As Brands and manufacturers look to the Eastern African region to locate manufacturing operations, Tanzania welcomes those looking to capitalise on its favourable environment for investment.
Tanzania has a long history and tradition of textile and apparel manufacturing. Building on its position as Africa’s leading producer of organic cotton, and Eastern Africa and Southern Africa’s largest producer of cotton, the government has prioritised Textiles & Apparel for investment for growth under its Domestic Industrialization Plan.
There are many immediate reasons for manufacturers, brands and buyers to choose Tanzania today for investment, here’s why Tanzania is primed to become a global textile hub.
1. Opportunity for a sustainable supply of local handpicked cotton
Tanzania is the leading cotton producer in Eastern and Southern Africa and the largest producer of Organic Cotton in Africa. For generations, cotton has been grown in Tanzania using traditional methods – Today those same methods are used by up to 450,000 smallholder farmers, supporting the claim that Tanzanian cotton comes with strong sustainability and ethical credentials. Uniquely, Tanzania combines this scale of cotton production with the necessary expertise and infrastructure to sustain the spinning, weaving and manufacturing elements of the value chain. As such, Tanzania offers a unique opportunity for vertically integrated textile and garment operations – a model which is already under adoption here.
2. Target global consumer markets with advantageous trade preferences
In addition to a growing demand from the domestic and East African Community market, Tanzania has duty- and quota-free access to the US market through the African Growth and Opportunity Act (AGOA) and to the Southern African Development Community.
3. Access an ample, adaptable and available workforce
As wages in leading garment and textile producing countries continue to rise, investors are looking for new economies which offer more competitive rates. Labour costs in Tanzania remain very competitive compared to those in other garment-producing Sub-Saharan countries.
In a survey for the 2012 UNIDO Tanzania Competitiveness Report, 83% of industrial firms said it was easy to find a suitable low-skilled workforce, and 66% of firms said it was easy to find a suitable medium-skilled workforce. In the World Bank’s Africa Competitiveness Report 2013, only 6.7% of firms in Tanzania said an ‘inadequately educated workforce’ was a problem for their firms – below the Sub-Saharan African average. Fewer firms in Tanzania report it as a problem than in competitor countries in North Africa like Algeria and Morocco and in Sub-Saharan Africa like Mauritius and South Africa. Skill levels are set to rise. The Government has backed a scheme, initiated by the Textile Development Unit, to educate a group of trainers to improve the skill level of supervisors and thus of operators working in the Tanzanian textile and garment sub-sector. This scheme, currently being piloted in Western Tanzania, is expected to be rolled out nationwide.
4. Reliable and competitive power costs
Power costs in Tanzania are cheaper than in most of the Sub-Saharan countries in Africa. The table below shows the power cost advantage Tanzania has over these countries:
5. Reduce time to market with exceptional global connectivity
- Existing deep-sea ports at Dar es Salaam, Mtwara and Tanga with frequent sailings
- New mega-port under development in Bagamoyo north of Dar ready in 2020, promised to be the largest in Africa when finished.
- Choice of international airports, with new terminal under construction in Dar es Salaam.
6. Invest with certainty with dedicated support in a stable and supported business environment
Dedicated technical unit to help apparel exporters locate and expand operations
- Attractive investment incentives.
- Tanzania Investment Centre – www.tic.co.tz.
- Export Processing Zones Authority – www.epza.go.tz.
- Politically stable democracy.
7. Look to the future with extensive infrastructural investment programme
- Developing new mega-port facility at Bagamoyo to be ready in 2020.
- Upgrading and extending national road network.
- Finishing new high capacity 3rd terminal at Julius Nyerere International Airport (DSM).
- Modernisation and extension of freight bearing rail network.