African Entrepreneurship Record

”Starting from the late 19th century, the steel industry underwent major changes. Technological progress triggered profound shifts in its production structure and site selection: as efficiency increased, the steel industry’s demand for coal declined, and the dominant industrial factor for steel shifted from coal to iron ore.”

”Moreover, factors such as transportation and markets have also had a significant impact, making it necessary for the steel industry as a whole to carry out a major transformation. Take transportation, for example: with the initial formation of the railway network and the development of highways and internal-combustion-engine vehicles, more resources began to circulate across the country’s inland regions. A typical case is the development of the steel industry in New Frankfurt City, where almost all raw materials and energy come from other regions, as there is neither iron ore nor coal or other basic industrial resources locally.”

”Maritime shipping and inland water transport have also greatly changed East Africa’s current industrial pattern. As time moves on and technology continually advances, ships are built larger and carry more cargo, driving industrial development in coastal areas and inland water-transport hubs, with typical examples being Mwanza in the Great Lakes Region and the various coastal cities of East Africa.”

”To return to what was mentioned earlier, nowadays the steel industry’s demand for coking coal has fallen, and transportation costs have dropped accordingly. This is bound to impact our country’s traditional steel-industry layout.”

”Therefore, the task requirements for upgrading our steel industry during the First Five-Year Plan should be adjusted accordingly. On the one hand, we must adapt measures to local conditions and focus on iron-ore production areas as the main direction of construction; on the other hand, we should be guided by transportation and markets to lay out our steel industry in a more rational manner.”

In the 19th century and earlier, the steel industry’s primary locational factor was coal resources. Classic examples include coal mining in the British Isles, which helped the United Kingdom become the world’s first industrial nation; the Northeastern industrial region of the United States; the Ruhr District in Germany; as well as the industrial zones in East Africa’s Matabele Province and the Malawi Lake Industrial Zone. Steel plants were mostly built near coal mines.

Early technological immaturity led to low efficiency in coal use by the steel industry and very high coal demand; thus, if steelworks were not built close to coal-producing areas, transportation costs would be high.

However, after the mid-19th century, the steel industry underwent a technological revolution. With the promotion and application of new technologies such as the Thomas Steelmaking Method, the industry entered a phase of major transformation. By the early 20th century, its dependence on coal-producing regions had already shrunk dramatically.

In other words, even if a steel plant was not built in a coal-producing area but instead along a railway line, its costs would be comparable, or even lower.

”Therefore, starting from 1900, our steel industry will focus on developing the steel sector in central-southern Angola in the west, the northern part of Southwest Province, Tete Province in Mozambique, and the Malawi Lake Industrial Zone, while also promoting industrial upgrading in traditional steel regions such as Bohemia Province, Lorraine Province, and Hansa Province (the northeastern part of South Africa and the southwestern coastal area of Mozambique).”

East Africa’s iron ore resources are relatively evenly distributed nationwide, but the main reserves are still in the central-southern regions and overlap with the principal coal-producing areas. This means heavy industrial zones such as Bohemia Province (Zimbabwe) will still maintain their traditional dominant position in the steel industry.

Among these, Tete Province in Mozambique is rather special. As a later-developed region in East Africa, it has abundant iron ore and coal resources, and it lies on the southern shore of Lake Malawi; together with the northern Mbea City, it forms part of the Malawi Lake Industrial Zone.

Central-southern Angola and the northern part of Southwest Province, that is, the border region between present-day Namibia and Angola in a previous life, are mainly rich in iron ore. However, due to transportation and climatic factors, the focus of steel-industry development there will definitely tilt toward the Angolan side, namely within Letania Province.

”Before the end of 1905, our country’s steel output must reach at least five million tons. We will establish three new steel production bases and four new large state-owned steel enterprises: Steel Plant No. 1 and No. 2 in Tete Province, Steel Plant No. 1 in Letania Province, and the Maputo Steel Plant, while also carrying out expansion and upgrading projects for existing steel facilities, including those in Mbea, Harare, Bulawayo, New Hamburg Port, Mombasa, Dar es Salaam, and other areas.”

