Tanzania's erratic power hurts manufacturing sector

Manufacturing sector growth slowed in the third quarter of 2015 pulled down by erratic power supply that hit the country from mid last year and the weakening of the shilling, latest data released showed.

The National Bureau of Statistics (NBS) said in its third quarter report that activities in the sector grew at the rate of 3.6 per cent in the third quarter of 2015 compared to 6.3 per cent in the third quarter of 2014.

For the period of July - September 2015, there was slight decrease in the manufacturing activity compared to the corresponding quarter of 2014 due to a general decrease in the production of food, beverages and tobacco industries.

There was also less production of textile and apparel; chemicals and pharmaceuticals and rubber and plastic products during the third quarter of 2015 compared to a similar quarter of 2014.

According to the NBS report, electricity sector growth registered a negative growth of 1.2 percent in the third quarter of 2015 compared to 14.2 percent in the corresponding quarter of 2014.

The negative growth was due to low water level at hydroelectric dams, rehabilitation of generation and distribution infrastructure and some plants stopped operations because of expiry of contracts.

For the period of July - September, 2015, total electricity generated was 1,550 Million kwh compared to 1,581 Million kwh in the corresponding quarter of 2014.

The Confederation of Tanzania Industries (CTI) Director for Policy and Advocacy, Mr Hussein Kamote attributed the slow growth of the manufacturing sector to power outages that hit the country from mid-last year.

Other factors included weakening of the local currencies that affected imports of raw materials and importation of sub-standard and counterfeit products that undermine local production by distorting the market, he said.

Mr Kamote said the manufacturing sector continued to experience challenges of unreliable, intermittent power supply, frequent rationing and outages from last year which affected growth of the sector.

“If you read the (NBS quarterly) report you will also see electricity sector registered negative growth. There is symbiotic kind of relationship between the two,” he said.

The weakening of the shilling was another major factor for the slow growth of the manufacturing sector as it meant imports of raw materials became more expensive thus increasing the cost of production.

“The weakening of the shilling has a lot of implications to the sector. Most of the industries buy raw materials abroad. Most of these failed to import according to their planned operations,” he said.

He said smuggling and importation of substandard and counterfeit products was another major factor that led to a slow growth in the manufacturing sector as it led to an influx of cheap imported commodities in the market which create unfair competition with local products.

“There is a lot of smuggling due porous borders. There are lots of unofficial border posts in Dar es Salaam, Bagamoyo and other areas...all these affect the local producers,” he said.

According to him they have raised the problem of cheap imports to government authorities but they are in a view that it has not received the attention it deserves. 

“Every year we raise these matters up but it seems there is no strategy to address them,” he said.
Source: Daily News, reported by Henry Lyimo, from Dar es Salaam, Tanzania
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