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Tanzanian manufacturers say shortage of shillings affect their operations

What you need to know:

  • They are urging the government to expedite payments to contractors, as this could help alleviate the cash flow challenges

Dar es Salaam. Even as the dollar shortage eases, manufacturers remain concerned about the shortage of the Tanzanian shillings in business circulation that has adversely impacted their operations.

They are urging the government to expedite payments to contractors, as this could help alleviate the cash flow challenges.

These concerns were voiced during the 18th President's Manufacturer of the Year Awards organised by the Confederation of Tanzanian Industries (CTI) on Friday, November 9, 2024.

In the awards ceremony TCC Cigarette Company, Alaf Roofing Company and Plasco Company were recognized as top performers in the industry.

Vice President Dr Philip Mpango assured manufacturers that the government is committed to addressing the shortage of shillings and contractor payments to support locally produced goods and provide a stable market.

He emphasized the industrial sector's potential to drive development through job creation, innovation, and technological advancement.

However, he noted that despite these benefits, the sector's contribution to GDP remains modest at 8.1 percent, with an 8 percent growth rate over the past decade.

Dr Mpango highlighted the sector's increasing impact on foreign revenue, which rose from $0.9 billion in 2020 to $1.4 billion in 2023, calling for further efforts to enhance its contribution.

Vice President Dr Philip Mpango, shares a light moment with the executive director of the Confederation of Tanzanian Industries, Leodegar Tenga, (second right) and the Chairman of the Confederation of Tanzanian Industries, Paul Makanza, (right) after the 2024 President's Manufacturer of the Year Awards, held at the Super Dome Hall in Masaki, Dar es Salaam on November 8, 2024

However, he acknowledged several challenges facing the sector, including limited capital, skilled labor shortages, infrastructure gaps, and tax burdens.

“I call upon CTI to identify high-growth sub-sectors and address these obstacles for greater success locally and regionally,” he said.

CTI Chairman Paul Makanza also pointed out that while dollar shortages have subsided, the shortage of shillings has become a pressing issue, along with delayed contractor payments, which are hindering industrial operations.

He appealed to the government to intervene and sustain the momentum of industrial growth.

Deputy minister of Industry and Trade, Exaud Kigahe, noted that government efforts have already improved the business environment through policy adjustments, contributing to the sector’s progress.

“All obstacles hindering the industrial sector have been addressed,” he said.