The Ignition Zone Podcast

Unpacking Tanzania's exciting economic future with Andrew Mahiga

• Mmathebe • Season 1 • Episode 3

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Ever wondered how Tanzania is unlocking its vast economic potential amidst challenges that many African nations face? Join me as I sit down with Andrew Mahiga, the Country Director for the Department for Business and Trade at the British High Commission in Dar es Salaam. With over a decade of expertise in policy engagement and trade facilitation, Andrew shares invaluable insights on creating an enabling business environment, addressing taxation hurdles, and bridging the skills gap that stymies investment and innovation in Tanzania.

As Tanzania experiences rapid economic growth in sectors like transport, logistics, and tourism, the gap between progress and poverty remains stark. Together with Andrew, we navigate through the complex terrain of inclusive growth, emphasizing the need for job creation and strategic investments in employment-rich sectors. Discover how government initiatives and partnerships with development actors aim to cultivate a fairer economic landscape where opportunities are accessible to all, not just a fortunate few.

Tanzania's entrepreneurial spirit is vibrant and undeniably promising. Yet, the challenge lies in transforming that innate hustle into sustainable businesses. Andrew and I explore the crucial role of accessible business development services and the importance of genuine problem-solving in the entrepreneurial ecosystem. As we look toward Tanzania's future as a leading East African economy, we also highlight the transformative potential of renewable energy partnerships and the pivotal shifts needed in education, entrepreneurship, and technology to ensure lasting prosperity for every Tanzanian.

Watch on YouTube on: https://youtu.be/CHJlseTM3hM?si=YzK_RPOa0pESGTXp

Speaker 1:

Hello and welcome to the Ignition Zone, your go-to podcast, where we ignite ideas, spark transformation and fuel the journey to unlocking Africa's economic potential. I am your host, Matebe Zrobo, and I'm so excited to take you on this incredible adventure into the world of economic development, entrepreneurship and career growth. To the world of economic development, entrepreneurship and career growth. Welcome back to the Ignition Zone podcast, where we spark conversations about Africa's economic transformation. Today, we're focusing on Tanzania, a country that has been seeing steady economic growth and is emerging as a key player in East Africa. Joining me is Andrew Mahiga, the Country Director for the Department for Business and Trade at the British High Commission in Dar es Salaam. Tanzania, Andrew, is a champion for fostering partnerships, driving trade relations and unlocking business opportunities between Tanzania and the global market. Andrew, thank you so much for honoring the invitation and welcome to the Ignition Zone podcast.

Speaker 2:

Thank you. Thank you for having me.

Speaker 1:

Andrew, your career spans over 13 years, with experience in policy engagement, private sector advocacy and trade facilitation across Tanzania, the US and the UK. What motivated you to pursue these fields and how has your journey sort of brought you here today in your current role?

Speaker 2:

Thanks. So I think my passion has been sort of policy advocacy and bringing about sort of institutional change, you know, within government, within government agencies, to sort of improve Tanzania's socioeconomic sort of status in the region and in Africa and globally. So I think policy and policy change and business environment reform is kind of like the umbrella of my professional career. But I think, specifically when it came to private sector work, I kind of stumbled upon it After my master's degree in the UK when I came back to Tanzania, you know, one of my first jobs was to work with sort of helping government better deliver public services and part of that work was working more closely with investors, with private sector, with businesses, to understand their challenges and to address their challenges.

Speaker 2:

So I think through that work as well I was like you know what I think private sector work. You know trade facilitation is my niche when it comes to policy, policy reform. So policy reform is what I want to do and I like doing, and private sector reform fell on my lap and I realized I was good at it.

Speaker 1:

Great, and maybe it's an opportunity for us to learn a little bit more about what private sector reform in particular really entails.

Speaker 2:

I would define private sector reform as creating an enabling environment so that businesses can enter the market with ease, they can grow within the market, they can expand, they can invest in other places, they can hire and scale the economy, pay their fair share of taxes, but investing and doing business in that particular market should be easy, should benefit, you know, should benefit as many people as possible and should also help the government, you know, raise revenue and grow the economy.

Speaker 1:

Perfect. So I saw that you're involved in Tanzania's private sector foundation. I just wanted to figure out what are some of those policies that you saw coming to life that enable exactly that in terms of that private sector reform and human capital development.

Speaker 2:

Yeah, so quite a few. And the work that I was doing was really speaking for or speaking on cross-cutting issues. So, for example, if one company is facing a problem that necessarily other companies in the same sector were not facing, we would not address that because that's a company-specific challenge rather than an industry or sector challenge. So a lot of the work that we did was to make sure that every player within this sector is facing this challenge. They agree that this is a challenge and they are proposing solutions or things to address these challenges. So we really focus on those cross-cutting issues.

