Tanzania's National Trade Policy

On 30 July 2024, Tanzania launched the Tanzania National Trade Policy (NTP) 2023 Edition (the Trade Policy). The Trade Policy is meant to modernise the country’s environment, significantly boost the economic impact of its trade sector, increase trade competitiveness, and push for industrial-led social-economic transformation. It places greater emphasis on policy coherence, institutional and legal frameworks, domestic trade development, and trade integration.

Rationale for a revised National Trade Policy

The National Trade Policy of 2003 had visible gaps that didn’t take into account the significant developments within and outside of Tanzania, which include policy coherence, the emergence of new bilateral, regional, and multilateral trade platforms, the growing importance of trade services, e-commerce, and advancements in technology and trade safety.

Vision, mission and objectives

The Trade Policy aims to help Tanzania become a competitive and resilient economy. The slogan is “trade competition driving industrial-led socio-economic transformations.” The mission is to stimulate the development and growth of domestic and external trade through enhanced competitiveness to accelerate socio-economic transformation, and to strengthen Tanzania’s integration and participation in international trade. The key objectives are to spur trade through efficiency, diversification, and competitiveness to accelerate the achievement of socio-economic transformation, such as:

1. Improve policy coherence, legal and regulatory frameworks, and institutional coordination;
2. Enhance domestic trade development;
3. Strengthen trade integration and utilisation of foreign market opportunities;
4. Strengthen and develop economic resilient measures against impacts of global trade shocks, tensions, and disputes;
5. Strengthen marketing infrastructures;
6. Strengthen fair trade practices and consumer protection;
7. Improve performance of trade-in services;
8. Enhance trade facilitation to reduce trading costs and time;
9. Strengthen e-commerce infrastructures and utilisation of digital technologies;
10. Improve access to trade finance;
11. Strengthen private sector engagement and inclusiveness in trade development; and
12. Mainstream cross-cutting issues in trade.

Policy coherence, legal and regulatory framework and institutional coordination

This framework plays a critical role in establishing an enabling environment for fostering the trade sector. Institutional and legal frameworks for trade are interlinked with other sectoral legislation and policies. Legal and regulatory frameworks provide the guidance needed to achieve the policy objectives which mainly are to improve policy coherence, legal and regulatory framework, and institutional coordination.

Domestic trade development

1. Agricultural economy – support farmers through established marketing infrastructure like Cooperative Unions, Marketing Boards for Commercial Produce, Online Platforms, etc.
2. Manufactured goods - Primarily sourced from local industries and supplemented by imports via Dar es Salaam port.
3. Blue economy activities - Presently, the blue economy activities are concentrated in fishing, maritime transport, hotels, restaurants, and sea sports activities.
4. Market initiatives - including marketing promotion programs, formulation and implementation of the Blueprint for regulatory reforms to improve the Business Environment; Building of optic fiber cable; Buying cargo airplanes; Expansion of ports; Formulation of agricultural marketing strategies; Establishing and scaling up of market risks management system; and Developing marketing infrastructure.

Tanzania’s domestic trade is characterised by a fragmented domestic market and weak industrial base. Production is disconnected from demand due to a lack of comprehensive trade information systems and communication networks, inadequate road and railways, inadequate market infrastructure, packaging facilities, logistics, financial services, etc.

Trade integration

Tanzania integrates with other countries through trade arrangements on bilateral, regional and multilateral levels. The objectives are to maximise the benefit from the movement of goods and services and to strengthen trade integration and utilisation of foreign market opportunities.

Tanzania is a Member of the World Trade Organization (WTO) which makes her committed to different multilateral agreements such as the Trade Facilitation Agreement (TFA), Sanitary and Phytosanitary Agreement (SPS), Technical Barriers to Trade (TBT) Agreement, Anti-dumping Agreement, Agreement on Agriculture, General Agreement on Trade in Services, and Trade Related Intellectual Properties (TRIPs) Agreement, etc.

The Trade Policy comes as the government counts on several achievements in the trade sector. The success stories include the growth of trade with the East African Cooperation (EAC), Southern Africa Development Community (SADC), African Continental Free Trade Area (AfCFTA), and exploring markets such as China, which allowed 98 percent of Tanzanian products to be sold duty-free, India, African Growth and Opportunity Act (AGOA) and the European Union.

Private sector engagement and inclusiveness in trade development

In the implementation of the Trade Policy, the Private Sector is designated as the implementer and the Government as a facilitator although some factors hold back the effective participation of the private sector in trade development such as the capacity of the private sector, legal and regulatory framework and access to trade finance, inadequate competitiveness, limited diversification and reliance on few commodities, and weak application of information communication technology.

E-commerce

The Trade Policy states that digital technologies are affecting trade composition by increasing service components by fostering trade changing patterns and affecting the complexity length of global value chains. Digitisation of trade uses online services for business transactions. E-commerce is growing fast globally. This fact demonstrates that e-commerce has great potential for trade. Tanzania has undertaken several efforts in fostering e-commerce, which include establishing legal frameworks for e-commerce such as the Electronic Transaction Act (2015), Cyber Crime Act (2015), and the ongoing process of developing the Personal Data Protection Act.

Marketing infrastructure

In the course of production, both hard and soft infrastructures are vital for economic growth. Hard infrastructures include telecommunications, transportation, power, water, and sanitation, while soft infrastructures include financial and information services. The efficient and effective delivery of both types of infrastructure is crucial for fostering a competitive economy and enabling broader participation in economic activities, through various programs such as Marketing Infrastructure, Value Addition and Rural Finance Programme (MIVARF); and Agricultural Sector Development Programs (ASDP).

Trade-in service

The scope of trade-in services includes business services, tourism, and travel-related services, financial services, communication services, education services, distribution services, transport services, construction services, energy services, sports and recreation services, health and health-related services, and others.

Legal and regulatory framework

Effective implementation of the Trade Policy requires functional capacities including effective legislative and regulatory frameworks. The Government shall review, repeal, amend, and where necessary enact new legislation to address trade-related issues. There have been overlaps among key players and other stakeholders. The Ministry of Industry and Trade, as the leading authority in trade matters, lacks the full mandate to oversee other ministries dealing with trade-related matters whereby the need for the enactment of the Trade Act.

Conclusion

The Trade Policy addresses critical areas such as domestic trade growth, global trade shocks, and trade integration. It aims to fortify Tanzania's trade environment, ensuring sustainable economic growth. It stands as a testament to the collaborative efforts of various stakeholders and the commitment to advancing Tanzania’s trade landscape. This initiative underscores the importance of strategic partnerships and highlights the transformative impact of effective trade policies on the nation’s economic growth.