Leadership and managerial mismatch as a contributing factor in the failure of public industrial projects in Tanzania

Abstract

By the early 1980s—a period termed as the period of de-industrialization in Tanzania, or the ‘lost decade’—the people of Ugweno in Mwanga district in Kilimanjaro region, Tanzania, tried to industrialize particularly in ceramics. Three villages: Raa, Rangaa and Kisanjuni had two fully equipped industrial sites to produce clay vessels and bricks. An attempt to explain the reasons for the failure of such well-conceived and costly projects is the gist of this article. Using a case study approach, the article attempts to explain the performance of the said industry based on the principal-agent model. Findings suggests that moral hazard, rather than adverse selection, explains the dismal results in the performance of the said public investments. One salient observation is that in a public-owned project, the roles of politicians (as principals) need to be reasonably balanced with the roles of the managers of the public concerns (the agents) for the success of projects. The major finding is that the failure of the two projects was due to too much political control. Thus, there is a need to redefine the roles and relations between leadership and management to ensure the success of any industrialization strategy.

Keywords: industry, leadership, management, Tanzania