Irene Katulu Ndavi Agricultural Officer Formulation and Implementation of Industrial Policy and strategy in Tanzania

Fredrick Romani Economist Ministry of Industry , Trade and Marketing

Japan

Tanzania GRIPS MEP 09036 Public Policy Programme Policy Design and Implementation in Developing Countries

Outline of the Presentation

1. Introduction 2. Role of Industrial sector and Performance 3. Industrial Policy formulation and Implementation 4. Constraints and Challenges 5. Industrial Development strategy 6. Conclusion 7. Way Forward

1. Introduction

Tanzania has centralized system of government inherited from the colonial rule but strengthened after independence Four phases of Government Leadership 1 ST Phase 2nd Phase 3rd Phase 4th Phase ( 1961-1985) Mwinyi (1985-1995) HE Benjamin W. Mkap a (1995 - 2005) HE Jakaya M.

Kikwete (2005-present ) The economy is predominantly agric economy contributes 25.8% of GDP (2008).

National Vision 2025 recognizes role of Industrial sector transformation the economy from low agric productivity to semi-industrialized one.

NSGPR / MKUKUTA requires sector to contribute to Poverty reduction.

Sector

Structural Change

1998 2000

Services Agriculture 45.2 % 46% 39.5% Manufacturing & Construction 16.7% Of which manufacturing 7.1% 17.9% 8.5%

2008

25.8% 21.2% 9.2%

2. Why Industrial Sector?

i Energy Sector Manufacturing sector Transport Sector Material industry Agr/resource based ind Fabricating industry Consumption Goods Capital Goods Financial Sector Telecommunic ation sector

Role of Industrial Sector in Growth

Service Agriculture For the country to achieve sustainable economic growth and Development, contribution of manufacturing sector to GDP should surpass that of traditional sector

Era of Socialist Economy Era of Structural Adjustment Era of Stable Growth Source: United Nations Statistic Division, 2009

3.Policy Regime

Main Evolution of Industrial Policy

Post Independence Industry Strategy inherited from colonial production Import Substitution Industry Strategy (1967 – 1985): State led Basic Industry Strategy (BIS) from 1985 – 1995: State led Sustainable Industrial Development Policy ( 1996 – 2020):Private sector led Sustainable Industrial Devt Policy ( SIDP) Privatization of State owned enterprise ( Govt role – Create conducive environment for private sector to grow) Promote investment in untapped potential for development of industrial sector Export led Industrialization ( EPZ & transformed to EDZ ) Development of Human resources for industrial sector 8

Policy Formulation Process

Policy making

is 'the process by which government statements are arrived at‘

policy

refers to 'specific statements, guidelines and pronouncements on....development and related issues in the country In Tanzania, policy formulation and implementation is a process that is political at every stage Three main stages in policy planning & process are:

Policy Formulation

(Cabinet, Gvt Departs & Line Ministries, Dev Partners, Private Sector);

Policy Decision/ approval

(Parliament); and

Policy Implementation

(Implementing Agencies (e.g. Ministries and Govt agencies, Private Sectors, Devt 9 Partners etc).

Main Players in Industrial Policies and Strategies Formulation and Implementation Cabinet & Parliament President Office Planning Commission Ministry of Industry, Trade and Marketing Ministry of Finance Prime Ministers Office Private Sector & Devt Partners UNIDO, JICA, UNDP etc) Industrial and Trade support Agencies ( EPZA, TBS, TIRDO, NDC, TIRDO, TEMDO, CAMARTEC etc) 10 Other Government Agencies ( BOT, TIC etc.

Roles of the Key Players Roles of MITM 1.Policy formulation, and development of the National Industrial Sector Strategic Plan.

2. Provision of policy guidance and supervision to Affiliated Institutions ( IS0’s, Private sector, Agencies etc ) 3. Monitoring & Evaluation of industrial policy formulation, review process and spearheading implementation of all the aspects of the Policy/strategy. 4. Facilitate co-ordination and ensure co-operation with other stakeholders in Industrial policy formulation, implementation and review process. 6.Ensuring that industrial policy remains an integral component of national development plans. Roles of Dev’t Partners 1. Assist technocrats in policy & strategy formulation.

2. Funding policy formulation and implementation process.

3. Capacity building in policy and strategy support .

4. Constraints of Manufacturing Sector High taxes Poor access to finance Inadequate road and railway network Inadequate supply of human resources Macro economic instability

Future outlook in the integrated Industrial Development Strategy

5. Integrated Industrial Development Strategy 2025 and Master Plan “I look forward to building a nation that is economically independent ...I’ll do so by undertaking deliberate steps to revolutionalise agriculture, livestock keeping, fisheries and industries,” … H.E President Jakaya Mrisho Kikwete (2010).

Why Integrated Industrial Development Strategy & Master Plan?

Challenges facing industrial sector are integrated Ensure co-ordination of uncoordinated efforts in the productive sector SIDP lacks focused and comprehensive strategy and action plan for implementation Ensure stable growth and realization of National vision 2025.

Structure of IIDS & MP

Lesson from Asian miracle Overview of Manufacturing Sector Constraints Water- front and Air front EDZ ( Dar, Tanga, Mtwara and Arusha) Priority sectors (Textile, leather, cashew nuts, food , fertilizer) Economic Development Zones Regional EDZ ( Kigoma, Mwanza ) Corridor Development Corridors Development & Port Sub-sectors approach Sub-contracting, Industrial clusters Action Plan for implementation

Strategy for Growth

Business Linkage and Cluster Development Specialized Industrial Park Develop Sub contracting Culture EDZ Strategy Corridor Development SME Park Strategy Gateway Port Strategy Improving Business Environment Gas & Bio Energy Development Agriculture Led Industrializa tion Resources based Industrialization

Development Corridors

Three Development Corridors Tanga Development Corridor Central Development Corridor Mtwara Development Corridor Industrial Zones

A Gateway to East and Central Africa Democratic Republic Of Congo Rwanda Burundi Uganda Kenya Tanzania Zambia Malawi “We must turn Tanzania into the hub from which goods are transported to other countries in East, Central and southern Africa...this will be done by strengthening our railway and port operations,” H. E. Jakaya Mrisho Kikwete (2010)

Farmer

Cotton Textile Industry Tomorrow

Ginner Spinner Farmer Ginner Farmer Farmer Ginner Ginner

Region

Weaving Printing & Dying Kanga Overseas Market Sewing Apparels

Water Front

6. Conclusion.

Stakeholders participation in policy planning include among other things: increased ownership, sustainability, increased commitment, etc; However, the industrial policy planning process in TZ has been political, slightly inclusive, largely owned and led by government officials & Development partners.

Political commitment and priority settings has been in favour of political popularity with less attention given to industrial sector.

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7. Way Forward

Need for political commitment for realization of Integrated industrial development strategy and Master Plan interventions.

Key to success would be through implementing Sector-based approach (Textile, Leather, Cashew nuts etc, dev’t strategies) which is more suitable for an economy like Tanzania.

Role of infrastructure in facilitating industrial development should not be undermined Encourage sub-contracting, SME-led Industrial clusters for economies of scale and agglomeration

Way Forward

Industrial sector has a great potential in achieving sustainable growth and poverty reduction.

Care must be taken in addressing implementation gaps.

Strong leadership with focus priorities interventions for industrial growth.

Required human, financial and tech resources; Clear roles and responsibilities; Coordination and reporting mechanism/framwk; Technological adaption and transfer; Engage private sector capacities in seeking solutions.

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AHSANTENI SANA ARIGATO