Assessment of implication of bilateral trade between Tanzania and south Africa

Bilateral trade relation between Tanzania and south Africa has existed for more than 10 years and the objective of this study is to assess and explain whether and how this bilateral trade relation has resulted into nation welfare of most Tanzanians. Moreover, this study is to see if it is an ideal time to engage into more trade relations with other countries and if they can improve the welfare of Tanzania. Findings of the study revealed that one of the most important observations is that there is trade imbalance, the difference between the monetary exports and imports of Tanzania to/from south Africa shows negative trends, and this means Tanzania exports are little than its imports from south Africa. A good example shows Tanzania exports leather products to south Africa of about USD 0.1 million while south Africa export leather to Tanzania of about USD 8.7 million and Tanzania exports textile product to south Africa worth USD 0.2 million while south Africa export to Tanzania textile products worth USD 8.2 million. This is due to poor strategies of Tanzania export promotion. Furthermore, the effectiveness in increasing trade performance for Tanzania has been lower than possible; low capacity to increase production of various commodities and weak initial position for Tanzania to meet international trade required standards are the main constraints. Opportunities from trade arrangements are generally not transmitted to the producer/traders; neither is there a system of follow-up on their implementation. This implies that most of the initiatives in trade arrangements are hinged more than on political than economic basis; and are not very clear to public and private sector.