Transcript sustainable developments

2016 INTERNATIONAL CONSULTING
ENGINEERS FORUM
“Innovative Thinking International
Perspective New Breakthrough”
Industrialisation Strategy towards
Medium Income Economy - Tanzania
Presented at: The Twenty-first Century Hotel, Beijing, China
Forum sponsored by: China Association of Plant Consulting Engineers (CAPEC) in
collaboration with international organizations
Eng. Rizwan Qadri, President, Association of
Consulting Engineers Tanzania (ACET)
2nd to 4th November 2016
STRUCTURE OF THE PRESENTATION
Introduction
ACET and Country Information
Industrial Strategies
Global Dynamics
Sustainable Development
Conclusion
INTRODUCTION
 The role of Industries is critical for sustainable economic
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development.
The Tanzania Vision 2025 has a core objective of realizing
medium income economy.
Tanzania is an agrarian society, conducts external trade in
raw commodities, minerals and tourism.
To become a semi-industrialized country, contribution of
manufacturing to the national economy must reach a
minimum of 40% of the GDP.
There is a need of innovative transformation to become a
modern economy with a broad and diverse base of
manufacturing, processing and packaging industries.
Sustainable industrial development is propelled through use
of development corridors and intermediation by financial
institutions.
ASSOCIATION OF CONSULTING
ENGINEERS TANZANIA (ACET)
 Formed in 1985, ACET is an association made up of
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consulting engineers who operate in Tanzania.
ACET promotes the interests of its members.
Membership includes individuals, associates and
firms.
The Association welcomes foreign individuals and
companies that operate within the country.
ACET is a member of FIDIC AND GAMA
Membership comprises of 95 Individual Consulting
Engineers and 50 Member Firms.
For more information: http://www.acet.or.tz/
COUNTRY INFORMATION
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Area: 947,303 km2, 13th largest country in Africa & 31st largest in the world.
Population: 51.04 Million (Jan 2016).
GDP: $43.8 billion (2015).
Member of UN, African Union, East African Community and SADC.
The Tanzanian economy contributors:
 Agriculture  Industry & Construction  Services -
27.6% of GDP
25% of GDP
47.4% of GDP (2013)
INDUSTRIAL STRATEGIES
The national objectives are:
 To meet domestic basic needs for industrial manufactured goods;
 To create value addition chains for raw materials and commodity
outputs from agriculture, livestock, fisheries, forestry and mining;
 To enhance national direct global trading capacity in manufactured
goods as well as to establish transit trade value-addition capacity for reexport to the regional markets of EAC, SADC and COMESA;
 To transform the economic base of the country from dominance by
agriculture and extraction industries in order to allow manufacturing
and processing to become lead sectors of the national economy; and
 To achieve socio-economic transformation through building of
national enterprise capacity in all key sectors of the economy with
requisite technology and innovation capacities that will build an
industrial society in Tanzania with endless opportunities to create
economic value, wealth and prosperity for all.
INDUSTRIAL STRATEGIES
The desired pattern for industrialization is to be achieved
through the establishment of the following industry clusters
in optimum time: Agro-Processing Industries;
 Textiles Industries;
 Leather and Leather Goods Industries;
 Building Materials Industries;
 Pharmaceutical Industries;
 Cosmetics Industries;
 Jewelry Industries;
 Consumer Durables Manufacturing, Processing and
Assembly Industries; and
 Capital Goods Manufacturing and Assembly Industries.
INDUSTRIAL STRATEGIES
In order to create a vibrant business infrastructure a coordinated
development in the following key areas is necessary: Modernization and commercialization of primary production
activities;
 Industrial parks development;
 Human skills and Enterprise development;
 Technology transfer and capacity development;
 Logistics Clusters development at marine ports, inland dry-ports and
border posts;
 Cooperation development in select and specific areas of
pharmaceuticals, biotechnology and ICT industries; and
 The development and strengthening of national capital and financial
markets.