Maputo is adjacent to New Hamburg Port City, a powerhouse in the steel industry. It can make full use of coal, steel, and other resources from the South African Plateau, and it has marked advantages in maritime shipping.

Tete Province is even more remarkable. It boasts significant local resource advantages and sits between the Malawi Lake Industrial Zone and the Bohemia industrial area. With the Colimane Railway section in Tete Province already completed, and being right next to the Zambezi River, its combined strengths in geography, transport, water resources, and social conditions rank first among the newly planned steel-industry bases in East Africa.

As a result, the East African Government plans to invest in two large state-owned steel enterprises in Tete Province in one go. With the two most developed heavy-industrial regions in East Africa as its immediate neighbors, it would be hard for it not to succeed.

By contrast, the East African Government is much more cautious in investing in Letania Province’s steel industry. The province is far from East Africa’s traditional industrial belts, lacks sufficient manpower and technical capacity, and finds it difficult to accommodate industrial transfers. It was developed relatively late, and its own industrial base is comparatively weak.

Letania Province is one of the four provinces of Angola, and in the early days East Africa’s construction efforts in Angola focused on coastal cities such as Cabinda and Luanda. Therefore, among the three planned new steel-industry bases, developing the steel industry in Letania Province will be the most difficult.

To say nothing else, its transport conditions alone are far inferior to those of Tete Province and Maputo. Tete lies on East Africa’s main railway trunk line, and Maputo’s railway was completed early on; it was the first railway to be built and put into use in Mozambique by East Africa. By contrast, Letania Province, as the southernmost part of Angola, has only the Atlantic coastal railway and no other railway lines.

However, the section of the Atlantic coastal railway that passes through Letania Province does not run through the iron-ore belt. Thus, to build and bring a steel plant in Letania Province into operation will still require considerable effort in transportation.

Of course, compared to many other regions, Letania Province’s conditions are already quite good. After all, plenty of places have neither iron ore nor coal and therefore lack the basic prerequisites for investing in a steel industry.

In addition to the three major new steel-industry bases mentioned above, during the First Five-Year Plan period East Africa will build a number of small and medium-sized steel enterprises in inland and coastal areas to meet local steel demand.

These small and medium-sized steel enterprises will be concentrated in transportation hubs or in regions designated as policy-supported centers. For instance, northern East Africa is relatively short of relevant mineral resources, so that northern part of East Africa will be a key area for deploying this type of enterprise.

Judging by East Africa’s current capabilities, however, the scale of such investment is unlikely to be very large. The country’s total territory is now too vast, and the government simply cannot devote enough energy to every locality.

The above outlines East Africa’s general steel-investment program during the First Five-Year Plan. At present, East Africa’s steel output is slightly over three million tons, ranking just behind the United States, Germany, and the United Kingdom, and ahead of Tsarist Russia and France. Austria-Hungary has only just broken through 1.1 million tons and ranks behind France.

That is to say, in terms of steel output alone, the United States, Germany, the United Kingdom, East Africa, and Tsarist Russia are in an absolutely leading position over other countries. Even the smallest among them, Tsarist Russia, produces over two million tons of steel, while East Africa is between Tsarist Russia and the United Kingdom, at about three million tons.

If in 1905 East Africa’s steel output surpasses five million tons, there will be little change in its basic position in the world rankings. As early as 1900, the United Kingdom, the world’s third-largest steel producer, had already approached five million tons; by 1905, the United Kingdom’s steel output should at least reach six million tons.

As for Germany and the United States, they are simply beyond comparison, far ahead of all other states. Although the gap between Germany and the United Kingdom is not yet very large at present, Germany’s steel-industry growth rate is much higher than that of the United Kingdom. By 1905, Germany is likely to have become one of only two countries in the world with steel output exceeding ten million tons, leaving all other countries except the United States far behind by a cliff-like margin.