. This goes a long with creating a conducive environment for doing business.

In Africa, Mauritius leads in the ease of doing bisness index and Rwanda is number two. Like, I said, each country has its specific issues and challenges--not everything that has happened in Rwanda or elsewhere, can be replicated in other countries but there are broad lessons in terms of education and institution building, openness and ease of doing business.

These are important lessons. Now, what specific things the countries can do? It's up to the leadership, in collaboration with the private sector to identify those areas of improvement. Currently, there is global competition to attract investment and global competition to attract talent.

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