Light Manufacturing in Tanzania argues that for Tanzania to remain
one of the fastest growing economies in Sub-Saharan Africa, it has
to make progress in the structural transformation that can lift
workers from low-productivity agriculture and the informal sector
to higher productivity activities. Manufacturing, which has been
the main vehicle throughout the world to achieve this
transformation, has remained stunted in Tanzania. Using new
evidence, the book shows that feasible, low-cost, sharply focused
policy initiatives aimed at enhancing private investment could
launch Tanzania on a path to competitive light manufacturing. These
initiatives would complement progress on broader investment reforms
by increasing the share of industry in regional output and raising
the market share of domestically produced goods in rapidly growing
local markets for light manufactures. And, as local producers
increase their scale, improve quality, and gain experience with
technology, management, and marketing, they can take advantage of
emerging export opportunities. In Tanzania, as in East Asia,
policies that encourage foreign direct investment can speed
industrial development and the expansion of exports. The impact of
isolated successes can be multiplied. The strategies proposed here
can launch a process that would create millions of productive jobs.
Light Manufacturing in Tanzania has several innovative features.
First, it provides in-depth cost comparisons between Tanzania and
four other countries in Asia and Africa at the sector and product
levels. Second, the book uses a wide array of quantitative and
qualitative techniques to identify key constraints to enterprises
and to evaluate differences in the performance of firms across
countries. Third, it uses a focused approach to identify country-
and industry-specific constraints. Fourth, it highlights the
interconnectedness of constraints and solutions. For example,
solving the manufacturing input problem requires actions in
agriculture, education, and infrastructure. Detailed cross-country
analysis was carried out in four subsectors in Tanzania: textiles
and apparel, leather products, wood products, and agroprocessing.
Based on this analysis, the book suggests directing government
policies toward removing constraints in a few of the most promising
light manufacturing sectors using practical and innovative
solutions inspired by the fast-growing Asian economies the starting
point of which 20 years ago was not so different from Tanzania's
today. This book will be valuable to African policy makers,
professional economists, and anyone interested in economic
development, industrialization, and the structural transformation
of developing countries.
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