New import curbs position Tanzania to grow local industry

“We cannot industrialise if our own market becomes a dumping ground for goods that we are capable of producing locally,” he said. He instructed the Ministry of Finance to stop granting tax exemptions on imported products that are already available in Tanzania.

“Tax incentives will only be considered where local production does not meet demand,” he emphasised. This comes at a time when, for years, local manufacturers have complained that some imported products enjoyed duty relief, giving them an unfair price advantage.

Analysts now say the government’s move helps to correct that imbalance. A trade economist based in Mwanza, Dr Aikins Nyanswi, said the directive sends a strong signal to both local and foreign investors.

“This is a clear policy statement. When investors see that the government is willing to protect domestic production, it increases confidence. However, the protection must be strategic and time-bound,” he told The Citizen.

According to him, industrial growth requires a “learning period” in which local firms are shielded from unfair competition. “Temporary protection, combined with efficiency reforms, allows industries to mature. But firms must use this opportunity to improve productivity and quality,” he added.

Another directive that has attracted support is the push to tighten border controls and strengthen digital tracking systems to curb smuggling.

“All institutions and security organs must supervise the importation of goods in accordance with procedures. If you fail to do so, you will kill the investment being made locally,” the Prime Minister warned.

Experts argue that smuggling has long distorted Tanzania’s market. Goods that bypass taxes are sold cheaply, making it difficult for compliant businesses to compete. A local economist and investment expert, Job Mwakibinga, said tackling smuggling is as important as adjusting tax policy.

“You cannot talk about industrial protection while illegal goods flow freely. Formal investors need assurance that the rules apply equally to everyone,” he said.

He added that effective enforcement of Electronic Tax Stamps and the Single Customs Territory under the East African Community will help to restore fairness in trade.

Private sector at the centre

Economists also note that the directives recognise a key reality: the private sector remains the main engine of employment. With more than two million graduates entering the labour market each year, Tanzania cannot rely on the public sector to provide jobs. Industrial expansion is therefore viewed as critical for absorbing young workers.

Factories such as Lodhia’s create direct employment on production lines and indirect jobs across supply chains, from transporters to service providers. More importantly, they contribute to GDP growth through value addition rather than the export of raw materials. Industry and Trade Minister Judith Kapinga reassured investors that the government will continue to improve the business environment.

“We guarantee full cooperation. We are working day and night to remove red tape and improve the ease of doing business,” she said. Experts say this combination of market protection and regulatory reform is essential. “Protection without efficiency reforms would be dangerous,” Mr Mwakibinga noted.

“The two must move together.”

Another directive focused on reducing production costs by expanding natural gas infrastructure to industrial zones. According to government estimates, switching from diesel to natural gas can reduce production costs by up to 40 percent.

Dr Nyanswi described this as a “game changer” for competitiveness.

“Lower energy costs mean Tanzanian goods can compete not only locally but also regionally. Cost efficiency is what will determine success in larger markets,” he said.

Lower costs, analysts add, also encourage new investment, particularly in energy-intensive industries such as steel, cement, fertiliser, and ceramics. These sectors are seen as critical for deepening industrialisation and expanding export capacity.

Regional trade opportunity

Analysts say the new policy stance could strengthen Tanzania’s position in regional trade blocs such as the Southern African Development Community (SADC), the East African Community, and the African Continental Free Trade Area (AfCFTA).

“If Tanzania builds strong domestic industries now, it will be better positioned to export to regional markets,” Dr Nyanswi said. “Regional demand is growing. Countries with manufacturing capacity will benefit the most.”

Some policy observers have compared the approach to the early industrial strategy of China, which protected its infant industries before exposing them to global competition.

They argue that similar sequencing could allow Tanzanian firms to build capacity, master technology, and achieve economies of scale before facing intense international pressure.

Economists caution, however, that the protection must not become permanent.

“The shield is important,” Dr Nyanswi concluded. “But eventually, Tanzanian industries must stand on their own and compete globally. That should remain the ultimate goal.”

They stress that long-term success will depend on consistent policy, strong institutions, transparent enforcement, and sustained investment in skills and infrastructure. Without these elements, protection alone may not deliver the desired transformation.

For now, the government’s tougher stance on imports is widely seen as a decisive move to reset the balance in favour of domestic production, with the hope that it will unlock industrial growth, create jobs, and accelerate Tanzania’s journey towards middle-income.