Private sector lobby upbeat on industrialisation

THE country's drive towards industrialisation and middle income status by 2020 can easily be achieved compared to China because of abundant natural resources including natural gas.

Tanzania Private Sector Foundation Executive Director, Mr Godfrey Simbeye, said in Dar es Salaam at the weekend that the country may not necessarily follow China's path to industrialisation although there are many lessons to learn from the Asian nation.

Stressing the need for export oriented industrialisation which has made China a global manufacturing power house, Mr Simbeye told a meeting of Chinese and local business people, policy makers and public enterprise executives that hard-work made China a giant.

'We know that China did not count on massive natural resources, economic growth was gained the hard way -- farm by farm, factory by factory, and shop by shop.

There was no oil, gas, or mineral bonanza pumping billions of dollars into the economy and into the government's coffers,' Simbeye argued. In contrast to Tanzania, China had to import much of the natural resources to feed its industrial development.

'This should make industrialisation relatively easier for Tanzania, a country super-rich in natural resources,' he argued, while revealing that over the past decade, use of installed industrial capacity increased from 20 to 50 percent.

Official data also shows that manufacturing contribution to gross domestic product increased from 4 to 10 percent between 1960s and 1990s.

By 2008, there were more than 700 large industrial establishments in Tanzania by the private sector, according to Annual Industry production and performance survey of 2010 Private sector has massively led the increase of Manufacturing Value Addition (MVA) in the past decade, for example, between 2000 to 2010, MVA increased by 12.3 percent from 894 million US dollars to 1.9 billion US dollars.

In 2004, 46.2 percent of sales in manufacturing were from firms that were making less than 50m/- per annum and only 7.7 percent of sales came from firms whose sales exceeded 5bn/-.

But by 2008 sales of firms earning less than 50m/- decreased to 22.1 percent while the sales share of firms earning more than 5bn/- had increased to 18.4 percent, the TPSF chief pointed out.

Tanzania Investment Centre Executive Director, Ms Juliet Kairuki challenged local business people to team up with their Chinese peers to invest in the manufacturing sector which has potential to employ many people and contribute to economic growth.

'Industrial development was one of the things which President Jakaya Kikwete agreed with his Chinese counterpart during his visit to that country last year,' Ms Kairuki said.

She noted that the 1bn US dollars (approx. 2.1trn/-) China-Africa Development Fund (CADFund) is an important financial institution set up by the Chinese government to solely focus on Africa.

SOURCE: DAILY NEWS

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