Speaker 2:

So issues like taxation, of course, you know whether, if taxes are too high and they're hurting the industry, or the way taxes are applied or administered, sometimes it's not a policy issue, it's more of a tax administration issue. Are companies or specific types of companies being targeted when it comes to tax collection? Are they given a fair assessment? Things like that. Other things were levies and licensing and sort of the multiplicity of these things. You find, let's say, the telco sector. They pay so many levies and taxes that you know 60% of their revenue goes into paid taxes and you know, and levies, and they cannot reinvest that into the company. So things like that. Or you know, if there's too many controls and permits that a company or sector has to adhere to, it makes the cost of business really high and that company may survive one or two years, but after a few years you know it may go out of business.

Speaker 2:

So things like that survive one or two years, but after a few years you know it may go out of business. So things like that Is it easy for foreign direct investors to come in and partner with local companies, right? Is the barriers to entry really high in Tanzania? Is importing and exporting really expensive? So things like that really cross-cutting. You know some were sector-specific but a lot of them were cross-cutting and they affected most industries. For every employer a company hires, they have to pay, let's say, a skills development levy. Now, if that levy is too high, it's a disincentive for a company to hire a lot of people or to have a lot of people on their payroll. So different issues like that we were addressing directly with government, sometimes with other private sector or chambers of commerce, sometimes with parliament, sometimes with development partners. So it's really the issue and finding the right avenue to advocate on this issue.

Speaker 1:

Awesome. So, when you think about the work you've done, what conversations do you feel like we're not having enough about Tanzania and Africa's economic future, especially in terms of the diversity of the issues that impact business growth and attract investment?

Speaker 2:

I mean, there's quite a lot. If I was to pick maybe one or two, I think one is the skills gap. I think anyone you speak to, whether local or international, the skills gap is something. It's not a pressing issue, but it's one of those issues. If it's not addressed early enough, it could create some instability as far as investors or companies would rather outsource some skills they need, especially the way Africa is becoming more interconnected.

Speaker 2:

We may see people from other countries coming to work here because they have the skills that companies and investors need. And then, of course, sort of the elephant in the room is a really, really young and growing population, not just Tanzania but, I think, throughout the continent. You know, I think that the mean age in Tanzania is around 25 or under. You know, majority of our population is under the age of 21. If this young population is not skilled and equipped for jobs or even self-employment in this world we live in, in the current world we're living in or the future, I think it's going to be a big, big, big challenge for companies. To be a big, big, big challenge for companies.

Speaker 2:

So I would say really skills is something that needs to be addressed as soon as possible, because companies need it.

Speaker 1:

Yeah, I love that because actually one of the key things that we're trying to figure out on this podcast is how do we start to create an effect in which people are able to partner and work on addressing skills gap? Because, like you said, Africa is one of the youngest populations and we need to kind of reap the population dividend, as it were, and yet we remain largely with a young population that is not as skilled. So what are some of the things that you've kind of seen work, whether you know, in the UK or elsewhere, to try to bridge that skills gap that exists?

Speaker 2:

Yeah. So a really good example I saw and I actually was fortunate enough to work for a little bit for that organization was a program that encouraged apprenticeships within companies. So companies that would take in interns or apprentices. They would get a tax relief on their corporate income tax because they were training and skilling young people who were either, you know, out of school, who were not following the conventional academic path. You know, maybe they went to secondary school. They don't really want to, you know, go to college or university. They'd rather gain a skill, technical or go to vocational training.

Speaker 2:

There's a program where these companies would take on these students, you know, for six months, for a year, you know, equip them with the skills that the company needs. Some would eventually get hired by these companies, but some, you know, would leave and find jobs elsewhere. Some would even start their own businesses from the skills and exposure they had. These companies that took on these young people. They weren't paying as high corporate income tax as companies that were not taking on these young people. So programs like this, I think, is a win-win for both the people that need the skills and the companies that need the tax relief. I think such a program could work in a place like Tanzania and a lot of places in Africa is to take on these young people that need the skills, they need the experience.

Speaker 1:

And are there any sort of programs that are spearheaded by the government and being led by them and enabling this tax-free or sort of tax-incentive environment for the partners coming in or corporates coming in?

Speaker 2:

I mean there's programs, but not necessarily programs that sort of give tax relief. I think it's programs that sort of support the business development that young people need to enter the market. So, for example, there's a regulation in Tanzania where all local government authorities have to put aside I believe it could have changed, but I believe it's around 3% of their total revenue for programs or activities or initiatives that are run by young people and women. You know, to give them the opportunity. One is to start their own businesses, but two also is to be able to say, you know, bid for small procurement, jobs or projects that local government has. So it's equipping young people or young businesses to tap into opportunities with governments. It's not necessarily providing tax reliefs to companies, but at least it's providing them a platform to get employed or to be self-employed. So you know the efforts are there, but I think there's a lot more to be done, because the challenge we see is the private companies.

