Industrial development, exports and foreign direct investment (FDI) are the cornerstones of modern statehood. Any country that lacks these components risks remaining a “banana republic” for years to come. To stay relevant and competitive, every nation needs robust industrialisation, a thriving export sector and steady inflows of FDI.
Over the past decade, Export Processing Zones (EPZs) have accelerated Tanzania’s industrialisation, boosted export capacity, attracted FDI and created jobs. Domestic EPZs have drawn more than US $3 billion in capital investment and generated in excess of US $2.5 billion from export-oriented projects. They have created over 60,000 direct jobs and some 100,000 indirect positions across more than 250 registered factories in agriculture, mineral processing and manufacturing. Notably, more than 70 per cent of Tanzania’s exports to the United States under the African Growth and Opportunity Act (AGOA) originate from EPZs.
Yet EPZs still face significant constraints: inadequate infrastructure, too few ready-to-use industrial buildings, poorly integrated industrial clusters and weak linkages to the domestic economy. At the Benjamin Mkapa EPZ, for example, enterprises range from textiles and garments to smart-card production, coffee processing and sports-equipment manufacture – without the synergy that true clustering can offer.
EPZ operations too often fail to intersect meaningfully with the wider economy. Consider Tanzanite: Although Tanzania is the world’s sole source of this rare gemstone, India is the leading exporter because Jaipur’s cutting and polishing industry adds the value before re-export. The required skills are far from esoteric. Why not bring experienced instructors—perhaps from India—to teach gem-cutting in our Vocational Education and Training Authorities (VETAs), enabling Tanzanite processing to take place within Tanzanian EPZs?
A model worth emulating is Morocco’s Tangier and Kenitra Processing Zones, strategically interconnected around the automotive and electric-vehicle industries. The entire supply chain—from battery assembly to car upholstery—is on-site, and Morocco is widely recognised for running one of Africa’s most successful EPZ systems.
If textiles and garments are to form a viable cluster within the Benjamin Mkapa EPZ, the zone should host factories producing finished garments alongside facilities for textile printing, weaving and spinning, as well as plants manufacturing buttons, sewing thread and other inputs. Tanzania would do well to take a leaf out of Morocco’s book and plan for cluster-linked EPZs.
Infrastructure inside and around EPZs also demands urgent attention. Many zones suffer from poor road access, unreliable electricity and inadequate water supply. Government investment in last-mile infrastructure and a guaranteed 24/7 utility service would help avert costly production disruptions.
The importance of EPZs cannot be overstated, and the Government must address these challenges so the zones can operate at peak efficiency. Tanzania currently hosts 23 EPZs – 11 publicly owned and 12 privately owned.
