By Damas Kanyabwoya
Dar es Salaam. Tanzania didn’t receive its industries on a silver platter. It had to create them. In accordance with the colonial development pattern the Tanganyika territory was a source of raw materials and a market for finished goods from the
metropolitan Germany (and later British) economy and the settler territory of Kenya. The few industries that were created before independence were solely for ‘import substitution’. This occurred when a multinational that exported products to the Tanganyika decided to build a factory in the territory to gain from economies of scale.This is how Julius Nyerere, the first President, described the state of industrialisation at independence in a speech he gave in 1971 when commemorating 10 years of independence; “The industrial sector of the Tanganyika economy in December 1961, was so small as to be hardly worth noticing. Insofar as small factories- such as breweries and cigarette manufacturing plants- did exist, they were alien owned and controlled…” At independence on December 9, 1961 there were 220 manufacturing industries which employed 200,000 out of a population of 9 million people, according to a historical account by Prof Samuel Wangwe and Jamal Msami. The number though significant should be put in context because most of the industries were small processing firms established to add some value in agricultural products. About 30 per cent of these industries were the rural-based cotton ginneries and sisal decorticators; 25 per cent were agro-processing, mainly grain millers, beverages, tobacco. And yet a large number were also wood furniture workshops.
The relatively large and notable industries present at independence included the Tanganyika Brewer (later became TBL), Nyanza Salt Mines in Uvinza, East Africa Tobacco (established in 1961 and now known as TCC), Coca-Cola Bottling Company, Tanganyika Packers, Metal Box, Aluminum Africa, Kilombero Sugar Company (formed in 1960 with Capital from the World Bank, the Commonwealth Fund and other foreign investors), Tanganyika Planting Company limited (TPC) and Bata shoes.
In 1965 the number of industries increased to 569. Some of the industries established soon after independence by both private investors and the government included Mansoor Daya Chemicals Ltd (1962), Urafiki Textile Mill (1968), Kibo Match Factory (1965), Tanzania Portland Cement, East African Cables Limited, Moshi Textile Mill, Tanelec and Tanga Cement (1980),
In fact at this point the government put a lot of emphasis on private and foreign investments in the industrial sector, despite Mwl Nyerere’s socialist inclinations. The government went as far as enacting the Foreign Investment Protection Act of 1963 that offered generous tax and other incentives to attract foreign capital in the industrial sector. The law was not successful enough and was abandoned in the late 1960s after the adoption of the Arusha Declaration. The government also used the five years economic plans, which were the major economic policy documents since independence to create a policy environment conducive enough to facilitate investments in industries. The First Five Year Economic Development Plan (1964–1969) focused on private investments and the second Five Year Plan (1969-1974) focused on state-led investments in the industrial sector.
Despite all these efforts, historical records show that industrialisation in Tanzania was a difficult endeavour. But it was made possible by the determination and political will of the new government and the goodwill of development partners from across the global ideological divide. Determination, political will and goodwill is always not enough, however, to industrialise a country. In the case of Tanzania there were other complex factors at play. In effect, then, Tanzania’s nascent industrialisation was nipped in the bud by lack of technological and managerial sophistication and the negative global economic imbalances as well as global crises that led to a foreign currency crisis in Tanzania. Unable to import the much needed spare parts, new machinery and intermediate goods, most of the factories fell into losses and in disrepair. Others had to close down altogether. By the early 1980s Tanzania had an acute shortage of basic consumer goods such as sugar, soap, clothes and footwear. In hindsight, of course, the collapse of the state-managed industries was not the end of the industrialisation journey in Tanzania. It was a transition toward a new phase; the phase of private sector-led industrialisation.
Earlier hopes of reviving the rundown industries were dashed, though, in a botched up privatization process that came with the restructuring of the economy in the late 1980s. Many of the industries taken up by private hands could never be revived and have remained history. All in all opening up the economy to private enterprises and foreign investments in the industrial sector saved the day. A sizable industrial base has been created. Though not diversified and sophisticated enough it raised expectations and ambitions on the possibility of transforming Tanzania into a semi-industrialised country by 2025. But that is the story for another day.
National Development Corporation (NDC)
Soon after independence the government moved with speed to arrange for the start of the industrialisation journey. It established the Tanganyika Development Corporation in July 1962. TDC was given the task of building an industrial base for the nation, according to Mwl Nyerere in his report of achievement of 10 years of independence to Tanu cadres. In January 1965 TDC was merged with the Tanganyika Agricultural Corporation to form the National Development Corporation (NDC). Tanu’s economic arm, the Mwananchi Development Corporation was also disbanded and its assets given to NDC. In 1969 when the National Agriculture and Food Cooperation (NAFCO) was established it took over NDC’s functions of running agricultural plantations. Trade functions of NDC were also shifted to the newly formed State Trading Corporation (STC), and tourism functions were given to the Tanzania Tourism Corporation (TTC). NDC then became “responsible for public investment, initiation, and management in the manufacturing, processing and mining industries…” Mwl Nyerere said in his 1971 speech. At its formation NDC took over from the Treasury investment portfolios of the Tanganyika Packers and Nyanza Salt Mines. Other industries that were placed under its management after nationalization and those it created itself included; Tanzania Dairies Ltd (TDL); Tanzania Karatasi Associated Industries (TKAI); Tanzania Breweries Limited (TBL); Tanzania Cigarette Company (TTC); Tanzania Crown Cork Co. Ltd; Tanzania Motor mart Co. Ltd and Aluminium Africa Co Ltd. Other industries are the Ubungo Farm Implement; Tanzania Oxygen Ltd; National Bicycle Co. Ltd; Zana Za Kilimo Mbeya; Mang’ula Mechanical &
Machine Tools Co. Ltd; Tanga Steel Rolling Mills; TANELEC, Urafiki (Friendship) Textile Mill; and Tanzania Cables Ltd.
As the industrialisation journey continued the government realized the crucial role of small industries, specifically, in areas such as agro-processing. It therefore established the Small Industries Development Organization (Sido) through the Parliamentary Act of 1973. Sido’s functions were to plan, coordinate, facilitate the development of and offer requisite services to small industries, but also small and medium trade ventures. The government also established the Tanzania Industrial Research Development Organization (Tirdo) through the Parliament Act of 1979. Tirdo’s purpose was to develop industrial technologies to meet demand for new technology in agro-processing.
To ensure quality of industrial goods the government created the Tanzania Bureau of Standards (TBS) through the Parliamentary Act of 1977.
The government also set up the Tanzania Engineering and Manufacturing Design Organization (Temdo). The functions of the organization that was established through the Parliamentary Act No 23 of 1980 were to deal with engineering and design of industries machinery and equipment.
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