Dar es Salaam - Imported goods should be subjected to higher taxes to protect local industries, President John Magufuli said yesterday.
Addressing the President's Manufacturer of the Year Awards 2015 ceremony organised by the Confederation of Tanzania Industries (CTI), Dr Magufuli said many imports were of an inferior quality and were being sold at lower prices than locally produced goods, adding that they posed a threat to domestic industries.
"We have every reason to protect our industries. They generate direct employment for our people and provide our farmers with reliable markets for their produce. The government collects revenue from them and they play a key role in spurring economic development.
"That is the direction I want to take, and I know the Minister for Industry, Trade and Investment (Mr Charles Mwijage) is here...this is what I want him to do."
President Magufuli also said the government was considering establishing a fully-fledged industrial development bank that would provide loans and capital for local investors in the industrial sector.
"We currently have 54 banks in the country, but most of them are busy investing in treasury bills and are reluctant to reduce interest rates so that they can provide loans to industrialists and other people, but we are already working on this," he said.
In the meantime, the government would continue to invest in the Tanzania Investment Bank to enable it to issue loans to industrialists.
President Magufuli said the Second Five Year Development Plan, which is aimed at overseeing rapid industrialisation in the country, had already been passed and would be implemented in the 2016/17 financial year starting on July 1.
"Our main focus will be on manufacturing industries, and by 2020 we want the industrial sector's contribution to the economy to reach 15 per cent and employ 40 per cent of the labour force... the plan will adequately address the challenges you are facing and will strive to ensure reliable power supply and smooth transportation networks," he said, adding, "If you fail to prosper during my time in power I dare say that you will never prosper, for I'm with you and I'm ready to protect your interests wholeheartedly."
President Magufuli said that for Tanzania to register significant economic growth, it must invest in industrial transformation, adding that there were important lessons to be learnt from countries like China, India, Thailand, South Korea and Vietnam, whose economies boomed after they invested in industry.
"In other words, I'm saying that we are late. We need to move fast as far as our industrialisation agenda is concerned. We had a juice processing factory in Tanga, but those machines were uprooted and installed in a neighbouring country. We had a milk processing and packaging factory in Arusha, which suffered a similar fate. This trend is unacceptable."
Dr Magufuli also challenged manufacturers to fully utilise the local market and expand their presence to other East Africa Community member states, saying the region had a ready market of 150 million people.
The Head of State also warned public officials against asking for bribes from potential investors, saying there was no room for such conduct in his government.
Earlier, CTI chairman Samuel Nyantahe said that although the industrial sector had seen significant growth in recent years, there were still a number of problems that hindered further growth, adding that the confederation's members were optimistic the hurdles would be addressed in the next two years.
"Electricity is a major problem and we face transportation challenges as well. There are a lot of smuggled and counterfeit products imported into the country, not to mention a multiplicity of taxes and levies as well as multiple regulatory authorities."
A total of 20 awards were presented to local manufacturers at the event sponsored by, among others, The Citizen and Mwananchi newspapers published by Mwananchi Communications Limited.
Tanzania Breweries Limited was named the overall winner.
Source: The Citizen