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Zanzibar eyes oil in US$2 billion growth plan

Zanzibar is touting a US$2-billion plan to entice shipping, explore for oil and process seaweed as it seeks to expand beyond tourism that makes up more than a quarter of its economy.

The five-year blueprint proposes developing an oil and gas industry alongside efforts to boost its “blue” economy, Hussein Mwinyi, president of Tanzania’s semi-autonomous archipelago, said in an interview. The government will hire an adviser for the financing and debt needed to fund almost two dozen wide-ranging projects estimated at 5.5 trillion shillings (US$2.4 billion), he said.

The Indian Ocean islands are seeking new sources of income and to reduce dependency on the mainland for provisions, including power. It wants to encourage fishing and better use of the seaweed that’s exported for use in food and beauty products, with a renewed push for diversification coming after global Covid-19 restrictions caused travelers to stay away from its tropical beaches and resorts.

We need to capitalize on oil and gas,” Mwinyi said from his office in Zanzibar City, the capital of the island state of 1.6 million people. Zanzibar has commissioned the collection of data to help attract investment, he said.

The move will boost access to electricity, currently delivered through undersea transmission lines. Talks about building as much as 180 megawatts of renewable and possibly gas generation have started, according to the president.

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It’s also looking to promote its position off Africa’s east coast to create a shipping hub where cargoes can be offloaded and rerouted, using the experiences of Dubai and Singapore.

“Their economy grew because of the ports, it was transshipments,” said Mwinyi, the 55-year-old ex-Tanzania defense minister and the son of the nation’s former, President Ali Hassan Mwinyi. “We want Zanzibar to be a hub of shipments of cargo, make it a logistic center for the region.”

Made up of Unguja, Pemba and several small islands, Zanzibar accounts for about 6% of the gross domestic product of Tanzania, East Africa’s second-biggest economy. It has its own government and runs a separate budget, but has been pushing for a greater share of foreign loans and grants amid negotiations with the mainland over revenue-sharing from fossil fuels.

Damaged Coral

While the growth plan reflects the priorities of developing nations to secure its own power sources and thrive from trade and natural resources, it clashes with environmental concerns that are especially key to coastal areas and island states.

Zanzibar is directly affected by climate change with saltwater infiltrating areas including rice farms. It’s also threatening the local water supply, causing residents near the capital to suffer from headaches and nausea when no other water source is available, according to a United Nations Environment Programme report.

Coral reefs have been destroyed by people and the government is encouraging fishermen to move to other areas, Mwinyi said.

At the same time, Africa is not to blame for significant greenhouse-gas emissions, he said, and states like Zanzibar should be able to utilize natural resources to grow their economies.

“So if we happen to find this gas which we are going to find because all indications are there, we must use it for economic development,” Mwinyi said.

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