Tanzania Could Become a Middle Income Country - Minister

East African Business Week (Kampala)

(Minister of Industries and Trade  Dr. Abdhalla Kigoda speaking during the meeting  Photo By Kenan Kalagho)

Tagged: Business, East Africa, Tanzania

By Kenan Kalagho, 6 August 2012

Dar es Salaam — Tanzania Minister for Industry and Trade Dr Abdhallah Kigoda has assured the private sector in the country that the government recognizes them and will continue to support them.
Speaking during the Tanzania Private Sector Foundation (TPSF) day in Dar es Salaam last week, the Industry and Trade Minister said that he was aware of the 9.7% this years' private sector contribution was making towards the national economy as compared to the 9.6% contribution in 2010-2011 financial year.
"We want to make sure that Tanzania moves from the Least Developed Country (LCD) status to the middle in-come country making sure that we improve our industries, trading with our partner states and find market access for our products" Kigoda said.
He added that there was need for both the private sector and the government to show commitment in their plans and make sure that such plans are implemented for the benefit of the country and its people noting that the private sector could drive the economic growth especially in a country like Tanzania.
Kigoda noted that the government recognized the support of private sector for doing business and investment in the country and also in attracting investments through the reforms being made by the government in making sure that Tanzania becomes a conducive country for attracting investment.
For continual assistance of private sector, he stressed, there will be more improvements in business environment in the country, while noting that currently the Small, and Medium Enterprises SMEs were contributing 27.9% to the GDP in national economy far above the contributions for the previous years.
"The immediate fact is to improve the economy in industrialization even with the limited resources we have", Kigoda said adding that by using the intellectuals in the country and the good cooperation between the public and private sector the country can be able to move forward economically and attain the development required."
He also pointed out that for the need of the private sector to do away with the mistrust to the public sector while encouraging the TPSF to engage itself in deliberations in issues that are critical to development with a formulation of Public Private Partnership (PPP) while stressing to work together with the private sector and speak with one voice on development issues.
On his part the Chairman of Confederation of Tanzania Industries (CTI) Mr. Felix Mosha noted that there was need for the government to fully support and the private sector in participation on issues that could lead to improve the country's welfare.
Mr. Mosha said that it was important for the East African Business Council a business commission he is chairing, to also speak with one voice on issues that concerns the region especially trade agreements like the issues of Economic Partnership Agreement (EPA) something he said the body was lacking.
The Chief Executive Officer for Tanzania Horticulture Association Jacqueline Mkindi said that it was important to resolve issue that exists within the East African trading bloc if the region is to move forward and trade with other member blocs like the SADC and COMESA blocs.

Tanzania: More Investment Needed in Agriculture

East African Business Week (Kampala)

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Tagged: Agribusiness, Business, East Africa, Investment, Tanzania

By Kenan Kalagho, 6 August 2012

Dar es Salaam, Tanzania — The government of Tanzania has said that there is unsatisfactory pace of growth in agriculture sector at 4% for a period of 10 years making agriculture fail to contribute heavily to the national economy.

(A farm under cultivation in Dar es salaam, there is need for much investment in agriculture in order to attain the food security in the region Photo By Kenan Kalagho)

The Deputy Permanent Secretary in the Ministry of Agriculture and Food Security, Ms Sofia Kaduma said during an agricultural meeting in Dar es Salaam that there is need to invest more in agriculture in order to make sector contribute heavily to the national economy and uplift the majority from poverty.
"We need to invest more in irrigation infrastructure in terms of irrigation and research if the agriculture initiatives are to be realized"Ms Kaduma said.
However, the deputy permanent secretary said there was some slight improvements in irrigation to 480, 382 ha in 2012 as compared 264,388 ha that were being irrigated in 2006 while at the same time seeing the extension services improving to 7,974 ha in 2012 from 3,379 ha in 2006.
She also pointed out that there has been an improvement in both the agricultural inputs to seeds, fertilizer subsidies schemes and access of such inputs to small scale farmers in recent years especially with the formulation of agricultural Kilimo Kwanza initiatives in 2008-2009 financial year.
The deputy PS also pointed out that the government efforts to introduce the Southern Agriculture Growth Corridor of Tanzania (SAGCOT), a unique public - private partnership agricultural transformation initiative was mainly aimed at transforming agricultural areas into productivity while ensuring food security as well as exporting that will lead into gaining foreign currency as well.
Kaduma stressed that the concept of SAGCOT was to support partnership between small scale holder farmers and investors by adding value to their products and finding markets for them.
She pointed out that the government was keen in as far as issues of land is concerned and has already earmarked the land for investment in order to control and refrain from land conflicts and also removal of taxes for key agriculture inputs that may scare away investors.
The PS said that SAGCOT together with the coming up of Agriculture Development Bank to be realized later this year would aim at making sure that small scale farmers have access to finances in order to improve the agriculture sector in the country and make them grow into larger scale farmers.
The Chairperson of SACGOT, Mr. Salum Shamte said the need for efforts to be directed on agriculture while noting that there hasn't been yet the commitment of making sure that agriculture attains a 10% budget allocation as per the Maputo (Mozambique) deliberations made by African heads of state to improve food security in the region.
"I hear that the current budget allocation on agriculture has risen up to around 9% in 2012/2013 financial comparing to the previous financial year allocations of 3.2%, though it is still below the 10% Maputo agreement" the SAGCOT chairperson noted.
He however noted that in the recent years there have been some improvements in the production to some agricultural products like beef, cashew nuts, cotton, tobacco, and pyrethrum and also the importation of tractors or power tillers have improved to 13,000 imports by the year 2011 from 256 importations in 200.
The SAGCOT's chairperson also pointed out that, SAGCOT has potential of 7.5 million ha of land suitable for agricultural production with an access to rail, electricity and water resources while mentioning the Rufiji Basin as being one amongst them.
"We need to look on how we link small scale farmers to financial institutions; markets access as well as empowering them "said SAGCOT Chairman while adding that Tanzania was still importing much in agricultural input."
He stressed that the current measures to improve Tanzania Zambia Railway (Tazara), both the airports expansion in Dar es Salaam and Mbeya including the construction of birth 13 and 14 at the Dar Port would improve the SAGCOT agricultural exports from the country.
He said that by 2030 when the project comes to fully implementation will aim to profit 350,000 hectors of land in profitable production where 420,000 new employments will have been created while 10,000 commercial small scale farmers being uplifted and making 2,400,000 million Tanzanians moving out of poverty which in turn would enable the government get more revenues from agriculture and grow its economy.

