EXPERT SAYS TANZANIA'S INDUSTRIALIZATION REMAINS LOW

Industrialization in Tanzania remains low due to too much reliance on foreign direct investments (FDIs). 

The country also does not have a competitive advantage in energy supply and challenges in infrastructure. 

This emerged last week during an awareness dialogue on the economic performance of the Southern Africa Development Community (Sadc) states.

Discussants said Tanzania is not likely to attain the status of semi-industrialized country it envisages for 2025 due to the drawback.

"The contribution of manufacturing must reach a maximum of  40 per cent of the Gross Domestic Product (GDP). 

"This seems to be too ambitious", said Prof.Mohamed Bakari of the University of Dar es Salaam.

He told the dialogue - held virtually - that despite a host of strategies, the contribution of the industrial sector in Tanzania to GDP remains low.

The country's manufactured goods export reached $795million in 2018 compared to exports worth $1.2billion in 2014.

That was a decline of 36 per cent, the don said decrying, a heavy reliance on FDIs to provide capital for the desired industrialization. 

He also attributed slow industrialization in Tanzania to a  skewed structure of the economy which is dominated by agriculture and the service sector. 

It is estimated that 24 per cent of the manufacturing sector in Tanzania is dominated by food processing followed by textiles 10 per cent.

Chemicals account for 8.5 per cent of the manufacturing sector. Others are beverages, leather and leather products. 

Tanzania's fledging manufacturing also includes paper and paper products, publishing and printing and plastics.

Prof. Bakari warned that heavy reliance on FDIs for mega industrial projects was a drawback because "FDIs have their priorities".

Lately, the multinationals behind large investments in the developing countries have their preferences in the extractive sector

The two day virtual dialogue  was organized by the Eastern and Southern Africa Smallholder Farmers Forum (Esaff), a regional lobby based in Morogoro, Tanzania.