Speaker 2:

The type of skills they need isn't the type of skills that's available out there. There's one thing to provide someone with the skills. There's another thing to provide someone with the right skills that are in demand, and I think that's probably the bigger problem is what type of skills are we skilling our young people with? Are they updated skills? Are they skills that are on a demand? So I think probably that's the bigger problem is what type of skills? And not just to say, oh, we train this person or provide them an opportunity for six months to a year, but once they go to the job market it's not needed or it's outdated.

Speaker 1:

Talking about the market, right. So for me it's a question of you know, how do we focus that? How do we focus those scaling programs? Because, you know, governments tend to do a bit of everything. One way of looking at it would be to figure out what are those sectors that are in demand from either UK companies coming into Tanzania and the sort of workforce that they're kind of looking for from a skills perspective, from a sector perspective, you know, and from a value adding perspective.

Speaker 2:

Absolutely, absolutely, I mean, I think, anything around STEM. You know science, technology, engineering and mathematics will be in demand for the next 50 years. You know those are skills that you can't go wrong with and its skills, increasingly, are in demand, no matter the industry. You know things are becoming more digital, things are becoming online, software is needed. Sort of engineering, design and engineering type of thinking is being demanded in a lot of sectors. So I think things like STEM would be, you know, in much demand and I'm glad you know some development partners are also doing a lot of work STEM girls and women in STEM as well. We see a lot of initiatives pumping up as well.

Speaker 2:

I think a sector that naturally will also be in demand is manufacturing, as well, as Africa is moving more towards value addition and processing and packaging and creating industries that are actually making products and not exporting raw materials. I think that that skill demand will will be really, really high need and and we really need to um focus more on that, and I think also, I think a mindset change is needed as well, because sometimes, you know, if someone doesn't have a university degree, our culture it's sort of frowned upon, you know. Know like, go to university, get a degree and now you're ready for the world and you see a lot of people with degrees and they have nowhere to apply that degree. And you know we find countries like in a lot of European vocational institutions there are people finish high school, they go into the automobile industry and they are so skilled in that sector and they do well and thrive in that sector. No university degree.

Speaker 1:

I think we need to move away from the the conventional go to school, get a degree and find a job to more go to school, learn a skill and get a job yeah, and also it's um, it's learn a skill, but also teach kids about continuous learning, how to continually learn, upscale themselves, because with the advent of artificial intelligence, for example, with GNI for example, we're seeing that the learning pace is just a lot faster. So one of the things that I find fascinating about Tanzania is that, from an economic growth perspective, it is absolutely growing. I mean, we're talking about 5.2% in 2023 alone. What are these things that are, what are these sectors that are just driving the Tanzanian economy? I know that you know tourism is quite a big one, but what are those sectors that are really driving the economy and you think actually these could be, you know, the competitive sort of areas for Tanzania as a country?

Speaker 2:

Yeah, absolutely. And the growth. The growth has been around five, six percent for a very long time now, you know nearly 20 years, I would say, of course. You know, the big two drivers of the economy, of course, are tourism, the mining industry as well, which I think is still so untapped. The mining industry could probably be the biggest contributor to the economy. Right now it's around number two or three. I think transport and logistics are also driving a lot of growth in Tanzania, coupled with construction as well. Tanzania coupled with construction as well. I think, just where Tanzania is strategically, geographically located, we see a lot of movement of goods coming from Tanzania, going into Zambia, drc, burundi, parts of Kenya, rwanda, laos. Those three sectors, I would say, are really driving Tanzania's growth. And we can't forget Zanzibar as well. I think Zanzibar is even growing faster than mainland Tanzania. So, yeah, I think those three sectors, you know mining, tourism, transport, logistics, infrastructure as well is really driving the growth.

Speaker 1:

Yeah, that's interesting. So when you think about investors coming in and sort of the sectors that are driving growth, and then just touching back on our skills conversation, do you find that there's like a good Venn diagram there, or do you feel like you still have a large skill base still in tourism versus what they're looking for from a technology perspective?

Speaker 2:

Yeah, that's a good question. I guess it'll depend on who you ask. I still think, with the level of growth I don't think the skills are keeping up. I think we need to turn out more skilled people than the economy is growing. What's happening now? We're turning out a lot of graduates who can't find jobs, you know. One because there's just not enough jobs for them to have, and two it could be because they just don't have the skills that these companies are looking for.

