TANZANIAINVEST interviewed Mr. T.C. Machemba, Ag. Executive Director of the Tanzanian Chamber of Commerce, Industry and Agriculture – TCCIA, in order to gain insight about…
Tanzania’s industrial sector production reached USD 13.5 billion (33% of GDP) in 2018, compared to USD 9.1 billion in 2014, marking an increase of 48%.
Tanzania’s construction sector generated USD 6.7 billion (14% of GDP) in 2018, compared to USD 4 billion in 2014, representing an increase of 68%.
According to the Bank of Tanzania (BoT), the growth in the construction sector was attributed to growing public investments (construction of standard gauge railway, bridges, airports, and roads, expansion of ports), as well as on-going rehabilitation of metre-gauge railway.
Manufacturing in Tanzania
Tanzania’s manufacturing sector generated USD 4.1 billion (8% of GDP) in 2018, compared to USD 3 billion in 2014, representing an increase of 39%.
Since agriculture is the mainstay of the Tanzanian economy, the manufacturing industry is centered around the processing of local agricultural goods.
The manufacturing sector in Tanzania consists mainly of food processing (24%), textiles and clothing (10%), chemicals (8.5%), and others, including beverages, leather and leather products, paper and paper products, publishing and printing, and plastics.
Export of Tanzanian manufactured goods includes cotton yarn, processed coffee and tobacco, sisal products (yarn and twine), wheat flour, plastic items, textile apparel, and cement.
Tanzania’s manufactured goods export reached USD 795 million in 2018, compared to USD 1.2 billion in 2014 (-36%), and accounting for 18% of the total value of goods export.
Tanzania Key Industries
Currently, the majority of crops in Tanzania are marketed in their raw forms, while value-addition to agricultural products is mostly on a small-scale secondary level.
Still, the Tanzanian agriculture value-added net output increased by 46% during the period 2012–2017, from USD 10.5 billion to USD 15.3 billion.
Currently, value-added products in Tanzania include cotton yarn, manufactured coffee and tobacco, sisal products (yarn and twine), and wheat flour.
In line with the 2025 Vision of the Ministry of Agriculture, Food and Cooperatives of Tanzania, there should be at least two new products developed from each of the staple crops, horticultural crops, livestock, and fisheries by that year.
Tanzania Construction Materials
Construction materials in Tanzania include cement and cement products, bricks and building blocks, wood building columns, and others.
Tanzania’s cement production amounted to 4.5 million tonnes in 2018, compared to 2.8 million tonnes in 2014, representing an increase of 61%.
The Tanzania Portland Cement Company (TPCC) is the leading company in Tanzania’s cement industry, holding 36% of the market share. The company’s production of cement stands at 2 million tonnes per year as a result of the construction of a new Cement Mill (CM5), completed in 2014.
Africa’s leading cement producer, Dangote Cement, commissioned the largest cement factory in Tanzania (the Mtwara plant) in December 2015. The Tanzanian plant is part of Dangote’s regional plan to shift Africa from cement importer to producer, raising the yearly production by 25 million tonnes per annum.
The Government of Tanzania focuses on industrialization as the main catalyst to transform the economy, generate sustainable growth, and reduce poverty.
The Government of Tanzania introduced its Sustainable Industrial Development Policy (SIDP) in 1996 to phase itself out of investing directly in productive activities and let the private sector take that role.
The main purpose of the Government’s SIDP is to design a plan for industrializing Tanzania so that the country becomes semi-industrialized by 2025.
In order for Tanzania to become a semi-industrialized country, the contribution of manufacturing to the national economy must reach a minimum of 40% of the GDP by 2025.
Foreign Direct Investments (FDIs) are expected to provide the capital for the desired industrial development.
In 2002 Tanzania established its Export Processing Zones (EPZ) scheme, to provide for the establishment of export-oriented investments within the designated zones with the views of creating international competitiveness for export-led economic growth.
Tanzania’s EPZs are conducive environments for the promotion of exports of products that use local materials, such as textiles and garments, leather goods, agro-processing, and the lapidary industry.
In addition, in 2006 the Special Economic Zones (SEZ) scheme was introduced, to promote quick and significant progress in economic growth, export earnings, and employment creation as well as attracting private investment in the form of both Foreign Direct Investments (FDI) and Domestic Direct Investment (DDI) from all productive and service sectors.