Textile manufacturers call for action over rampant smuggling

Dar es Salaam. The Textile and Garment Manufacturers Association of Tanzania (Tegamat) has asked the government to clamp down on traders who smuggle clothes from abroad and adversely affect production in factories in the country.

Tegamat executive secretary Adam Zuku made the call during a stakeholders’ meeting in Dar es Salaam.

Mr Zuku said some traders were sabotaging local producers by importing clothes contrary to the government’s laid-down procedures, thus causing the country to lose billions in tax revenue.

He added that the government through the Tanzania Revenue Authority (TRA) recently seized two containers in Tabata, Dar es Salaam, which were full of clothes that had entered the Tanzanian market illegally.

Mr Zuku said there were also reports of containers of smuggled clothes being seized in various other regions, including Tanga.

“We ask the government to take stern measures, including prosecuting all smugglers. It’s an open secret that the government loses a lot of money due to this kind of sabotage,” he said.

He said only through “exemplary” punishment of the culprits will the government will be able stop acts of sabotage and create a level playing field for local producers.

Mr Zulu added that allowing smugglers to release their merchandise into the market is having a “devastating” effect on local manufacturers, who have invested significant sums in the production and distribution of garments.

“Smuggled clothes are being sold at much lower prices, and this affects local manufacturers. This is because local producers are unable to meet production costs, unlike smugglers, who don’t pay tax,” said Mr Zuku.

He said the impact until now has been “very great”, adding that there were 17 garment factories in 2000, but the number has since dropped to only eight.

These factories are currently operating at 40 to 60 percent of their capacities due to a lack of a reliable market caused by unfair competition.

Mr Zuku also said some importers pay little or no taxes, which means that local producers cannot compete.

“Smuggling of clothes, especially kitenge, earns the smugglers super profits, but is having a devastating impact on the domestic industry.”