“In Tanzania, and in [other African countries] in general, as far as the wages are concerned, they are very low, and that comes back to areas like textile, where if you want to expand you need cheap power, have the raw material in terms of cotton, [and] you need have cheap labour to be able to compete with the likes of China and India,” Mohammed Dewji, CEO of MeTL group, told CNBC Africa.
Dewji added that the fact that two thirds of Africa’s population was under the age of 25 meant that unemployment would be particularly prevalent in the continent.
While businesses such as that of the MeTL group in Tanzania have been lauded by the country’s government for creating over 20,000 jobs, it is nonetheless a toss-up between high wages and less workers, and vice versa.
MeTL group is an investment and manufacturing company based in Tanzania, and operates in agriculture, trade, and transport and logistics, among others.
“A job is a job. It’s better to be at work than to be home with zero income, that’s the way I see it,” Dewji explained.
Besides the challenge of job creation, investing and reviving industries that struggled to be sustained can be a key employment driver, and this is a narrative that is already playing out in Zambia.
Zambia China-Mulungushi Textiles’ assets, which are based in Kabwe, will be leased to the MeTL group. This is after the business joint venture, in partnership between the Zambian and Chinese governments and, fell apart and forced the business to close in 2007.
(READ MORE: Africa the next textile manufacturing hub)
“[As Tanzania’s] GDP size is increasing, the [MeTL group] revenues are increasing together with the GDP. Now we have a regional strategy in investing money to 10 sub-Saharan African countries with high GDP growth and good population, and that’s where we see the next growth that’s going to come as far as MeTL is concerned,” Dewji explained.
In addition to this venture, a South African bank has arranged a 200 million US dollar working capital facility for the MeTL Group.
The loan will allow the MeTL group to ramp up its commodities trade in and out of East Africa, and also assist in the group’s manufacturing of retail products such as cotton, edible oil and cocoa beans, among others.
The partnership is expected to increase the supply and circulation of foodstuffs in East Africa, as well as contribute to the region’s employment.
“We have to look at avenues and industries that create jobs. Our vision as a group is by 2017 to 2018, we want to have a five billion dollar revenue business with 100,000 jobs. This is direct employment,” said Dewji.