Tanzania is fully funding its $3.6 billion Rufiji dam that will provide 2112MW of electricity to the country.

President Magufuli

It is no secret that African leaders have a great appetite when it comes to seeking loans for infrastructure projects. Whether this desire for loans is to fully invest the funds to the ascribed projects is still mired in controversies. Initially, they had to rely on the world bank whose criteria to disburse loans became increasingly stringent. Since China came to the scene in 2000, African leaders have shifted to the middle Kingdom to satisfy their loan needs.

While taking loans is not inherently bad, it should be a last resort. This means African countries should make sure all internal sources of funds are exhausted before going to look elsewhere. But this idea does not seem to register in the minds of African leaders. When it comes to funding infrastructure projects, only one source of funding pops into their minds, take loans.

Examples of loans taken by African governments

For instance, the administration of Nigeria’s Muhamadu Buhari has embarked on a heavy revitalisation of the country’s dilapidated infrastructure. However, most of the infrastructure projects are being funded by Chinese loans.

China also funded most of the completed infrastructure projects in Nigeria in the past few years. For instance, in 2013 China provided $400 million to fund the building of four new airport terminals in the cities of Lagos, Abuja, Port Harcourt and Kano. Furthermore, the Abuja light rail which started operations last year was funded by china’s EXIM bank at a cost of $694 million.

China also funds infrastructure projects in other African countries. For example, Kenya’s Nairobi-Mombasa standard gauge rail (SGR) which was recently extended to Naivasha was funded by China to the tune of $4.7 billion. Ethiopia’s Addis Ababa-Djibouti SGR was also funded by Chinese loans.

These are just a few examples when it comes to the increasing debts African governments are accruing not only from China but also other international financial institutes such as the world bank.

President Magufuli’s sweeping reforms

Since the ascend of Dr John Magufuli to the seat of the presidency of Tanzania in 2015, sweeping reformations have been ongoing in the Swahili-speaking country. The number of government officials unnecessary foreign trips have been drastically reduced. He reduced his salary from $15000 to $4000 per month. His cabinet size was also reduced from 30 to 19 ministries . He also cancelled the inefficient and costly power contract which was ran by a private corporation.

His reforms paid off

It seems the huge cuts he made in various areas of his government have paid off. The Tanzanian government is fully funding the $3.6 billion 2112 MW Rufiji Hydro power project. President Magufuli is on an industrialization drive and he knows power is a must if he is to achieve his goal. This remarkable feat is a lesson for the insatiable loan-seeking African leaders. They must learn from President Magufuli how to self-finance projects, instead of burdening their future generations with mounting debt.

According to the Tanzanian minister of energy, Dr Medard Kalemani, the dam would be fully funded by the government of Tanzania at the tune of $3.6 billion. This feat was achievable because of the savings made from the cuts mentioned above, coupled with tax revenues and increased income from the growth in GDP.

President Magafuli’s objectives

President Magufuli aims to transform Tanzania from a low-income country to a middle income country by 2025. With the way he is going, this goal is definitely on track. We at africahappenings say cheers to Dr Magufuli and more power to your elbow!!!

Do you think other African countries should learn how to fund infrastructure projects from Tanzania? Share your thoughts below.

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