National Trade Policy

In order to respond and to build up the internal economic reforms that have been under implementation since the mid 1980s, and unfolding events in the international economic scene, the Government of Tanzania has elaborated the national trade policy in 2003. It is a sectorial policy that aims to transform the economy from a supply constrained one into a competitive export-led entity responsive to enhanced domestic integration and wider participation in the global economy through national trade liberalization. In accordance with the National Development Vision 2025, the goal of trade policy is that of raising efficiency and widening linkages in domestic production and building a diversified competitive export sector as the means of stimulating higher rates of growth and development.
Five specific objectives emanate from and reflect this goal. The first specific objective is to stimulate a process of trade development as the means of triggering higher performance and capacity to withstand intensifying competition within the domestic market. This includes the establishment of improved physical market-place infrastructure and stimulating the dissemination of market information and increasing access to the market. The second objective involves economic transformation towards an integrated, diversified and competitive entity capable of participating effectively in the MTS. The third objective entails the stimulation and encouragement of value-adding activities on primary exports as a means of increasing national earnings and income flow even on the basis of existing output levels. The fourth is the stimulation of investment flows into export-oriented areas in which Tanzania has comparative advantages as a strategy for inducing the introduction of technology and innovation into production systems as the basis for economic competitiveness. The fifth objective is the attainment and maintenance of long-term current account balance and balance of payments through effective utilisation of complementarities in regional and international trading arrangements as a means of increasing exports combined with initiatives for higher efficiency in the utilisation of imports. The ultimate target is to enhance income generation and the people's earning power at the grass-roots level as the key to poverty reduction in fulfillment of the fundamental human right of equal opportunity for all citizens as enshrined in the constitution of the United Republic of Tanzania.
In order to make agriculture, forestry and fisheries more productive and sustainable, the policy will prioritise measures for agricultural transformation through implementing the Agricultural Sector Development Strategy (ASDS) of 2001.
Regarding the reduction of rural poverty, the policy plans the following specific targets: (a) contribute to raising per capita income to levels targeted in National Development Vision 2025, (b) trade development measures to stimulate and expand domestic demand through product and market diversification, (c) limited interim safeguard of domestic economic activity threatened by liberalisation while building economic competitiveness, (d) achieving and sustaining a rate of growth in trade of not less than 14% i.e. an average of twice the targeted rate of growth of GDP, (e) achieving and sustaining the long-run share of exports in GDP of about 25% and reversal of the declining trend in the import-coverage ratio, (f) attainment of a two-fold increase in manufactured exports for every ten-year interval, and a two-fold increase in trade in services at intervals of 6 years and (g) raising the value of merchandise export earnings in absolute terms to US$1,700 million within five years as envisaged in the EDS. In addition, the policy also plans to provide the best practices necessary to tackle the problem of poverty by facilitating access for the poor to factors of production including education, skills development and finance.
In order to enable inclusive and efficient agricultural and food system, the Government will implement strategies for the development of hard and soft infrastructure based on the following measures: (i) encourage reforms underpinning the emergence of a suitable credit culture as the means of stimulating efficient financial intermediation in support of the SMEs segment, (ii) modernisation and expansion of the transportation infrastructure based on increasing recourse to private sector resources through Build, Own, Operate and Transfer (BOOT) and Build, Operate and Transfer (BOT) schemes. Emphasis will also be placed on efficient utilisation of existing infrastructure in the course of exploiting the accessible resource-base.
To increase the resilience of livelihoods to disasters, the policy plans to strengthen institutions entrusted with the execution and enforcement of environmental laws and regulation. Priority measures include the mainstreaming of environmental issues into the development agenda. Environmental policies and simplified guidelines will be put in place to ensure consideration of environmental issues in formulating and implementing growth strategies.
In the context of governance, the overall responsibility for the monitoring and evaluation of trade policy implementation lies with the MIT working in close collaboration with the economic sector ministries. The central ministries, including the MoF and POPP all play key roles in the implementation process as well as monitoring and performance evaluation. Likewise, key sector ministries include MAFS, MCM, MNRT, MWLD and MEM. The Ministries responsible for social and physical infrastructure also have a critical role to play. Effective monitoring will depend on co-ordinated efforts and close co-operation between these public institutions and the private sector in a relationship of enduring smart partnership. A Clear definition of the specific roles of the different institutions in the course of monitoring and evaluating this trade policy is a function of time and the process of learning that results from active implementation.