An analysis of productivity trends in the Tanzania forest industry: a case of Tembo Chipboards and Fibreboards Africa Limited Companies

Industrialization is associated with accelerated economic growth, productivity and technological change. Tanzania like many other countries undertook industrialization after independence in 1961. The Tanzanian manufacturing sector has however showed fluctuating upward and down ward trends caused by under utilization of the productive capacity, electricity shortages, aged machinery and scarcity of foreign exchange. This study attempted to estimate and analyze total productivity trends in the Tanzanian forest sector and its determinants. Within the forest sector, the study concentrated on two case study firms i.e. M\S Tembo Chipboards Ltd and Fibreboards Africa Ltd. Using both qualitative and quantitative analyses the study established that capacity utilization, working capital availability, the age of the machinery, capital intensity and workers education were important determinants. The study however concluded that, all these determinants have a close relationship with capacity utilization. The study ended by discussing the results and charting out the various policy implications relating to the theory of productivity. Most of the policy issues discussed have some applications in the current national reforms Tanzania is undertaking with a view to transform the public enterprises to private ownership