In this exclusive interview with TanzaniaInvest, Frank Dafa, the newly appointed Executive Director of the Confederation of Tanzania Industries (CTI), the leading organization representing Tanzania’s manufacturers, discusses the state of the manufacturing sector, the business environment, and his strategy for CTI.
The interview examines the main challenges facing Tanzanian manufacturers, led by the high cost of producing locally and access to finance, CTI’s assessment of the 2026/27 Budget and its engagement with government, and the most attractive investment opportunities and export markets.
Dafa argues that the sector has significant potential but must become more competitive, and calls for predictable policies and closer coordination between government and industry. He also outlines his strategy for CTI, built on five pillars including financial sustainability, regional outreach and proactive policy advocacy, and explains the benefits of CTI membership for manufacturers and investors.
This interview is a must-read for investors, manufacturers, business leaders and policymakers seeking to understand the opportunities and challenges of Tanzania’s manufacturing sector and the priorities of its leading industry organization.
Tanzania’s Manufacturing Sector
TanzaniaInvest: Can you describe the current state and key challenges of Tanzania’s manufacturing sector?
Frank Dafa: Manufacturing growth currently averages around 6% to 7%, below the double-digit growth called for by the government and Vision 2050, and the sector’s contribution to GDP, at 6.9% in the first nine months of 2025, remains well below the 15% target for 2031.
Yet the sector has significant potential to become a stronger engine of economic transformation, productive employment, exports and domestic value addition, building on the country’s natural resources, agricultural production, strategic location, improving transport connections and access to regional markets. There is also scope to deepen local production in sectors where Tanzania already has demand, skills or an emerging industrial base.
“The biggest challenge is cost. Most industries still cannot be competitive because of the high cost of producing locally compared to imports.”
The biggest challenge is cost. Most industries still cannot be competitive because of the high cost of producing locally compared to imports, and this is due to several factors:
- Logistics: the roads in some of our industrial areas are not well maintained, so it is still hard to move raw materials from the port and other areas to the industries, and finished products from the industries to the market.
- Power: access to power is no longer the issue, thanks to the major investment in hydroelectric power generation, but quality is. Most industries are still connected to the same lines as commercial and domestic users, so during peak hours, there are a lot of fluctuations, and power cuts sometimes happen without notice. This is why CTI has been requesting dedicated power lines to industrial areas.
- Water: during a recent visit to our members in the Lake Zone, most of them were still having difficulties accessing water, especially soft drink manufacturers, who need large volumes to produce their products. We were told this was due to maintenance and may be addressed in the near future.
- Regulation and taxation: regulatory and tax uncertainty, together with the time and expense of complying with fees, levies, and regulations, make production costs high and sometimes unpredictable.
“Regulatory and tax uncertainty, together with the time and expense of complying with fees, levies, and regulations, make production costs high and sometimes unpredictable.”
Beyond cost, manufacturers face access to finance challenges, skills gaps, and difficulties in accessing markets. Small and medium-sized manufacturers face these constraints particularly acutely, because they have fewer resources to absorb compliance costs or invest in new technology. We must also strengthen the links between local raw materials and domestic processing so that more value is retained in Tanzania.
The task is therefore not simply to establish more factories, but to help existing manufacturers become more productive, increase capacity utilization, innovate, meet standards and compete on quality and price.
CTI’s strategic response is to connect practical business environment reforms with a more proactive industrial development agenda, built on evidence-based advocacy, stronger public-private dialogue, regional outreach, sector-specific platforms, investment promotion, and better connections between manufacturers, financiers, technical institutions, and markets.
“CTI’s strategic response is to connect practical business environment reforms with a more proactive industrial development agenda, built on evidence-based advocacy.”
Government, industry, financial institutions, training providers and development partners each have a role to play, and CTI can help bring these actors around a shared, results-oriented agenda.
You mentioned access to finance among the challenges. What role can banks, development finance institutions, and the Dar es Salaam Stock Exchange (DSE) play?
Many large domestic manufacturers source capital from international partners or parent companies, while others rely on retained earnings, family capital, or private networks, as commercial bank lending rates, often between 14% and 16%, remain prohibitive and discourage long-term borrowing.
“Many large domestic manufacturers source capital from private networks, as commercial bank lending rates, often between 14% and 16%, remain prohibitive and discourage long-term borrowing.”
Access to finance is not only about the availability of capital, but also about whether businesses can present bankable projects, demonstrate reliable cash flows, provide suitable information and collateral, and access financing instruments that match the nature of their business and financing needs.
