Local suppliers in Tanzania: Ready for the petroleum sector?

Abstract

This study examines the gaps between the international oil companies ' (IOCs) expectations and the Tanzania ' s industrial base regarding therequirements of the oil and gas sector. The focus is on perceived IOCsourcing priorities and intra-firm improvement priorities as perceived fromthe perspective of the locally owned, managed and operated firm. A cross-sectional survey of 110 Tanzanian controlled firms focused on three majorareas: perceived buyer expectations, identified improvement areas, andexperience in improvement processes. The findings indicate thatdevelopment priorities on the supplier (or seller) side are generally inbalance with what they assume to be buyer priorities when it comes toproduct and delivery processes. One exception is quality, which isconsidered less important to improve than assumed customer priorities. Lessthan a half of the local firms have formalized improvement processes, and aquarter of these have experience with foreign firm collaborations.Nevertheless, Tanzanian firms have a long way to go in order to qualify fordemanding customers in the oil and gas industry. The extent of localparticipation is primarily a result of government policies and local contentlegal requirements imposed on the IOCs, but also on the local firms ' willingness and ability to improve towards international standards withinthe petroleum sector.  * Associate Professor, University of Dar es Salaam, E-mail:wineaster@udbs.udsm.ac.tz