Cement, glass makers raise alarm over rising production costs
Dar es Salaam. Tanzanian manufacturers have raised at least seven major concerns that they say are driving up production costs and threatening the sustainability of local industries. They are now calling on the government to act swiftly to safeguard jobs, competitiveness and industrial growth.
The issues, ranging from high operational costs and unreliable electricity supply to policy inconsistencies and unfair competition, were outlined during a high-level public-private dialogue held in Dar es Salaam with Industry and Trade minister Selemani Jafo.
In response, Dr Jafo pledged to engage directly with stakeholders and conduct industry visits to seek sustainable solutions. “We are committed to protecting and promoting local industries such as cement, iron sheets, steel bars, beverages and textiles,” he said. “These sectors are key to creating jobs and strengthening domestic production.”
Among the most vocal were cement manufacturers Twiga and Simba Cement, who urged the government to scrap the Sh20,000 per tonne excise duty on cement.
Their director, Mr Alfonso Velez, said past promises to remove the 16 percent Free Carry Index (FCI) had not been fulfilled, discouraging future investment.
“We’re also disappointed by the lack of incentives for clean energy users. Companies using gas over coal are losing money and jobs, while neighbouring countries benefit,” he said.
In the glass industry, Salehbhai Glass Industries director Mufaddal Dawoodbhar warned that his factory was weeks away from shutting down due to increased costs.
“We lost our duty remission, raising import costs from 10 to 50 percent. Our products can’t compete with cheaper imports from Kenya. Closure would cost jobs, hurt local supply chains and increase reliance on imports,” he said, noting that the firm directly employs 50 skilled workers and supports many more indirectly.
Kioo Limited financial controller Dipen Patel cited rising natural gas costs and a Sh22,000 per tonne carbon emissions tax as another pressure point. He called for a review of such levies.
Kilimanjaro Cement managing director Andrew Demello raised concerns over manipulated electricity meters and high tariffs, which he said disproportionately affect large industrial users. Dr Jafo said that while production challenges exist, the government has made substantial progress in improving the operating environment.
“Domestic cement production capacity now exceeds 10 million tonnes—more than our national demand. We’ve also improved industrial power supply, increasing national generation from 1,690MW to 4,031MW.”
Dr Jafo stressed that industrial development offers the most sustainable path to employment creation and inclusive economic growth.
“The absorption capacity of developing countries cannot guarantee jobs for all. But industry can employ the majority—directly and indirectly—while supporting the economy at large,” he noted. Highlighting major infrastructure gains, Dr Jafo said local steel was used in constructing the Julius Nyerere Hydropower Project. “We also now have the capacity to produce windshields and other key industrial inputs domestically,” he said.
He added that regional trade links are being strengthened, with Tanzanian exports already reaching Rwanda, Malawi and Zambia.
“We have inaugurated the Kigongo–Busisi Bridge and the Kwala Inland Port is set to be launched before the end of this month to reduce congestion from trucks,” he said.
