Five ways Tanzania can cut China trade deficit

Investment, Trade and Industry deputy minister Exaud Kigahe. PHOTO | FILE

Summary

  • Recommendations are the setting up of Chinese companies in Tanzania, joint ventures, value addition, going digital and raising the standards of products

Dar es Salaam. Business stakeholders yesterday recommended five ways that could reduce Tanzania’s trade deficit with China.

The recommendations are the setting up of Chinese companies in Tanzania, joint ventures, value addition, going digital and raising standards of products so that they can meet international standards.

Going by official data, the current trade volume between the two countries stands at $6.74 billion (about Sh15.5 trillion), with Tanzania accounting for only $606 million (about Sh1.4 trillion).

This suggests that trade is in favour of China and thus the need for creating an enabling environment that will bridge or narrow the gap.

Those who made recommendations were speaking during the opening of a three-day China Trade Week (CTW) that kicked off yesterday at the Diamond Jubilee Hall.

Investment, Trade and Industry deputy minister Exaud Kigahe called for more Chinese investors to come and set their manufacturing industries here in the country.

“Instead of importing products from China, it is high time they produced the same here in our country,” said Mr Kigahe when officiating the three-day global hybrid show that involved over 50 Chinese manufacturing companies.

To make it possible, he said, investors from Tanzania and China, which is currently a leading foreign investor in the country, should forge the partnership.

“We need to benefit from Chinese technology so that we can improve our production and trade with China,” insisted Mr Kigahe.

“Investors need to take advantage of the conducive business environment that the sixth phase government is creating.”

This, he added, is important as it would cement trade ties between the duos.

Tanzania Private Sector Foundation (TPSF) director of membership and outreach services Zacky Mbenna called on local investors to use the CTW as a platform to enter partnership with Chinese investors.

In doing so, he said, it will help not only to improve the balance of trade, but also boost trade with China.

“Our share in trade volume between China and Africa, which stands at $254.3 billion, is very small,” observed Mr Mbenna, adding: “We need to do something to take it up.”

He said partnering with Chinese investors will enhance capital flow and technology transfer and thus boosting trade and investments in the country.

Mr Mbenna was also of the view that Tanzanian traders should mend the way of doing business.

“We need to go digital. We need to use modern technology, if we are to cut operational costs both in terms of money and time,” he suggested.

Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA) chairman for the Dar es Salaam Region Vincent Minja said the CTW should be more of business talks.

“Top on the agenda should be on how investors from Tanzania and China could forge a partnership,” stressed Mr Minja.

CTW Tanzania 2022 has been organised by Mie, a global event management company, in partnership with 19 Events.

Mie Group Vice president-strategy and partnerships Zahoor Ahmed said engaging with Tanzanian manufacturing industry leaders with Chinese manufacturers directly in a live and hybrid environment will be critical to engaging and discussing key project delivery.

“The government of Tanzania has been incredible in their support to bring Chinese innovation and industry to form new partnerships and drive FDI (Foreign Direct Investment) into this East African economy,” said Mr Ahmed.

CTW, he said, has been successfully held in Kenya, Ethiopia, Ghana, Morocco and South Africa for many years, which include an exhibition of brand products and seminars.

It is held with its theme of “China Africa economy and trade cooperation, investment, and culture exchange”, which covers infrastructure construction, energy, agricultural, food, science and technology sectors.