Enhancing productive capacities in the United Republic of Tanzania: A coherent and operational strategy

Tanzania is confronted with the daunting task of developing productive capacities and transforming the structure of its economy in a rapidly changing global environment characterized by, among others, rapid technological progress, the phenomenon of global value chains, climate change, the shift in global economic power, and constraints on the use of trade policy instruments to foster industrialization and other national development goals.

These challenges have now been compounded by the coronavirus (COVID-19) pandemic which became evident in the first quarter of 2020 and has led to massive infections and deaths, disrupted trade and investment flows, and triggered a global recession in 2020.

It is evident that to effectively cushion the effect of the pandemic in Tanzania and ensure that it does not jeopardize the achievement of national development goals, there is a need to build resilience to shocks through the development of productive capacities. To this end, there is the need for the government to place the development of productive capacities at the center of current and future development policies with a view to laying a solid and robust foundation for sustained and inclusive growth.

Against this background, this report presents a coherent and operational strategy for the development of productive capacities in Tanzania. The phrase "operational strategy" for the development of productive capacities is used in this report to refer to a set of country-specific policies and an action plan designed to support and achieve the goal of productive transformation in an economy.

The operational strategy presented here revolves around six pillars:

  1. Setting clear and realistic goals and targets.
  2. Lifting core binding constraints to the development of productive capacities in the country.
  3. Addressing issues of policy incoherence.
  4. Harnessing gender potential for productive transformation.
  5. Developing, promoting and diversifying exports.
  6. Making regionalism work for productive transformation.

Under the core pillars identified, the report highlights and discusses strategic policy measures and an action plan to enhance the development of productive capacities in Tanzania.

The report also provides insights into two issues that are vital to the effective implementation of the strategic measures and action plan proposed. The first is the importance of having an effective resource mobilization and allocation strategy and the second is the need to have a credible system for monitoring and evaluating the implementation of proposed policy actions.

This Report is one of the main outputs of the 12th Tranche UN Development Account Project on "Coherent Strategies for Productive Capacity Development in African Least Developed Countries" which was launched in the first quarter of 2020 and is being implemented in Burkina Faso, Rwanda and Tanzania.