A man of the people? Tanzania's President Kikwete has now been in power for two years, during which his country has continued to show robust growth. What has been his personal impact on the nation? Analysis by Neil Ford.

Prior to his election as president, Jakaya Kikwete had a solid reputation as Tanzanian foreign minister and as a member of the ruling Chama Cha Mapinduzi (CCM) party. After two years in power, the time is perhaps ripe to consider Kikwete's performance to date. The Tanzanian economy continues to make considerable progress, but how great a contribution has the man in charge made towards achieving that success?

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In many ways, it is difficult to separate Kikwete's record from that of his predecessors. The political and economic condition of Tanzania prior to economic liberalisation is well known. The African socialism of Julius Nyerere depressed economic growth and deterred investment by Tanzanians and foreign investors alike, but his role in binding 200 different ethnic groups into a Tanzanian nation means that he is still generally regarded fondly as the father of the nation. Yet, since the mid-1980s, his successors have gradually adopted a more market driven approach.

This approach has begun to pay dividends in terms of increased investment and higher levels of growth since the turn of the millennium, under the leadership of Benjamin Mkapa, who served as president for the decade up to 2005.

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Rather than introducing a whole new set of economic policies, Kikwete has largely continued to implement Mkapa's strategy. Social spending has been boosted by the deep-seated debt cancellation that was achieved under the enhanced Heavily Indebted Poor Countries (HIPC) initiative. Overall, however, the programme of selective privatisation has been sustained and while the country continues to rely heavily on donor support, expenditure and revenues have largely been balanced.

As ever in Tanzania, Kikwete's political position seems secure. The CCM controls about 90% of all seats in the Bunge or parliament and Kikwete's popularity within the party does not seem to have suffered since he was elected with 80% of the vote in 2005.

Unlike in many African states, the CCM tolerates a reasonable level of internal discussion, debate and even dissent without threatening the position of the president. At this stage, it seems highly unlikely that the party will not retain the incumbent as its candidate for the 2010 election. Given that Tanzanians were prepared to vote for CCM when the economy was stagnating, the ruling party is almost certain to maintain its parliamentary dominance now that the benefits of reform are finally being felt.

GDP grew by an estimated 6.2% in 2007 and the government predicts that this rate will rise to 7.3% in 2008, partly because the country will recover from the impact of the 2006-07 drought that hit agricultural output and reduced power generating capacity in hydroelectric plants.

However, national power company Tanesco has increased its 2007 tariffs by up to 22%, while the very high oil price continues to climb, so the energy shocks may not quite be over. In addition, there is no guarantee that rainfall will be both plentiful and timely this year.

Tourism, mining remain robust

Nevertheless, employment in the tourist sector should continue to rise and the mining sector is expected to maintain strong growth. A strike at the Bulyanhulu gold mine that began in October was resolved in mid-December, so production should return to normal. Canadian firm Barrick Gold Corporation, which operates the mine, initially sacked about 1,000 workers in what it described as an illegal strike, but many were later rehired.

The strikers had complained about the disparity between the wages and benefits of Tanzanian and foreign workers. Barrick is currently developing another gold mine and a nickel mine in Tanzania.

However, the living standards of the bulk of the Tanzanian population have yet to see the benefits of strong economic growth. Mining sector investment may look good in the GDP figures, and has the potential to boost government revenues, but it creates relatively little employment.

The tourist industry may be more labour intensive but again tends to be limited to particular areas and many of the largest businesses are owned by foreign interests. Nevertheless, the government appears to be well managed so higher revenues should eventually feed through to all regions in the form of improved health and education services. The pace of new school construction already appears to have picked up and the emphasis on education for girls has been increased.

In the meantime, however, Tanzania has to cope with many of the more negative side effects of economic liberalisation. Millions of Tanzanians have moved to the cities in search of work over the past 20 years and huge suburbs have built up around Dares Salaam.

The incomers may be closer to the centres of wealth and employment but the living standards of most are no better than in the rural areas they left and in many ways are a great deal worse. Greater differences in wealth have certainly generated more crime, while migration also appears to be fuelling the spread of HIV/Aids.

Kikwete has attracted a great deal of praise from the international community but his greatest success is that of being in the right place at the right time.

He was fortunate to come to power at a time when economic growth was finally taking off and his five or 10 years in power may come to be regarded as a time of unprecedented economic success for the country.

In speeches over the past year, Kikwete has talked of the need to move away from reliance on development assistance towards a greater focus on investment. He talks of "partners in development" and seems to suggest that the European countries that provide most financial aid should encourage greater trade between their own companies and Tanzania.

One break that Kikwete has made with his predecessors is in spending a great deal of time in various rural parts of Tanzania. He tours different regions several times a year, holding meetings in remote places with local people. He says: "It is vital for me to meet the people", and even takes his holidays in Tanzania.

Continuing the policies of the past 20 years should certainly serve the president well. Radical changes in approach rarely yield long term benefits and the government is perhaps right to pursue selective reforms, while allowing the benefits of the liberalisation achieved to date to filter through.

But politicians with the right motives often fail to see the results of their work on the ground and so lose touch with the people they are trying to help. Gaining the presidency cannot but change a politician, but at least Kikwete is trying to see the impact of his policies on ordinary Tanzanians. Perhaps he has brought something new to the table after all.

RELATED ARTICLE: Angola

Green light for new $4bn LNG plant

After years of discussion, the final investment decision (FID) has finally been taken on the Angola LNG project. US firm Chevron has put pen to paper on a deal with Angolan state owned oil and gas company Sonangol to develop the project. According to the project consortium, gas will be supplied to the plant from associated gas fields, thereby helping to avoid gas flaring and enabling the production of oil on associated fields.

The development consortium comprises Chevron subsidiary Cabinda Gulf Oil Company (36.4%), Sonangol offshoot Sonagas (22.8%), BP (13.6%), Eni (13.6%) and Total (13.6%).

A single liquefied natural gas (LNG) train with production capacity of 5.2m tonnes a year will be developed on the Angolan coast close to the city of Soyo, about 350km north of Luanda. The plant, which has a projected lifespan of 30 years, will consume about 1bn cubic feet of gas a day, which will be collected from offshore gas fields on blocks 14,15,17 and 18, while the operating company will also supply up to 125m cubic feet of gas a day to Sonangol for use within Angola.

Apart from LNG, the plant will also produce propane, butane and condensate. Gas is expected to be shipped from the Soyo plant from the first quarter of 2012 to Gulf LNG's regasification terminal in Mississippi for sale across the US. George Kirkland, Chevron executive vice president, upstream and gas, said that the scheme would "establish Angola as a competitive source of LNG to the emerging global natural gas market". Alan Kleier, the managing director of Chevron's Southern Africa operations, added: "Chevron has worked and been in partnership with Angola for the past 50 years, and we appreciate the government of Angola's strong support for the project. The benefits of Angola LNG are broad: the project is expected to commercialise the country's natural gas resources, facilitate more oil development and natural gas exploration and provide natural gas for domestic use to stimulate further economic development."

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According to Angolan sources, the project will cost $4bn to develop, making it the single biggest individual investment in the country. Italian firm Eni joined the consortium as the result of a strategic co-operation agreement with Sonangol in December 2006.

One year later, Eni signed a participation agreement to join another consortium, led by Sonagas with a 40% stake, which will assess proven gas reserves with a view to developing a second LNG plant that would also be fed by offshore reserves.