Poor infrastructure leads among snags affecting competitiveness of the agricultural business in Tanzania, a new study reveals.The study by the Tanzania Chamber of Commerce Industry and Agriculture, Arusha Region - (TCCIA-Arusha) reveals that poor infrastructure inflate cost of production which leads to increased prices of agricultural products.
“The key public infrastructure in Tanzania is weak. Overdependence on roads has made agricultural business accumulate unnecessary costs,” reads the study report which is part of technical assessment on a Progressive Implementation of the East African Common Market protocol.
“Rural roads that reach producers are often in worse condition after the rainy seasons. This prompts transporters to manoeuvre the situation by using single axle trucks that are costly and unfortunately attract bribes, because they are usually overloaded and subjected to numerous roadblocks,” the report whose study was financed by the Business Environment Strengthening for Tanzania Programme - Advocacy Component (BEST-AC), reads further.
It, however, notes recent government efforts to revamp the central and TAZARA railway systems which are crucial for agriculture development in the central and southern highland regions. Experts say the current practice of using heavy trucks as an alternative to railway leads to high costs in terms of fuel and spare parts which are passed on to the consumers, thus affecting the competitiveness of agriculture business.
The study further reveals that weak public sector institutions in Tanzania also undermine the ability of actors in the Agricultural Value Chain (AVC) to operate competitively.
“The government in particular officials attitude toward markets and freedoms and the efficiency of its operations depict excessive bureaucracy and red tape, overregulation, corruption, dishonesty in dealing with public contracts,” reads part of the report.
Lack of transparency and trustworthiness, inability to provide appropriate services for the business sector have significant economic costs to agricultural businesses in the country and consequently slowed the process of economic development, the study said.
Other bottlenecks include macroeconomic environment where the fiscal debt - external and domestic have swelled and the burden of servicing the interest has had a bearing upon commitments made to support agricultural sector.
Running fiscal deficits limits the government’s future ability to react to business cycles and to invest in competitiveness-enhancing measures, the report says.
The report highlighted Tanzania as in crisis with regard to quality of basic education. Most chain actors (on supply side) including producers on farms, traders and transporters need to have basic education.
Financial market development was also one of the obstacles as the study says that although the financial sector in Tanzania may seem to be vibrant, the fact remains it is not well developed.
“The financial institutions are aggressively mobilising domestic savings, but remain exceptionally reluctant to allocate resources to the key productive sectors of economy like agriculture, ” reads the TCCIA report. Failure to reward the scientists justifiably and patenting the intellectual rights significantly has played down innovation in Tanzania.
Financial market development was also one of the obstacles as the study says that although the financial sector in Tanzania may seem to be vibrant, the fact remains it is not well developed.
“The financial institutions are aggressively mobilising domestic savings, but remain exceptionally reluctant to allocate resources to the key productive sectors of economy like agriculture, ” reads the TCCIA report. Failure to reward the scientists justifiably and patenting the intellectual rights significantly has played down innovation in Tanzania.
Source: The Daily News, reported by Beda Msimbe in Dar es Salaam
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