Tanzania's infrastructural development is a key goal to the country's industrialization program aimed to promote SADC regional trade for the next five years of the regional Revised Regional Indicative Strategic Development Plan (RISDP) set between 2020 and 2030 respectively.
The ultimate objective of the RISDP is to deepen the regional integration agenda of SADC with a view to accelerating poverty eradication and the attainment of other economic and non-economic development goals.
Tanzania has already determined to ensure the economic wellbeing, improvement of the standards of living and quality of life, freedom and social justice, and peace and security for the peoples of Southern Africa.
According to one economist from the University of Dar es Salaam (UDSM), Prof Mohammed Bakari, improvement of transport infrastructure such as ports, railways, roads and electricity power plant currently going on in the country, will help further drive the economic growth of SADC member states.
Prof Bakari highlighted his findings at his recent presentation he made for the Virtual Workshop across SADC region for Tanzania’s NSAs and talked on Tanzania’s Performance in three areas namely Industrialization, Agriculture and Trade.
He said Transport and storage are among the major drivers for the Tanzanian economy and the significant volume is already generated from landlocked SADC member states.
With strategic comparative advantage put in place, Prof. Bakari cited Julius Nyerere Hydro-electricity power Generation Project which upon its completion is scheduled to generate 2,115 megawatts of electricity. This is enough to cater for the southern African countries.
The long stretch of the Standard Gauge Railways (SGR) which would cover 1,450km in total which on its completion will also connect three African landlocked countries of Rwanda, Burundi and DRC.
Another one is the 1,860 kilometre-long bi-national railway link known as TAZARA owned by Tanzania and Zambia which is vital in boosting intra-regional trade as it joins southern Africa and Eastern Africa through its railway transport network.
The comparatively low levels of intra-regional trade have been ascribed to the fact that SADC firms have not broken into global manufacturing production networks nor created these networks regionally. Globalization and the lowering of transport costs is a key ingredient in the emergence of intra-industry trade.
Supply side constraints, inadequate trade related infrastructure and other trade policy instruments such as Non-Tariff Barriers (NTBs) and restrictive rules of origin in particular on items of textiles and clothing, are also cited as some of the main contributory elements to the relatively stagnant growth in the levels of intra-SADC trade.
According to the 2017/18 Bank of Tanzania (BoT)’s Annual Report, Tanzania was the fastest growing economy in SADC with a GDP growth of 7.1 percent. Tanzania’s total intra-SADC trade however declined by 3.5 percent in 2017 as compared to 2016 due to fall in both exports and imports.
Nevertheless, Tanzania continued to be a net exporter to other SADC countries, recording a trade surplus of USD 445.5 million in 2017, up from USD 397.2 million in 2016.
Deputy Director for export department in the Ministry of Trade and Industry, Abdul Chacha, says: “Total Tanzania’s exports to SADC member countries were US$ 999.34 during 2018 trading period compared to US$ 877.8 attained during 2017 trading period.”
This is equivalent to 12.16 percent increase.
The figures are slightly higher from the report issued by the Bank of Tanzania (BoT) on annual economic operations it issued in June 2018 for the year 2017/18.
The report showed that, “Tanzania continued to be a leading exporter of its products in SADC countries with trade surplus of US$ 445.5 million in 2017 up from US$ 397.2 million in 2016 which is an increase of 4 percent.
Specifically, Tanzania recorded a trade surplus with South Africa, DRC, Malawi, Mozambique, Zimbabwe, Angola and Botswana. Meanwhile, Tanzania recorded a trade deficit with Zambia, Madagascar, Mauritius, Namibia, Swaziland, Seychelles and Lesotho.
Tanzania’s major exports to the SADC region were gold, cigarettes, wheat flour, juice, ceramic, fish, glass, cement, soap, footwear, and bricks, while major imports, were motor vehicles, maize seeds, gas, iron sheets, lubricants, beer, apples and sugar.
The rules of origin are still a thorny issue and utilisation rate is low. SADC adopted product specific rules aimed at encouraging the optimum utilization of regional resources and allowing for forward and backward linkages in the various production chains.
However, several studies and audits of the implementation SADC initiatives indicated that from a Private Sector perspective, these rules were complex and not supportive to enhancing intra-regional trade and competitiveness.
SADC rules of origin are considered to be unfriendly to most of the Member States. Most members including Tanzania considers the rules to be so complicated, hence not conducive to the region. They have been largely taken from the EU.
The minimum standards set are too high for most products such as 60 percent of local content versus 40 percent of foreign content to be traded in the region. Some countries which benefit from this includes South Africa and other are losing miserably under the existing rules of origin.
The agriculture and food security sectors cover crops, livestock, forestry, fisheries, wildlife as well as environment. The objective of these sectors is to develop, promote, coordinate and facilitate harmonization of policies and programs to promote agricultural trade.