Banks can deepen their engagement with industries by developing products that reflect manufacturing cash flows and investment cycles, assessing viable projects on their merits, and working with business associations to understand sector risks.
Development finance institutions can support longer-tenor industrial investment, risk-sharing arrangements, technical assistance, technology upgrading and financing for areas such as energy efficiency and cleaner production. They can also help develop financing structures that commercial lenders may be reluctant to provide alone, while maintaining sound project appraisal and accountability.
The DSE can be part of the solution for companies that have reached the appropriate scale and governance standards. It is a cheaper option, and corporate bonds are a reasonable financing mechanism.
“The Dar es Salaam Stock Exchange (DSE) can be part of the financing solution for companies that have reached the appropriate scale and governance standards. It is a cheaper option, and corporate bonds are a reasonable financing mechanism.”
However, many domestic businesses are family-owned and approach public capital markets with caution, often concerned about loss of control or dilution, even though bonds are debt instruments. CTI has an institutional relationship with the DSE, and we plan to revive targeted engagements to educate our members, as structured corporate bond issuances can benefit both manufacturers and institutional and retail investors.
All in all, CTI can help bridge the information gap by convening manufacturers and financial institutions, identifying common financing barriers, improving investment readiness, and connecting members to relevant funding opportunities.
“The Tanzania International Manufacturers Expo (TIMEXPO) is our platform for showcasing new products and industrial capabilities, with the next edition taking place in 2027.”
Our strategy also proposes investor pitching opportunities and Made-in-Tanzania recognition of innovation at the Tanzania International Manufacturers Expo (TIMEXPO), our platform for showcasing new products and industrial capabilities, with the next edition taking place in 2027.
Business Environment and Policy Advocacy
Which budget measures are having the biggest impact on manufacturers, and what are CTI’s priorities for the next budget?
Our opinion of the 2026/27 Budget is mixed. First of all, we commend the government for continuously involving CTI in the process of tax reforms. Every year before the budget, from around February to April, a technical team reviews tax laws, fees and levies, and we provide the manufacturing sector’s technical input, presenting proposals to remove, reduce or increase specific taxes with supporting justifications. CTI actively advocates for the Duty Remission on raw materials and industrial inputs to promote the competitiveness of domestic industries. This year, we shared about 114 proposals, and about half of them were approved.
In the 2026/27 Budget Speech, CTI welcomed measures including VAT refunds within 30 days, the removal of nuisance fees and higher import duties intended to protect local producers. At the same time, CTI raised concerns about annual Excise Duty increases requesting for the 3 years tax calendar, the 10% import duty on crude edible oils, and a higher sugar levy. The impact of each measure should be assessed in relation to domestic production, input costs, consumer prices, investment and the competitiveness of downstream industries.
However, some measures did not make it into the final Finance Act, such as the reduction of the timeline for VAT refunds, which is a major concern for our members. The framework clearly states that a refund must be issued within 90 days of submitting all required documents and receiving a review from the Commissioner of the Tanzania Revenue Authority (TRA), but that timeframe is usually not respected, and companies wait one to two years for their refunds. This ties up cash flow and has become a cost of doing business.
For the next budget cycle, CTI’s priority is to move from reacting to budget announcements to engaging earlier in the policy process. Our strategic agenda proposes preparing evidence-based pre-budget submissions well ahead of the budget cycle, informed by structured consultation with member companies and sector platforms. We want to identify the practical effects of proposed measures, assess alternatives, and present recommendations that support both a sustainable revenue base and a competitive productive sector.
“In the 2026/27 Budget Speech, CTI welcomed measures including VAT refunds within 30 days [while] raised concerns about annual Excise Duty increases. The impact of each measure should be assessed in relation to domestic production, input costs, consumer prices, investment, and the competitiveness of downstream industries. For the next budget cycle, CTI’s priority is to move from reacting to budget announcements to engaging earlier in the policy process.”
We will also advocate for predictable tax and regulatory administration, timely VAT refunds, rationalization of nuisance fees, efficient customs procedures, and a careful assessment of duties and levies that affect locally manufactured products and their inputs. We should measure reforms by whether they improve investment certainty, reduce avoidable compliance costs, support local value addition, and allow firms to expand production and employment.
How does CTI work with the government, the Tanzania Private Sector Federation (TPSF) and the Tanzania Investment and Special Economic Zones Authority (TISEZA) to advance these priorities?
CTI’s role is to consolidate the experience of the manufacturing sector and translate it into practical policy proposals. That requires regular engagement with individual companies, sector groups and other business associations, followed by evidence-based dialogue with the relevant public institutions.
