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Coal exports will certainly boost the economy

Coal exports will certainly boost the economy

The National Development Corporation (NDC) announced over the weekend that more clients are likely to come on board. This is good news indeed.  The deal will have massive benefits on the national economy as more revenue would be raised and hundreds of jobs created.

For many years, the Southern Corridor has seen very little in terms of huge investments, save for the gas project at Mnazi Bay in Mtwara. Plans by Nigerian investors to construct a cement factory in Mtwara could not materialize as expected.  Residents in the area have continued to depend mainly on cashewnuts and fishing to earn a living. 

These sources of income, much as they have helped them make ends meet over the years, have not been sufficient enough given a number of factors, including market saturation.   With proven huge coal and gas deposits, life is likely to improve, taking into account plenty of activities in the area.

Moreover, the thirst for energy among local manufacturers is likely to ease if they switch to coal.  The manufacturing sector has continued to perform well in the last five years with the land-locked countries depending heavily on imports from Tanzania.  However, the construction and manufacturing sectors slowed down by 5.2 and 0.7 per cent respectively in the third quarter of last year compared to similar quarter in 2010, reflecting higher energy and borrowing costs. 

The World Bank says in its latest report that the on-going power outages will stall the economy which expected to grow at around six per cent, the lowest in 12 years.  

The report further says that generation of power has dropped by 22 per cent in the second quarter and more problems are likely to pile up if rains to feed the hydro-plants stop.  So, with coal in abundance, there is no need for more uncertainties in getting reliable power. 

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Author: EDITOR

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