Effective rate of protection in Tanzania’s industry

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University of Dar es Salaam
The role of production in the process of industrialization has been a subject of extensive discussion in economic literature, but the general opinion has been that, protection has a significant role to play in industrial growth particularly at early stages of industrialization. In view of this understanding, many governments have understaken to adopt and institute various protection measures with a view ct provide a conducive framework for domestic industrial development. However, while protection has generally been accepted as an important element in the process of industrialization, on the other hand it has been shown that if not properly designed and used, it any lead to industrial distortions and inbalances. The purpose of this study has been to analyse the role and effects of protection in Tanzania’s industry. Specifically we have analysed the protective effects of the tariff structure on the pattern of investment and industrial growth in Tanzania’s in the light of the on going outlined in the longer industrial Plan (1975-1995). In this study, we have used the 1976 input-output table of Tanzania to pbtain data value added and input coefficients, unlike earlier studies done by D. Kessel (1966) and J. Rweyemamu (1973), both of whom used Kenya’s input-output table, as well as J. Semboja (1977) and V. Gibogwe who both used the “derived approach” to obtain free trade coefficients to evaluate ERPs in Tanzania. The results of our investigation has shown that Tanzania’s tariff structure has tended to perpetually encourage the development of the consumer goods sector and thus discriminating against the intermediate and capital goods sector by according greater protection to the former sector than the later. In addition we have seen that the tariff structure has also tended to encourage greater use of imported raw materials and inputs in the domestic industry as a result of the low tariff rates imposed on these imports. This tendency if allowed to persist may frustrate efforts geared towards reducing dependence on foreign suppliers of raw materials and inputs. The tendency to discriminate against the development of the capital and intermediate sectors and to encourage continued dependence on imported raw materials and inputs is certainly a contradiction to the stated objectives of the basic industry strategy as outlined in the Longterm Industrial Plan. In the light of these observations, a restructuring of the tariff structure in Tanzania in order to reverse the situation, has been recommended.
Available in print form, EAF Collection, Dr. Wilbert Chaguala Library, (THS EAF HD3616.T3.N3)
Industry, Tanzania, Tariff-Tanzania
Ngiliule, P.B.C (1986) Effective rate of protection in Tanzania’s industry, Masters dissertation, University of Dar es Salaam, Dar es Salaam