Steel: Yet another chance for Tanzania

Steel: Yet another chance for Tanzania

There is something called the world market commodity price, usually quoted in US $. Everyday, as our lives get more difficult, we are told that the value of the shilling has gone down relative to the US currency or that the commodity price (usually oil) has gone up on the world market. Ten years ago, the price of gold was US $ 320 an ounce and now it is over US $1600, an increase of over 5 times.

As a major producer of this commodity in Africa (and the world), we have not felt the positive impact of this price rise! Wakati wote inakula kwetu! We have millions of tons of iron ore and coal in the southwest of the country. Some investors are already working on these projects.

Just as water is more basic to life than oil, steel (a product of iron) is more useful as a structural and industrial metal than gold. Steel scrap has been a subject of a lot of controversy in this country. Cases have been told whereby hand grenades were sold as scrap to a steel rolling mill. There have been cases whereby railway lines have been removed (without regard to safety of train passengers) to be sold as scrap.

Manhole covers, street sign poles and bridge railings have all been vandalized so that scrap dealers could make a few bucks.  No economic power house could ever make it without plentiful use of steel. Steel is used in the infrastructure construction industry for the buildings, bridges, flyovers and railways.

The Automotive industry depends on it; the power plants and bodies of vehicles as well as the manufacturing plants for the vehicles require steel as the basic raw material. All mechanization at the present time is based on steel, because the metal is versatile, flexible and can be obtained in abundant quantities. It is indispensable in the machine tools industry, armaments, shipping, aerospace, etc.

As a country, we have become very weak in terms of industrialization. Current normal uses of steel are gates, window grilles and nondo for concrete reinforcement. The price of a single 16mm piece of nondo is well over Tsh. 30,000/-. Can we build quality houses at these prices?  

Can our small metal working entrepreneurs such as those under the umbrella of SIDO survive if the price of power keeps on rising and the price of steel is on the roller coaster of global prices? We would like to ask the government to subsidize the price of steel when this project eventually takes off. If the price of steel is at a fraction of the world market price, our local contractors can become competitive and build good and strong infra structures at reasonable prices.

Subsidies to the local price of steel will also make industrialization possible in Tanzania since this would be an incentive for foreign and local investors people to put up businesses in the metalworking industry here unlike the current trend where the focus is in the service industry and trade.

It might even rekindle an interest in fields like mechanical and civil rather than political engineering in our youth. So with Liganga iron in the pipeline, blessed Tanzania has yet another opportunity to become a rich and powerful country. The remaining ingredient is the right people in the right positions to lead us out of poverty. The natural endowment we have; the rest is up to us.   


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