Without Manufacturing and Industrialization Investments, Tanzania's Development Goals Will Remain Pipe Dreams.

Posted on : Wednesday , 3rd April 2024

Tanzania's economic growth and structural transformation are significantly influenced by industrialization and manufacturing, even though they are occurring on a small scale. Since gaining independence in 1961, Tanzania has gone through several stages of industrial development, from import substitution led by the state to liberalization and privatization spearheaded by the private sector.  

To reach the currently unachievable aim of having a semi-industrialized, middle-income economy by 2025, the late President John Magufuli's administration reinstated industrial development as one of the policy priorities.

The performance of Tanzania's manufacturing sector has improved recently, particularly in terms of output growth, export growth, innovation in production, and product diversification.  

Food products, plastic and rubber, chemicals, basic metalwork, and non-metallic mineral products are the most dynamic subsectors. The growing demand both domestically and regionally, the accessibility of raw materials, the uptake of new technology, and the favorable policy climate have all helped these subsectors.

About 5% of Tanzania's workforce is employed in the manufacturing sector, which also accounts for 8% of the country's GDP. The industry still has a lot of obstacles to overcome, though, including poor infrastructure, expensive energy, low productivity, and restricted financial access.

An economy that is not dedicated to manufacturing and industrialization keeps a country economically dependent on developed nations. Dependence on imports from multinational industrial conglomerates undermines economic autonomy and leaves developing nations vulnerable to the fluctuations of international trade.  

Price swings and shocks to the economy can have a major negative influence on growth and stability, making the climate unstable for countries trying to wean themselves off of dependency

Like in many other less developed countries, Tanzania's population's ability to make purchases is hampered by the high cost of imported goods.