Revealed: Asia and Sadc are Tanzania’s main trading partners

Dar es Salaam. Tanzania’s trade sector grew by 4.3 percent in 2023, with Asian nations and the Southern African Development Community (Sadc) emerging as the country’s top trading partners.

Asking Parliament to approve Sh110.89 billion as its 2024/25 docket budget in Dodoma on Tuesday, Industry and Commerce Minister Ashatu Kijaji said the sector grew by 3.9 per cent in 2022.

It added that the contribution of the commercial sector to GDP was 8.3 percent in 2023 compared to 8.2 percent in 2022.

Tanzania’s exports to Asian countries, including China, India, Japan and the United Arab Emirates (UAE), amounted to Sh7.48 trillion in 2023.

Although this represented a 31.6 percent decline from exports worth Sh10.9 trillion recorded in 2022, Asian countries remained Tanzania’s main trading partners.

On the other hand, Tanzania imported goods worth Sh21.52 trillion from Asian markets in 2023, slightly below the 2022 figure of Sh23.32 trillion.

Dr Kijaji said the decline in imports was due to a reduction in the import of capital and ordinary goods that previously came from Asia.

Tanzania exported goods worth 4.42 trillion shillings to the Sadc region in 2023, compared to 4.61 trillion shillings in 2022.

Imports from Sadc countries amounted to Sh2.01 trillion in 2023, compared to Sh1.41 trillion in 2022.

“The most traded products in this market were minerals, tea, avocados, building glass, coffee, mosquito nets, soap and lotions,” said Dr. Kijaji.

Europe was Tanzania’s third largest export destination in 2023, with the value of exports increasing by 56.8 percent to 3.83 trillion shillings from 2.44 trillion shillings in 2022.

“The increase was driven by an increase in trade in agricultural and industrial products,” Dr Kijaji said.

The value of imports from Europe fell to 4 trillion shillings in 2023 from 4.4 trillion shillings in 2022.

Tanzania exported products valued at 3 trillion shillings to other member states of the East African Community (EAC), a decrease of 16.6 percent from the 3.4 trillion shillings recorded in 2022.

“This situation was caused by a decrease in sales of agricultural products, in particular coffee, tea, corn, wheat, rice, vegetables and industrial products such as roof tiles and cement,” the minister told lawmakers.

Tanzania imported goods worth 1.34 trillion shillings from the rest of the EAC in 2023, compared to 1.48 trillion shillings in 2022.

Dr Kijaji explained that the decline in sales of commodities such as coffee was due to Tanzania selling the products directly to international markets rather than through Kenya as was previously the case.

“In addition, there has been an increase in domestic demand for construction materials, including roof tiles, cement, steel and steel products.”

Trade between Tanzania and the United States through the African Growth and Opportunity Act (Agoa) grew by 7.06 percent last year to reach Sh205.824 million. It stood at Sh192.256 million in 2022.

“This increase was due to increased production of textiles and clothing sold in that market,” Dr Kijaji said.

Through the African Continental Free Trade Area (AfCFTA) market, the government revealed that a total of 11 Tanzanian companies have successfully sold products to various African countries, with a total of 24 certificates issued to these companies.

“Products that have been sold in large quantities through these certificates include 426.4 tons of sisal fibers to Nigeria, Ghana, Morocco and Egypt, 273.3 tons of coffee to Algeria and 21.1 tons of tobacco to Nigeria. ”.

Meanwhile, industrial sector growth was 4.3 percent, up slightly from 4.2 percent in 2022, however, the sector’s contribution to GDP fell slightly to 7 percent from 7.1 percent. cent of the previous year.

The Sh110.89 billion budget for the Ministry of Industry and Commerce during the 2024/25 fiscal year is an improvement on the Sh81.11 billion that Parliament approved for the ministry during the current fiscal year .

Key focus areas in the ministry’s 2024/25 fiscal year include the development of the Engaruka Basin Soda Ash Project, the Liganga (iron ore) and Mchuchuma (coal) integrated projects, as well as Tanzania expansion Biotech Products Limited (TBPL) for production. of biofertilizers.

Other strategic plans for the government include building small-scale sugar processing plants to meet local demand and creating alternative energy technologies for artisanal and small-scale miners to help in environmental conservation.

“The government also plans to establish industrial zones for clusters of industries and businesses at least in one district in all regions of the country to add value to agricultural, livestock and fishery products,” Dr Kijaji said.

Parliament’s Trade and Industry Committee said that despite the government’s efforts to revive some of the industries that had long halted production, some still face a capital shortage, preventing their full contribution to national income.

The committee also recommended the government to establish reliable and affordable electricity infrastructure in all industrial areas.

“Industrial owners face the significant challenge of insufficient and unreliable electricity, leading them to use substantial funds to purchase fuel to run generators,” said committee chairman Deo Mwanyika, presenting the views of the panel.

The committee also addressed the renovation and expansion of internal markets, recommending that the government allocate funds for the renovation and expansion of the markets to improve their condition.

“By doing this, the environment will be attractive, customers will increase, businesses will prosper and government revenue will increase,” Mwanyika said.

“The committee recommends that the government continue to allocate special areas for all street vendors to conduct their business in a friendly environment, including creating infrastructure that will help collect taxes using simple and modern systems.”