As the Voice of Industry, CTI works closely with government institutions, including the Ministry of Finance’s Task Force on Tax Reform (TFTR). We have a collaborative and direct relationship with the Ministry of Industry and Trade, which consults CTI when formulating new industrial policies and invites us to technical working groups such as the Trade Facilitation Committee and to institutional boards such as the Weights and Measures Agency (WMA) and Tanzania Bureau of Standards (TBS). We engage regularly with the Minister, the Permanent Secretary and technical leadership across various subsectors, such as the recent policy discussions on cement supply and domestic production capacity.
“CTI’s role is to consolidate the experience of the manufacturing sector and translate it into practical policy proposals. Our strategic agenda envisages a more structured program of engagement with government.”
CTI’s strategic agenda envisages a more structured program of engagement with government, including the pre-budget position papers mentioned above, an annual CTI-Government working session, and a rolling policy agenda informed by an investment climate and risk assessment.
TPSF is an important platform for coordination across the private sector. CTI is a member of TPSF, and our Chairman also heads TPSF’s Industry and Manufacturing cluster. TPSF participates in the Task Force on Tax Reform alongside us, and we align our proposals when engaging the government on tax issues, coordinating our submissions so that sector presentations reflect our collective recommendations. Working with TPSF and other business membership organizations helps align common private sector priorities, reduce fragmentation in advocacy, and present a stronger, evidence-based voice on cross-cutting issues.
TISEZA has a complementary role in investment promotion and the development of Special Economic Zones, and we maintain a collaborative relationship. When investors approach TISEZA, they are frequently connected with CTI so that we can provide sector-specific industrial insights, outlining the current industry environment, its challenges, and what CTI is doing to address them. CTI can contribute industry intelligence on existing production capacity, supply chain gaps, sectors with potential for local manufacturing, and barriers that may discourage investment. CTI’s strategic agenda proposes working with TISEZA on regional and sector-specific investment dossiers, as well as investor roundtables that connect concrete opportunities with investors and relevant incentive frameworks.
The principle guiding these relationships is partnership with clear purpose. CTI brings the perspective of manufacturers, government agencies bring policy and implementation responsibilities, TPSF helps coordinate the wider private sector, and TISEZA helps connect investment opportunities with the investment ecosystem.
Investment Opportunities and Markets
Where do you see the most attractive investment opportunities in manufacturing for local and foreign investors?
I see opportunities both in strengthening established industries and in developing new areas of local production. The starting point should be market demand, the availability of input, existing capabilities, skills, infrastructure, and the potential to compete, not simply the attractiveness of a sector on paper.
Agro-processing is currently the biggest manufacturing subsector and a major opportunity because it can connect Tanzania’s agricultural base with manufacturing, create markets for local producers, and increase the value of products before they reach domestic or export markets. This includes soft drinks, processing fruits into juices and potatoes into chips, and animal feed, areas that have always had potential, still need more investment, and attract a lot of investment. There is scope to expand processing and packaging, improve product quality, and develop stronger links between producers, processors and buyers. Older sectors such as textiles, linked to Tanzania’s cotton production even if cotton is increasingly substituted by synthetic fibers, as well as leather and edible oil, are also key sectors with potential.
“I see opportunities both in strengthening established industries and in developing new areas of local production. Agro-processing is a major opportunity, and textiles, leather, and edible oil are also key sectors with potential. Our strategic agenda also identifies automotive, telecommunications and ICT hardware as areas for focused exploration.”
Our strategic agenda also identifies automotive, telecommunications and ICT hardware as areas for focused exploration. In the automotive sector, the opportunity is to move beyond assembly and repair towards locally produced components and related products where technical and commercial feasibility can be demonstrated. In ICT hardware, initial opportunities may lie in selected accessories and components, subject to feasibility, technical capability, and market assessment.
We also want to look at how existing small-scale activities, such as fashion and the creative industry, where designer clothes and leather products, can become more industrialized.
There is also room for expansion in cement, as raw materials, particularly limestone, are abundant, and companies such as Dangote and recent established facilities in Tanga reflect continuing investment in the sector. Other opportunities include furniture, hospitality supplies, construction materials, packaging, recycling and other circular economy activities.
The Africa Cup of Nations (AFCON) 2027 provides a time-bound opportunity to assess whether local manufacturers can competitively supply products such as uniforms, sports merchandise, furniture, linen, kitchenware, and hospitality goods.
