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Tanzania: What Tanzania Can Do to Lower Imports, Attract Investment

Dar es Salaam — The recent shortage of industrial sugar has prompted an impassioned call by a prominent business stakeholder for a change in trade policies. 

Speaking at a breakfast organised by the Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA) for its members in Dar es Salaam last week, Infotech Group of Companies chairman Ali Mufuruki decried the lack of smart industrial policies for the high cost of production in the country. 

He singled out poor collaboration between the government and the private sector on key development areas, including on industrial sugar, insisting that the country has the capacity to meet local demand for the product. 

"There's this misconception that the private sector is a handful of business executives and company owners. However, the reality is that 90 per cent of the country is made up of the private sector, including non-licensed businesses," he told the gathering, which brought together over 100 personalities from the private and public sectors. 

To be able to wean itself of dependence on imports, and create an industrial economy, Mr Mufuruki said the country needed food-sufficiency, a skilled workforce, affordable transport and cheap housing to drive down the cost of production. 

"Because of the high cost associated with these key pillars, local labour has become prohibitive for investors looking to establish businesses here. Relatively developed economies such as China and Bangladesh are able to pay less for labour compared to Tanzania, thereby attracting investors. 

"Even if import duty and other taxes were abolished today we wouldn't be able to achieve the level of competitiveness that we crave under the current circumstances," he warned, telling the captivated audience that Tanzanian companies imported between 70 per cent and 80 per cent of raw materials for industrial products annually. 

Drawing parallels with India, Mr Mufuruki said: "In India, for example, the local population forms the basis of its market, while we continue to consume foreign products that we don't understand well." 

"In India everything is rough around the edges, but the country takes pride in the fact that such products are made locally. With a huge investment in education, shortcomings in Indian products are fixed by local technicians who understand them, transforming them to superior brands. As a result, India is in control of its own destiny," he said, hailing the Asian giant for supporting its tottering brands through protectionism. 

He praised the government, through the Energy and Water Utilities Regulatory Authority (Ewura), for putting in place laws that will see local businesses benefit from the East African Crude Oil Pipeline (Eacop) project. 

Speaking at the same event, Ewura senior local content officer Kenneth Kaganga called on Tanzanians to take advantage of opportunities created by government projects. 

"More often Tanzanians don't heed calls for involvement in these projects. For instance, Eacop recently asked us to send them names of companies involved in geo-technical surveys; Ewura could only come up with one name. How are we supposed to have competitive bids under these circumstances?" queried Mr Kaganga. 

The Ewura official mentioned some contracts reserved for Tanzanians as part of Eacop local content as transportation, security services, fuel supply, hotel accommodation and catering, land surveying, food and beverages, among others. Tanzanians are also eligible to participate in contracts set aside for international investors. 

The breakfast attracted the involvement of Azania Bank, ACTL, Brela, EAG Group, Ewura and Zurich Insurance Brokers, among others. 

Culled from The Citizen