Lift manufacturing sector for all round growth - economists

27Feb 2016
The Guardian Reporter
The Guardian
Lift manufacturing sector for all round growth - economists

ECONOMIC analysts in the country have challenged the government to make significant investments in manufacturing industries to register robust increases in the national income.

They aired their views in a breakfast meeting on Sustainable Development Goals and Poverty Alleviation held yesterday in Dar es Salaam.

Science, Technology and Innovation Policy Research Organization (TIPRO) executive director Bitrina Diyamett underlined the critical importance of the manufacturing sector in growth and development because of its potential for employment and its unique multiplier effect.

She said that apart from its own huge potential for employment generation, the development of the manufacturing sector stimulates demands for more and better service sector inputs.

She said these include banking, insurance, communication and transport, which leads to further job creation.
The growth of the manufacturing sector however presupposes growth of the agricultural sector, a structural transformation process.

“Extensive literature on structural transformation indicate that there would first be growth in agricultural productivity with falling share of employment, giving way to rise of the manufacturing sector in terms of share of employment and contribution to Gross Domestic Product (GDP,” she specified.

Echoing similar points, Research on Poverty Alleviation (REPOA) senior researcher Dr Blandina Kilama said there is a need to invest more in the manufacturing industry to create employment opportunities.

She said when people have regular monthly incomes they will have a choice in the sort of products and services that they want, which boosts growth.

She said with once the government has facilitated a robust manufacturing sector, it can channel social services to the people easily.

Dr Kilama emphasized that the government must provide finance, build capacities for agro-processing (entrepreneurs, technology, markets and skills).

It must encourage minerals processing by providing incentives for value adding on minerals rather than raw exports or scant value added.

Besides, she said the government must develop agro-industrial innovation systems by strengthening agricultural research and development, create linkage with farmers and enhance the marketing of agricultural products.

However, in all these spheres it is important to build knowledge and physical infrastructure, promoting science and technology and encouraging innovation, the researcher further noted.

For his part, the Deputy Minister for Health, Community Development, Gender, Elderly and Children, Dr Hamisi Kigwangalla said that investment in the manufacturing industry is vital to alleviate poverty.

With the creation of jobs, people can have a multiple choice of services, including health and education, among others.
Since all people cannot be employed in the public sector, alternative channels of reliable employment like formalizing informal sector activities must be sought.

Mainland Tanzania poverty levels were reported to have declined by approximately one percentage point each year between 2007 and 2012, in a World Bank report released early May last year.

Based on the 2012 Household Budget Survey, the Tanzania Mainland Poverty Assessment highlighted the country’s first significant decline in poverty in 20 years.

Basic needs poverty, which refers to the minimum resources needed for physical wellbeing, declined from 34.4% in 2006, to 28.2% by 2012. During the period, extreme povert decreased from 11.7% to 9.7%.

“There are emerging signs of increased participation of the poor in the growth process during the last five years,” said Nadia Belhaj Hassine Belghith, World Bank senior economist and lead author of the report.

“The government will be able use this information to examine how this happened as they continue to devise policies to further accelerate extreme poverty eradication and promote growth, because in reality around 12 million Tanzanian people still live in poverty, and more than four million citizens continue to be in extreme poverty.”