What you need to know:
- Tanzania can become a global leader in the trade sector if it recognizes the significance of individual choices in a market economy
For Tanzania to become a global leader in the trade sector, it must recognize the importance of individual choices and understand the existing dynamics of both supply and demand. The success of any business depends on the rate of supply and demand. That is because individuals decide what, how, and who is the consumer of goods and services.
The recent directives from the Tanzania’s Ministry of Agriculture to formalize the trading of crops align with the concept of individual choices in the market economy. The government establishes procedures and regulations to ensure transparency, traceability, and compliance in agricultural trading activities. This formalization process will protect farmers against fraud, conning, and inconveniences while enabling the country to gather accurate data on crop trading. The government’s focus on transforming crop trading to eliminate fake trading activities and promote compliance with laws and regulations is in line to increase productivity and efficiency.
Business or trading companies can achieve higher profits and success if they become innovative by producing new and quality products (goods and services), which improves market competitiveness. Eventually, this will benefit the workforce by increasing wages and improving working conditions.
Furthermore, the impact of supply and demand factors on the cost of living, particularly in the urban areas like Dar es Salaam is evident. The high demand for goods and services has eventually contributed to the price increase of the same. For instance, in the case of plots or residential houses, prices have significantly increased due to the high demand. Land value is soaring higher than ever before and is expected to double in the near future (depending on the location). Recognizing this influence can help Tanzania develop strategies to manage the cost of living and ensure affordability for its population.
Linking the importance of individual choices, supply and demand dynamics, and the government’s initiatives to formalize the trade sector can make Tanzania create an environment conducive to economic growth and prosperity. Recognizing the significance of consumer satisfaction, efficient production, and compliance with regulations will attract foreign traders and position Tanzania as a global leader in the trade sector.
The success of any business depends on the rate of supply and demand. In a market economy, the choices made by individuals regarding production and consumption shape the market dynamics. Hence, any business exists if it produces products that meet the market demands (its consumers’ demands in the market). High demand for a particular product makes it possible to remain in the market. Consequently, the higher consumer demand drives a high production rate, and the vice versa is true. Thus, individual choices play a role in determining which products thrive in the market.
Individual choices also extend to how companies produce their goods and services. While there may be many similar products in the market, existing differences in materials used in production, packaging, and other factors can make a significant impact. Customers have the power to choose among these options, provided they have the means to pay for them.
In a market economy, the link between consumers and producers is basically relies on the individual consumers’ decision on what to buy, while businesses decide on what to produce. Consumers are motivated by their needs and wants, whereas the primary business goal is to earn profits. Therefore, the consumers and producers determine the quantities of goods and services to be produced, consequently these influencing the cost of living.
Tanzania can therefore become a global leader in the trade sector if it recognizes the significance of individual choices in a market economy. Understanding the dynamics of supply and demand and fostering an environment that promotes efficient production and consumer satisfaction can help pave the way for economic growth and prosperity of our country.