Today we are going to talk about privatization and nationalization in Tanzania. For those who don’t know, privatization is the transfer of ownership of a business or property from public ownership to private ownership. So when the government for example sells the rights to water management to a private company. Nationalization is the inverse of this.
Tanzania has had a somewhat troubled past with privatization. There is of course the famous case of water privatization in Dar es Salaam. By the end of the century Dar es Salaam’s water infrastructure had fallen into disrepair and there were insufficient funds to repair it. The solution was the lease of the water infrastructure rights to a private company named City Water. In order to become profitable City Water took many controversial measures, it cut water supply to areas with a high amount of people who weren’t paying, invest
ments were only being made in high-income areas, City Water didn’t spend the money it had promised it would and water quality had deteriorated. And in 2005 the lease was cancelled, with multiple legal battles as a result.
In this case privatization clearly did not do its job correctly, however it was under government ownership that the infrastructure fell into disrepair in the first place. Additionally worldwide privatization has generally resulted in increased profits, employment and quality of life. Is Tanzania a special case, or was this particular project just a failure? Tell me what you think, and if possible I’d love to hear about a privatization project in Tanzania that was a success, share it with me.
Sources
Greenhill, R. and Wekiya, I. (2004). Turning off the taps : donor conditionality and water privatisation in Dar es Salaam, Tanzania
Economic Development in Tanzania 