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Event Recap: Regional Economic and Development Planning in East Africa

On Wednesday, November 7, DUSP, urbanAfrica and the MIT Energy Initiative (MITei) hosted a panel discussion called “Regional Economic & Development Planning in East Africa: Natural Gas – Fueling Tanzania Forward." The panel, moderated by MITei Associate Director Rob Stoner, included Joseph Simbakalia (Mtwara Regional Commissioner). Professor Calestous Juma (Harvard Kennedy School), Professor Donald Lessard (Sloan International Management) and DUSP Professor Balakrishnan Rajagopal.

Natural gas, discovered recently in coastal East Africa, has the potential to change the development equation in regional economic development and planning.  Natural gas is coming ashore in Mtwara, Tanzania, a relatively undeveloped region in south-eastern Tanzania, which is creating opportunities and very serious social and environmental challenges.  Colonel (Retd) Joseph Simbakalia, Regional Commissioner of Mtwara, is responsible for charting the future economic development plan for Mtwara.  Simbakalia’s presentation was followed by remarks from the panel and questions from the audience.

DUSP MCP student Sarah Dimson, who helped organize the event with DUSP student group urbanAfrica, provided the following write-up of the panel:

U.S. Assistant Secretary of State Johnnie Carson states that Africa “represents the next global economic frontier.”  The International Monetary Fund posits that seven out of ten of the world’s fastest growing economies between 2011 and 2015 will be in sub-Saharan Africa. Furthermore, a recent McKinsey report forecasts gross revenue projections in Africa to exceed US $ 2,600 billion by 2020. These promising economic outlooks are also being met by rapid population growth as Africa will be home to an additional 1 billion people by 2050.

The confluence of economic growth and rapid urbanization is creating the ultimate development challenge in Tanzania, which has maintained GDP growth at 5-7 percent over the past decade and includes one of sub-Saharan Africa’s fastest growing emerging market cities in Dar es Salaam.  Moreover, distinct to Tanzania are the 2012 discoveries of abundant world class natural gas reserves on-and-off shore. To this, Mtwara, Tanzania, a largely undeveloped region south of Dar es Salaam, is currently the gateway city to the off-shore reserves.

As a result of the hydrocarbon discoveries, Col. (Retd) Joseph Simbakalia, Regional Commissioner of Mtwara, is advancing a progressive short-to-long term development and partnership strategy for the Mtwara Development Corridor, which spans the geographic region of Tanzania and segments of neighboring countries.  The Tanzanian Government is keen to appropriately, fairly and justly leverage its natural resources for sustainable and equitable socio-economic development.

On November 7, 2012, the distinguished, multi-disciplinary faculty panel used their respective expertise to provide Mr. Simbakalia with some recommendations on how to move forward. Professor Lessard spoke about the need to develop human infrastructure, project infrastructure, and develop a local business structure that supports small and medium sized enterprises.  Professor Rajagopal outlined five key areas for review: the revenue structure (i.e. the possibility of a sovereign wealth fund); relationship terms between the Government and private firms; institutional coordination efforts, particularly per the various countries involved in the Mtwara Corridor; social and environmental mitigation strategies; and aspects of the national policy that provide a framework for decision making apropos regional and local development plans. Finally, Professor Juma suggested that Mr. Simbakalia focus on requisite infrastructure and entrepreneurship. The panel also addressed questions posed by Mr. Simbakalia and those in attendance. The panel was focused, full of energy and thought provoking. Mr. Simbakalia left Cambridge with a robust set of new ideas and resources.