Tanzania is targeting to become semi-industrialized middle income economy by 2025, in accordance with the Development Vision.
Data by Tanzania Revenue Authority (TRA) computation, featured on the Bank of Tanzania’s (BoT) Monthly Economic Review for September show an increase of $300 million (705bn/-) in just one month compared with $1.1 billion recorded in July this year.
The current value of manufacturing exports is more than half of the value of dominant gold exports with $2.7 billion (6.3trn/-) and nearly double of the value of traditional exports, which stand at $754.8 million (1.7trn/-) during the year ending August this year.
The value of manufactured goods exports is also ore than the combined value of exported other non-traditional exports, cereals and horticultural goods.
Most of the Tanzanian manufactured goods are destined to DRC, Zambia, Uganda, Rwanda, Burundi, Malawi and Asia, which include ceramic products, textiles, cement, cosmetics, plastic products, iron and steel.
The increasing exports of manufactured is a result of increased standalone industries and opening of Special Economic Zones (SEZs) in different regions of Tanzania, mostly targeting to produce goods for exports markets.
Akida Mnyenyelwa, the director of policy and advocacy at the Confederation of Tanzania Industries (CTI) told The Guardian yesterday that there has been a recovery in manufacturing industry from the impact of Covid-19 pandemic.
“This indicates that manufacturers are now increasing productions, as business environment continue to improve from the effects of the pandemic,” he said.
Mnyenyelwa explained that during the pandemic, most of the manufacturers failed to produce to their maximum because of logistics challenges, including imports of raw materials taking a long time.
He also said there has been an improvement of business environment in Tanzania and the decision of the government to refund Value Added Tax (VAT) to manufacturers has stimulated industrial productions.
“The VAT refund to exporters has become one of the major incentives for stimulating manufacturing sector,” he said. “Generally, there has been an improvement of business environment, which resulted into manufacturers expanding their operations.”
He gave an example of growing exports of cosmetics products from Tanzania to markets not only in Africa, but also in Asian markets as well as two ceramic manufactures who are massively exporting their goods to African markets.
Bank of Tanzania report shows imports of industrial transport equipment increased by 66.5 percent during the year ending August to $663.4 million from $398.4 million in 2021, which indicates increased industrial activities.
Food and beverage for industrial use jumped by 56.2 percent to $801.3 million from $521.9 million respectively and imports of industrial supplies increased by 47.7 percent to $4.3bn from $2.9bn respectively.
Banks’ financing on manufacturing industry also considerably grew during the year ending August this year by 35.8 percent, third to agriculture and mining &quarrying.
Banks and BoT computation shows credits to manufacturing increased to 11.1 percent of total credits extended to various economic activities, third to personal loan and trade, from 9.9 percent in August 2021.
This means that in each 100/- loan issued by commercial banks in Tanzania, 11/- went to manufacturing sector.
Data by ministry of finance shows external borrowing for industries also increased to $1.2 billion during the year ending August, which is 5.1 percent of total country’s external borrowing from $718 million recorded in August 2021 or 3 percent.
Another area which has stimulated manufactured goods exports earnings is established Special Economic Zones (SEZ) across the country.
Export Processing Zone Authority (EPZA) director general Charles Itembe says existing SEZ in Tanzania have been recording more than 160bn/- each year from exports of goods.
According to the working paper by Uongozi Institute, manufacturing sector in Tanzania has been growing in the recent past, but with a less diversified export structure, concentration in food products, textiles, wearing apparel, and leather, chemicals, and basic metal industries and fabricated metal products.
The growth is, however, far below the targets set for the sector in the Tanzanian Integrated Industrial Development Strategy 2025, according to the paper titled constraints on the performance and competitiveness of Tanzania’s manufacturing by Roseline Misati and Kethi Ngoka.
“Manufactured exports are mainly low-technology intense coupled with low and medium skill levels. Measures aimed at deepening the technology intensity of manufactured exports are beneficial for tapping into international markets,” the paper says.
