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Tanzania |
DEVELOPMENT
The US-Africa Growth and Opportunity Act (AGOA) initiatives, have started benefiting African countries, but present both challenges and opportunities
The AGOA programme, which aims at benefiting about thirty-five countries world-wide, is viewed as economic salvation to all 48 Sub-Saharan African countries. However, Tanzania still needs to do more in order to get the best out of it.
For Tanzania, the main challenge remains the immediate establishment of the long-awaited Export Processing Zones (EPZ). The EPZs will enable Tanzania to export to the USA, processed or semi-processed commodities which will in turn achieve a sizeable amount of foreign exchange. Such commodities have in the past been considered as providing less export revenue for most poor and developing nations, including Tanzania. But with the AGOA now in place, some African nations with EPZs have started benefiting from the export of clothes and other similar items to the USA. This has earned a significant revenue for the countries concerned.
Kenya is Tanzania’s neighbour and is said to have already earned more than US $35 million through the AGOA programme, mainly because of its EPZs.
It should be remembered that almost all products are eligible for duty-free treatment under the AGOA, provided they meet set requirements and are imported or exported directly from a Sub-Saharan African country which is a member of the scheme.
Tanzania and the AGOA
But how can a country such as Tanzania use the AGOA in order to improve on its exports to the USA and earn a significant revenue?
Elvis Musiba is president of the Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA). He says the country stands to earn very little out of the AGOA unless EPZs are established. He insists that establishing the EPZs could attract foreign investors, especially in small and medium enterprises with a hope of exporting to neighbouring countries as well as to the USA through the AGOA
He cites the example of the recent agreement signed between the Tanzanian and Korean governments, saying such an agreement could result in agro-processing joint ventures between local firms and Korean companies if only the EPZs were in place.
Mr Musiba also gives the example of Mozambique. In the 1980s and early 1990s, the entire country could be described as devastated. In those days Mozambique had nothing to offer. However, today, after the establishment of the Maputo Development Corridor (MDC), the country is one of the fastest growing economies with an annual growth rate of over 10 percent!
Tanzania’s government has now heard the business community’s cry. Mr Joseph Simbakalia, the chief executive officer and Managing Director of the National Development Corporation (NDC) says the process of initiating the EPZs in Tanzania has started.
In order to enable investors to fully exploit regional and international trading opportunities, Tanzania is in the process of establishing well-equipped export-processing zones. Regions to benefit first with EPZs include Dar-es-Salaam, Arusha, Mwanza, Bukoba, Kigoma, Mtwara, and Tanga.
These EPZs will provide unique opportunities for investors to access the developing markets resulting from the envisaged free trade areas of the East African Community (EAC).
The short-term objectives in creating the EPZs would be to provide employment and absorb skilled labour from collapsing industries that are unable to survive in the new competitive and free market environment. Long-term objectives would facilitate the transfer of technology to local people and gradually assimilate the domestic economy into the global economy.
- Perege Gumbo, Tanzania, March 2002 — © Reproduction authorised, with usual acknowledgment
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PeaceLink 2002 - Reproduction authorised, with usual acknowledgement