In this article, we will explore the challenges that trade encounters in Tanzania. Trade, which involves buying and selling goods, plays a crucial role in the country’s economy.
However, Tanzania faces various issues that can hinder the smooth flow of trade. These challenges include inadequate infrastructure like transportation and ports, complex bureaucratic processes, fluctuating currency values, and limited access to international markets.
Examining these problems is essential to understand their impact on Tanzania’s trade and to consider possible solutions for a more robust and efficient trading environment.
THE FOLLOWING ARE PROBLEMS FACING TRADE IN TANZANIA
Some people sneak in goods from other countries and at the same time export TANZANIA’s products to such countries through the black market. Such trade is detrimental to the economic growth of the country because such traders avoid paying taxes.
Nature of TANZANIA’s imports and the unfavourable balance of trade
Most of the imports are heavy industrial materials and finished products. These products are expensive as compared to TANZANIA’s exports thus results in a large deficit balance of payment.
Value of TANZANIA’s Exports
TANZANIA’s exports are mainly based on processed raw materials. Minerals and processed agricultural materials from TANZANIA are generally bulky and of low value. Thus the total production and export cost is not commensurate with the profit accrued from such sales.
Poor trade Pattern
TANZANIA’s patterns of trade still follows the line of flow established by her former colonizer Britain being mainly a supplier of raw materials; the developing countries provides the manufactured goods that TANZANIA requires so they form better trading partners.
Inadequate transport and communication facilities
Transport and communication network not well developed between TANZANIA and other African countries. This affects the flow of goods to and from these countries.
The imposition of quotas regulates the supply from each country to avoid any economic glut, which has negative effects on TANZANIA that depends heavily on particular commodities for export. Coffee, a major export from TANZANIA, has for example, suffered with the introduction of quotas by International Coffee Organization.
Overreliance on agricultural products
Given the fact that TANZANIA’s trade items are mainly agricultural, they are vulnerable to climatic changes, pests and diseases. The fact that most of the other African countries also produce agricultural goods and other primary products the demand for TANZANIA’s goods among the neighbouring states is reduced.
Traders are charged high fees in form of trading license in order for them to carry out their businesses. High fees make the traders to earn little profits from the sale of their goods.
Poverty among the people
Majority of TANZANIANS are poor making them offer a very small internal market. Some cannot afford the very basic needs in their homes.
Sometimes traders are attacked by thugs who steal their goods or take away the money earned. Some businessmen are even killed in the attacks.
Scarcity of goods
There are times in the remote areas of TANZANIA that the goods needed by people are not available in the markets or shops. Then scarcity makes such goods expensive.
Most traders engage in small retail businesses because they lack adequate finances to expand their activities.