Tanzania-China logistics centre to widen trade ties

The establishment of Tanzania and China logistic centre at Kurasini area in Dar es Salaam is set to put new records of increased trade volume between the two countries as well as addressing the long-lasting inflow of substandard goods.

Minister for Industry and Trade Dr Abdalah Kigoda

Available records from the China’s Ministry of Commerce shows that trade volume between the two countries last year ballooned to 3.7 billion US dollars in the favour of China while Tanzania exports went home with only 600 million US dollars, equivalent to 45 per cent increment compared to previous years.

Winding up the budget estimates for the 2014/15 fiscal year in Dodoma last month, the Minister for Industry and Trade, Dr Abdallah Kigoda, told National Assembly that the government has already set aside funds for compensation, to pave way for the project to takeoff as soon as possible.

The envisaged business hub which is expected to serve both East and Central African countries will have positive economic impacts in terms of more revenues generation to the government and creation of jobs. For example, about 30,000, both direct and indirect jobs will be created.

The fast tracking of over 600bn/- worth project is expected to bring China’s Guangzhou to Dar es Salaam to make it an economic hub for many land locked countries.

“It will obviously push up trade volumes between the two nations as well as lessening trade imbalances because the business facility will also comprise of an industrial part for value addition to agriculture produce,” he said.

Tanzania main exports to China include agricultural produce, hide and skins and forests products unlike other African countries which have trade surplus from oil and minerals exports.

The hub’s construction is expected to be done in two phases and upon its completion, will also comprise of trading centres, wholesale markets, warehouses, exhibition and conference centres.

When completed, the facility would offer a common entry point for Chinese imports for Tanzania and the region. The 61 acres plot is close to the Dar es Salaam Port, is suitably located for the establishment of a huge business centre.

The Ministry of Industry and Trade, Information and Communication Officer, Mr Nicodemus Mushi said importers of Chinese goods have been facing challenges as consumers complaining of substandard quality, a drawback hard to control as importers seek cheaper goods from China rather than established brands.

With the business facility, he said the brand goods will be imported directly from main Chinese business centres such as Yiwu City and Quanzour to Kurasini warehouses, where whole and retail business operators would be able to readily obtain quality goods.

“Goods will be screened at the port before and after offloading. They would then be moved to logistic warehouses distinct from imports of non-brand goods and substandard products.

The brand goods will be ferried to Dar port, inspected by the respective agencies and moved to warehouses at the Kurasini Centre, with traders purchasing at the Centre and hauling their wares to their respective destinations,” he further said.

The proposed Centre is expected to accommodate services by various authorities to facilitate the processing of clearance of goods, grouping agencies like the Tanzania Revenue Authority (TRA), police, banking services, airline services, residential apartments, tourism services and tourist hotels.

“The new Centre will improve the business environment, as goods can be collected after being paid for in clearance taxes at one point,” he added. “The project is basically set to benefit the local population. With considerable support from the Chinese government, this will allow foreign and local investors to make fully-processed or semi-processed goods for the world market.”

He said the project is also expected that this method would reduce the need for foreign exchange to procure quality goods, as they would be availed within the country. Business with the neighbouring countries will grow where countries like Uganda, Rwanda, Burundi, DRC, Zambia, Malawi, and even the Comoros and Seychelles which could trade directly from the facility in Dar es Salaam.

The Dar es Salaam port which has been facing a drifting away of importers from neighbouring countries due to excessive official bureaucracies, leading to high waiting charges and sluggish performance. “It is hoped that when the Logistics Centre project is up and running, the port would then become the focal point of importers again,” he said.

Instead of losing foreign exchange, Tanzania stands to benefit, traders from other countries would have their goods shipped through Dar es Salaam port. Also, traders from other countries could come shopping at the Logistics Centre using foreign currency, thereby further boosting the country’s economic growth.

The Centre will provide zones for establishing manufactories for export to countries like China, India, Thailand and Indonesia where beans and similar produce have considerable market uptake.

“The new Centre will improve the business environment, as goods can be collected after being paid for in clearance taxes at one point,” he added.

The project is thus, set to benefit the local population because with support from the China government it will allow foreign and local investors to make fully-processed or semi-processed goods for the world market.

Source:  Tanzania Daily News