Speaker 2:

So I would say, probably in all the sectors that I mentioned, there's still a big skills gap. And I think also and that's why we talk about sort of like, for example, the tourism industry there's different levels of the skills that are needed. You know there's a difference between, let's say, a safari driver to someone who's managing a five-star hotel, right. A chef you know who's cooking at that five-star hotel, right. So you'd find there's a big supply of people who are doing maybe the basic, you know work at a hotel, but managerial staff, chefs and things like that, you know there's not enough of those, right? So even within these sectors, there's an imbalance in the quantity and quality of skills that are needed. The gap is still there. There's still a demand all around.

Speaker 1:

Yeah, that's very interesting. So it sounds like we should be moving up the value chain from a skills perspective.

Speaker 2:

Absolutely. We're supplying a lot of people with very basic skills and we need to change that.

Speaker 1:

Yeah, that's very interesting. So one of the things that also is an enigma for me is, despite the economic growth you've got, about 75% of Tanzanians living below the international poverty line, and this sort of is a big thing in terms of keeping growth going in the future. Not only that, but obviously it creates all sorts of disparities as well. So is government playing an active role in addressing poverty gaps beyond any sort of social protection mechanism, and how has this sort of come together? So there's a government piece, for sure. There are private sector players as well that we should be thinking about here international partners and so on. So is this a conversation that's being had? Are there partnerships that are really being developed to make sure that we address the poverty component?

Speaker 2:

Yeah, really good question. I'm sure that's a question that probably keeps most people in government up at night. I think there's the issue of inclusive growth. I think when you just look at GDP growth, it doesn't tell the whole picture. It's good for reports, it's good for media and publicity that Tanzania is growing at 5-6%, but I think how inclusive is that growth is another question. I think. One part not to defend the government, but when we go back to the point of how fast Tanzania is growing, it's like population-wise, the country's economic growth cannot keep up with the population growth right.

Speaker 2:

Right, and then it's exacerbated even more if the types of investment we are attracting are not ones that require a lot of employment. You know, sort of high value investments that are more tech, that are more sort of like we're putting money into this sector but we don't necessarily need to hire 5,000 people in this sector. Right, because I think that's how you address poverty is create jobs. Because these people are going to spend, they're going to take care of their families, they're going to possibly open a small business themselves, and there's a trickle-down effect, right. So I think there's still a lot of work to do when it comes to the types of sectors we are targeting for growth. You know, for example, the mining sector as big as I said, the potential of it being the number one sector in Tanzania. The mining sector uses so much technology and machinery it's not going to need to hire One. Mine is not going to need to hire 10,000 people. To hire 10,000 people, right. So we need a good balance of economic growth that, yes, can really exponentially grow numbers and bring in really large sums of FDI. But we need those sectors like manufacturing, like value addition in agriculture that already employs a lot of people, and I think there's more to be done there. To be quite frank, big challenge. And I think also and I know a lot of development partners you know where I work. I don't work on the development side of things, I work on trade and business, but I know, you know, one big focus of development partners is inclusive economic growth. You know it's yeah, how many jobs are you creating? What are the quality of these jobs? Are these people able to take care of their families? Are they able to start their own small businesses? Like, what is the trickle-down impact of, of, of of the work that they're doing here? So I know there's a concerted effort in the development community around inclusive economic growth. And I know the government as well, especially you know the current government that we have. I know, um, the current president is a big, big supporter of sort of.

Speaker 2:

You know the marginalized Tanzanian, especially women. You know women initiatives. How do we empower women? And I think one Tanzanian majority is women in the population, but two.

Speaker 2:

I really believe and it's not like a cliche thing I really think an empowered woman empowers a community. You know an economically empowered woman can empower a whole community way better than a man can. So I think I know there's initiatives. I know there's programs, but again, we kind of need to move faster than the population is growing, because I think we're going to be nearly 100 million people by 2050. That's, I can't even fathom that number. That's like Nigeria. So, yeah, there really needs to be concerted effort and, of course, even with private sector they have a role. I know they think of profits expanding and sometimes if they don't need the skill they don't need to employ people, they probably wouldn't. But I think there's some efforts that private sector can do as well to address this poverty line where we see the growth but we don't see it. Maybe, or people don't feel the growth. Rather, you know, your average Tanzanian may not feel that growth.

Speaker 1:

You know that is exactly it with growth and where there's still a lot of poverty, people see the growth, they sort of hear about it. Rather, they hear about the growth but it doesn't translate and I think you know it remains a pressing issue, like you say. But do you feel like we have, you know, a fundamental understanding of you know what are those key drivers that are driving poverty? Do you feel like you know Tanzanians, from a government perspective, from a private sector perspective, have really kind of looked at the three, four, five drivers and put effort behind those, or do you feel like it's a bit of everything?

