Tanzanian exporters expand markets, face losses

DAR ES SALAAM: Tanzanian businesses are expanding across Africa. From agriculture and manufacturing to logistics and services, more companies are entering regional markets, securing new customers and building cross-border partnerships. On the surface, this reflects the growing promise of African trade.

But beneath that growth lies a quieter challenge.

Many businesses are still losing value, not because they cannot sell, but because of how they get paid. And this remains one of the least discussed barriers to intra-African trade.

Most conversations around African trade focus on market access, logistics, tariffs and frameworks such as the African Continental Free Trade Area. These issues matter. However, they are no longer the only major constraint facing exporters.

Increasingly, the challenge sits in the financial infrastructure that supports trade itself.

For a Tanzanian exporter, a transaction is not complete when goods are delivered. It is complete when payment is received, converted and settled. That process remains slow, fragmented and, in many cases, expensive.

In practice, businesses can lose between 5% and 10% of a transaction’s value through foreign exchange spreads, intermediary fees and settlement delays. For larger companies, this may be absorbed as a business cost. For SMEs, it can determine whether a transaction remains commercially viable.

A Tanzanian exporter supplying agricultural produce, processed foods or manufactured goods into regional markets may wait several days for payment settlement, only to find that currency conversion losses and banking fees have significantly reduced the value of the transaction.

This creates a challenge many businesses do not fully anticipate.

Companies compete on the strength of their products and services yet lose margin on the movement of money itself. This is largely because a significant share of intra-African payments still depends on correspondent banking systems outside the continent. Transactions between African countries are often routed through financial centres in Europe or the United States before reaching their final destination. Every additional layer adds cost, time and uncertainty.

For businesses, the implications are substantial. Cash flow becomes harder to predict. Pricing becomes more volatile. Expansion decisions become more cautious.

Over time, businesses begin prioritising markets where payments are easier rather than where demand is strongest. Some reduce their exposure to regional trade altogether. Others add pricing buffers that ultimately weaken their competitiveness.

This creates a disconnect between Africa’s trade ambitions and the systems supporting them.

The continent continues pushing for deeper economic integration, yet the infrastructure supporting the movement of value has not evolved at the same pace. The conversation therefore needs to shift.

The question is no longer whether African businesses can access markets. It is whether they can retain the value they generate through trade.

Business leaders across the continent have increasingly pointed to the hidden costs embedded in cross-border commerce. Aliko Dangote has repeatedly highlighted how inefficiencies in financial and regulatory systems continue to affect African enterprise, even at scale.

Institutions such as African Export-Import Bank have also noted that a significant share of intra-African payments still relies on external clearing systems, increasing dependency, cost and settlement risk.

For Tanzania, whose economy is becoming increasingly integrated into regional trade corridors across East and Southern Africa, the efficiency of cross-border payments is becoming just as important as market access itself. This is especially true for SMEs, many of which continue to face foreign exchange liquidity constraints that make it harder to settle transactions efficiently, manage currency volatility and scale confidently across markets.

Greater attention therefore needs to be given to financial infrastructure, particularly the systems supporting cross-border payments. This includes improving settlement speed, increasing transparency around pricing and reducing dependence on external clearing networks.

Encouragingly, change is beginning to happen. New payment solutions are emerging that allow businesses to hold multiple currencies, settle locally and manage foreign exchange more efficiently.

However, adoption still needs to scale.

If payment inefficiencies continue being treated as a normal cost of doing business, value will continue leaking out of African trade. Addressing them directly creates a different outcome, one where businesses compete on the strength of their products rather than the friction of their payments.

Tanzanian exporters are already proving they can compete in regional markets. The next step is ensuring they retain more of the value they create.

Mark Mwaniki is the Sales Director for East Africa at Verto