East Africa: EPA Pacts Will Derail Region - Mkapa

East African Business Week (Kampala)

(The former President of Tanzania Mr Benjamin Mkapa says the EPA agreement will derail EAC region due to influx of EU goods into the market Photo BY Kenan Kalagho)  

Tagged: Business, East Africa, East Africa, Europe and Africa, External Relations, Tanzania

By Kenan Kalagho, 6 August 2012 

Dar es Salaam Tanzania — The Former President of Tanzania Benjamin William Mkapa has stressed that signing the Economic Partnership between the East African Community would derail the community development and weaken its economy as a result of EU goods entry into the East African market.
The EU negotiations between East Africa Caribbean and Pacific (ACP) countries as a fully reciprocal trade arrangements between EU and ACP commenced in 2002 to replace the previous non reciprocal, preferential trade access of ACP countries to EU markets under the various Lome convention and the cotonou agreements.
Speaking in Dar es salaam at a meeting organized by the Tanzania Private Sector Foundation (TPSF) in collaboration with its members last week, the former President stressed that the EPA agreements being negotiated as a bloc and individual countries in the EAC countries and Africa at large will mean more losses to respective countries in terms of tariff revenue looses and leads to weaken the economy of such countries.
Mkapa noted if the EAC agreed into signing the EPA trade agreements, it would mean also that big and economically stable country like the USA is likely to demand for the same reciprocal agreement with the bloc which will aim at weakening the current community intra-trade agreements.
"Africa is in trouble, its feature is once again on the table, and it is Europe that holds the ace" Mkapa lamented while addressing the TPSF members and its partners adding that it was important for Africa to be allowed latitude to conduct trade, industrial and development policies for its own development and not for the benefit of Europe while the continent remains with no voice and choice."
He explained while Africa Caribbean and Pacific countries have largely rejected EPA negotiations with protests from around 20 countries against the raw deal, it was certain that the EPA agreements were being forced to sail through.
The EPA agreements requires for nations or blocs in the respective African countries to have access to European markets by eliminating tariffs on over 80% of imports from the EU market and in some cases abolish all export duties and taxes in others, introduce new taxes, eliminate all quantity restrictions and meet all kind of instruments that all countries that have industrialized applied to build competitive national economies.
Mkapa said while Tanzania has in recent years enjoyed fairly high levels of growth rates with a GDP growth of between 5-7% per year and the main sectors for the contribution to this growth being mining, construction, communication and the financial sector, the country still remain underdeveloped in the aspect of agriculture which accounts for only 24% of the country's GDP while at the same time undervalued.
He stressed that with this context of agriculture being underdeveloped and undervalued, and both manufacturing and services not providing sufficient opportunities for employment, it was not a good context for negotiating EPA trade agreements with the well modernized bloc like the EU in terms of agriculture, manufacturing and service provisions.
Mkapa said that the ongoing unconcluded EPA negotiations which has been pushed to sometime October next year (2013), has been due to closed and or controversial or what are termed as "contentious" issues which have remained unresolved.
Mkapa stresses that if the entire EAC signs as a bloc, this would mean that Kenya would continue to receive preferences for its flowers, fish, fruits and vegetables export to the EU market while countries like Tanzania facing off with nothing to gain in terms of market access to the EU market but many areas to lose where 90% of Tanzania's tariff on EU's imports will have to be eliminated thereby posing challenge to domestic industries.
The former President also stressed that if Kenya is to sign the EPA trade agreements with the EU that would mean other LDCs countries in East Africa to remain with no benefits on the EU trade agreements, while the refusal of the entire EAC into signing the EPA agreement would mean putting the customs union more intact and eliminating border controls between EAC countries and posing no danger s in terms of EAC countries while trading more with the region and bringing economic development.
He stressed that EPA demands on g high levels of liberalization of duties charges on EU products to be eliminated for two-third the value of imports from EU would not only lead to blow on domestic production and regional trade agreements but would also lead to impact on tariff revenue as well.
He also pointed out that despite opposition to having discipline on exports taxes by many African countries in the context of EPAs the EU continues to insist on eliminating export taxes in order to have access to easy and cheap raw materials for its competitiveness and employment as many of its industries depended on steady supply of raw materials.
"EU refusal to deal with agriculture products on the EPA agreements and subsidies would mean that the EAC would be unable to compete with the highly subsidized EU products" Mkapa said.