Tanzania Industry and Construction Sector Grew by 9.3% in 2018

The Central Bank of Tanzania (BOT) has recently published its Annual Report 2018-19, which includes an overview of the Industry and Construction sector in the country.

The report indicates that Industry and Construction activity which includes mining, quarrying, manufacturing, construction, electricity and gas supply, and water supply and sewage grew by 9.3% in 2018 compared with 10.6% in 2017.

Growth in construction, which contributed 26.4% to GDP growth, was 12.9% in 2018, reflecting growing public investments notably the construction of standard gauge railway, bridges, airports, and roads, expansion of ports, as well as on-going rehabilitation of metre-gauge railway.

In 2018, manufacturing sub-activity grew by 8.3% compared with 8.2% in 2017 due to continued expansion in markets, particularly in the EAC and SADC regions, on-going infrastructure improvement, and stability in the power supply.

Manufacturing commodities with notable increase include building materials—cement, metal products and paints, food and beverages, and wheat. The contribution of manufacturing activity to GDP increased to 8.1% in 2018 from 7.7% in 2017.

Mining and quarrying grew by 1.5% in 2018 lower than 5.3% in 2017, largely on account of a decline in the production of gold, gemstone, salt, limestone, and pozzolana, associated with the government ban on the export of unprocessed mineral, mainly gemstone and salt.

Despite the slowdown in overall growth, the contribution of mining and quarrying activities to GDP increased to 5.1% in 2018 from 4.4% in 2017.

Production of coal, diamonds and natural gas increased in 2018.

Coal production increased following improvement in the domestic market due to the Government ban on the importation of coal. Meanwhile, the production of natural gas, which is also a source of power, increased to 60,349.4 million standard cubic feet in 2018/19 from 53,907.1 million standard cubic feet in 2017/18 due to high demand for electricity generation and other industrial uses.

Noteworthy, gas utilized in power generation accounts for 64.4% of total gas produced during 2018/19, followed by industries at 10.6%.

Electricity sub-activity that involves electricity generation, transmission, and distribution, grew by 5.8% in 2018 compared with 1.0% in 2017 largely on account of completion of the Kinyerezi II Power Plant.

Electricity generated in 2018 was 7,307.6 million kWh compared with 7,010.4 million kWh in 2017 owing to an increase in thermal power generation, particularly from gas-powered turbines. Thermal power generation was 3,340.6 million kWh, of which 99.1% was from gas-powered turbines.