TANZANIA’S manufacturing sector has emerged as one of the fastest growing on the continent contributing 26 per cent to the economy, according to Africa Economic Outlook 2019 report released recently by Africa Development Bank ( AfDB).
Today the sector has become the biggest contributor to the GDP among the countries of the Eastern Africa region. The achievements can be attributed to a landmark decision to revive the manufacturing sector in 2015 under the Second Five Year Development Plan 2016/17–2020/21 (FYDP II) whose theme is Nurturing Industrialisation for Economic Transformation and Human Development.
It is absolutely good news as it shows the efforts by the government in reviving the sector are paying off.
However it is even more important as manufacturing sector is seen to be holding the key to future growth in East Africa as countries are focused to diversify their economies and exports from producers and exporters of mainly unprocessed crops or minerals which are fetching lower prices on world markets.
The potential of the manufacturing sector in boosting economic growth and development, generating jobs and trade opportunities and ultimately reducing poverty cannot be overemphasised and it is against this backdrop we see that we are moving in the right direction but we need to remain steadfast in pushing for reforms that will ease business and investment climate in Tanzania.
Tanzania is among one of the most preferred destinations for foreign investment in Africa. According to UNCTAD 2018 World Investment Report, in 2017 the inflow reached USD 1.18 billion (2.3 per cent of GDP), down by 13 per cent compared to the previous year but the country is still among the 10 biggest recipients of FDI in Africa.
However, it seems we could have done better in attracting investments if not for some problems that could be solved including excessive bureaucracy in some government quarters, overly aggressive behaviour of some Tanzania Revenue Authority ( TRA) officials and multiplicity of regulatory agencies which make doing business in Tanzania difficult.
Not once, President John Magufuli has spoken about these problems and just recently when he opened a tea processing company, Unilever Tea Tanzania Limited (UTT) in Njombe he said some investors were diverting their investments to neighbouring countries because of red tape and unfriendly relations with some government agencies.
President Magufuli said also last week that he was not pleased that indecisiveness by some government officials had delayed establishment of a sugar factory by Mauritius investors since 2017.
He issued a one month ultimatum to the Ministry of Lands, Housing and Human Settlements Development and the Ministry of Industry and Trade to finalise investment procedures to enable Sugar Investment Trust (SIT) of Mauritius to establish a sugar factory in Tanzania.
We need to change. Some of those entrusted with powers in the government must change their attitudes and embrace changes.
We must do more to improve the perception of domestic and foreign investors if we are to attract more investments and boost the contribution of the manufacturing sector in the economy.