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Interview with Leodegar Tenga Executive Director of the Confederation of Tanzania Industries (CTI)

Interview with Leodegar Tenga Executive Director of the Confederation of Tanzania Industries (CTI)

In this exclusive interview with TanzaniaInvest, Leodegar Tenga, Executive Director of the Confederation of Tanzania Industries (CTI)—the leading independent organization representing the interests of the industrial sector in Tanzania—offers an in-depth exploration of the country’s current industrialization status and future prospects.

The interview delves into the significant strides Tanzania’s manufacturing sector has made over the past decade, its contributions to Tanzania’s GDP, the dynamic sub-sectors driving growth, the challenges it faces, and the opportunities ahead.

Industrialization and Sectorial Growth

Can you provide an overview of Tanzania’s current industrialization status over the past decade?

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    The manufacturing sector in Tanzania is still relatively small but has a significant contribution to the country’s overall GDP.

    Over the past decade, the sector has averaged 8% of GDP and a 4% annual growth rate. Most of the manufacturing activities are centered on simple consumer products such as foods, beverages, tobacco, textiles, chemicals, plastic, wood, and steel allied products.

    Recently, the country’s development agenda has prioritized industrial growth, with policymakers actively steering efforts to transform Tanzania’s economy from one characterized by low productivity and growth to a more dynamic and high-productivity economy. This transformation aims for structural changes and sustained income growth.

    Currently, the domestic value addition is limited by the dependence on imported intermediate goods, signifying limited inter-industry linkages that are important for promoting domestic manufacturing base and employment. Various technological, financial, policy, and administrative constraints remain unresolved and therefore, limiting faster industrial growth and transformation.

    Which sub-sector of manufacturing proved to be more dynamic?

    In our assessment, industries such as food processing, iron and steel manufacturing, motor vehicle assembly, float glass production, tile manufacturing, cement production, textiles, and fertilizer production have shown significant dynamism and continuous evolution over time.

    Business Environment and Policy Advocacy

      What are the main challenges Tanzania industries face today?

        One of the big challenges facing Tanzania industries is the high cost of doing business which includes: unreliable power supply, access to finance, regulatory fees and charges, etc. as stipulated in the CTI study on “Growth Diagnostics and Competitiveness Study of the Manufacturing Sector in Tanzania”.

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        Also, there are high costs associated with Electronic Tax Stamps (ETS) on excisable goods and unreliable and unintegrated ICT systems.

        However, the government is taking deliberate measures to improve the business environment and enhance the competitiveness of the domestic industries including; infrastructure improvement, enhanced Public-Private Dialogue (PPD), etc.

        How does CTI engage with policymakers to ensure industry needs are addressed?

          In order to have a fruitful discussion with policymakers to address challenges affecting industries in Tanzania, CTI has been preparing evidence-based information for public-private dialogue, and conducting research and studies to create a basis for evidence-based advocacy.

          CTI has been involved in different committees and forums to provide opinions, for example, the Tax Reforms Committee, Non-Tariff Barriers (NTB), the parliamentary committees of Industries and Trade as well as the Budget Committee, etc. CTI also collaborates with other private sector organizations to create positions for advocacy purposes to influence changes.

          How prepared is Tanzania to take advantage of its strategic memberships in EAC, SADC, AfCFTA, EPA, and AGOA?

            The country is working hard to reduce the high cost of doing business to enable industries to be competitive in both domestic, regional, and international markets through:

            • Sensitizing the business community on the existing opportunities that arise from the prevailing strategic memberships.
            • Improving the business environment for the local manufacturers to enhance the competitiveness of the local manufacturers.
            • Constructing both hard and soft infrastructures to facilitate intra-country trade.

            Investment Opportunities

              Where do you see the most attractive investment opportunities in manufacturing in Tanzania?

              We see great opportunities in value addition on agricultural produce, livestock, minerals (gold, graphite, iron ore, etc), forestry, and fisheries products among others.

              But also in the establishment of strategic pharmaceutical industries as most of the medicines are imported, in the construction of liquified natural gas (LNG) plants and other products from natural gas, and the manufacturing of packaging as most of these are imported.

                What is your opinion on the best markets for Tanzania products?

                It is our view that the best markets for Tanzanian products are: the East Africa Community (EAC), the African continent, and the Asian and the European Union markets.

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                  Tanzania’s Industrial Sector Future Outlook

                    What are the emerging trends shaping the future of Tanzania’s industrial sector?

                    The government is actively working to create a favorable business environment aimed at attracting more investors to the manufacturing sector. They are implementing various investment incentives to encourage both local and foreign investors.

                    Additionally, significant infrastructure projects are underway to support industrialization efforts. These projects include expanding power generation capacity, constructing the Standard Gauge Railway (SGR), and improving port facilities. These infrastructure developments are essential for enhancing logistical efficiency and reducing operational costs for manufacturing industries in Tanzania.

                    Withing this framework, CTI has identified several strategic priorities aimed at fostering industrial growth over the next five years.

                    Firstly, CTI aims to position itself as a leading advocate for industrial development in Tanzania, championing initiatives that support the sector’s growth.

                    Secondly, the organization is committed to improving Tanzania’s business environment through evidence-based policy advocacy, aiming to create a more conducive climate for investment and business operations.

                    Additionally, CTI strives to inform its members and stakeholders about pertinent business opportunities within Tanzania, facilitating informed decision-making and resource allocation.

                    Collaboration with other Private Sector Organizations (PSOs) in public-private dialogues is also a key priority for CTI, seeking collective efforts to influence policies beneficial to industrial growth.

                    Lastly, CTI emphasizes the importance of building trust among various stakeholders, including the government and development partners, to foster partnerships that support the industrial sector’s expansion and contribute to Tanzania’s economic development goals.

                      How will industrial development contribute to Tanzania’s overall economic growth and national wealth?

                      Industrial development in Tanzania will significantly boost economic growth and national wealth by creating jobs, increasing productivity, and enhancing export revenues. It diversifies the economy and fosters technological advancements and infrastructure development.

                      These advancements improve efficiency and competitiveness, leading to higher foreign exchange earnings and government revenue. Additionally, industrialization promotes skills development, urbanization, and value addition to natural resources, collectively contributing to a more resilient and prosperous economy.

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