President John Magufuli’s administration is in a dilemma as it seeks to move its capital from Dar es Salaam to Dodoma.

Questions have arisen on Dodoma’s capacity to accommodate Tanzania’s government departments and staff and the source of the $582.9 million it requires to effectively finance the move in the next three years.

President Magufuli recently announced that he will ensure that his government moves to the centrally located town before the end of his first five-year term in 2020.

Already Prime Minister Kassim Majaliwa has announced that he will shift to Dodoma by September, with the ministries under his docket. The Ministry for Agriculture, Livestock and Fisheries is expected to be the first to start operating from Dodoma, by the end of this month.

READ: Tanzania to move capital to Dodoma starting September

Three years ago, a new master plan made by Saman Corporation, a South Korean engineering firm, was presented to retired president Jakaya Kikwete’s administration.

Details of the master plan have remained a state secret, but the completion of the National Bank of Tanzania and Ministry of Finance buildings in Dodoma, with support from China, shows that the master plan is gradually being implemented.

It is now expected that Tanzania will turn to partners like China, with whom it is developing its industrialisation plan, to finance the relocation.

The Capital Development Authority (CDA), the government agency in charge of the shift, has estimated that it needs $582.9 million for infrastructure upgrades to accommodate the shift.

Ahmed Salim, a senior associate at an advisory firm, Teneo Intelligence, said that the government’s decision to move from Dar es Salaam to Dodoma will have limited economic impact.

“The assumption here is that the private sector will move to wherever the government moves to. Dar es Salaam will remain the commercial capital of Tanzania and the most important city in terms of economic and business activity,” Mr Salim insisted.

'Neglected city'

The concept that is most developed in South Africa where Johannesburg, Durban and Cape Town serve as economic hubs with Pretoria serving as administrative capital.

“The trouble with the Tanzania situation is that Dodoma has been a neglected city for decades and I don’t foresee investment flows overnight that will dramatically change Dodoma, even if the government is situated there,” Mr Salim said.

“Perhaps small to medium enterprises and services sector will thrive. Overall though, this will likely make doing business in Tanzania more difficult, particularly if companies that want to have offices and headquarters in Dar es Salaam will have to shuttle to and from Dodoma to get basic paperwork done,” noted Mr Salim.

He added that what ought to be looked at are the opportunity costs of the relocation. President Magufuli’s administration has been preaching the importance of austerity and limiting government wastage.

According to Mr Salim, there are some things that must happen first.

A panoramic view of Dodoma. The de facto Tanzanian capital remains largely undeveloped despite decades of planning. PHOTO | FILE

“When Tanzania receives heads of state or senior government and private sector officials, they will obviously fly into Dar es Salaam airport, which is undergoing a costly renovation including building of a new terminal. If the government is in Dodoma, there will have to be a complete overhaul of the airport there, essentially building a new one,” he said.

Mmari Chacha, an international relations consultant at Innovate in Dar es Salaam, said the cost implications of the shift will be the most telling sign about how serious the government is with the move.

“We haven’t really seen much of advance preparations for the move so it remains to be seen off how the government will pull it. We are talking about more than 120,000 government employees who will move with their families. The multiplier effect will have huge budgetary implications,” Mr Chacha said, adding that how President Magufuli’s regime will finance this remains to be seen.

Despite Tanzania’s desire four decades ago to have Dodoma as its capital city, no law has been in place to effect it, with only the CDA established through an Act of parliament as the sole implementing agency for the shift.

Last month, Prime Minister Majaliwa said the government is working on a Bill to be submitted to parliament to effect the shift but no timelines were given.

“We are working on the proposed law that will facilitate the shift. This will give us the legal grounding to implement it,” Mr Majaliwa said.

Infrastructure upgrades

Prof Delphin Rwegasira from the economics department of the University of Dar es Salaam said that for the shift to be smooth, the government needs to do advance preparations.

Water, electricity and telecommunications utility service providers have been given up to the end of the year to upgrade and expand their services to accommodate the expected population influx.

The Tanzania Telecommunication Company Ltd (TTCL) has already received funding from TIB Development Bank to upgrade the national broadband network between Dar es Salaam and Dodoma to increase the bandwidth fivefold to 200GB by November.

The project is being implemented in partnership with Huawei and Alcatel. Energy Minister Sospeter Muhongo has also said that Dodoma’s electricity infrastructure is being upgraded to provide better reliability.

Demand for water in Dodoma currently stands at 50 million litres daily against a supply of 32 million litres. This means that the government must improve the capacity of the water supply.