“The Africa Cup of Nations (AFCON) 2027 provides a time-bound opportunity to assess whether local manufacturers can competitively supply products such as uniforms, sports merchandise, furniture, linen, kitchenware, and hospitality goods.”
This should be approached through early demand mapping, quality requirements, and realistic procurement discussions rather than assumptions that local supply will automatically meet every need.
Which markets offer the best prospects for Tanzanian manufactured products?
In addition to its domestic market of more than 61 million consumers, Tanzania’s membership in the East African Community (EAC), the Southern African Development Community (SADC), and the African Continental Free Trade Area (AfCFTA) opens access to regional and continental markets. For manufactured goods, East Africa is our primary market and an important starting point, because geographic proximity and established trading relationships help firms build experience in cross-border trade. We maintain steady exports to Kenya, Uganda, and Rwanda, although our trade profile with Kenya has overlaps, and the Democratic Republic of the Congo (DRC) is also an important consumer goods market.
“Tanzania’s membership in the East African Community (EAC), the Southern African Development Community (SADC), and the African Continental Free Trade Area (AfCFTA) opens access to regional and continental markets.”
SADC is also a substantial market, and export data show significant volumes going to Zambia and South Africa, though much of that is agricultural. National trade data often list South Africa and India as leading export destinations, but that is driven heavily by gold and raw minerals. The AfCFTA offers a wider framework for expanding intra-African trade as tariff preferences and implementation arrangements become operational, and the development of the Standard Gauge Railway (SGR) and of regional corridors such as the Lobito Corridor will provide strategic access to these markets.
Market access also depends on more than tariffs, as businesses need to understand customs requirements, standards, certification, rules of origin, logistics costs, and non-tariff barriers. CTI’s strategy therefore proposes an AfCFTA advisory service for members, monitoring of tariffs and rules of origin, a readiness assessment of member companies, and better access to export market intelligence.
“CTI proposes an AfCFTA advisory service for members, monitoring of tariffs and rules of origin, a readiness assessment of member companies, and better access to export market intelligence.”
There are also opportunities to supply regional value chains with intermediate goods, processed agricultural products, textiles and garments, furniture, construction materials, fabricated components, and other products for which there is demonstrable demand. The priority should be to identify products that Tanzania can manufacture competitively and reliably, and then connect producers to buyers through trade information, business-to-business engagement, and investment partnerships.
Our objective is to turn regional integration into real commercial opportunities for Tanzanian firms, which requires efficient transport and border procedures and the consistent implementation of regional trade commitments.
CTI Leadership and Priorities
What is your vision for CTI, and which strategy and initiatives will you pursue as Executive Director?
CTI is the primary voice of industry, established more than 30 years ago. My vision is to strengthen CTI as an institution that does more than represent industry’s concerns, helping to mobilize the partnerships, evidence, and practical initiatives needed to advance Tanzania’s industrial transformation. Our next chapter should respond to the changing needs of manufacturers, including small and medium-sized enterprises.
“My vision is to strengthen CTI as an institution that does more than represent industry’s concerns, helping to mobilize the partnerships, evidence, and practical initiatives needed to advance Tanzania’s industrial transformation.”
Our Strategic Leadership Agenda 2026-2030 is organized around five interconnected pillars.
- Financial sustainability and resource mobilization. CTI must achieve operational self-sufficiency through a more diversified revenue model that combines membership, services, events, corporate partnerships and well-aligned donor-supported programs. We also plan to expand the reach and efficiency of our membership and technical services to lower operational costs for manufacturers.
- Regional outreach and inclusive membership. We want to strengthen CTI’s geographical reach by activating regional offices and industry networks and engaging industry ambassadors. CTI’s physical presence is currently centred on Dar es Salaam, Arusha and Kilimanjaro, Tanga and Mwanza, and we intend to expand into the Southern Highlands and deepen our coverage in the Coast Region, specifically in industrial hubs such as Kibaha and Mkuranga. Membership should offer value to large manufacturers as well as SMEs, start-ups, women-led businesses, youth enterprises, and other under-represented groups.
- Industrial innovation and emerging sectors. CTI can convene sector platforms around opportunities such as automotive components, textiles and garments, and ICT hardware. We will also explore how local manufacturers can participate in supply chains linked to AFCON 2027 and other major market opportunities, while ensuring that proposals are grounded in demand and production feasibility.
