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Globalisation, AGOA Provide Tanzania Tremendous Opportunities

Published date:
Friday, 19 September 2003

Globalisation and America's Africa Growth Opportunity Act (AGOA) offer tremendous opportunities for the Tanzania economy.

This is according to the US Ambassador to Tanzania, Robert Royall, as told to scholars and businessmen who attended a seminar in Morogoro last week on how to export agricultural products to the US.

"Advances in technology bring us closer together," Royall said, adding that "the world becomes a smaller place; people and nations are more connected."

He said consumers can benefit from more affordable goods, while businessmen can benefit from wider markets. Labour benefits from increased employment and wages, even as farmers benefit from new customers.

Royall had it that this commerce loop can keep expanding, drawing all the countries of the world together.

The United States wants all countries to be in that loop, and the Embassy in Dar es Salaam is working to give Tanzanians a helping hand through AGOA, which is a door of opportunity. AGOA opens the door for African entrepreneurs and businessmen with duty-free exports of 6,000 different types of products to the US.

The envoy observed that Tanzania has a wondrous natural bounty of agricultural goods. "Now, I don't like to be play favourites; but the mangos grown here, I think, are the sweetest, the juiciest in the world. It's really not fair to the rest of the world that they'll never get to try a Tanzanian mango. Those need to be exported, at least in some form. Corn, pineapples, coconuts, cashews: all that you have an abundance here should be available in the US market.

The Embassy Commercial Section wants to link Tanzanian agricultural interests with US investors who can provide the knowhow and the capital to develop the country's agricultural potential.

The Tanzanian businessman has been characterised by excuses about the plight of Tanzania at a time when their neighbours are taking advantage of the opportunities globalisation and AGOA, Royall noted. The US agrees that trade distorting practices need to be phased out, and indeed has much lower trade barriers than its trading partner, something that is forgotten here in Tanzania.

The acting vice-chancellor of the Sokoine University of Agriculture, Peter Msolla, said the University, acting with NORAD support, has established a business Centre for conducting regular courses in agribusiness, entrepreneurship and agricultural products value-adding technologies.

"We do see this initiative evolving into a resource Centre for agricultural market information and trade," Msolla said.

Alfred Makemo of Techno-Combine, timber exporters, said the standards set by the US cannot be met by Tanzanian agro-processors unless US firms enter into partnerships with Tanzanian firms in order to boost the level of technology in agro-processing.

Makemo noted that agro-processing requires advanced and sophisticated technologies that Tanzanians lack.

Dr Amon Maerere from the SUA department of crop science and production said Tanzanian farmers can benefit by cultivating more vegetables and fruits for the US market. He said these crops are what is behind Kenya's success and, as they do not require huge investments, they can be grown by small holders.

According to the man, the products could have a competitive advantage for Tanzania and, hence, benefit from AGOA.

In that regard, the University is ready to help farmers and exporters in pest risk assessment for fresh Tanzanian fruits and vegetables, so as to enable them enter the US market.

Tanzania ranks among the smaller of United States' bi-lateral trade partners in sub-Saharan Africa (sSA). It is a net importer of US goods, and continues to record a trade deficit with the US. To-date, Tanzania has exported very little to the US under AGOA, including a very small quantity of agricultural products, and seems unlikely to start doing so in great measure in the short term.

Analysts says the country's trade deficit with the US is likely to continue growing, since imports from the US are growing steadily, while exports to the US continue to remain negligible.

The value of bi-lateral trade flows between Tanzania and the United States has remained fairly constant in recent years. In 2002, Tanzania recorded a trade deficit of $37 million (cf $36 million in 2001) with the US.

Tanzania's exports to the US are dominated by agricultural products, minerals and metals which, together accounted for over 84 per cent of the country's exports to the US in 2002. Imports by Tanzania consist of a variety of products, including transportation equipment, electronic products, textiles, apparel, chemicals and related products.

Ironically, while Tanzania has met the Wearing Apparel Provisions of AGOA, trade data for 2002 show very little exports to the US of textiles and apparel.

Tanzania qualified for the Wearing Apparel Provisions on February 4, 2002.

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