Industry and Retail
From The Report: Tanzania 2018
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Industrialisation is set to accelerate in Tanzania, as part of a significant push by the government to sustain economic growth and inclusion, on the back of increased manufacturing output and recent investment in labour-intensive industries. Diversifying the country’s narrow production base and boosting exports of manufactured goods are critical priorities for Tanzania’s mid-term economic development strategy, and the government is moving to attract new investment in value-added manufacturing at export processing zones and special economic zones, offering attractive tax incentives and a simplified regulatory regime. While still in its nascent stages, formal retail development in Tanzania holds considerable potential for long-term expansion, with population growth and rising demand for fast-moving consumer goods slated to support the sector over the next decade. As is the case for formal retailers across the continent, however, there are a number of structural challenges to contend with, such as high distribution costs, rising taxes and inflation, which have driven up overheads and reduced consumer purchasing power. Moreover, limited demand for organised retail space outside of select locations in Dar es Salaam is likely to weigh on near- and mid-term growth. This chapter contains an interview with Charles John Poul Mwijage, Minister of Industry, Trade and Investment.

Articles from this Chapter

Overview

Diversity matters: The public and private sectors work together to expand the scope of activities and investment
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As part of a significant push by the government to sustain economic growth and inclusion, industrialisation is set to accelerate in Tanzania, on the back of increased manufacturing output and recent investment in labour-intensive industries. However, the sector faces notable challenges, including rising production costs, limited infrastructure and a higher tax burden, while manufactured exports dropped sharply between 2016 and 2017 against tightening credit conditions, prompting renewed calls…

Interview

Manufacturing growth: Charles John Poul Mwijage, Minister of Industry, Trade and Investment, on manufacturers’ contribution to industrialisation
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Interview:Charles John Poul Mwijage, Minister of Industry, Trade and Investment What are the biggest obstacles for manufacturers doing business in Tanzania? CHARLES JOHN POUL MWIJAGE: In general, people in the manufacturing sector have challenges related to imports. There is difficulty competing with similar products imported from abroad. First, a large amount of goods available in Tanzania are highly subsidised by their country of origin. Also, some of these products are produced by internationally…

Analysis

Cementing its reputation: Economic growth has triggered an increase in cement production, provoking interest from international companies
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Outside of food and beverages – and the broader agro-processing segment – the manufacturing sector is supported primarily by cement manufacturing, with the country’s cement capacity expanding rapidly in recent years, most significantly after the 2015 market entry of Nigeria’s Dangote Cement, one of the continent’s largest cement players. Dangote’s entrance has had a mixed impact on the industry, which includes Tanzania Portland Cement Company (TPCC), currently the largest market…

Analysis

Something special: Despite initial challenges, special economic zones continue to attract investors from around the region
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The government of Tanzania hopes to encourage industrialisation and investment in labour-intensive manufacturing through its export processing zone (EPZ) and special economic zone (SEZ) schemes, which were launched in 2002 and 2006, respectively. Managed by the Export Processing Zones Authority (EPZA), the EPZ scheme promotes investment in export-oriented manufacturing activities, while the SEZ programme is broader and more inclusive and promotes sector-specific investment with an emphasis…

Analysis

Plan of a tax: A new draft budget emphasises capital projects as a means to further boost industrial activity
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The draft budget for FY 2017/18, tabled on June 9, 2017 by the Ministry of Finance and Planning (MoFP), aims to raise real GDP growth to 7.1% in 2017, up from 7% the previous year, while shrinking the budget deficit from 4.5% to 3.8% of GDP, and keeping inflation between 5% and 8%. A country of 53m, Tanzania remains one of the strongest economies in the EAC, with the IMF forecasting GDP growth of 6.8% in 2018 on the back of robust industrial growth. Government Support Under the theme of…

Analysis

Finished product: Agro-processing is a pillar of industrialisation efforts
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Already a dominant segment of the manufacturing sector, Tanzania’s agro-processing industry holds tremendous potential for future expansion. The country benefits from abundant agricultural resources, leaving it well positioned to grow its textile and leather production segments, while rising domestic demand for processed food should boost production of bread, sugar products and meat. Although the agro-processing industry still remains in its early stages, the government’s mid-term development…

Overview

Open for business: Despite a low urbanisation rate, rapid economic growth has led to a series of major retail developments
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While still in its nascent stages, formal retail development in Tanzania holds considerable potential for long-term expansion, with population growth and rising demand for fast-moving consumer goods slated to support the economy over the next decade. Challenge & Opportunity As is the case for formal retailers across the continent, however, there are a number of structural challenges, such as high distribution costs. Retailers and local producers in Tanzania have also grappled with rising…