Download 2. Why Industrial Sector?

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
1ST Phase
HE Julius K. Nyerere
( 1961-1985)
2nd Phase
HE Ali Hassan
Mwinyi (1985-1995)
3rd Phase
4th Phase
HE Benjamin
HE Jakaya M.
W. Mkapa (1995 Kikwete (2005-present
- 2005)
)
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.
Structural Change
Sector
1998
2000
Services
45.2 %
42.9 %
47.7%
Agriculture
46%
39.5%
25.8%
Manufacturing &
Construction
16.7%
17.9%
21.2%
7.1%
8.5%
9.2%
2008
Of which manufacturing
2. Why Industrial Sector?
Transport
Sector
Energy
Sector
i
Manufacturing sector
Material industry
Agr/resource
based ind
Fabricating industry
Consumption
Goods
Financial
Sector
Capital Goods
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
Source: United Nations Statistic Division, 2009
Era of
Structural
Adjustment
Era of Stable Growth
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
Ministry of Prime
Industry,
Ministers
Trade and Finance
Office
Marketing
Industrial and Trade support
Agencies ( EPZA, TBS, TIRDO,
NDC, TIRDO, TEMDO, CAMARTEC
etc)
10
Other Government
Agencies ( BOT, TIC
etc.
Private
Sector &
Devt
Partners
UNIDO,
JICA, UNDP
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
Macro
economic
instability
Inadequate road
and railway
network
Inadequate supply
of human resources
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
Overview of Manufacturing
Sector
Lesson from Asian miracle
Constraints
Water- front and Air front
EDZ ( Dar, Tanga, Mtwara
and Arusha)
Economic Development Zones
Priority sectors (Textile, leather,
cashew nuts, food , fertilizer)
Corridor
Development Corridors
Development
& Port
Regional EDZ
( Kigoma, Mwanza )
Sub-sectors approach
Sub-contracting,
Industrial clusters
Action Plan for implementation
Strategy for Growth
Business Linkage and Cluster Development
Specialized
Industrial
Park
EDZ
Strategy
Gateway
Port
Strategy
Improving Business Environment
Develop
Subcontracting
Culture
Corridor
Development
Gas & Bio
Energy
Development
SME
Park
Strategy
Agriculture
Led
Industrializa
tion
Resources based Industrialization
Development Corridors
Three Development Corridors
Tanga Development Corridor
Central Development Corridor
Industrial Zones
Mtwara Development Corridor
A Gateway to East and Central Africa
Uganda
Democratic
Republic Of
Congo
Kenya
Rwanda
Burundi
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)
Cotton Textile Industry Tomorrow
Farmer
Ginner
Farmer
Ginner
Spinner
Weaving
Overseas
Market
Farmer
Farmer
Ginner
Printing
& Dying
Kanga
Apparels
Ginner
Sewing
Region
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.
21
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.
23
AHSANTENI SANA
ARIGATO