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Sunday, November 19, 2006

Tanzania faces MASSIVE electricty shortage! Kenyans Rejoice!

I have nothing against the Tanzanian people (who are much warmer than Kenyans!) but my rant is about the idiotic policies of the Tanzanian leadership that created the mess.

Kenyan "rulers" are no better but the Kenyan populace has taken trade liberalisation to heart.

No hand-wringing will help TANESCO but I rather Kenyans (& not the Chinese) export to TZ. TZ money flowing to Kenya often flows back to TZ. TZ to China is generally one-way!

Tanzania's (partially) self-inflictedcrippling electricity shortage/crisis elicits little sympathy from me.

Whereas , inadequate rainfall, & low water levels, at some dams forced the shut down of turbines e.g. Mtera, TZ never developed their MASSIVE coal deposits in the south. Why?

Tanzanian politicians & xenophobes consistently refuse to acknowledge that an economic alliance with Kenya will greatly benefit BOTH countries. They feel that SADC has more to offer than a resurgent EAC.

An electricity grid linked with Kenya's grid would provide BOTH countries with the ability to sell/trade surplus electricity. Furthermore, Kenya (through the semi-privatised KenGen) is fast developing alternate sources - geothermal & baggasse - to keep up with the increased demand as well as maintaining "excess" thermal capacity.

Kenya experienced good rains since April 2006 & has surplus capacity, which may be sold to Uganda. Kenya could have sold the excess to the (northern) Tanzanians had they cooperated with Kenya in connecting the grid.

Northern Tanzania is a natural extension of southern Kenya (& vice versa) including the electricity grid, road & rail network and petroleum supply (pipeline). Just look at the National Parks (Masai Mara & Serengeti) or the Masai who live on either side of the border!

Northern TZ has better roads than Kenya but the rest of the infrastructure is of inferior quality. It makes business sense for KenGen/KPLC to extend the network to TZ since it provides both a source & market for electricity.

KPC should (if TZ agrees) to extend the pipeline to Arusha. If KPC is privatised, I expect the pipeline to reach Kampala, possibly Rwanda, so why not Mwanza? Arusha & Mwanza could do with a shot in the arm since they are among Tanzania's largest commerical centers.

Connecting the road network (Kenya needs to do much more on it side) & removing trade barriers will lead to increased cross-border trade esp for fresh fruits & vegetables from TZ to Kenyan towns & lodges.

Mombasa can act as a much more efficient port for TZ users if the rail network is extended to northern TZ. With the recent privatization of KR, it need not cost either government much - since the private sector will pay for it - BUT the benefits are substantial!

Since TZ industries are crippled, as I argued in an earlier blog, the Kenya government needs to turn a blind eye to Kenyan traders who are "exporting" goods to TZ. Let Kenyans "smuggle" local goods e.g. cooking oils, fats, soap, tyres, mabati, etc to the northern TZ. These are essential goods for the Tanzanians while Kenyan industries can get a huge boost.

Kenya needs to improve the roads leading to the Kenya/TZ border. Let the traders figure out how to get the goods from Kenya into TZ. They will find a way... In the meantime, Kenya's factories can start churning out more goods for export!

15 comments:

Acolyte said...

Too bad your message may never get to the right ears!

coldtusker said...

There is money to be made by entrepreneurial Kenyans (& Tanzanians)...

Unfortunately, this is not my cup of tea... or I would be in the thick of things!

I expect many Tanzanians to flock across the border to buy these foodstuffs (among other items) & take them back to TZ.

These "borders" only help the crooks aka bureaucrats aka fatcats...

kenyanentrepreneur said...

why are african countries still relying on rain as a source for them getting electricity?

that is the scary part about this story

bankelele said...

Your wishes have ben answered. Donors will fund a 250KM power line that will connect Nairobi to Arusha (was on biz news last night) - as part of a plan to coonect all 3 country power grids

Odegle said...

TZians are hopelessly paranoid given their education challenges. they prefer SA to kenya any day. and that is what baffles me!

Anonymous said...

odegle:
Kenyans prefer south Africa as well. it has a larger economy, it has the rule of law, it has the best infrastructure....nothing baffling about that.

Anonymous said...

and why would kenyans rejoice? remove the log from ur eyes first

coldtusker said...

Don't respond to Anons but anon2...

It is NOT the Tanzanian people I am ranting against. Sadly, they will suffer while the politicos will benefit from tenders & kickbacks!

BTW, Kenyan politicians are just as idiotic if not worse! See recent story on moi & safaricom OR gichuru & KPLC.

The Kenyan people have embraced the concept of free trade better than TZ. That is the difference. Kenyans are FORCING the government to reform albeit slowly.

I feel that TZ has more to gain from Kenya than S.Africa.

Ken said...

Great blog Coldtusker you do well to highlight issues affecting us today. It' a pity I dont comment too often {blame it on blogger beta}

I think we need to look at trade and 'competition' issues from both sides of the border.
Much of what Kenya has to offer Tz, they already have.

If you were the Tz's president's economic advisor, would you rather belong to EAC or SADC, considering past relations and benefits in both blocks ?