Speaker 2:

That's a good question, probably a question to ask the government. I think it's a little bit of everything. I think there's some things that are beyond not beyond government's control, but the government can do on their own. I mean, one is the education thing that we're talking about. You know, I think the quality of education and the type of learning that our young people are receiving could directly impact their economic well-being. If people are being taught outdated syllabuses, if they're being taught to look for jobs, if they're not, you know, there's no that entrepreneurial thinking and teaching where someone can think about starting their own business, their own initiative, to generate their own sort of income and possibly hire other people, then of course you're going to, you're going to have a big population of people kind of sitting there waiting to get hired, right. But then of course there's another.

Speaker 2:

There's another issue of, you know, the big population growth is because people are having a lot of children. The average family size in Tanzania is around four kids. I think, right, if you have four children, economically that's a bigger burden for you to lift as a parent, as a community. So again, that strain on government to provide those social services for a family that can't afford to take care of four children is another thing. So you find that funds or revenue that was supposed to be directed to, maybe, activities that can stimulate the economy end up going into social services like healthcare, like education and things like that, because it's a big population out there that needs to be serviced. I think it's a lot of factors and a lot of that is just the culture, the way we are, but also it's just something that the government needs assistance with. There's too many people, too many issues that the government can tackle on their own, and I think that's where private sector needs to step in places. I'm a big fan of private sector delivering some public services.

Speaker 1:

It may sound controversial, but some services can be delivered by private sector to remove distrust in government, yeah, so I mean, it obviously has its own you know implications in terms of you know, is it going to be equitable access from a price point perspective and so on? So, in your role actually in the you in the UK and Tanzania sort of trade relationship, what are those key things that you're actively doing to encourage the private sector stepping in and looking at Tanzania from a holistic perspective, both as a commercial opportunity but also contributing to the social element of it as well?

Speaker 2:

Yeah. So a few things. I think one is, and this is not. It's happening naturally this way, I think, because also you have to understand a lot of global companies also. They also face their new regulations and policies they have to adhere to. You know, environmental social governance, you know. Is this? You know, is this company going to be creating employment? Is it going to? You know, environmental social governance, you know. Is this, you know, is this company going to be creating employment? Is it going to?

Speaker 2:

You know, skills transfer, technology transfer, so, automatically, a lot of companies these days are really thinking about these things, which is really good, because then it's a breath of fresh air when you're working with them, right? So, for example, you know companies that want to set up. You know, 20 years ago you'd find a company that would want to bring a whole machinery ready, ready, assembled and everything into Tanzania, you know, for an operation. But these days we find companies that are happy to do assembling in Tanzania. You know they're happy to train local Tanzanians to do the maintenance of some machinery or even operating of some machinery. So we see a lot of that happening in some sectors. Automatically, right, some machinery. So we see a lot of that happening in some sectors automatically, right, you know we're seeing some companies that are looking for local partners that can be, you know, the majority of the team on the ground. You know they don't need to bring their own people down here to do everything. So we see a lot of that happening already and we really encourage that type One. It's a good thing to do, right, and also it's sort of supporting government in creating employment and transferring of skills. So that's happening a lot and we kind of facilitate things like that.

Speaker 2:

I think another thing also and that kind of speaks to what I do in my work is not only do we bring UK companies and investors to Tanzania, but also, especially when it comes to sort of working with government government projects you know government initiatives is we also bring in a level of financing and we bring in other UK government agencies into the project as well, right, so it's a UK company wanting to build a bridge somewhere, right, and the government needs to pay for this bridge. What we do is also we can bring in an export financing agency where the government doesn't have to pay 100% of the cost for this bridge. We bring in the export financing element where an export financing organization can pay up to 75% or 70% of the cost, as long as the UK company gets this tender, gets this project. So imagine, as a government, 70% of the cost of what you wanted to do is removed off your balance sheet. It's taken upon someone else, either soft loan or an investment. So we see a lot of British companies working with export finance agencies, international investment agencies, where now not only are we bringing a solution and a technology, we're also bringing some financing to remove your burden of having to finance this project.

Speaker 2:

And then another step further is public-private partnerships. Like I said before, the government doesn't have to deliver everything in their plans. Make it attractive for a private company to partner with you and either build the thing, operate the thing or, you know, transfer the thing to you after a certain number of years. So I think there's still a huge opportunity for public private partnerships. As it is, that hasn't been tapped into. You know, there's very few successful PPP projects in Tanzania. So you know, I think these three things reduce the burden on government. That can you know. I'm not saying necessarily the companies are coming in to do the public services, but they're reducing the burden on government so they can deliver the public services that are needed to address poverty and poverty alleviation.

