Electricity Industry Restructuring in Tanzania

Abstract

All of the effort the Tanzanian Government has put into restructuring the electricity industry up to the present has had little impact on investment, increase in access, or improved efficiency of the industry. Today, most countries have achieved a greater improvement in efficiency, investment and access to electricity that has led to lower electricity price. For the Tanzanian electric industry to catch up with the rest of the world, there is a need to draw from the experience of other countries. In order to achieve this, I conducted a case study analysis of the restructuring of the electricity industry in developed and developing countries based on competition, vertical separation, ownership, and regulation in relation to their effect on efficiency, investment, prices and fuel diversification. Based on this, I propose model/structure and policy recommendations for the electricity industry in Tanzania to achieve adequate investment, increase access to electricity, and improve the efficiency and fuel diversification of the industry. With the proposed model, the Government of Tanzania, the investors, and the community will leapfrog from the present situation to catch up with the rest of the world.