Revealed: Asia, Sadc are Tanzania’s key trading partners

Dar es Salaam. Tanzania’s trade sector grew by 4.3 percent in 2023, with Asian and Southern African Development Community (Sadc) nations emerging as the country’s leading trading partners.

Requesting Parliament to endorse Sh110.89 billion as her docket’s 2024/25 budget in Dodoma on Tuesday, Industry and Trade minister Ashatu Kijaji said the sector grew by 3.9 percent in 2022.

She added that the trade sector’s contribution to GDP was 8.3 percent in 2023 compared to 8.2 percent in 2022.

Read: Tanzania to become India’s second-biggest trading partner in Africa

Tanzania’s exports to Asian countries, including China, India, Japan and the United Arab Emirates (UAE), stood at Sh7.48 trillion in 2023.

Although this represented a 31.6 percent decrease from Sh10.9 trillion worth of exports registered in 2022, Asian countries remained Tanzania’s key trading partners.

On the other hand, Tanzania imported goods worth Sh21.52 trillion from Asian markets in 2023, slightly lower than the 2022 figure of Sh23.32 trillion.

Dr Kijaji said the decrease in imports was due to a reduction in the importation of capital and ordinary goods that were previously sourced from Asia.

Tanzania exported goods worth Sh4.42 trillion to the Sadc region in 2023 compared to Sh4.61 trillion in 2022.

Imports from Sadc nations amounted to Sh2.01 trillion in 2023 compared to Sh1.41 trillion in 2022.

Read: Tanzania 'shifting from traditional trade partners

“Products that were traded the most in this market were minerals, tea, avocados, construction glass, coffee, mosquito nets, soap and lotions,” Dr Kijaji said.

Europe was the third largest export destination for Tanzania in 2023, with the value of exports rising by 56.8 percent to Sh3.83 trillion from Sh2.44 trillion in 2022.

 “The increase was driven by a rise in trade in agricultural and industrial products,” Dr Kijaji said.

The value of imports from Europe dropped to Sh4 trillion in 2023 from Sh4.4 trillion in 2022.

Read: Tanzania's trade surplus across East Africa rose to $484 million

Tanzania exported to other East African Community (EAC) member states products valued at Sh3 trillion, a 16.6 percent decline from Sh3.4 trillion that was recorded in 2022.

“This situation was caused by a decline in sales of agricultural products, particularly coffee, tea, maize, wheat, rice, vegetables and industrial products such as tiles and cement,” the minister told lawmakers.

Tanzania imported goods worth Sh1.34 trillion from the rest of the EAC in 2023 compared to Sh1.48 trillion in 2022.

Dr Kijaji explained that the decrease in sales of commodities such as coffee was due to Tanzania selling the products directly to international markets instead of through Kenya as was the case previously.

“Also, there has been an increase in domestic demand for construction materials, including tiles, cement, steel and steel products.”

Trade between Tanzania and the US through the African Growth and Opportunity Act (Agoa) grew by 7.06 percent last year to reach Sh205.824 billion. It stood at Sh192.256 billion in 2022.

“This increase was caused by the rise in the production of textiles and clothing products sold in that market,” Dr Kijaji said.

Through the African Continental Free Trade Area (AfCFTA) market, the government revealed that a total of 11 Tanzanian companies have successfully sold products to various African countries, with a total of 24 certificates issued to these companies.

“The products that have been sold in large quantities through these certificates include 426.4 tons of sisal fibers to Nigeria, Ghana, Morocco, and Egypt, 273.3 tons of coffee to Algeria, and 21.1 tons of tobacco to Nigeria.”

Meanwhile, the industrial sector growth was at 4.3 percent a slight surge from 4.2 percent in 2022, however, the sector contribution to GDP dropped a little to 7 percent from 7.1 percent in the preceding year.

The Sh110.89 billion budget for the Industry and Trade ministry during the 2024/25 fiscal year is an improvement from Sh81.11 billion that the Parliament approved for the ministry during the current fiscal year.

Key focus areas in the ministry’s 2024/25 fiscal year include developing the Engaruka Basin Soda Ash Project, the Liganga (iron ore) and Mchuchuma (coal) integrated projects as well as the expansion of the Tanzania Biotech Products Limited (TBPL) for the production of bio-fertiliser.

Other strategic plans for the government include the construction of small-scale sugar processing plants to cater to local demand, and the creation of alternative energy technologies for artisanal and small-scale miners to aid in environmental conservation.

“The government also plans to establish industrial zones for clusters of industries and businesses at least to one district across all regions in the country to add value to agricultural, livestock, and fisheries products,” Dr Kijaji said.

Parliament’s Industry and Trade Committee said despite the government’s efforts to revive some of the industries that had halted production for a long time, some still face a shortage of capital, which prevents their full contribution to the national income.

The committee also advised the government to establish reliable and affordable electricity infrastructure in all industrial areas.

“Industrial owners face a significant challenge of insufficient and unreliable electricity, leading to the use of substantial funds to purchase fuel for running generators,” the committee’s chairman, Mr Deo Mwanyika, said when presenting the panel’s views.

The committee also addressed the renovation and expansion of domestic markets, recommending that the government allocate funds for the refurbishment and expansion of markets to improve their condition.

“By doing this, the environment will be attractive, customers will increase, businesses will thrive, and government revenues will increase,” Mr Mwanyika said.

“The committee recommends that the government continue to allocate special areas for all street vendors to conduct their business in a friendly environment, including setting up infrastructure that will help collect taxes using simple and modern systems.”