How Tanzania can benefit fully from continental free trade area

Trade Minister Kitila Mkumbo

What you need to know:

  • Business leaders have called for pending issues to be ironed out if Tanzania is to benefit from the African Continental Free Trade Area, which has created a $3.4 trillion economic bloc and market of at least 1.3 billion people

Dar es Salaam. Business stakeholders yesterday said for Tanzania to really benefit from the African Continental Free Trade Area (AfCFTA), then some pending trade barriers need to be addressed.

The challenges that were pointed out during the Chief Executive Officer Round Table (CEOrt) meeting and that need to be rectified include low productivity, lack of regional and international competitive culture, inefficiency of some regulatory bodies and delays in clearance at ports.

The AfCFTA, whose trading started officially on January 1 this year aims to bring continent-wide free trade to 1.3 billion people in a $3.4 trillion economic bloc.

Industry and Trade minister Kitila Mkumbo, who was the chief guest, said for Tanzania to enjoy the opportunity, it was high time investors in the country improved their productivity for them to be fit in the AfCFTA arena.

He said, currently, most of the industries in the country were operating below 40 percent of their installed capacity.

To make things even worse, some were operating seasonally.

“If we are to improve, we need to address the question of human resource skills and attitude gap which is very huge,” said Prof Mkumbo.

He also urged investors in the country to build a regional and international competitive culture that will help them to move out of their comfort zones and fight for more successes.

“My experience shows that most of the businesses are very comfortable with protectionism and thus they don’t want to hear about opening up the market,” said the minister.

“The signing and ratification of the AfCFTA reminds us that our businesses need to be competitive.

“As a government we are ready to facilitate by coming up with friendly policies and legislations. Members of the private sector too need to play their part. ”

Coca-Cola managing director Unguu Sulay called for a review of regulations in such a way that they did not become a hindrance towards competitiveness of local businesses.

He said if Tanzania was to become competitive, there was a need for a friendly tax regime that did not hurt taxpayers.

Noting that the world was running in terms of innovation, he also expressed the need of upgrading and revamping the Tanzania Bureau of Standards (TBS), not only in terms of equipment, but also human resources, knowledge and skills.

For this to happen, he said, there was a need to bring together people who have been working with the private sector in the business and trade and those working with TBS to share insights.

“We call upon regulatory bodies from the government to be business facilitators rather than otherwise,” stressed the Coca-Cola boss.

“If we do not address these challenges, we are defeating our competitive advantage to the rest of the world.”

MAC Group chairman and CEO Yogesh Manek said: “We really need the preparedness if businesses of all sizes are to benefit from the AfCFTA.”

He said it was time for Tanzania to beat the odds that it is only multinational companies that could easily capture the market when it comes to big opportunities.

“If we are to make it, we need to formulate exactly what we want, how to get ready, what is it that is required to show from the government and the private sector,” recommended Mr Manek.

Again, referring to the standardisation, legislative and trademark issues, he expressed the need to improve the easy of doing business

Vice President Sustainability at AngloGold Ashanti Geita Gold Mine Limited Simon Shayo said as the government and the region, it was high time that they determined their competitiveness edge in the areas that they wanted to focus on.

“When it comes to mineral value addition, for-instance, what is the use of having the refinery in Tanzania, Uganda and Rwanda?” asked Mr Shayo.

Freight Terminal Tanzania Managing director Zulobia Dhala said high operational costs were making Tanzania less competitive compared to other nations.

She said the high cost was significantly caused by bureaucracy in clearance of goods at the ports-- that was plunging them into incurring demurrage charges.

“We are not competitive. It is hard for us to win tenders when it comes to AfCFTA,” said Ms Dhala.