Should Tanzania Invest on Industries

During the election campaigns many politicians in Tanzania argued that  the government should invest more on industries in order to tackle the employment problem. Also, on the opening of the parliament the president pointed that the focus will be on improving the industrial sector as means of creating mass employment.  I personally think it’s a good intention however I do not think if it’s appropriate for the government to focus on industries as means to stimulate the economy for the following reason.

Focusing on industries won’t provide a competitive edge for Tanzania. One of the reason is that we are competing with countries which have heavily invested in industrial sectors in terms of the skills and capital which makes their product more efficient and cheap in the market. By saying so I don’t mean that we shouldn’t try to compete but we should weigh whether we should focus our strength somewhere else for instance in service sector or remain on competition that we know we have a long way to go. For instance, imagine finding a shirt in in Kariokoo market whereby one is produced in Tanzania and the other is produced in China and the one from China is much cheaper than the one  from Tanzania. It is obvious that the consumer will buy the Chinese one. Yes, the government may decide to tax more the Chinese product but in that way the government is punishing a Tanzanian consumer. If the Tanzania product is not going to have market it means that the industry is going to fail and the investment on Tanzania industry are going to dead end.

I recommend that the government should invest more on social service and infrastructure. The government will make a better use of  tax payers money by improving education , health sector, improving water supply, roads and markets. By doing so the government will tackle the inequality by ensuring good living standard to its people and unleashing their opportunities to participate in economic activities.  So is it better for government to invest on industries were the money will just go into a dead end or should it rather invest on social service?

However, if the government wishes to stimulate the economy they should just create a robust business environment which will attract people to invest not only on the stagnating industrial sector but also on the growing service sector. The government may however intervene in the market by subsidizing the areas were the market is failing for instance instead of the government investing on the industrial sector it’s much better for them to subsidize local  industries which offer apprentice which improve skills and provide Tanzania with much better base for competition in the long run. Otherwise , the government may decide to diversify the economy instead of putting a focus on one (Industrial) sector that is so risky to invest (with uncertain prospects).

The intention of improving the industry sector is good, this shouldn’t be a revolution but it need to be an evolution. Therefore the government should focus on  improving education and vocational trainings which will provide necessary skills to compete. Also the government can subsidize local industries in return of showing how they have improved their efficiency from the subsidy that they are getting this will enable them to compete with established industrialist powers in the long run