Speaker 1:

Got you. So we spoke about entrepreneurship earlier on, just entrepreneurial thinking. How are you finding Tanzania's entrepreneurial ecosystem? Are you finding that it is one that is creating value in the right sectors, especially when you think about you know Tanzania trade relationships? If not, you know, what advice would you give entrepreneurs to think about how they create value between the UK and Tanzania and scale their businesses and create mutual value?

Speaker 2:

So I'll answer that in two ways. One I think Tanzanians are very entrepreneurial minded.

Speaker 1:

Nice.

Speaker 2:

And very creative people as well. I think the gap is how do you formalize the entrepreneurial spirit? You know it's like you're good at a sport, but you don't know how to be a professional in that sport.

Speaker 1:

Very interesting.

Speaker 2:

I think it's the same when it comes to entrepreneurs. You know we find people who are I think we have like a hustler mentality. You know you find very few people who just have one job. You know it's someone that you know they have their day job, they've started a small business, they're hustling, they're trying to do different things. So that's the entrepreneurial spirit that I'm talking about. But for you to formalize that and turn that into a business and grow that business, I think that's where the gap is.

Speaker 2:

We find maybe a lot of people are for lack of a better term like copycats. They see someone that was successful in a certain area doing something like you know what, I'm going to try that out, but they don't have a passion for it. They don't have the understanding of that sector, what it took for that person to get where they were. So people are kind of like testing the waters everywhere. So I feel like there's a big gap in formalizing this entrepreneurial ecosystem that we have. Learn the business skills, learn business development, learn marketing, learn accounting, learn branding. If this is what your entrepreneurial spirit wants to do, formalize it and turn it into an actual brand or product. There's a big gap there still, and I think also the other gap.

Speaker 2:

I think this gap of formalizing.

Speaker 2:

It's difficult for private sector to come in and assist with that because that's kind of like that's your problem, right, you know, come to us when you're ready to do business, right, we're not going to help you find your way. So I think that's where there's a need for maybe government and development partners to come in and sort of like set up and this is sort of something I always think about come in and sort of like set up a, and this is sort of something I always think about. I'm like you know how we have, you know, public libraries everywhere. You know we have places that people can go and work. If we had sort of business development services that were either free or very affordable for young entrepreneurs to tap into right, whether in every district, every region, I think that could really help address this lack of formalization of entrepreneurs that I'm talking about. So I think there's a big gap in these business development services that young Tanzanians need sort of formalizing to understand how to run a business, not how to be a hustler. Keep the hustle spirit.

Speaker 2:

Keep the hustle spirit but formalize. There's a big gap there that I think can be addressed through development partners, through government and also these sort of you know these incubators and ecosystem enablers and things like that.

Speaker 1:

Yeah, I mean, are you finding that there is incentive for people to come in and do that? If I'm thinking about setting up an accelerator in Tanzania, I'm just trying to think you know what would be the incentive for me to do that, and you know, is it easy for me to register one and so on. So are you finding that the ecosystem support sort of that people may want to advance to entrepreneurs would be easy to set up? Or you know there's still a bit of work that needs to be done to enable that?

Speaker 2:

So whoever's listening to me, who's in this ecosystem or is in space, is probably not going to like me saying this, but I think the challenge we have in Tanzania is it's easy to set up these things, but I think we do it because we are after the funding that's available for those things.

Speaker 2:

I think we do it because we are after the funding that's available for those things. So you find someone is chasing a funding opportunity rather than they are chasing to solve a problem. So we see that with the accelerators being set up, but more so we see that with the type of startups that are forming in Tanzania. So let me put it this way you know you'd find there's an association that's supporting startups in fintech, right, finance technology, right. So someone you know, this hustler, young, hustler spirit Tanzanian is like I heard there's this new program that is giving out $100,000 for fintech startups in Tanzania. You know what? I'm going to start a fintech in Tanzania. And then you're like, okay, but what problem are you trying to solve? And then they give you a very generic thing that 100 other people are trying to solve.

Speaker 2:

I think that's our challenge, right, a challenge is right. The funding and support, financial support or whatever technical support for some of these sectors is so available that people are forgetting that they need to solve a problem and they're just looking after the, looking for the funding. And do you know what I mean? I feel like there's a, there's a, there's a disconnect there and now, if there's startups forming to go after the funding, there'll. There's startups forming to go after the funding. There'll be incubators forming to go after the startups. Sure, you know, big fish eat little fish.

Speaker 2:

So I think that's the challenge. I'm like I think we need to take a step back and when I say we, I mean even me too. I think you know I'm not pointing fingers at anyone but like we need to take a step back into looking at what are the problems that we have and what solutions, creatively, can we come up to address these problems. We have so many problems still in the agriculture sector, but it's not a sexy thing to say I have an agriculture startup. It's not attractive. So I think we need to go back and also the funding. The people provided the funding and support and they need to look what are the the main fundamental problems in tanzania and how can we encourage startups and smes to address these problems?

