Tanzania’s industry sectors are among the smallest in Africa, accounting for only 22.7% of the GDP. Tanzania was badly hit during the 2002-03 drought-ridden years and in 2005-06 by persistent power shortages due to low rainfall. In 2008-09, the global economic slowdown caused industrial production to plummet badly, the rate going down by more than 36% in 2009.
The primary industrial activities (90%) are dominated by small and medium sized enterprises specializing in food processing including dairy products, meat packing, preserving fruits and vegetables, production of textile and apparel, leather tanning and plastics. A small percentage of larger factories (10%) manufacture cement, rolled steel, corrugated iron, aluminum sheets, cigarettes, beer and bottling beverages, fruit juices and mineral water. Others produce raw materials, import substitutes and processed agricultural products.
Tanzania Industries: Mining
The Tanzanian mining industry, which was badly hurt by the 2009 recession, expects a better 2010 with gold leading the sector’s revival backed by higher global demand. According to Reuters Africa, contraction of Tanzania’s mining industry during 1Q 2009 reduced the overall economic expansion from 7.1% to 5.6%. Although the gold sub-sector is looking optimistic, other sub-sectors like diamonds and gemstones are facing a slow recovery due to low demand. Tanzania is Africa’s third largest gold producer, but also has reserves of uranium, nickel and coal. Tanzania’s Chamber of Minerals and Energy predicts that the mining industry would contribute more than $1 billion to the nation’s economy in 2010. Tanzania is at the threshold of introducing a new mining legislation that aims to benefit the local economy by addressing issues of royalty payments by mining companies to the state and ownership of mines.
Tanzania Industries: Telecommunications
Tanzania’s telecommunications industry appears to have resumed growth, following more than two quarters of poor growth. This growth has largely been attributed to operators like Vodacom, Zain and Tigo. Intense competition among the operators has also led to an expansion of this sector, resulting in both Vodacom and Zain also reporting their strongest quarterly net additions in 3Q 2009. In addition, reductions in tariff have led to large scale adoption of mobile phones and equipment. Currently, the number of mobile phone users in Tanzania is close to 20 million, with a penetration rate of more than 40%. This rate is expected to reach 77% by 2014.