Industrialisation is critical for job creation, income generation and sustainable long-run development. Tanzania will need to transform its economy in order to increase value addition in its export basket, tap into global value chains (GVCs) and, ultimately, provide its citizens with a better life.
Industrial policy is an important but very delicate area of public policy due to the challenges of design and implementation of an industrial plan and the importance of integrating the interests of both society and the private sector. These challenges are particularly pronounced for developing economies, which need to kick-start industrial development while dealing with limited institutional capacity and restricted fiscal space. While the scope and rationale for industrial policies have changed over the last decades, the path of today’s developed economies has demonstrated that clear objectives and constant monitoring are critical. Equally important is having a notion of how much different policy instruments cost in financial and fiscal terms, and which policy instruments work better in specific circumstances.
Building on the literature on structural transformation and industrial policy, this project provides a solid analysis of the industrial policy strategy of Tanzania in the agro-processing industry. The main objective is to advance the assessment of the industrial strategy of Tanzania in this sector, as well as helping the identification of relevant practices and effective policy instruments for industrialisation through technological upgrading and climbing up the GVCs.
This project will be undertaken in close contact with the Ministry of Industry, Trade and Investment (MITI) and will use customs data sets from the Tanzania Revenue Authority (TRA). The result and recommendations from the study will provide relevant input to the ongoing review process of the 2nd National Five-Year Development Plan (2016/17-2020/21).