LET me start by paying my condolences to thousands of families around the world for losing their loved one due to Corona pandemic.
As am writing now, over 33,976 people in the world have died already due to this super – contagious disease.
Prayers are in order for 722,196 people who are now infected, believing that they will soon recover and join 151,766 people who have been declared healthy again and sound to get back to work.
It goes without saying that the world economy is at its knees at the moment, although not yet attained the peak that Great Depression reached.
Now that production activities have been muted in so many countries, due to either complete or partial lockdown, the global supply has markedly dwindled.
Since production has literally tanked, firms’ income have been reduced exponentially, situation that makes their workers redundant for that matter. In the custom of modern economy, middle class (largely composed of workers) is a leading spending class.
Anything that affects them affects spending that eventually leads to economy contraction. So it was not shocking to hear that coffee consumption in Italy is expecting to drop by 10 – 12 per cent, causing a serious damage to the coffee industry.
What happened in the past two months since the pandemic was declared is rather appalling. The west (including all the developed countries regardless of their location), which is customarily a receiver of raw materials from the third world countries and manufacturer for the same, radically started to demand final goods from any country in the world.
In simpler words, the west is desperate to get what it needs even at fair or not tariff. Two weeks ago, lawmakers in the United States of America found them in a heated debate over whether Trump administration should remove tariffs it have imposed in many countries around the world.
An idea behind this is not benevolent at all, but it is due to economic pressure that the country is going through. But this is not an interesting story to Tanzania and many African countries, because they want final goods and not raw materials.
And if this thinking will come to pass now it is unlikely that we will be the leading beneficiaries. No wonder Americans are worried that this tariff removal will favour their biggest rival – China. And they are not ready for that. A blessing in disguise?
African traditions prohibit jubilating from our fellow man’s mishaps. Sadism is highly discouraged in here. However, this has nothing to do with inflicting pain but trying to distinguish fire in our neighbour’s burning house.
If official statistics are anything to go by, Tanzania is one of the least affected countries with COVID – 19 in the world. With measures in place and public awareness, there are no signs that the situation will worsen in a near future.
This is a great opportunity and is supposed to be regarded as competitive advantage. In 2002, Tanzania established Export Processing Zones to promote exportation of products from our borders. Motives were at expanding foreign exchange earnings, attract new technology transfer and create employment.
It is statistically proven that agricultural products are perennial contributors of exports from the country. Nonetheless, with all those investments in establishing Special Economic Zones (SEZ), the proportion of products sold in its raw form outweighs the processed ones, making us perform below our potential.
In all measures, this should serve as fierce urgent call to re-think our strategy. Time has come for us to do away with limiting SEZs into a certain location that enjoys infrastructures built by the government.
Experience show that demand from the prospective investors outweighs government’s capacity to establish them, because they are inherently very costly.
These costs are always accompanied by a number of giveaways from the government, like corporate tax grace periods – which acts as incentives.
We should stick to our goal of creating proper environment for export companies by allowing investors to establish their plants wherever they wish with the same 80 to 20 percent export ratio, and a promise to continue enjoying same incentives as those enjoyed by those in the confined areas.
All we need to do is devise mechanisms that will monitor and prove if they abide by the conditions. This will certainly encourage so many to join the bandwagon.
So this COVID – 19 is a nightmare that has come to remind us that we need to think beyond our past limits, and opened markets for us that normal conditions failed to do.
Why shouldn’t we take some good lessons from this? Why can we take this as blessing in disguise?