Horticulture, and wood and furniture industries in Tanzania: Performance, challenges, and potential policy approaches

• Manufacturing has long been considered an engine of economic growth and socio-economic development. Today, several developing countries are looking for the right industries that can trigger structural transformation.
• This brief discusses the cases of two agro-processing industries in Tanzania: horticultural processing, and wood and furniture. It discusses their characteristics and main challenges and analyses the industrial strategy of the country as well as the experience of other developing countries that have become world leaders in these sectors.
• The authors’ analysis indicates that while these industries have a huge potential in Tanzania, their growth is hindered by several obstacles related to how firms are organised, but also to government’s policies which are currently limited to special economic zones and ad hoc interventions.
• The authors make two policy recommendations that can be generalised to resource-rich developing countries and resource-based sectors: SEZs by themselves cannot accomplish the task therefore industrial targeting requires a carefully designed policy mix; and even in so-called low-tech sectors, science, technology, product quality, and innovation must be key priorities.

A blog about this project can be found here.