Tanzania sees surplus in construction materials, eyes lagging sectors

According to Dr Jafo, the government has focused on building value-added industries using local raw materials to reduce imports, increase exports and create jobs.

“In cement, tile and iron production, we’ve not only met but exceeded the national demand. Now we are working to replicate that success in sugar, fertiliser and agro-processing,” he told the parliament.

Tanzania currently has two tile factories with a combined installed capacity of 149,000 square metres per day, far above the national demand of 80,000 square metres.

Daily production stands at 125,000 square metres, leaving a surplus of 45,000 square metres for export. In cement, the country boasts 14 factories, seven of which produce clinker—the key ingredient in cement. 

Total clinker production is 7.1 million tonnes, while the national demand is 5.5 million tonnes, resulting in a surplus of over 1.5 million tonnes. The excess is exported to EAC and SADC markets.

Similarly, local cement production reached 10.9 million tonnes in 2024 against domestic demand of 8.5 million tonnes, generating a surplus of 2.4 million tonnes. 

Tanzania has 54 iron sheet factories, four of which dominate production. These factories now produce 260,000 tonnes of coloured iron sheets annually—double the national demand of 130,000 tonnes.

Agricultural industries still lag behind

However, challenges remain in the agro-industrial sector. In sugar production, local factories have an installed capacity of 638,486 tonnes, but actual production for domestic consumption was 446,332 tonnes by March 2025—well below the 650,000-tonne demand, excluding the 250,000 tonnes needed for industrial use.

To address this, the government is overseeing the expansion of the Mkulazi factory to produce industrial sugar while fast-tracking the construction of the Rufiji Sugar Factory (30,000 tonnes capacity) and Kasulu Sugar Factory in Kigoma (targeting 100,000 tonnes, expandable to 300,000 tonnes).

Fertiliser production is also under pressure

Although Tanzania has 36 fertiliser factories, only two—Minjingu and Itracom—are large-scale. National demand stands at 1 million tonnes, over 60 percent of which is imported.

To close the gap, Dr Jafo said the government is seeking an investor to establish a natural gas-powered fertiliser plant, while the NDC’s organic fertiliser plant in Kibaha is expected to begin production by December 2026.

“Increasing domestic capacity is critical to reduce dependency on imported, petroleum-based fertilisers,” he added.

Cashew processing still underutilised

Despite having 57 cashew nut processing factories with an installed capacity of 103,395 tonnes, only 36 are operational. Reasons for the rest include outdated machines, lack of capital, and weak market access.

Still, there has been steady progress. Processing rose from 6,628 tonnes in 2020/21 to 26,656 tonnes in 2023/24, thanks to investments in large processors like Coastal Nuts, Akofa East Africa, and Tankom (T) Ltd.

To accelerate industrial growth, the ministry of Industry and Trade has outlined seven key priority areas for 2025/26.

First, it aims to facilitate the establishment and development of industries, especially those using local raw materials.

Second, it will continue implementing flagship and strategic projects, including Mchuchuma, Liganga, and the Engaruka Soda Ash project.

Third, the ministry plans to strengthen industrial production capacity by supporting the expansion of existing factories and promoting new investments.

Fourth, it will enhance the enabling environment for SMEs, focusing on industrial cluster infrastructure.

Fifth, the ministry intends to boost the business environment by reviewing outdated policies and laws, such as revising the Agricultural Marketing Policy, to attract more private sector investment.

Sixth, it will work to expand market access, both domestically and internationally, by coordinating trade fairs, exhibitions, and trade missions.

Lastly, the ministry will prioritise human development by supporting skills training, improving product safety oversight, and promoting compliance in food and cosmetics industries. Dr Jafo emphasised that these priorities aim to stimulate private sector growth, reduce import reliance, and position Tanzania as a regional manufacturing hub.