Imagine Tanzania as the beating heart of African trade, a bustling hub where commerce thrives and economies grow.
Picture Dar es Salaam as a vibrant epicentre, teeming with traders from all corners of Africa, drawn by the promise of a thriving marketplace where their needs are met efficiently and affordably. This vision is plausible; it’s a tangible reality that can be achieved with strategic planning, investment, and innovation.
In 2023, I embarked on a learning tour across the UAE and China, immersing myself in the bustling cities of Dubai, Guangzhou, Yiwu, and some 20 other Chinese cities. These cities stand as pinnacles of international trade, attracting millions of traders worldwide.
During my travels, I encountered many traders from African nations like Rwanda, Burundi, Kenya, Uganda, Malawi, the Democratic Republic of the Congo, Zambia, and Mozambique. These entrepreneurs spent thousands of dollars travelling and procuring products such as clothing, home appliances, and smart gadgets, not from factories but from local marketplaces in China.
What struck me most was the paradox: traders from landlocked African countries were bypassing Tanzania’s strategic advantage, its access to the Indian Ocean via the port of Dar es Salaam, to procure goods directly from China. This scenario raises a critical question: why can’t Tanzania position itself as the primary procurement destination for these traders?
Conducive ecosystem
To transform Tanzania into a trade hub, we must build an ecosystem conducive to international trade. Creating duty-free zones in strategic locations can significantly boost trade.
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These zones would offer tax incentives, streamlined customs procedures, and a business-friendly environment, attracting traders from neighbouring countries. The duty-free zones would act as magnets for foreign exchange, fostering a vibrant local economy.
For instance, the Jebel Ali Free Zone in Dubai is a prime example of how duty-free zones can transform an economy. By offering tax exemptions and state-of-the-art infrastructure, Jebel Ali has attracted over 7,000 companies from more than 100 countries, contributing significantly to Dubai’s gross domestic product (GDP).
This model could be replicated in Tanzania to attract similar levels of international business activity. The East Africa Commercial and Logistics Centre (EACLE) is said to be one of those hubs where all this can happen. Still, the scale needs to be larger than Tanzania’s potential to be a supplier to neighbouring countries, especially the landlocked ones.
Developing world-class infrastructure is also essential. This includes modernising the port of Dar es Salaam, improving road and rail networks, and upgrading airport facilities.
Efficient logistics will ensure that goods move swiftly and cost-effectively, making Tanzania an attractive option for traders. The port of Rotterdam in the Netherlands, Europe’s largest and most advanced port, demonstrates the impact of state-of-the-art infrastructure and logistics systems on becoming a critical gateway for trade.
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Tanzania is already doing this by upgrading ports, airports, and standard gauge railways, which will terminate in some neighbouring countries. Yet, the potential to do more is still there.
Leveraging technology can streamline trade processes, reduce costs, and increase transparency. Implementing digital platforms for trade documentation, customs clearance, and payment processing can enhance efficiency and attract more traders.
Singapore’s TradeNet system is a pioneering electronic trade documentation system that integrates various trade processes into a single, streamlined platform, positioning Singapore as a leading global trade hub.
Local businesses
Supporting local businesses and manufacturers can create a robust supply chain within Tanzania. By encouraging the production of high-quality goods locally, Tanzania can reduce its reliance on imports and become a source of products for neighbouring countries.
South Korea’s support for its domestic industries, through policies such as the New Village Movement (Saemaul Undong), transformed it from a developing country into an industrialised nation known for its global brands like Samsung and Hyundai.
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By attracting traders to Tanzania, we create a ripple effect that benefits various sectors of the economy. Traders from neighbouring countries will land in Tanzania, dine at local restaurants, stay in hotels, shop in markets, and engage with local service providers.
This influx of foreign exchange will bolster the economy, create jobs, and spur further development. The tourism industry in Bali, Indonesia, showcases how a single sector can stimulate diverse economic activities. Tourists contribute to local businesses, arts and crafts, hospitality, and transport sectors, creating a holistic economic impact.
Challenges
While the vision is clear, achieving it will require addressing several challenges. Streamlining regulatory processes and reducing bureaucratic red tape is essential. Simplified and transparent regulations will attract more businesses and traders.
Ensuring a stable and secure environment is paramount. Investments in law enforcement, anti-corruption measures, and political stability will create a trustworthy atmosphere for international trade.
Investing in education and training programmes to build a skilled workforce will also support the growing trade ecosystem. Specialised logistics, customs procedures, and global business training will be critical.
Tanzania may become a leading African trading centre; that much is certain. We can revolutionise our economy to become a key player in African commerce by improving policy and regulatory environment, creating duty-free zones, improving infrastructure, making technological investments, supporting local companies, and attracting regional companies to come and establish their presence and trade in our country.
The tale of my travels and the traders I met reminds me of the enormous potential that is just waiting to be realised. Tanzania has to grab this chance and take the initiative to influence how trade develops in Africa going forward, given that we are heading towards realising the potential of the African Continental Free Trade Area (AfCFTA).
Kennedy Mmari is the Founder and Chief Executive Officer of Serengeti Bytes, a Dar es Salaam-based communications, public relations and digital media agency. He’s available at kennedy@serengetibytes.com and on X as @KennedyMmari. The opinions expressed here are the writer’s own and do not necessarily reflect those of The Chanzo. If you are interested in publishing in this space, please get in touch with our editors at editor@thechanzo.com.
