Over the past decade, Tanzania maintained annual real GDP growth rate averaging 6-7%. In 2017, the economy attained a 6.8% GDP growth, driven by growth in services sector (specifically construction, professional services, and transport and storage) and manufacturing. In particular, transport and storage grew by 6.7 percent in 2017, following improved efficiency at Dar es Salaam and Tanga ports, and increase in transit cargo (by 19.5%). Other activities with high growth rates include; arts and entertainment (9.9%), health services (7.6%), education (7.3%), ICT (6.2%), and trade and repair (6.1%). Despite its low growth rate of 5.9 percent, agriculture remains a core sector in the economy, employing 66.3 percent of the population, while accounting for 20 percent of export earnings.
With a population of 52.5 million people in 2017, per capita income stands at US$ 1,044, which is a 8.9 percent increase from 2016 (US$ 958). The current account deficit increased, following increased imports, especially of transport equipment, building and construction materials, industrial raw materials, and petroleum products for large public investment projects, such as the Standard Gauge Railway (SGR). The reported GDP growth rate is expected to sustain in 2018 and 2019, following increased implementation of various earmarked infrastructure projects (water, energy, rail, road, airport), together with increased production of minerals and natural resources (diamond, natural gas, and coal), and enhanced performance in the agriculture sector.
Despite these positive rates, several challenges bedevil growth, posing significant risks to the attainment of the country’s objective of industrializing and becoming a middle-income economy by 2025. Some of these challenges include; slow pace towards inclusive growth, infrastructure bottlenecks (especially in transport and energy sectors), growing private sector concerns about economic policy uncertainty, and vulnerability to climate change.
The FYDP II pronounced objective of leveraging Tanzania’s geographical advantage to become a transport and trade hub in East and Central Africa. The port of Dar es Salaam is arguably Tanzania’s most important infrastructure asset. Future growth of the economy depends on the port’s ability to improve, to become more efficient and to be able to handle more trade. Despite the remarkable progress and economic opportunities, the country is still economically dependent on agriculture, which employs most people and especially women. Continued progress will rely on deliberate efforts to tap into natural resources, increase tourism revenue and exploit the potential for exporting value-added agricultural products.
The programme will continue to support increase in trade, as a model to drive economic transformation and achieve sustainable and inclusive prosperity in Tanzania. There will be continued investment to increase the efficiency and productivity of the Dar es Salaam Port, Central Corridor and border posts and developing agriculture-related economic growth along the Dar/SAGCOT corridor to Zambia. Also, the programme will improve standards, leveraging ICT for trade, support advocacy for trade policy, and removing NTBs.
TMEA will focus on inclusiveness by ensuring that women, the poor and small businesses are increasingly involved in the local, regional and international trade. Cross-border trade interventions will focus on increasing access to information and simplifying trade information and procedures that enable small cross-border business to get started.
The strategy provides guidance on the institutional and policy reforms necessary to execute the Vision 2025 and its implementation strategies (notably the FYDP II) and deliver on its goals and can thus play a central role in facilitating economic transformation, industrialisation and human development in Tanzania and propelling the country towards middle-income status by 2025.
TMEA strategy 2 aligns well with the FYDP II priority areas of; (i) fostering economic growth and industrialisation; (ii) fostering human development and social transformation; (iii) improving the environment for business and enterprise development; and (iv) strengthening implementation effectiveness. The FYDP II highlights a number of flagship projects and interventions, most of which align with TMEA Strategy 2. These projects include; skills development and development of the Central, North-West and Mtwara Development Corridors, as well as enhancing trade for growth. TMEA Strategy 2 envisages an important role for the private sector, PPD, and conducive policy and regulatory environment for trade, as an engine of growth.
