Was Tanzania's Cabinet reshuffle sparked by current power crisis?

Monday October 23 2006

By J. MWAMUNYANGE
Special Correspondent

As Tanzanians study the implications of the recent Cabinet reshuffle, it is beginning to emerge that a solution to the crippling energy crisis was a key motive in the mind of President Jakaya Kikwete when he effected the changes.

The EastAfrican has learnt that the removal of Dr Ibrahim Msabaha from the critical Ministry of Energy and Minerals was spurred by growing complaints from the private sector that the minister had mishandled the crisis by failing to warn manufacturers early enough about the gravity of the situation.

Several manufacturers who spoke to The EastAfrican blame the ministry for not being candid enough and accuse Dr Msabaha of failing to give information they needed to make contingency plans and seek alternatives.

What comes through from an interview of a broad section of industrialists is the view that the manufacturers were starved of information by the ministry.

"The immediate former Minister for Energy and Minerals, Dr Ibrahim Msabaha, gave conflicting statements on the true prevailing power situation in the country," said a leading industrialist.

As it is, the ministry, having realised that it underestimated the magnitude of the problem, has now been forced into taking frantic measures to avert the looming crisis.

The country is bound to suffer heavily from the loadshedding, which is expected to get worse because the Mtera and Kidatu hydropower systems have been switched off.

Already, manufacturers are lamenting that their costs of production, already high compared with the country’s major trading partners, will go up further as they are forced to switch to generators using expensive imported fuel.

Local manufacturers are thus almost certain to increase the prices of their products, decreasing their competitiveness in the region and the world market.

Dr Msabaha, who has now moved to the East African Community Ministry, had assured the public that the power situation would get better by the middle of October. But this, say analysts, is now highly unlikely because of the failure of the two hydropower systems.

The general manager of Mbeya Cement Company, Ravi Iyer, told The EastAfrican that, "The power problem is very hard on us."

The director-marketing and strategic planning of Tanga Cement Company, Harpreet Duggal, told The EastAfrican that large power consumers had on September 17 written to the government to waive duty on fuel used for generators. The government is yet to respond to the request.

"Large consumers like Tanga Cement will suffer the most from the current crisis, because at the moment we are spending Tsh20 million [$19,000] every day to run generators during the crisis," said Mr Duggal, hinting at the prospect of a rise in the price of cement.

"We have been absorbing the extra cost, but we are now reaching a point where we will have to pass this cost on to the consumers," he said.

He said that the company was planning to introduce a loadshedding surcharge, which would be removed once the power is back, "because at present industry is reeling under this crisis."

On Thursday last week, before it was overtaken by events in the form of the Cabinet reshuffle, the Tanzania Electric Supply Company (Tanesco) was supposed to have issued a new timetable increasing the loadshedding from the current 36 hours to 72 hours a week.

Come Thursday, all the relevant officials from the power utility firm and government were said to be in different crisis meetings.

Tanesco managing director Adrian van der Merwe was said to have been summoned to the Ministry of Energy and Minerals.

However, other sources told The EastAfrican that because of the seriousness of the issue, some of the meetings to tackle the impending crisis had been held at State House.

Industrialists were also planning to meet the president over the energy crisis, which threatens to affect progress made over the past two decades.

Another industrial source told The EastAfrican that large-scale manufacturers would suffer the most, "because we can’t change shifts to be in line with the loadshedding schedule; some of the machinery we are using must remain switched on continuously, if it is to function efficiently.

"In essence, the loadshedding has impacted on us and our production capacity.

"Some manufacturers are losing 36 hours every week and this translates into a lot of money. The power crisis will also have a negative effect on investors," said the source.