The other thing to note is that Tanzania has fast growing sectors too in tourism, (which has larger growth potential than Kenya), fisheries, mining and farming most of which are quite similar to Kenya's hence the perception of competition.

On the issue of power, it's really a problem of poor management by those in the preious regime. The previous Tanesco mgt didnt consider possibilities of equipment failure or extremely high demand for electricity (something I'm not so sure Kenya has done).
It would be wise to have all grids interconnected, what I;m not so sure about is whether this blocks allow member states into such partnerships. At the moment the south of Tz is connected to both the Mozambique and the Zambian grids.

coldtusker said...

ken - Southern TZ is naturally better suited/connected to Mozambique, Malawi & Zambia.

TZ is LARGE. Twice the size of Kenya.

Northern TZ is naturally suited to Kenya & Uganda.

TRADE:
I disagree that TZ has all Kenya can offer. Yes, the potential is there but TZ is not there, yet... Especially, not with current leadership.

I concentrate on North TZ since that's where the port of Mombasa & the Kenya Railway provides the advantages Kenya offers.
Building a railway is expensive & its better to rehab & enxtend KR's cuurent network (which will happen) than duplicate a Tanga-Arusha railway.

I think a Arusha-Mwanza railway should be built.

Electricity networks are complex thus connected networks help "balance" the system. The sooner Kenya & TZ inter-connect, the better for BOTH.

Kenya's agricultural productivity has decreased & TZ can fill that void with better railway & roads.

TZ has BETTER roads than Kenya. We need to learn from Tanzanians!

Finally, I see a creeping Chinese influence that will hurt us (Africa) 5,10,15 years from now. The Chinese want CHEAP RAW MATERIALS & we are too short-sighted.

Kenyans are more receptive of Tanzanians than S.Africans. Perhaps TZ needs to make some moved into Kenya e.g. consolidate industries.

I found the S.African xenophobic & thinking they are better than the rest of us.

The best success story is KQ/Precision which grows from strength to strength...

Ken said...

Coldtusker.
There is a railway from Arusha via Tanga to Dar and Mwanza to Dar. It's just been as underutilised and poorly managed as the Kenyan ones. They have recently awarded it's management to an Indian firm quite similar to what Kenya did with KR. Between Arusha and Mwanza is the Serengeti.
What would make sense is probably linking Arusha - Kajiado and Mwanza - Kisumu. Though I'm not sure how many KM of track that would eventually add up to.

My point on trade Cold tusker which u really didnt take on is to look at things from their side of the border. we all seem to cry foul when we pay the tariffs but seem to applaud when we are the ones imposing them on others.

In my opinion tariffs hurt just as much as it hurts when a dying industry cant compete. Tz is a huge country and there are actually more Kenyans (especially from the coast) doing business in Tz than South Africans. The problem I have with most Kenyans entering this market is that they have nothing to offer, except compte with the existing locally produced goods, which with time will be just as competitive. In my opinion the country remains a little underpopulated and very unexploited, but the myth that Kenyans are hated and South African's embraced is just a myth.

coldtusker said...

My bad!
I was ignorant of the Arusha-Tanga railway. I should have researched further. I looked at a "map" that did not show the railway. No excuse!

Competition: It is good but why does TZ allow the influx of Chinese traders who compete across the ENTIRE gamut of commerce while disallowing Kenyans?

My views are coloured by the expulsion of Kenyan journalists of a paper owned by Nation Media. Note that the primary reason Nation Group is not more "East African" is coz TZ & UG were difficult to do business in the 1970s.

Kenyan govt played tit tat with Swaleh Mdoe BUT Kenyans were aghast at that! Gado apparently is TZian & we love him esp how he lambasts the poor excuse of "leaders" we have!

Basically, IMHO... TZ treats Kenyans as "step-sisters" while embracing others e.g. Chinese & S.Africans - who are only after TZ's natural resources & market.

Maxwell said...

As an Afrocoid of Carribean heritage, I'd love to see Africa really soar. There's sooo much potential over HERE - especially East Africa - that it boggles the mind. It hurts me so much IF such "economic hostilities" between Kenya and Tanzania actually exist.
As an outsider, all I'm going to say is that it's VERY IMMPORTANT to nurture and improve business relations with your neighbours. Heck, look at trade between Canada (32 million peeps) & The US which is the largest trading partnership on earth. Why can't Uganda, Tanzania, Rwanda and Kenya have such beneficial trade??

You know, colonialsm really screwed up our leadership to the point that no one sees the BIG PICTURE. With regards to electricity & transportation networks, it makes sense for these countries to collaborate for the greater good of EVERYONE. Oh well!

By the way, I totally LOVE Tanzania, but Nairobi is the heart of East Africa - for now. However, Kenya had better watch out for this quiet nation because she's going to be making a lot of noise - soon. And remember, they don't have "as" (with 'as' being the operative word ) SERIOUS a problem with corruption as Kenya does. Ditto for Rwanda. See my posts here and here about my feelings for TZ.

Nice blog! I'll be back!

Anonymous said...

Prompt reply, attribute of mind :)

Anonymous said...

I truly am grateful what you're doing here!