- Proactive policy advocacy and regional integration. Rather than reacting after legislation is drafted, we intend to strengthen policy research, prepare earlier and more evidence-based budget submissions, and develop an annual investment climate and risk report that forecasts regulatory impacts and presents empirical data to the government before policy decisions are finalized, addressing regulatory unpredictability. We are also increasing our participation in regional trade negotiations within the EAC, SADC and AfCFTA frameworks, working alongside peer organizations in the region.
- Skills, innovation and youth ecosystems. We want to strengthen collaboration between industry and higher education on industrial internship and apprenticeship placements, and partner with the Tanzania Startup Association on innovations and sectoral scalling. We will also explore manufacturing hackathons and digital services for members, and support intellectual property registration so that local industrial innovations can be commercialized effectively.
What are the benefits of CTI membership for manufacturers and for investors setting up operations in Tanzania?
For manufacturers, CTI membership should provide a practical return through representation, information, connections and opportunities to improve competitiveness.
Joining CTI provides industrial firms with direct representation on top-level national dialogue platforms, including the Tanzania National Business Council (TNBC) chaired by the President, alongside structured access to ministerial working committees.
Beyond policy advocacy, members receive direct technical support and tax incentive advisory services and have access to industry platforms such as the President’s Manufacturer of the Year Awards (PMAYA) and the Tanzania International Manufacturers Expo, the national industrial exhibitions. Membership also connects businesses to industry networks, policy updates, peer learning, events, and potential partners, which can be important for identifying suppliers, buyers, investors, and technical expertise.
“Joining CTI provides industrial firms with direct representation on top-level national dialogue platforms. Beyond policy advocacy, members receive direct technical support and tax incentive advisory services and have access to industry platforms such as the President’s Manufacturer of the Year Awards (PMAYA) and the Tanzania International Manufacturers Expo.”
For investors considering Tanzania, CTI can be a useful point of engagement with the manufacturing community and a source of industry perspectives on the business environment, sector opportunities and common operational challenges. Working with relevant public agencies, including TISEZA, CTI can help connect investors with manufacturers and industry stakeholders and identify questions that need to be addressed before investment decisions are made.
“For investors considering Tanzania, CTI can be a useful point of engagement with the manufacturing community and a source of industry perspectives on the business environment, sector opportunities and common operational challenges.”
We propose a tiered membership structure with services calibrated to the needs and capacities of different types of firms, including large companies, SMEs and start-ups. We also propose an annual member value report to demonstrate the benefits delivered and provide a stronger basis for member renewal.
What role does PMAYA play in promoting excellence and competitiveness in Tanzanian manufacturing?
PMAYA is an important platform for recognizing achievement in Tanzania’s manufacturing sector and raising the visibility of local industry. Recognition can help showcase the capabilities of Tanzanian manufacturers, encourage firms to pursue higher standards, and give the public and potential business partners greater awareness of locally produced goods.
The broader objective is to encourage a culture in which the Tanzanian industry is increasingly recognized for quality, reliability, and innovation.
What would be your one message to policymakers on improving the competitiveness of Tanzanian industries?
My message is this: make industrial competitiveness a shared, measurable national priority by ensuring that policies are predictable, implementation is coordinated, and local manufacturers can compete on a fair and productive basis.
Manufacturers need an environment in which they can plan, invest, access input, comply with clear regulations, move goods efficiently and reach markets without avoidable costs or uncertainty. Supporting local industry does not mean protecting inefficiency. It means creating the conditions for firms to become more productive, innovative, and competitive while meeting quality and regulatory requirements.
CTI stands ready to work constructively with the government for Tanzania to build a stronger manufacturing base that creates quality jobs, expands exports, and contributes more substantially to national economic transformation.
And what is your message to investors considering Tanzania’s manufacturing sector?
Tanzania’s geographic position as a maritime and transit hub serving the East African Community market of more than 350 million people and the wider African Continental Free Trade Area market of more than 1.3 billion is unmatched in the region.
“Tanzania’s geographic position as a maritime and transit hub serving the East African Community market of more than 350 million people and the wider African Continental Free Trade Area market of more than 1.3 billion is unmatched in the region.”
The structural fundamentals are solid and improving. Power generation and transmission capacity have expanded significantly (including the 2,115 MW Julius Nyerere Hydropower Project), industrial water and logistics infrastructure continue to strengthen, port efficiency at Dar es Salaam has risen sharply (record cargo volumes exceeding 33 million tonnes in 2025/26), and public-sector leadership is increasingly accessible and oriented toward constructive industrial dialogue. Fast-moving categories, particularly beverages and other consumer goods, already demonstrate how domestic manufacturing capacity can scale rapidly to meet regional demand.
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