US-China Competition Plays Out in Tanzania

Gabe Joselow
June 30,2013

DAR ES SALAAM, TANZANIA — U.S. President Barack Obama’s visit to Tanzania as the last stop of his African tour, underscores a silent competition with China to tap the country’s growing economic potential.

It’s always a hard day’s work at the Kivukoni fish market in Dar es Salaam. This place was once the center of business and trade in the city by the sea. But that has all changed. Tanzania’s economy has a 7% growth rate and the country is quickly developing. Competition to get into the market is heating up.

Chinese companies are already at the forefront, leading construction of buildings and infrastructure.

But the United States is also looking for a stronger foothold, a priority emphasized by U.S. President Barack Obama’s visit to the country.

Lead economist for the World Bank in Tanzania Jacques Moriset says the competition can be a good thing. “In my view, it’s a benefit, it’s a huge opportunity for Tanzania, I mean I strongly believe in the basic principle of economy: competition is good. Of course competition has to go with transparency which is the main challenge now," he said.

China and the United States have a very different approach to aid and investment. When Chinese President Xi Jinping visited Tanzania in March he emphasized his country would always offer assistance with no political strings attached.

American public investment however, is often tied to economic and political reforms.

Rehema Twalib, head of the African Peer Review Mechanism (APRM) office in Tanzania, says what is really important is that any reform helps the population. "Good governance is a good ingredient for development, we’ve just seen it. If you have transparent policies, you make your citizens participate in programs they feel like they own them, it’s good. If you have predictable policies, it’s good for investors," he said.

China and the U.S. both have an eye on Tanzania’s natural resources, with U.S. companies in particular showing an interest in natural gas and oil exploration.

But growth in that sector rarely translates into jobs or any great improvement in the lives of citizens.

It is the hope of businesses here that new investment will bring with it a transfer of skills and knowledge.

Bhakti Shah is the President of the American Chamber of Commerce in Tanzania. “When you look at the U.S. government, it is the engine of the private sector so all the intellectual knowledge that the U.S. government has we hope that Tanzania will benefit from, that is how to have a booming private sector," he said.

The United States has downplayed any competition with China for access to African markets, but it is falling behind in the numbers.

China says it is trading nearly $200 billion a year with Africa, which is about twice as much as the United States.

As African economies become among the fastest growing in the world, we will see if the U.S. can get itself a stronger foothold.