Tanzania records big rise in exports
Tanzania’s exports to East African countries have increased significantly going up last year by 82.6 percent, as the countries in the region come close to the signing of the common market protocol.
Exports to EA, SADC, Europe, America and the Gulf reached $315.5 million from $172.8 million recorded in 2007, said minister for Industry, Trade and Marketing, Dr Mary Nagu this week in the National Assembly when moving the Ministry’s budget estimates.
SADC countries imported goods worth $443.4 million from Tanzania last year, up from $301.1 million recorded in 2007, reflecting an increase of 47.3 percent.
The minister noted that Tanzania imported goods worth $6,439.9 million last year compared to $4,860.6 million in 2007.
The industrial sector in the country grew by 9.9 percent compared to the 8.7 percent in 2007, said the Minister adding that the manufacturing sector had 92,015 employees last year, up from 91,112 in 2007.
The revelation comes at a time when Tanzania and Kenya are on the verge of signing a bilateral trade agreement in a bid to end suspicions that have stifled business between the two countries in the past three decades.
The agreement will govern future trade relations between the two countries and is expected to stem “protectionist policies” of which other EAC member states have accused Tanzania.
Kenyan exports to Tanzania grew from Sh22.3 billion in 2007 to Sh29.3 billion in 2008, an increase of 27 per cent. Over the same period exports from Tanzania to Kenya rose from Sh6.6 billion in 2007 to Sh7.3 billion in 2008.
Kenya’s High Commissioner to Tanzania, Mutinda Mutiso told The Guardian on Sunday recently that the “Joint Commission Agreement” would among other things consider harmonisation of trade policies, tariffs and legislation between the two countries in line with the envisaged EAC common market protocol that allows members to enter into exclusive arrangements on contentious issues.
“The document will be a Memorandum of Understanding that will express a convergence of business relations between us and chart a common line of action to grow trade across our borders,” said Mutiso,
According to the envoy, ministers for trade, energy and education in the two countries will hold a consultative meeting to fine tune the agreement before a summit of the two presidents this month.
Kenya says doing business in Tanzania has been expensive for foreign professionals like lawyers, doctors and engineers because of comparatively higher registration charges levied on service providers.
According to Mutiso a foreign engineer pays $7,500 as annual registration in Tanzania compared to $20 in Kenya; doctors pay $8,600 compared to $100 in Kenya while lawyers are charged $6,200 and Kenya charges $104. Visa charges for Kenyans visiting Tanzania are $100, twice those charged by Kenya on Tanzanians.
Mutiso said another disparity is in the registration fees for products that encouraged dumping of counterfeits in the region, especially in Tanzania.
He said charges for registering a new type of drug in Tanzania is $5,000 while in Kenya it is only $690.
Kenya is seeking re-introduction of the 35 percent customs duty taxation for trucks weighing 10 to 20 tonnes in a bid to protect local assemblers, said Mr Mutiso. The tax is expected to shield local EAC industries from competition.
Companies like General Motors have been hard with reports indicating that most GM trucks which are produced in Kenya are experiencing lesser sales due to stiff competition from trucks bought from Far East, which are comparatively cheaper.
Also set for harmonisation are cement sector policies as EAC grinders face market failure due to cheap imports.
“While a bag of cement manufactured in Mbeya sells at $6, an imported bag from Indonesia is sold at $2 in the domestic market,” Mr Mutiso said.
High cost cement producers in the region are being wrestled out of the market by cheaper construction materials from Indonesia, Egypt and Europe.