Can CEOs drive inclusive industrialization?
Just ask your Tanzanian counterparts.
Nearly two-thirds of Tanzania consumes imported palm oil, despite the fact that the country has more than 1 million sunflower farmers who produce a substitute product. Sunflower oil has 80 percent less saturated fat content than palm oil and it is recognized by Tanzanian consumers as healthier oil. However, domestic sunflower oil is expensive. It retails at almost twice the cost of imported palm oil. CEOs have naturally responded by developing palm oil importing and refining operations that import cheap crude oil from Southeast Asia, refine it locally, and distribute it across the country. That’s industrialization, right?
Well yes, but it doesn’t create many jobs in Tanzania. A majority of Tanzanians work in the agriculture sector, but most of them do not benefit from the palm oil industry. Tanzanian farmers cannot produce for export because their oil is not as competitive as oil coming from Ukraine or Argentina. They can produce for domestic markets, but consumers cannot afford their products.
About the authors
Devang Vussonji
Devang Vussonji is a partner at Dalberg Advisors, a firm focused on promoting inclusive and sustainable growth in the world. He is the founder of Dalberg’s Tanzania office and he leads Dalberg’s education to employment practice. He advises governments and donors on youth unemployment issues, in both developing and developed countries. Of late, he has been focused on how countries can create jobs by attracting private sector investments, industrializing their economies, and promoting more inclusive growth.
Carlijn Nouwen
Carlijn Nouwen is a partner at Dalberg Advisors in the Johannesburg office. Carlijn leads Dalberg’s inclusive business expertise area. Recognizing that a viable business case for a private sector actor can drive adoption of inclusive innovations, much of her work focuses on finding opportunities for lasting competitive advantage for companies by being inclusive.