 Tanzania is a Low Income Country. Foreign Direct Investment (“FDI”)
is envisaged to provide the much needed capital for the desired
industrial development.
 The development of regional markets in Africa will provide the
motivation and ultimately determine the investor risk appetite to
establish industries in Tanzania.
GLOBAL DYNAMICS
 Global linkages are enhanced through development corridors and partnering within
the area of prominence.
 Relation of western industrialised societies to African agrarian based society is a
complex set of interaction.
East And Central African Corridor
Asian Corridor
The dynamics and impact of economic globalization has a time window to embark on the
development path of industrialization by riding on the wave of industrial relocation and
move offshore from China which is the number one manufacturing and exporting country in
the World. Therefore, the “China Factor” is an important consideration in the overall
scheme of industrial development plans of Tanzania.
GLOBAL DYNAMICS
 Geographic location, terrain, physical infrastructure,
trade treaties and protocols facilitate regional markets
integration.
 Tanzania is the bridge economy occupying unique
position linking the markets of the EAC, SADC and
COMESA regional trading groups.
 China has the economic capacity, political will and
motive to support the drive to expand global commercial
footprint by way of investing in the emerging markets of
Africa.
 Tanzania has legacy cordial relationships for industrial
development cooperation with China.
SUSTAINABLE DEVELOPMENTS
Transportation
infrastructure
is
a
vibrant
link
to
both
manufacturing and processing value chains; supported by logistics
clusters, market place and trading platforms. The government is
carrying out further development of road infrastructure.
An integrated approach results from:
 Production enterprises with local business synergies and
linkages to markets;
 Infrastructure development synchronized with demand of
production enterprises to access markets for domestic and
international trade;
 Financial services infrastructure to fund physical infrastructure
development, production activities and trade;
 Utility services and logistics; and
 Social services delivery in the host region.
SUSTAINABLE DEVELOPMENTS
In terms of the 2nd FYDP, the national industrial development strategy is
recommended to be implemented using Development Corridors.
 Development of Industrial Production Capacity;
 Development of Human Capacities for Industrialization;
 Development of Trade Capacity in Industrial Goods;
 Development of Economic Services Infrastructure;
 Development of National Innovation Systems (“NIS”);
 Development of Financial Services; and
 Development of Local Business Infrastructure
Production and economic development as a whole, stems from the
ingenuity of Man. It is Man that makes use of acquired scientific
knowledge to invent technology that is applied in the form of
innovation for economic development for production, as well as to render
economic and social services to society.
The transformation of rural communal settlements into urban
communities is both profound in its social implications as well as the
economic costs of building and maintenance of the multipurpose
supportive infrastructure.
CONCLUSIONS
 Following economic reforms of the last two decades, the economy of Tanzania has
achieved and maintained a steady growth of 7% year-on-year with relatively low inflation
rates.
 Fundamental economic motives to seek rapid growth in industrialization will create an
industrial manufacturing base that will enhance export trade capacity and employment.
 China is currently the leading industrial manufacturing economy in the World. The gross
industrial labour cost package in China has hit the global competitiveness ceiling of US $
200 per month for the labour intensive industries such as textiles and garments
manufacturing. For some energy intensive industries, it may prove to be economical to
locate the manufacturing or processing facilities outside China, where the energy
resources and raw materials are available at globally competitive rates.
 It may be economically more efficient to locate an aluminium smelter or petrochemical
industries in Mtwara where bauxite, coal and onshore natural gas could be available at
relatively low prices rather than export the industrial inputs and natural gas to supply
similar manufacturing and processing facilities in China.
 The domestic economic conditions and driving factors as the basis for industrialization
of Tanzania with investments from China, a mutually acceptable selection of marketseeking, efficiency-seeking and resource-seeking industries from China may be
facilitated, encouraged and supported to locate to Tanzania, within the context of
implementing the mutually beneficial, bilateral industrial development cooperation
agreements.
 Capacity development and Technology Transfer will strategically enhance industrial
development.
THANK YOU