Light manufacturing in Tanzania and beyond

Skills has to be seen as key in any focus on sustainable growth and, as with the example from Sri Lanka and the German led vocational skills centre Tanzania is exploring the same agenda. The World Bank has just produced a Report on “Light Manufacturing in Africa” and, at the launch in Dar-es-Salaam, Emmanuel Ole Naiko made clear that this emphasis on skills starts in the schools which can play a key role in nurturing entrepreneurial skills. Giving an example, he said the schools being operated by Vocational Education Training Authority (VETA) in Tanzania should specialise on training students on industrial sectors where Tanzania is strong.”This will enable our people to develop industries in their localities with the objective of producing semi-finished industrial goods which will be further processed in major cities,” he said.

As with the Naesey Project, which is focussed on training the rural unemployed in Tamil Nadu (Archomai is a supporter) the development of rural skills capacity has an impact on retaining young people in their home areas and reducing the pressure on overcrowded cities. Given technology, this could result in supporting rural production units that feed an aggregation hub before moving to market. This could facilitate investment in facilities (warehousing and materials handling equipment) and, improve market access. This World Bank Report can facilitate these initiatives as the report could be used to guide countries in sub-Sahara Africa in the process of transforming economies.

There are other things to consider in all of this push on light manufacturing. Statistics from places like the Tanzania Investment Centre (TIC) show that despite the real potential for light manufacturing industry in these countries, the incentives are rarely strong enough to compete against the tourism (and service) sector or, the pull of the towns. IN fact, in many cases growth in these developing countries is not triggering a parallel rise in employment. The country Director of the World Bank to Tanzania, Uganda and Burundi, Mr Philippe Dongier said although Tanzania’s economy has been growing at 7.0 per cent per year, job creation has been lagging. “This report is valuable because it gives us a blueprint for how to develop this sector by identifying constraints and designing effective policy solutions,” said Mr Dongier.

According to the report, light manufacturing can offer a viable path for Tanzania and other Sub Saharan African countries as they transform their economies to create more productive jobs. The report, which covers Ethiopia, China, Tanzania, Vietnam, and Zambia, is the first research project based on World Bank Chief Economist Justin Lin’s theory of New Structural Economics (NSE).

This theory argues that continual growth can only happen with structural changes. For Africa, continued strong performance will require transforming out of agriculture into areas such as light manufacturing. “This light manufacturing study can be the guide for transforming industrial structure and creating productive jobs, including in the leather, apparel, wood, metal and agribusiness sector in Tanzania,” said Lin. And as with the Italian leather industry helping small firms in Tamil Nadu to develop its design capability, the developed world can support these exciting initiatives through skills development on the ground and, in the equally important skills of sales and marketing.

Article by: Rob Bell, Transformational Logistics Blog

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