BY EDITOR
21st October 2015.
The current development agenda, however, has brought industrial development back to be one of the policy priorities.
What has been the performance of the manufacturing sector? Has the country identified the emerging manufacturing subsectors, drivers of their success, and challenges for sustained competitiveness?
Indeed the manufacturing growth over the last ten years has helped to sustain GDP growth. The growth in manufacturing notwithstanding, it remains largely undiversified, and vulnerable to variations in agricultural production and commodity prices.
The most dynamic subsectors in terms of output growth, export growth, production innovation and product diversity are food products, plastic and rubber, chemicals, basic metal work, and non-metallic mineral products.Nevertheless, the domestic value addition is limited by the dependence of imported intermediate goods, signifying limited inter-industry linkages that are important for promoting domestic manufacturing base and employment.
Various technological, financial, policy, and administrative constraints remain unresolved and therefore, limiting faster industrial growth and transformation.
The prevailing discourse on Africa's economic development has shifted from whether the region will develop, to how the continent can position itself as the next economic frontier.
The Economic Report on Africa 2015 takes cognisance of the fact that Africa has the potential to experience growth greater than the East Asian countries through industrialisation.
With Africa's natural resource endowment, it is no wonder that a considerable share of its oil, minerals, and agricultural produce is exported.
Worryingly, however, is that the continent's performance has been volatile, with short periods of acceleration followed by long spells of deceleration, underscoring serious shortfalls in some areas, notably in the
industrialisation and economic diversification of many countries, a case not unique to Tanzania.
Industrial development remains inextricably linked to generating impetus in transforming the Tanzanian economy into middle-income status by 2025.
The vision -- to move manufacturing back to Africa due to high production costs in other traditional markets such as Asia and Europe as well volatile commodity prices -- is achievable if the recent plunge of Glencore's shares, an Anglo-Swiss commodity trading giant, is anything to go by.
However, the gains from industrialisation will be a long time coming if Tanzania remains largely dependent on agriculture, continues engaging in a narrow export base with low value products, high trade costs, and inadequate access to global value chains and markets.
Trade-induced industrialisation can yield structural transformation in Tanzania through inclusive growth, efficient utilisation of resources, and economic diversification.
This transformation will provide unique opportunities to generate direct and indirect employment, foster strong forward and backward cross-sectoral linkages, and sustain economic growth.
Recent data from the Tanzania National Bureau of Statistics and the Bank of Tanzania indicate a favourable economic outlook for the country.
It has been widely recognised that Tanzania, like many African countries, needs to correct its large trade deficits, innovatively create employment for the working-age population, and consciously design trade policies that will favourably contribute to industrialisation.
At the heart of a country that is aiming for middle-income status by the year 2025, the country needs industrial transformation programme to prioritise flagship projects in sectors where the country has a competitive advantage.
However, agro-processing, fisheries, textiles and apparel, leather, oil, gas, and mining services will be important in leading the country to trade-induced industrialisation.
SOURCE: THE GUARDIAN
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