|Dar Port Programme||Increased handling capacity of the Port; Increased efficiency at the Port; Improved access to Port via local roads; Improved capacity for programmes management|
|Kigoma Port/ Lake Tanganyika Border Crossings||Increased handling capacity of the Port; Increased operational efficiency in lake and navigation safety services; Reduced environmental degradation|
|Improvement of border crossings and one One-Stop Inspection Stations (OSIS) on Dar corridor||Border agencies improve the efficiency of cross border processing; Reduced transit time along central and Dar corridor|
|Quality Standards||Tanzania Bureau of Standards (TBS) improves the efficiency and effectiveness in regulating and enforcing standards; Improved trading standards for agricultural goods|
|Hazard Analysis Critical Control Point (HACCP) and Sanitary and Phytol-Sanitary (SPS)||Increase in the total number of products standards technically harmonised.|
|Elimination of NTBs||Increased efficiency in implementation of national and regional NTBS mechanism|
|Single Window Information for Trade (SWIFT) / ICT for trade||Improved efficiency in the application and issuance of trade permits and licenses by targeted government trade agencies; Improved compliance to trade regulations at specified sector level by the trade fraternity|
|Dar and Central Corridor Transport Observatory Project||Increased efficiency and effectiveness of corridor performance monitoring|
|Trade Business Intelligence Solutions||Enhanced access to quality trade data|
|Regional Electronic Cargo Tracking Systems||Cargo Tracking Systems enhanced and interconnected to support SCT|
|Trade Policy and WTO Bali TF Agreement||Compliance to WTO TF measures by Tanzania is enhanced; Enhanced trade policy environment|
|Implementing the Common Market Protocol/regional integration agenda||Improved capacity to coordinate the implementation of EAC Commitments|
|Public-Private Dialogue (PPD) dialogue frameworks||Enhanced evidence-based PSO/CSO advocacy|
|Development of Transport Logistics in CB areas- Cross-Border Market at Tunduma/ Kigoma||Increased Local trade in the Tunduma/Kigoma regions|
|Logistics Hub in the SAGCOT Corridor||Increased market access along the SAGCOT corridor|
|Export Growth for Export-ready Businesses||Export revenue at firm level on TMEA-supported interventions; Level of value addition at the SME level; Access to new markets of TMEA-supported SMEs|
|Capacity Building for Women Traders and producers||Increased number of women exporters and cross border traders trading formally through the selected borders|
The existing standards frameworks in Tanzania, which is overseen by TBS, faces challenges of policy, administrative, regulatory and enforcement nature. These challenges have hampered TBS’s capability to offer quality service to its stakeholders, develop market oriented standards, and foster the uptake and adoption of standards by the business community.
|DETAILS||RESULTS TO DATE|
|Modernise Dar es Salaam Port||• Contributed to reduction in the average dwell time at Dar es Salaam port for imports from 11.3 days in 2013 to 7 days in 2015. Translates to US$ 641M savings per annum • Ship turnaround time reduced from 4 days in 2012 to 2 days in 2015. • Container dwell time has declined from over 10 days in 2014 to 7 days in 2015.|
|Set up One Stop Border Posts (OSBPs)||• Holili OSBP completed and launched in Feb 2016. Achieved 24% reduction in border transit time • Mutukula, Kabanga OSBPs expected to be completed and handed over by June 2016 • Tunduma OSBP expected to be completed and handed over in 2017|
|DETAILS||RESULTS TO DATE|
|Improved efficiency of trade along the Central Corridor||Simplification of customs clearance procedures, transit and border infrastructure formalities, and removal of NTBs and other trade barriers. This resulted in an overall reduction in turn-round time for trucks on the Central Corridor from 18 to 13 days (excluding dwell time at the Port).|
|DETAILS||RESULTS TO DATE|
|Give the private sector and civil society a voice||• Rice policy scoping study developed in 2015 by Tanzania Private Sector Foundation (TPSF) • Tanzania Charter on East Africa Civil Society Organisation Forum (EACSOF) developed in 2014 by Foundation for Civil Society (FCS) • 3 policy briefs and 2 position papers developed by Tanzania Association of Non-Governmental Organisations (TANGO)|
|Eliminate NTBs||• 181 NTBs reported in the SMS system and electronic certificates of origin developed and rolled out to traders & truckers • 1,000 women traders trained on trading rules and regulations across borders.|