Speaker 1:

whether they're in fintech, whether they're in technology or not, whether they're in ai or not, let's address these problems right yeah, are you finding that the leadership within, or or rather the sort of culture of leadership within, Tanzania, whether it is in government, whether it is in private sector, is one that is empowering to citizens to sort of say you know, what are the key sort of roles we can play, to prioritize the problems that get solved, solved? Or are you finding that it's very much like you know, let government do what government needs to do, let private sector needs to do what they need to do, and sort of you know, either they're not talking to each other or they're not even empowering citizens to kind of say, hey, these are sort of the key priorities that we think we need.

Speaker 2:

Yeah, that's a loaded question. That's a loaded question. I think I let me give my diplomatic answer. I think it depends.

Speaker 2:

I don't want to give a blanket answer to say that government doesn't engage citizens or the private sector to solving some problems. I think there is varying levels of engagement depending on the level of government. You know, sometimes at the ministerial level there isn't that much engagement. Depending on the level of government, you know, sometimes at the ministerial level there isn't that much engagement. But at the agency level there is. You know, at the institutional level there is. At the local government level there is.

Speaker 2:

So I think it's assuring that all levels are engaged right and there's no disconnect. Like you know, I'm speaking to a director of this agency and they're very forthcoming and they're very inclusive and they're very consultative when it comes to issues, but his or her boss at the ministry is disconnected. You know that line, that line breaks. It's difficult to re-engage the public that way. So I think there's that gap where you find really really good leaders and not just in government, in private sector and civil society as well who are really engaging, are really collaborative and inclusive in addressing issues. And then there are those who are really disconnected and not in touch with the reality. So I think it's up and down depending on where you look. So I'm hoping for more connection up and down, up and down government and up and down leadership.

Speaker 1:

Yeah, and really for me, these sort of conversations are to try and shed light in terms of which direction really should one be leaning in, to try and gauge let's have the right conversations. But, yeah, so let's think about the future, looking to the next decade, when you look at Tanzania, its current trajectory, where it's currently going, where do you think it will be and what are the key shifts that need to be there or that we need to make to ensure that it becomes the Tanzania in which everyone sees themselves prospering?

Speaker 2:

Okay, the first part is where do I see Tanzania? I think I see Tanzania as and I'm not saying this because I'm Tanzanian, I just think this is the way we're going One, tanzania is going to be the leading economy in East Africa. Right now it's second after Kenya. Tanzania is going to be the leading economy in East Africa and probably one of the top economies in sub-Saharan Africa. And I think two sectors will probably make us leapfrog. I think one is the mining industry, especially with critical minerals. Tanzania and I'm not even you know we've been mining diamonds and gold for quite a long time in Tanzania for quite a long time, for decades, and we're in the top 10 for both those in Africa. But critical minerals is going to be a game changer for Tanzania Right now.

Speaker 2:

You know, there's graphite discoveries, there's nickel. There's one nickel project. Right now there's graphite discoveries. There's nickel. There's one nickel project. There's a lot of graphite discoveries, but only about 15% of the whole of Tanzania has been 3D geologically mapped. So from all the discoveries we have found, it's only 15% of what we know of. There's another 85% under the ground that we don't know what's there, we don't know how much of it, we don't know the quality of it. So that sector is going to really make Tanzania leapfrog.

Speaker 2:

And I think also you know the offshore gas industry, the LNG that's been discovered offshore Tanzania. That's a $42 billion project that is hopefully going to cross the finish line this year, where we're going to see a host government agreement signed. Pumping $42 billion into the economy will be a game changer. I think the only country off the coast of East Africa that has similar discoveries is Mozambique, and their LNG project is already a little bit further ahead than ours. So I think the mining sector, the energy sector, is really going to transform this economy and take us to where we need to be.

Speaker 2:

But now I think the big problem, if all that revenue being pumped into the economy doesn't address what we're talking about skills, technology transfer, helping people create employment what's going to happen? This gap we're talking about, about GDP growth, but the poverty is not being addressed will even be even bigger and that becomes a political problem, that becomes social unrest, and we've seen examples around the world. So that is my sort of caution is yes, we will grow, it will be the biggest economy in Tanzania, but how would the marginalized people in this country be? Will they be better off, will they be more empowered, will they be more skilled? I think that's the big challenge, and I think I forgot the second part of your question.

