Business Development Trade

Tanzanian reforms lift obstacles for exporters

Training of startup businesses in Tanzania

More than a third (36%) of Tanzanian companies have fully or partially resolved trade obstacles in the last six years, according to the International Trade Centre report, Invisible barriers to trade – United Republic of Tanzania: Business perspectives.

The report based on a survey of over 600 businesses found that 72% of firms involved in cross-border trade – especially agricultural exporters – have difficulties with trade issues such as finding suitable export packaging materials and meeting international buyers’ quality standards. The survey also revealed that traders still struggle with delays, high fees, and charges, as well as limited or deficient facilities at home – so-called procedural obstacles that stem from non-tariff measures.

The United Republic of Tanzania has the potential to boost its exports by $2 billion in 2024. However, ‘$688 million of this untapped potential are in jeopardy due to market frictions such as lack of transparency and related non-tariff measures’, said ITC Executive Director Pamela Coke-Hamilton. ‘This is particularly true for small companies aiming to reach international markets. Clearly, a better understanding of these trade constraints is crucial to develop appropriate trade policies.’

Government-led initiatives and regulatory reforms have eased some exporter difficulties since ITC conducted its first survey in the country in 2013-14. Among the most important changes: a pilot electronic single window to meet export requirements, better regional recognition of conformity assessments, and fewer or lower fees charged by different agencies.

Companies say that better practices in public agencies are game-changers. ‘Import permission from the (former) Tanzania Food and Drug Authority was very difficult to get. The application process took too long. The process can be done online now, making things simpler and faster. It no longer takes weeks to get feedback,’ declares a company interviewed in the report.

Speaking on the occasion, Hon. Exaud S. Kigahe, Deputy Minister, Ministry of Investment, Industry and Trade said, ‘The government acknowledges the importance of the NTMs Survey as it helps to unveil fundamental challenges the business community faces in doing business. More coordination and collaboration between the government and the private sector is required in simplifying the export and import procedures.’

He further reaffirmed the Government’s commitment to ensuring enabling policy and regulatory environment for private businesses to flourish.

The report recommends that the government’s top priority should be an electronic single window system, a paperless one-stop service – now in the pilot stage – that connects all agencies involved in cross-border trade. ‘Full implementation of this programme could eliminate most of the domestic procedural hurdles that exporters face,’ the report says.

The country needs better, internationally accredited quality facilities and laboratories. It needs more domestic production of packaging materials, combined with packaging information and training for exporters. The report also urges policymakers to harmonize national and regional standards with international ones, making it easier for exporters to comply with different standards and save them time and money.

Finally, the report praises government plans to adopt a national quality policy that helps traders fulfill technical requirements and conformity assessments. Such a policy ‘would provide guidance on which quality infrastructure should be prioritized, what institutional arrangements are needed to improve the quality of Tanzanian products, and how to standardize national standards with international practices’.

Invisible Barriers to Trade: Tanzania – Business Perspectives, based on a survey of over 600 Tanzanian traders, identifies the biggest challenges and suggests ways to strengthen the country’s quality and customs infrastructure. Additional interviews were also conducted with representatives of various public agencies and business support organisations. This is the ITC’s second country report on NTMs in Tanzania.

This report is part of the EU-East African Community Market Access Upgrade Programme (MARKUP). The programme aims to contribute to economic development in the EAC by boosting trade and regional integration.

Non-tariff measures are official regulations, other than customs tariffs, related to cross-border trade in goods.

Procedural obstacles are practical challenges that traders may experience while attempting to comply with these measures.

About ITC – The International Trade Centre is the joint agency of the World Trade Organization and the United Nations. ITC assists small and medium-sized enterprises in developing and transitioning economies to become more competitive in global markets, thereby contributing to sustainable economic development within the frameworks of the Aid-for-Trade agenda and the United Nations’ Sustainable Development Goals.

About the author

Byron Adonis Mutingwende