Industrialization

tanzania industrializationThe industrial sector of Tanzania is comprised of manufacturing (53%), processing (43%), and assembling industries (4%). The manufacturing sector in Tanzania consists mainly of food processing (24%), textiles and clothing (10%), chemicals (8.5%), and others.

Since agriculture is the mainstay of the Tanzanian economy, the manufacturing industry is centered around the processing of local agricultural goods. Currently, the majority of crops in Tanzania are marketed in their raw forms, while value-addition to agricultural products is mostly done on small-scale secondary level.

Still, the Tanzanian agriculture value-added net output rose by 61% during the period 2009–2014, from USD 8.6bn to USD 13.8bn.

Currently, value-added products in Tanzania include cotton yarn, manufactured coffee and tobacco, sisal products (yarn and twine), and wheat flour.

Tanzania 2025 Vision: Industrialization with FDI

Tanzania aims to become a semi-industrialized country by 2025, for which the contribution of manufacturing to the national economy must reach a minimum of 40% of the GDP.

To achieve this, Tanzania aims to transform from being dominated by natural resource exploitation activities and extractive industries (agriculture, tourism and mining) to become an economy with a broad and diverse base of manufacturing, processing and packaging industries that will lead both the productive as well as the export trade sector.

Foreign Direct Investments (FDIs) are expected to provide the capital for the desired industrial development.

Tanzania Government’s Priority: Industrialization

According to President John Magufuli’s speech during the inauguration of the new Parliament at the end of 2015, industrialization will be a key priority to the government.

Industries, producing goods for mass consumption, such as clothes, textiles and edibles, will be encouraged.

The Government will also focus on electricity development, which is a necessary step for achieving industrialization, President Magufuli announced.

In addition the Government will support Tanzania’s industry through the establishment of an industrial development bank and reduction of taxes on locally produced goods.

In order to accelerate industrialization, the President urged banks to lower interest rates for industrial projects during the President’s Manufacturer of the Year Awards (PMAYA) on 31st May 2016.

In addition, the Government will strengthen the Tanzania Investment Bank (TIB) and establish an industrial development bank to accelerate industrialization in the country.