Tanzania’s Import Dependency Raises Economic Concerns
Tanzania’s reliance on six key countries for imports is growing, as highlighted in the recent Bank of Tanzania (BoT) report. The countries—China, India, Japan, Saudi Arabia, South Africa, and the United Arab Emirates (UAE)—have become the primary sources for Tanzanian goods over the past five years, prompting concerns over economic dependency and the urgent need for bolstered local production.
The 2023/2024 annual report indicates that China maintains its position as Tanzania’s top supplier, with import expenditures surging from Sh4.56 trillion in 2019/2020 to an astonishing Sh10.9 trillion. India has also seen significant growth, with imports rising from Sh3.02 trillion to Sh5.56 trillion during the same period. The UAE’s imports have more than doubled, climbing from Sh2.07 trillion to Sh4.01 trillion.
Japan has witnessed similar trends, with imports increasing from Sh906.15 billion to Sh1.47 trillion. South Africa and Saudi Arabia also contributed to Tanzania’s import growth, with respective increases in imports from Sh977.68 billion to Sh1.41 trillion and from Sh613.85 billion to Sh1.39 trillion over the last five years.
In light of this escalating import bill, economic experts urge Tanzania to cultivate a robust local production environment. Analysts advocate for substantial investments in technology and industrialization to enhance domestic manufacturing capabilities.
Dr. Donald Mmari emphasizes the need for research-driven insights to pinpoint profitable sectors, suggesting the local processing of raw minerals for increased value. He highlights the leather industry as another area with significant untapped potential.
While Tanzania’s import expenditures continue to climb, it’s noteworthy that the majority of these countries also serve as major buyers of Tanzanian products. In the current financial year, China acquired Tanzanian goods valued at Sh1.12 trillion, while India purchased Sh4.08 trillion, South Africa Sh4.02 trillion, and the UAE Sh1.47 trillion. Japan, however, stands out as the only country among the six where imports from Tanzania fall short, purchasing only Sh178.95 billion worth of goods.
Economists stress the importance of diversifying export markets to mitigate dependency on a few trading partners. They highlight that while consistent trade relationships can be advantageous, exploring new markets and boosting product competitiveness are vital strategies for sustainable economic growth.
Strengthening domestic industries and adding value to exports are recommended as fundamental steps toward addressing Tanzania’s economic challenges. Experts agree that investing in agriculture-manufacturing linkages and enhancing productivity will be crucial for the country’s economic resilience and job creation in the long term.
