Minister for Industry, Trade, Investment assures manufacturers of full cooperation

Industry, Trade and Investment Minister Hon. Charles Mwijage

The Minister for Industry, Trade and Investment Hon. Charles Mwijage has assured the Tanzania
Manufacturers of full cooperation from his ministry.

Hon. Mwijage made the statement when the Confederation of Tanzania Industries (CTI) Secretariat and few representatives of the manufacturing sector paid a courtesy visit to his office recently. The minister pointed out that the fifth phase Government was out and determined to serve its citizens calling for manufacturers to support it.

“My Ministry has, as the President of the United Republic of Tanzania John Pombe Magufuli has been reiterating, decided to take deliberate initiatives to make industrialisation a priority, and I will start with industries that add value to the agricultural products” he said.

He also said that the government will ensure all importers paid their due taxes as one of the measures taken by the
Government to enhance fare competition between local producers and importers of foreign goods. Earlier on in his briefing to the Minister, the CTI Chairman Dr. Samuel Nyantahe pointed out that there were a number of issues which made Tanzania manufacturers uncompetitive in local as well as regional market.

Dr. Nyantahe said that CTI was ready to support the Government to revive the development of industries as an engine of social and economic growth based on the Tanzania Development Vision 2025. He said that from the Government stand, Tanzania Manufacturers have promised to work diligently to enhance their businesses and help the government stimulate national economy.
The Industrial sector’s successes:
Dr. Nyantahe said that during the past ten years, the industrial sector grew by an average of 7 percent per
year, and its contribution to the National Gross Domestic Product (GDP) averaged 7 percent. He said, the sector employed an average of 11 percent of all national work force for the last five years, while for the last two years the production in the sector grew by 6.8 percent. The contribution of the sector’s products in foreign exchange earnings reached an average of 23
percent.

“CTI and its members believe the sector can perform much better and is determined to use all available avenues to fulfill the National Development Vision which aims at making Tanzania a middle income country by 2025.”

Challenges the manufacturers face:
However, the Chairman pointed out that despite the achievements made, the industrial sector is faced by a
number of challenges including:

i. Inadequate economic and social infrastructure.
ii. Old and insufficient central railway line which contributes to delays in clearance of goods at ports, inadequate feeder roads, electricity and water supply which adversely contribute to high cost of production for industries and thus making them uncompetitive in the domestic, regional and international markets.
iii. Weak Customs administration which leads into smuggling of goods through the porous borders especially along the Indian Ocean. Importation of substandard and counterfeits goods which results into unlevel playing field between imports and locally produced goods.
iv. Lack of predictable and stable Tax Policies, which would provide for coherent tax system as opposed to the current system where tax policies change every year thus negatively affects industries’ operational plans.
v. Lack of harmonized and rationalized regulatory authorities. Currently there are a lot of duplications by different regulatory authorities with similar functions and charge high fees. These increase costs of production.
vi. Red-Tapes in offering public services which lead to delays in businesses.
vii. Inadequate preferential financial products which can enhance affordable lending rates, particularly for SMEs.
viii. Low Labour productivity which influence investors to import skilled labour.
ix. Inadequate special preferences in the Public Procurement to local industries which would encourage the government to purchase more goods and services from local producers and providers of services.CTI and its members believe the sector can perform much better and is determined to use all available avenues to fulfill the National Development Vision which aims at making Tanzania a middle income country by 2025.
x. Inadequate access into the EAC and SADC regional markets due to inadequate awareness on the market potentials offered in these regional markets. Also existence of Non-Tariff Barriers (NTBs) which are applied from time to time by member States in the EAC and SADC aiming at protecting their markets.
xi. Inadequate utilisation of industries which were privatized. This was cited as one of the factors which have contributed to low growth of the manufacturing sector.

Minister’ responses:
The Minister was impressed by the CTI’s informative presentation which touched on a good
number of issues, and promised to address the challenges which were identified by CTI:-

i. Improvement of economic and social infrastructure: The Government was committed to making sure that a standard gauge railway was built from Dar es Salaam to Mwanza and Kigoma. Also make sure that the remaining road constructions to link regions as well as national roads were completed. The improvement of electricity and water supply was on top of the agenda of the fifth phase government.
ii. Improving financial sector: The Ministry would make close follow-up to see what has happened to the BOT-SME Credit Guarantee Scheme as it seemed not to be functioning well. The scheme was supposed to assist SME’s to borrow at affordable interest rates.
iii. Amending the Public Procurement Act: Informed that the Act was in the process of being amended. It was recommended that CTI should make sure it submits its proposals on the ongoing revision of the current Public Procurement Act so that it incorporates industrialists’ views.
iv. Enhancing Regional Integration: The Ministry would make sure that every time when there were regional consultation’s (EAC, SADC), CTI is fully consulted and involved so as to enable Tanzania to benefit from the regional integration.
v. Harmonisation of regulatory bodies: On the multiple regulatory authorities, the minister promised to work on it with a view to reducing duplication and charges and hence reducing the cost of doing business.
vi. On customs administration, it was promised that the government would discuss with other relevant authorities so as to address the problem of porous borders.
vii. The 5th phase government would not tolerate any red-Tape in the public services delivery. The Public servants have started to change their attitudes towards customers.
viii. The Ministry in collaboration with other relevant ministries would look for ways to end the problem of lack of skilled labour.
ix. On inadequate predictable and stable Tax Policies, the minister had assured CTI that the government would fully involve the Private sector specifically, CTI to try to address this problem.
x. On inadequate utilization of industries which were privatized, the government promised that it would carry a thorough assessment of the non-performing privatized industries. This would enable the government to make decisions based on facts, in order to avoid victimizing some honest owners.