Tanzania’s industrial sector has evolved through various stages since independence in 1961, from nascent and undiversified to state-led import substitution industrialization. Industrialisation has been characterized by shifts in roles of the state and private sector, Minister Prof. Kitila Mkumbo said the current development agenda, however, has brought industrial development back to being one of the policy priorities.
In fact, in the past 6 decades, 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. Prof. Kitila Mkumbo said industrialisation has taken an upward trend in the areas of manufacturing, agriculture, mining and other extractive industries and services.
Prof. Kitila Mkumbo noted that the government has always insisted that the key underlying notion to industrialisation is value-addition, occasioned by knowledge and skills accumulated through experience and training. The principle, he added, applies to all productive sectors and services, improving productivity and inventiveness to enhance competitiveness. At present, Minister Mkumbo said there are about 80,697 industries in the country which contribute to over 17% in the national Gross Domestic Product (GDP), a sign that the country’s ambitious industrialisation agenda by year 2025 will be perfectly achieved.
Prof. Kitila Mkumbo gave the statistics in the country’s capital, Dodoma on 17th November, saying industries were contributing to about 8.4%, while trade was adding up over 9% to the country’s GDP. The Minister was optimistic that come 2025, the target of his ministry was to see the Trade and Industries sector contributing up to 30% in the GDP. He said that an assessment that was conducted in July 2021 this year, found out that there were about 80,696 industries countrywide, adding that on 16th November this week Prime Minister launched yet another factory-SIKA Tanzania located at Salasala in Dar es Salaam, putting the figure at 80,697.
With mushrooming of industries in the country, Prof. Mkumbo said employment opportunities had increased whereas 99% of direct employment were occupied by Tanzanians with the remaining percent going to foreigners. He said employment opportunities in the industrial sector continued to grow significantly with statistics indicating that by 1961 the sector contributed to 9% of total direct employment in the country.
Minister Mkumbo further noted that by 2015, employment in the sector reached 254,786, adding further that following the government’s initiative to massively promote industrialization, the number of people employed in the sector has now reached 482,601. “On average mega industries have so far provided direct employment to about 400,000 Tanzanians. According to statistics available in the ministry and in the Small and Medium Enterprises, 100% of the people within the sector are locals,” he added.
On Special Economic Zones (EPZ) and Export Processing Zones (SEZ), the Minister said so far, a total of 174 companies have been registered, injecting a total capital of 2.23billion US Dollars (about 5,13tri/-). He said through EPZ and SEZ investments, some 57,563 direct jobs have been created. Prof. Mkumbo further took time to explain how Tanzania was doing well on trade with the rest of the world. He said participation in global and regional trade, including importation, attracts domestic and foreign investments and access to new technology and managerial skills.
He explained that exports reduce foreign exchange constraint; create jobs and higher capacity utilization of domestic resources, in turn, contributing to overall growth. Tanzania’s exports are concentrated, dominated by primary exports, including minerals and semi-processed agricultural exports. They have low technology-development impact on domestic producers as well as jobs in the domestic market.