Speaker 1:

In essence, those are the key shifts, because you know, on the one hand, it's sort of the path to growth is clear, but you know the challenges remain. So the second part of the question is what are the key shifts? And I think you know the key shifts really are that we should be thinking about. You know, getting to the bottom of skills development, particularly from what you've told us, in a sense, that there's a gap that remains and it is widening. So you know it's really about how do we do that Education skills, entrepreneurship, feel entrepreneurship and have the right quality of entrepreneurs as well. But yeah, thank you so much for sharing your perspectives. While mining is going to fuel the Tanzanian, what does that look like from a sustainability perspective and a renewable energy perspective, because we're seeing a whole lot of impacts coming from climate change and, of course, industries like mining, you know, definitely sort of add to that.

Speaker 2:

Yeah, and when I talk about critical minerals, I'm really talking about the energy transition, the critical minerals that are going to be used for renewable energy. So it's sort of a catch-22. You kind of have to do something dirty to get something clean.

Speaker 1:

To get something clean.

Speaker 2:

Yeah or cleaner.

Speaker 1:

Yeah.

Speaker 2:

Yeah, it's a big challenge about this government, especially this Ministry of Minerals, is they're looking at value addition in Tanzania. Because what's happening now? A lot of countries are exporting their mineral products and they go get processed in China or other parts of the world. They're looking into a cleaner way of processing material here, discarding of the waste here and so forth. But one thing I want to address on this, both on the mining sector and on the energy sector I think it's not a Tanzania-specific problem. I think there really needs to be some sort of economic block cooperation, because Tanzania alone can't be a critical minerals giant in Africa. Right, tanzania, mozambique, drc, zambia you know these countries that already have minerals. I feel like there needs to be sort of a combined critical minerals strategy or energy transition strategy that one is ensuring ESG principles are met, and not only in the process of getting the stuff out of the ground, but the type of companies and investors you're working with. If they don't adhere to some of these requirements, no matter how great they sound, how much money they'll give you, we have to have sort of standards that we cannot work with. So which partners are you partnering with and are they addressing environmental, social and governance issues right.

Speaker 2:

And then also sort of on the energy side of things Tanzania, right now I would say majority of our power generation is from hydro and then followed by gas, and a lot of our solar and other renewable is off-grid. We really don't have renewable energy that's on the national grid yet that's providing power to the whole country. We have off-grid small solar projects and maybe some wind projects here and there. Now I think there's a big opportunity to see how we can bring renewables into the national grid to possibly in the future, 20 years from now, reduce how much gas we're using, because even the LNG gas that we're talking about, 90% of it is going to be for export. We're not actually going to be using that offshore gas domestically, only 10% domestically. So again, one is to make renewables attractive. I think right now renewables is seen like a more expensive thing to do because you need so many solar panels to produce a gigawatt of electricity as opposed to just water that can just be redirected and flow. And I'm seeing, you know, renewables are becoming cheaper and cheaper as technology improves.

Speaker 2:

But I think there's a need to. You know the West has had 50 years to change and adapt to renewable. You know some countries, especially in Scandinavian countries. Majority of their power is renewable, right, but they had a 50-year head start to think about this, to transition slowly, right. Of course we don't have the luxury to wait 50 years to do that, because at some point some of these things will be banned. You know you won't be able to have a gas plant anywhere in the world, it'll be banned right.

Speaker 2:

So we need to find ways to accelerate this into a more cleaner economy faster than our friends in the West did it in 50 years or 40 years or whatever. But that accelerating of transition. We can't expect government to do that on their own, with all the other problems we just talked about. So there needs to be partners I don't want to say development partners, but there needs to be partners that can come in and accelerate this and reduce the burden of the need to accelerate or the need to reach that net zero target that everyone is trying to reach. But I think this company is already working in this space. There's development partners working in this space. I think this is providing the technical support and capacity building for governments to be able to deliver on these goals, on these climate goals and sustainability goals as well.

Speaker 1:

Yeah, I mean, it sounds like renewable energy is a very good opportunity, actually becomes an opportunity instead of a challenge or a problem. So I think it's definitely one of those sectors that you know entrepreneurs should be thinking about.

Speaker 2:

Absolutely.

Speaker 1:

From a skills perspective, aligning that and I find that most governments are not necessarily doing the alignment very quickly. They're sort of doing everything all at once and I'm hoping that we're going to start to get that traction where we're clear. You know we're betting on mining. It means that we also need to think about renewables and so on. But yeah, so, andrew, your passion for trade, investment and just economic development is very clear and thank you for just sharing your insights with us, and I hope that we start to galvanize a whole community of entrepreneurs, investors, policymakers, practitioners who really, really around, rally around the work that you do and rally around Tanzania, as well as most African countries as well, you know, especially in terms of collaboration. I mean, you spoke about Zambia and others and you know I'm hoping that we start to collaborate a lot more. So thank you so much for your time, thank you.