Local producers demand protection in Sadc market

Wednesday August 14 2019

Delegates of the Southern African Development

Delegates of the Southern African Development Community (Sadc) during their visit to Lodhia Group Industry in Mkuranga District, Coast Region, last week. PHOTO | ELIAS MSUYA 

By Elias Msuya @TheCitizenTZ news@tz.nationmedia.com

Dar es Salaam. Local manufacturers have asked the Southern African Community (Sadc) member states to increase duties on imports which they can produce to protect their industries.

They said low import duties on product similar to what they produce was threatening their survival in the local and regional markets.

The concern has been raised at the time Sadc has started implementing its Industrialisation Strategy and Roadmap 2015-2063, with specific focus on processes, strategies and programmes aimed at developing a competitive and productive industrial base in the region.

The concern was highlighted by Lodhia Steel Industries Ltd when Sadc delegates visited the industry in Mkuranga District, Coast Region recently.

The industry requested the government to increase customs duty for the imported steel from 25 to 35 per cent in order to protect local manufacturers.

Speaking during the visit, the Lodhia Group of companies managing director, Sailesh Pandit, said most contractors of the mega projects opt to import steel materials due to low customs duty rather than buying them from local producers.

“We are facing competitive challenges from mega projects contractors who import steel materials from abroad due to low customs duty.

“We have already notified the government about this concern, but has not been addressed,” he told the delegates.

He said the Mkuranga steel industry employed about 600 people who worked eight hours a day.

“We could have worked 24 hours and employed up to 1,200 people if we would have sufficient markets,” he said.

Apart from the 600 employees, Pandit said they had employed about 5,000 people in their group of companies nationally, out of whom 2,500 are permanent employees.

While Tanzania’s customs duty is said to be low, the Confederation of Tanzania Industries (CTI) information shows Uganda and Kenya have already raised their duties up to 35 per cent.

CTI also says Tanzania is leading in East Africa in importing steel materials mainly for construction purposes.

Responding to the concern, the director for industrial development at the ministry of Industry and Trade, Kamara Gombe, said the government was aware and it was working to address the concern.

“It is true that those who import steel materials are charged 25 per cent of the customs duty and local producers have requested us to raise the duty up to 35 per cent.

“We are still working on the request,” he said.

Tanzania produces about 200,000 tons of steel annually while demand stands at more than 300,000.

“We can’t just ban importation with such huge demand gap. So, we shall consider their request because they said they were ready to increase production,” he added.

He urged the local producers to focus on mega projects such as the over 2,000 MW Stiegler’s Gorge Hydropower Project which was launched recently by President John Magufuli.

The President urged owners of local industries to grab the opportunity by supplying construction materials like iron rods.

The Sadc acting director for industrial development and trade, Calicious Tutalife said in Dar es Salaam that a draft protocol on industry has been developed and subsequently reviewed by different structures and other bodies in the region.

It was then submitted and endorsed by the ministerial task force on Regional Economic Integration (MTF) in June 2019.

“Once ratified, the Protocol will become a stand-alone legal instrument, whose main objective will be to promote the development of a diversified, innovative and globally competitive regional and national industrial base to enable the Region to achieve sustainable and inclusive industrial development,” he says.

He said representatives of member countries had undergone capacity building workshop in March to assist them in aligning their industrialization policies and strategies to Sadc’s Strategy and Roadmap using the ‘Enhancing the Quality of Industrial Policies’ (EQuIP) methodology.

To allow for continuity and capacity building of the Sadc secretariat, four staff members were selected to take part in the training, he said.

Member States involved included, Botswana, Lesotho, Eswatini, Malawi, Mozambique, Namibia, Tanzania and Zambia.

She said all members were supported by the Sadc, the European Union (EU) and German partnership Programme, “Strengthening National Regional Linkages’’ (SNRL) and implemented by GITZ.

He says the Sadc Draft Regional Mining Vision (RMV) and Action Plan were finalized during the year to ensure increased production and use of Sadc raw materials as feedstock for downstream processing, “The RMV is anchored on the tenets of the African Mining Vision (AMV) and aims at optimizing the sustainable extraction of mineral resources across the region whilst being cognisant of the differing maturity of the minerals sector in the member states,” he says.

The Sadc delegates were also accompanied by the Mkuranga District Commissioner, Mr Filberto Sanga, who also challenged the ministry of Industry and Trade to work on concerns raised by local producers.

“We at Mkuranga have a large industrial area but we advise you (the ministry) to consider production costs and attend to their concerns as you push local producers to invest more,” he said.

Tutalife reminded that every Sadc member state had its sovereignty to decide for its citizens, despite the fact that the community provided guidelines on industry and trade.

“We as Sadc have our guidelines to safeguard our industries. If products are imported within community member countries, our guidelines will apply, but if they are imported out of the community, the World Trade Centre rules will apply,” he said.