Report: Beer industry contributed Sh2.2 trillion to Tanzania's economy

Most of the impact of beer on Tanzania’s economy arises from brewers making and selling beer locally.

However, the latest beer report by Tanzania Breweries Limited, which reflects the 2019 timeframe, quantifies the economic activity that occurs because Tanzanian businesses export goods and services used to make and distribute beer or used in other parts of the supply chain that are stimulated by the beer sector in other countries.

The report reveals that by making and marketing beer, Tanzanian brewers supported Sh2.1 trillion in gross value added to the GDP.

The contribution is in the form of jobs and tax revenues supported by the beer sector. Other channels of impact include economic activity generated at brewers’ and distributors’ operational sites, economic activity stimulated by brewers and distributors buying inputs of goods and services from third-party suppliers (indirect impact), and further activity supported in the consumer economy when the beer sector pays wages to its employees (induced impact).

The report states that this contribution represented about 1.6 percent of the Tanzanian economy, or Sh1 in every Sh63 of GDP produced in Tanzania in 2019. The magnitude of that impact is equivalent to 53 percent of all the GVA created in the city of Mwanza in 2019. Of this, it is estimated that the process of making beer by brewers supported Sh2.1 trillion (95.2 percent of the total contribution), while the remaining Sh110 billion (4.8 percent of the total) was supported by beer’s downstream activities of transporting and selling beer.

The high productivity of brewers in Tanzania was an important driver of the beer sector’s GVA contribution to GDP. The report estimates that, on average, each employee at a Tanzanian brewer generated a Sh380,000,000 GVA contribution to GDP in 2019. “This was almost 69 times the productivity of the average Tanzanian worker (at Sh5,600,000 per worker).”

While this productivity is important to brewers themselves, it also has benefits for the wider economy. The report states that when highly productive employees interact with others in the economy—whether through a supply chain relationship, in business meetings, or by moving jobs—their knowledge and techniques can spread to other businesses, increasing average productivity in the economy overall.

“This is valuable because productivity is the only mechanism that can sustainably increase wages and therefore living standards over the long run.”

Together, brewers and retailers supported an estimated 473,000 jobs in Tanzania in 2019. This is around 1.9 percent of all jobs in Tanzania, or one in 53 jobs in the country. Employment was similar in magnitude to 23 percent of employment in Dar es Salaam.

Some 448,000 jobs were supported by beer manufacturing (94.8 percent of the total jobs supported), while the remaining 25,000 jobs were supported by downstream transportation and retail activities (5.2 percent of the total jobs supported).

There were 25.0 million jobs in Tanzania in 2019. Employment was 2.0 million in Dar es Salaam in 2019. The beer sector is also important for government revenues in Tanzania. In 2019, the tax payments directly remitted or stimulated by the Tanzanian beer sector totaled Sh890 billion; of this, Sh730 billion (or 82.2 percent of the total tax contribution) is estimated to have come from sales tax and excise duties from beer sales.