On Monday, 27th February, 2024 the new US Ambassador Michael Battle presented credentials to President Samia Suluhu Hassan in Dodoma, Tanzania. Photo: Courtesy
US-Tanzania Commercial Dialogue: Charting New Economic Horizons in Global Geopolitical Shifts
By Adonis Byemelwa
In a bid to bolster economic ties, Tanzania and the United States have commenced a commercial dialogue in Dar es Salaam, marking a significant milestone in their bilateral relationship. With a focus on enhancing the business environment, key agenda items include discussions on Tanzania’s regulatory framework, the burgeoning digital economy, and strategies to boost export-import activities between the two nations.
This initiative stems from an agreement inked in October 2023 by U.S. Secretary of Commerce Gina Raimondo and Tanzanian Minister for Industry and Trade Dr. Ashatu Kijaji, signifying a commitment to fostering mutually beneficial opportunities.
Addressing the opening ceremony, U.S. Ambassador to Tanzania, Michael A. Battle Sr., underlined the dialogue’s importance, highlighting the potential for shared prosperity. “The United States does not engage in commercial dialogues with every country. This is a unique and special opportunity,” Ambassador Battle remarked. “We only embark on such dialogues when we believe in the promise of the trade and economic relationship.”
Echoing these sentiments, Dr. Hashil Abdallah, Permanent Secretary of the Ministry of Industries and Trade, expressed optimism about the dialogue’s outcomes, projecting the establishment of a working framework within three months. “The U.S. is a critical stakeholder in Tanzanian business,” Dr. Abdallah emphasized. “This meeting is vital for smoothing our trade relations.”
Notably, the dialogue is slated to become an annual fixture, co-chaired by the Tanzanian Minister for Industry and Trade and the U.S. Secretary of Commerce, underlining the commitment to sustained engagement. Moreover, the rotation of hosting duties between the two nations signifies a reciprocal approach to collaboration.
Indeed, a groundbreaking research study conducted by AidData-REPOA has unveiled the profound impact of the longstanding partnership between the United States and Tanzania. The study, spanning the period from 2012 to 2022, sheds light on the extensive collaborative efforts across various sectors since Tanzania’s independence, showcasing an estimated annual benefit of USD 2.8 billion to the Tanzanian people and economy.
During this period, alongside significant assistance from the United States, Tanzania also witnessed substantial investments from other international partners, including China and the United Arab Emirates (UAE).
Chinese investments, especially in infrastructure, propelled Tanzania’s development. With investments totaling $10 billion, primarily in infrastructure, China significantly fueled Tanzania’s economic growth. In 2021, China’s direct investment in Africa surged by 26% to over $3.7 billion, with Tanzania receiving $53.75 million in non-financial sectors, according to China’s Embassy.
In 2021, Tanzania solidified its position as a key partner in non-oil trade with the UAE, surpassing $1.8 billion in foreign trade within the first 10 months alone, marking a 7% growth from 2020. During February 2022’s Expo, President Samia Suluhu Hassan engaged in pivotal discussions with UAE leaders, including Sheikh Mohammed bin Rashid Al Maktoum and Sheikh Mohammed bin Zayed. Resulting of these talks, the two nations and private enterprises inked 36 MoUs, committing over $7.49 billion (approximately 17.8 trillion Tanzanian shillings) in investments set to generate 204,575 jobs over the next four years.
Minister of Industry and Trade Dr. Ashatu Kijaji engages in discussion with US Ambassador to Tanzania Michael Battle on March 28, 2023.Photo: File
However, amidst these partnerships, Tanzania faced conundrums related to the involvement of DP World, a global port operator. The investment in the port of Dar es Salaam raised concerns and triggered debates about its implications for Tanzania’s sovereignty and economic interests.
Despite the potential benefits of such investments, policymakers grappled with balancing economic opportunities with safeguarding national interests.
President Samia Suluhu Hassan’s visits further underlined the importance of fostering international collaborations while ensuring Tanzania’s sovereignty and economic interests. Her diplomatic engagements aimed to strengthen partnerships with key stakeholders and promote mutually beneficial cooperation.
Samantha Custer, Director of Policy Analysis at AidData, emphasized the critical need for transparency and informed decision-making regarding the partnership’s value.
She highlighted that despite the enduring relationship, Tanzanian leaders and the public have had limited information readily available to assess its true impact. Custer expressed hope that the report would provide policymakers with valuable insights and lay the groundwork for evidence-based research to inform future endeavors.
Dr. Jane Mpapalika, a Senior Researcher at REPOA, underscored the significance of the report in uncovering overlooked aspects of the partnership. She noted that the study provides a broader picture of contributions and challenges that may have been unnoticed by the Tanzanian community at large. Dr. Mpapalika emphasized that these findings would inform and enhance the partnership, ensuring it continues to promote Tanzania’s growth and prosperity.
This move is seen by some, like international politics expert Thabit Mlangi, as a savvy strategy to broaden Tanzania’s economic and diplomatic horizons.
However, skeptics, including analysts like Mussa Lugete, warn of potential geopolitical ramifications, citing the UAE’s expanding footprint in Africa and the broader Middle East.
Meanwhile, the recent state visit of Kenyan President Rutto to the United States signals a concerted effort to deepen ties within the East African region and strengthen collaboration on key regional issues. This diplomatic overture not only solidifies Kenya’s position as a key player in the East African Community but also underscores the strategic importance of the region in the eyes of global powers.
Against this backdrop, the palpable surprise regarding U.S. investments in Africa amidst the proliferation of Chinese projects highlights the intricate interplay of geopolitical interests and economic imperatives.
While China’s ambitious Belt and Road Initiative (BRI) has rapidly expanded its presence across the continent, the United States’ renewed focus on Africa highlights its strategic imperative to counterbalance China’s influence and secure access to key markets and resources.
The growing competition for influence in Africa extends beyond traditional players, with emerging powers like India, Russia, and Turkey vying for a foothold in the region. This multipolar dynamic complicates the geopolitical landscape, presenting both opportunities and challenges for African nations seeking to navigate a rapidly changing global order.
In this fluid geopolitical environment, Tanzania finds itself at the crossroads of competing interests, tasked with balancing economic development aspirations with strategic partnerships that safeguard its sovereignty and national interests. As the sovereign country and other African nations navigate these complex dynamics, the need for nuanced diplomacy and strategic foresight becomes increasingly imperative in shaping the continent’s future trajectory.
