The President of United Republic of Tanzania,Jakaya Kikwete. PHOTO|FILE
Dar es Salaam. Member states of the Southern
African Development Community (Sadc) and the East African Community
(EAC) are some of Tanzania’s major trading partners; official data
shows, signaling the need for the country to foster its relations with
the two blocs.
Tanzania’s exports to Sadc increased by 22 per
cent to reach Sh2.33 trillion last year from Sh1.91 in 2011, according
to official data from the National Bureau of Statistics (NBS).
Similarly, the country earned Sh956.7 billion from
exports to EAC member states in 2012, a 49 per cent increase from the
Sh641.6 billion registered in 2011.
A close analysis of the figures, however, indicate
that Tanzania has a deficit when trading with Sadc member states where
South Africa alone accounts for the lion’s share of exports to the rest
of the 14-member bloc.
In the same vein, the country has a trade surplus when trading within EAC is well analysed.
This, according to the Economic and Social
Research Foundation (ESRF) executive director, Dr Hoseana Lunogelo, is
an indication that Tanzania’s future within EAC is bright.
“This means we export more and get relatively more
foreign exchange trading with Kenya, Uganda, Rwanda and Burundi (EAC
Bloc), while we import relatively more than what we export to Sadc
countries, thus losing our foreign exchange earnings,” he said.
Gold, which is exported to South Africa, accounts for the largest share of Tanzania’s exports to Sadc.
The DRC, Zambia and Malawi are the only countries within Sadc where Tanzania sells its manufactured goods to.
On the other hand, Tanzania’s manufactured goods
are sold in Kenya, Rwanda and Burundi – suggesting how proximity plays a
role in fostering cross-border trade among African nations.
According to NBC data, Tanzania’s total exports to
Sadc are mainly gold and cashews. A total of 501,344 tonnes of the two
products were exported to the bloc last year. Analysts say Tanzania is
better-placed in EAC than it is in Sadc. This, they say is based on the
country’s geographical location as well as culture.
“Basically, we are positioned to trade well with
both blocs but most of our opportunities are in the EAC,” said the CEO
Roundtable of Tanzania Chairman, Ali Mufuruki .
That is because logistically, Tanzania’s exports to Kenya,
Uganda, Burundi and Rwanda can be easy and less expensive than the same
exports if directed to countries like South Africa.
If the level of economic growth for South Africa
and countries within the EAC is put to consideration, he said, then
Tanzania has no option but to go for EAC.
With a gross domestic product (GDP) of $400
billion, South Africa can only be compared to European nations. With a
combined GDP of about $83 billion, East Africa does not have a country
that is seriously a big brother. This gives Tanzanian firms a chance to
do well within the region.
According to Mr Mufuruki, the EAC integration
process was well planned. The asymmetrical system, employed during the
first five years of implementing the Customs Union – which saw goods
from Tanzania and Uganda entering Kenya with duty-free while those from
Kenya were charged some specific duty rates – helped firms in Tanzania
and Uganda to get prepared before those from Kenya started entering the
two markets duty free.
During that time, Tanzania started exporting industrial goods and farm products to Kenya and Uganda.
“Though I am not sure if the same products are still dominating the list of Tanzania’s exports to EAC,” said Mr Mufuruki.
Apparently, this is why intra-regional trade among
EAC member states has been on the increase since the customs union
became operational in 2005.
Former Kenyan Vice President Kalonzo Musyoka told
the meeting attended by media owners, publishers, editors and senior
journalists from across the region as well as senior government
officials in Nairobi in March 2011 that there was little contention that
the single market arrangement has yielded benefits across the region.
“Todate, the intra-regional trade between the EAC
partner states has increased exponentially. The latest estimates drawn
from last year’s performance show a 49 per cent growth since the
commencement of the Customs Union in 2005,” he said.
According to Mr Musyoka, Kenya, the strongest
economy in the region, accounted for 61 per cent of the total intra-EAC
exports. The share of the other EAC partner states’ exports to the
region have also increased.
Uganda’s share went up from 13 per cent in 2005 to
about 20 per cent in 2008 while Tanzania’s exports to Kenya rose from $
95.4 million in 2004 to $ 208.9m in 2007, an increase of 54.3 per cent.
Mr Mufuruki who supports Tanzania’s membership in
both the EAC and SADC as well as the proposed Comesa –EAC-SADC
tripartite said what is important is for the country to look for export
products for which it has a competitive advantage. Source: The citizen
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