What the East African Community means to Dar traders

Eight years have now passed since member states of the East African Community (EAC) started implementing the region’s Customs Union.

The Citizen’s Felix Lazaro sought out the expert opinion of members of the business community regarding the EAC and what it means to them.

Daniel Machemba is executive director for Tanzania Chamber of Commerce Industry and Agriculture (TCCIA).

How has the Tanzania business community benefited from the EAC?

Tanzania has gained a lot from the EAC since it was revived in 1999; are facts that show that the country has been doing better in terms of trade.

In 2001, the country’s total exports stood at $107 million, the figure rose to $448.4 million in 2008.

But from 2008 to some years later, there were some economic challenges which led to an economic crisis that hit the globe.

Tanzania’s trade was also affected. But as for the current figures, up to 2011, the country’s exports stood at $378 million.

These are statistics we get from the International Trade Centre. If you look at the trend, Tanzania is faring well in exports within the Community.

Are the current Tanzania trade benefits in EAC satisfactory?

They are satisfactory. Because, if you look at the country’s balance of trade in EAC, it is positive; we sell more within the Community than what we import. This is very helpful in terms of earning foreign exchange.

We are only falling behind in terms of balance of trade with Kenya.

With this country, we have negative balance of trade. We buy more from Kenya than what we sell to the country.

The obvious reason is Kenya is somewhat ahead of us in industrialisation.

It is a matter of time since the trend of trade growth between Tanzania and Kenya shows that our exports to Kenya are growing at a faster speed than the growth of Kenya’s exports to Tanzania.

If this trend increases, we will reach a point of overtaking Kenya in balance of trade.

If you take a good example of trade between United States and China, the former’s trade was growing slower than the later, but it has reached a point China has surpassed US.

Currently, China is the only country which exports more than any other country.

Since US’s GDP grows at between one and two per cent while Chine’s GDP grows at eight per cent, it will not take long before China overtakes US.

For Tanzania, the current business trend should help us understand our past, present and thus draw credible future plans.

That is why the business community have hailed the president’s speech in the Parliament about the country’s stand in EAC.

His stand that we will remain as part of the Community has brought hope to traders.

We have no time for withdrawing ourselves from the community whenever we face challenges.

We were once Common Market for Eastern and Southern Africa (Comes) member, but we withdrew from it, we do not like to go back into the same situation.  

Has the EAC contributed to the country’s good economic records?

Tanzania is among the largest economies in the Community.

Its economy is also growing fast among the EAC member states. I think the Community is contributing to the current impressive economic growth.

Kenya is still having higher Gross Domestic Product (GDP) than ours.

I think it is a matter of time; Tanzania will overtake the position of Kenya. EAC is the only regional bloc which is leading in intra trade activities.

This means, its members have more trade among themselves, if compared with other blocs or countries.

In the manufacturing sector, there are more goods traded within the region; this is influenced by historical background of member states, culture and the environment in general.

Take an example: it is easy for Tanzania flour manufacturer to sell flour within the EAC than in United States or other blocs.

It is because some partners are not used to some of things produced by our industries.

Tanzania stands also stands to benefit from its conducive climate, which supports agriculture. It can produce to feed the EAC and also Southern African Development Community (SADC).

The only task we have is to embrace value addition to our produces to sell them as goods in other countries in order to grow our economy more.

What are the opportunities the Tanzania business community have in the EAC market?

To me opportunities are what your neighbours need. If they face hunger, your opportunity becomes supplying them with food.

Opportunities keep on changing according to time and situations. The only thing to watch is we always have to be alert.

If there is a big opportunity for Tanzania traders and farmers to benefit from the EAC, it is agricultural goods.

In case we use our efforts in intensifying production of agricultural commodities and add value, we will feed all places in the Community which face food shortage.

But, we have to understand that not all we produce should be consumed within the country, also it is not that we only sell surplus.

This is a notion to be addressed.

We are saying if producers are in area close to neighbouring country, they should use the neighbouring market instead of incurring more costs to sell their products within their country.

If producers are at Mtukula, they better sell to Uganda or if they are at Ngara, they better sell to Rwanda. Farmers in Rukwa can easily access market is Zambia than in some parts of Tanzania.

That is why we are insisting the need to address these elements of borders in order to help manufacturers and farmers close to the neighbouring countries to sell their commodities outside. 

The argument behind this is, if you open markets, you even enhance production capacities, and if you close or limit markets, you discourage investors.