Tanzania’s Manufacturing Industries Fastest Growing Sector in Eastern Africa

By Desai Magobhe, Nairobi  

TANZANIA is yet again on the lime lights as its manufacturing sector continues to flourish, emerging as one of the fastest growing on the continent contributing 26 percent.

According to Africa Economic Outlook 2019 report released on 4^th April, 2019 by Africa Development Bank (AfDB), the achievements came from Tanzania’s landmark decision to revive its manufacturing sector in 2015; today the sector has become the biggest contributor to the GDP among the 14 countries of the Eastern Africa region.

This is good news for Tanzania which embarked on a set of reforms which include industrializing the economy after many years of relying on export of unprocessed agricultural produce.

The annual report released by the AfDB is a nod to Tanzania’s ongoing reforms implemented by Dr John Magufuli and his Government since he came to power in 2015.

Overall, manufacturing-driven growth in Africa, led to positive structural change, with potentially stronger dynamic effects in the long run. Other region’s countries and contribution of industries to their economy are: Rwanda (15.4), Ethiopia (22.9), Uganda (20%). The rest of the countries is as detailed in Table 7.

The Tanzania Investment Center (TIC) and Export Zone Processing Agency (EPZA) which accelerate investment in industries and manufacturing for exports, helped the country achieve structural transformation, attracting close to $1.2 billion in foreign direct investment. The report puts Tanzania the top three in 2018 real GDP growth in the Eastern Africa region.

On the GDP top three countries and their brackets are: Ethiopia (7.7), Rwanda (7.2) and Tanzania was estimated at 6.7, according to AfDB although the real GDB growth was 7.1.

Other Eastern African countries are: Burundi (1.4), Comoros (2.8), Djibouti (5.6), Eritrea (4.6), Kenya (5.9) and Seychelles (3.6). The remaining countries are Somalia (2.9), South Sudan (-3.8), Sudan (4.10) and Uganda (5.3).

Implementation of the industrialization policy in Tanzania has had a strong association between manufacturing-driven growth episodes and jobs. Industrialization, therefore, is key to the employment conundrum in Tanzania and Africa.The report credits Tanzania with one of  the lowest unemployment rate in the region with Burundi (1.5), Rwanda (1.4), Tanzania (2.3) and Uganda (2.2).