Scholars call for the revival of industries

Dar es Salaam. Industrialisation refers to the development of the economy - mainly through manufacturing. It transforms a country’s economy from being a primarily natural resources-based to one based on the manufacturing of goods.

The manufacturing sector is key towards reinforcing sustainable development, a crucial growth factor necessary for poverty alleviation.

Statistics show that, the bulk of world exports (about 70 per cent in 2010) is of manufactured goods.

The development of the manufacturing sector, apart from its huge potential for jobs creation, stimulates demand for more and better services, including banking, insurance, communication and transport, which lead to further jobs creation.

Currently, Tanzania has been pushing its industrialisation agenda by expanding and strengthening its manufacturing sector.

However, this road has not been smooth, as there are many hurdles in the way that inhibit fast development of the manufacturing sector as a matter of course.

According to the Economic Survey of 2017, currently, the services sector is the leading contributor to Tanzania’s economy, with more than 40 per cent share.

Normally, positive structural transformation is accompanied by increased per capita income, thus making countries richer. But, in the case of Tanzania - as is the case with many other African countries - the country remains more services-oriented, and with its structural transformation remaining poor and premature.

Tanzania’s manufacturing sector is still very small in size. It is also largely low-tech and resource-based, with very low levels of value-addition activities.

Discussing the relevance of industrialisation, innovation and development in Tanzania recently in Dar es Salaam, various stakeholders came up with some ideas on how to improve the sector.

Science, Technology and Innovation Policy Research Organisation’s (Stipro) executive director Bitrina Diyamett stressed policy improvements in order to produce competitive commodities in the market.

She added that, in order to achieve the industrialisation goal, innovation is a crucial factor that must be given top priority.

“With globalisation and a free market global economy, industrialisation is impossible without adequate capabilities in innovation. Moreover, poverty alleviation is a process of capability-building - and, most importantly, innovation capabilities,” she stressed.

She added that the manufacturing sector is basically a knowledge intensive sector and in the free market economy country firms compete both in the domestic and export markets.

“One has to sell better products at competitive prices - and firms cannot do this if they are not empowered technologically and innovation-wise,” she says.

She also pointed to policy reformation as a critical factor, saying the world is a free market, with rapid technological changes – and very little time and opportunity to learn.

“The government needs to intervene through policy to speed up the learning process. Policy has always been part; but, now, it is critical,” she says. “Many people think that when one is dealing with practical issues, theory is irrelevant. But, all the time, whether knowingly or unknowingly, we use some mental maps that inform our decisions to act – some model of best practices

“Theory remains essential for diagnosing events, explaining their causes, prescribing responses, and evaluating impacts of different policies,” she emphasized.

She explained that theories have been developed as a result of empirical observations, so they are not abstract.

“If you get theory wrong, you will have a flawed policy,” she argued.

She called on universities and the government to make sure the country has adequate expertise in teaching and doing research.

“Government ministries, especially the one responsible for STI, need them for innovation policy analysis. The Commission for Science and Technology (Costech) needs them to make sure a correct research policy that spurs innovation, is put in place,” she observed.

The issue was also discussed by various economists, including Dr Donald Mmari, who is the Repoa executive director, a research in development think tank, who went back to the Tanzania industrial history up to the current industrial movement and provided solutions to current challenges.

“Tanzania is not the only country that has been experiencing poor industrial development; almost all African countries have the same problem. Our previous policies - especially Ujamaa na Kujitegemea - contributed to the fall because it didn’t promote market competition. We fail to compete domestically and globally,” he noted. He also mentioned the lack of technology and skilled people as some of the factors of industrial fall.

“There was no sustainable technological and innovational development and people were not skilled in running the industries. As a result we were exporting raw materials.”

However, he says the current industrial era is full of automation, which requires a more skilled generation.

“We are now in the fourth industrial revolution in which all things are ran digitally. We must build the needed capacity. We must also encourage innovation to enable the production of competitive products,” he said.

He also stressed the need to attract more foreign investments in agriculture and mining to drive industrialization. “We have gas which can be used for electricity generation, we also have coal and iron ore which can be used for industrial improvement. We should also use Export and Processing Zones to boost investments,” he said.

Prof Samuel Wangwe pointed out the importance of the government to invest in industrial agencies.

“We started well with industrial agencies like the Tanzania Engineering and Manufacturing Design Organization (Temdo), Tanzania Industrial Research and Development Organization (Tirdo), Tanzania Bureau of Standards (TBS) and the like.

But, recently, we lost direction because of poor investment. We can’t improve without investment,” he noted.

He insisted on technological and innovational investment for the betterment of industrial development.