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Tanzania: When the economy matters more than the environment

Posted by on 25 April 2011

 

Soda ash (also known as sodium carbonate) is used in the manufacture of glass, as a water softner and as a chemical

There’s an interesting public debate that has been (almost silently) going on in Tanzania over the last four years. Tata Chemicals Ltd, an Indian company, has made a bid to build a soda ash plant near Lake Natron, a project worth 450 million dollars. The company approached the Tanzanian government some four years ago, had its plan approved by the Tanzanian Investment Centre (the one stop agency where foreign investors need to have their business plans approved by the government) and began conducting feasibility studies with respect to the construction site.

For those who don’t know, soda ash is a naturally occurring mineral (of which Tanzania has plenty!) that is nornally used in making chemicals and detergents, and the manufacturing of glass, among other things. If the factory is built and becomes fully operational, then in might be possible for the company to process up to 500,000 tons of soda ash per year. The factory would also hire predominantly local personnel thus reliving the unemployment pressure (about 25% of Tanzanians are currently unemployed).

So isn’t this great?, you might ask. Well, the catch is that this factory is supposed to be built next to Lake Natron, in the northeastern part of Tanzania, in an area used as a breeding ground by the Lesser Flamingo population, an endangered species of flamingos to be found in the Great Lakes Region and in southern Asia.  Basically, this particular species of flamingos is the most numerous one of all flamingos, but its numbers have decreased over the last decades because of human activities which led to a sharp decline in number of breeding sites in Africa. So Lake Natron serves as the last major breeding site for the Lesser Flamingos in Africa, though there have been reports of other isolated instances, in Kenya and Tanzania, where flamingos mated.

Lesser flamingos are an endangered bird species that will be further threathed by the opening of the soda ash factory in Tanzania

So the obvious question, if you’re a Tanzanian politician, if you’re in President Kikwete’s shoes, is: what do you do? And the answer, sadly, is equally obvious – you go for it. Tanzania is in dire need of foreign investment (or any investment as a matter of fact) and it needs to clinge to any opportunities that might come from potential investors. After all, for a poor country like Tanzania, the number one priority is the people, not the birds and their habitats, so the equation is simple – any business opportunity which helps alleviate poverty is welcomed. Now, at a formal level, the President announced that precautions will be taken so that the population of flamingos won’t be disturbed, but one can suspect otherwise.

The challenge for a country like Tanzania boils down to a simple decision that involves assessing the opportunities versus the costs that might come back to haunt the administration in the long term. When poverty is as rampant and devastating as it is in Tanzania, when there is constant and urgent need for new jobs, and when the government is under pressure to encourage the economic activities of the private sector, there seems no other way but to accept that the environment will take the hit.

With business opportunities like these, there is also an underlining power struggle which often passes unnoticed. Foreign investors know very well the situation in the country they’re planning on investing – they probably did their work ahead of time, hired consultants and legal experts. So when a company like the Indian one makes an offer to build a 450 million dollar plant, its CEO knows for a fact that Tanzania cannot turn down the offer. At the very least, because the same firm can simply move across the border and take its capital and resources to Kenya, which is another country in the region that has vast mineral supplies of soda ash.

And here you go folks: African leaders make difficult calls in a bet to ensure the well-being of their citizens and their economies. It’s just a shame that the environment has to take the hit. That’s all…

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