Data Collection Survey on Promotion of Agro-industry and Industrial Human Resource ...

230 Pages·2014·1.25 MB·English

Data Collection Survey on Promotion of
Agro-industry and Industrial Human
Resource Development in Tanzania
FINAL REPORT
October 2014
Japan International Cooperation Agency (JICA)
International Development Center of Japan Inc.
T Z
Overseas Merchandise Inspection Co., Ltd. J R
14-001
Data Collection Survey on Promotion of
Agro-industry and Industrial Human
Resource Development in Tanzania
FINAL REPORT
October 2014
Japan International Cooperation Agency (JICA)
International Development Center of Japan Inc.
(cid:16119)(cid:16067)(cid:16125)
Overseas Merchandise Inspection Co., Ltd. (cid:16109) (cid:16117)
(cid:16084)(cid:16087)(cid:16080)(cid:16083)(cid:16083)(cid:16084)
Exchange Rate
October 2014
USD 1 = ¥ 109.45
Tsh. 1 = ¥ 0.066
(JICA Rate)
Disclaimer

Use and dissemination of this report is encouraged; however, the JICA requests due
acknowledgement and a copy of any publication for which this report has provided input. The
views expressed in this report are those of the International Development Center of Japan and
do not necessarily represent the official position of JICA.
Data Collection Survey on Promotion of Agro-industry
and Industrial Human Resource Development in Tanzania

Draft Final Report

Table of Contents

Abbreviations and Acronyms

EXECUTIVE SUMMARY ........................................................................................................ i
CHAPTER 1: INTRODUCTION ............................................................................................. 1
1.1 OUTLINE OF THE STUDY ............................................................................................... 1
CHAPTER 2: AGRICULTURAL PROCESSING AND MARKETING .................................... 7
2.1 DATA COLLECTION OF THE PRODUCTION, EXPORTS AND IMPORTS ................................... 7
2.2 AGRICULTURAL PROCESSING AND MARKETING (VALUE CHAIN ANALYSIS OF SAMPLE
PRODUCTS) ............................................................................................................... 10
2.3 AGRICULTURAL INPUTS .............................................................................................. 25
CHAPTER 3: AGRICULTURE AND BUSINESS FINANCE ................................................. 29
3.1 FINANCIAL LANDSCAPE OF TANZANIA ......................................................................... 29
3.2 PRESENT SITUATION AND CONSTRAINTS ASSOCIATED WITH AGRICULTURE FINANCE ........ 40
3.3 PRESENT SITUATION AND CONSTRAINTS ASSOCIATED WITH BUSINESS FINANCE TARGETING
AGRO-PROCESSING INDUSTRIES .................................................................................. 47
CHAPTER 4: AGRO-INDUSTRY PROMOTION MEASURES ............................................ 55
4.1 SUPPORTIVE MEASURES FOR AGRO-INDUSTRY .............................................................. 55
4.2 LANDSCAPE OF LOCAL AGRO-INDUSTRY ...................................................................... 62
4.3 REVIEWS OF COOPERATION PROGRAMMES BY DEVELOPMENT PARTNERS ......................... 72
CHAPTER 5: INDUSTRIAL HUMAN RESOURCE DEVELOPMENT ................................ 81
5.1 BACKGROUND ........................................................................................................... 81
5.2 CURRENT STATUS AND CHALLENGES FOR INDUSTRIAL HUMAN RESOURCE DEVELOPMENT 83
5.3 KEY INSTITUTIONS AND CURRENT STATUS OF COOPERATION FOR TVET ....................... 101
CHAPTER 6: CONCLUSION ............................................................................................. 107
6.1 AGRO-INDUSTRY PROMOTION: FINDINGS AND RECOMMENDATIONS .............................. 107
6.2 INDUSTRIAL HUMAN RESOURCES DEVELOPMENT: FINDINGS AND RECOMMENDATIONS ... 119

APPENDIX ......................................................................................................................... A-1
Abbreviations and Acronyms

3ADI: African Agribusiness and Agro-industry Development Initiatives
ACT: Agricultural Council of Tanzania
AfDB: African Development Bank
AGITF: Agriculture Input Trust Fund
AMCOM: Agricultural Market Cooperative Societies
ASDP: Agricultural Sector Development Programme
ASDS: Agricultural Sector Development Strategy
ATC: Arusha Technical College
BDG: Business Development Gateway
BDS: Business Development Service
BOB: Bank of Baroda
BOT: Bank of Tanzania
BOT: Build Operate and Transfer
BRELA: Business Registration and Licensing Authority
CAD: Computer-aided Design
CBE: College of Business Education
CEO: Chief Executive Officer
CEZOSOPA: Central Zone Sunflower Oil Processors Association
CIP: Comparative Industrial Performance
CNC: Computerized Numerical Control
Co., Ltd.: Company Limited
CRDB: CRDB Bank
CTI: Confederation of Tanzania Industries
DANIDA: Danish International Development Agency
DB: Doing Business
DBSA: Development Bank of Southern Africa Limited
DFATD: Department of Foreign Affairs, Trade and Development, Canada
DIT: Dar es Salaam Institute of Technology
DP: Development Partner
DRC: Democratic Republic of Congo
DSM: Dar es Salaam
DTB: Diamond Trust Bank
EAC: East African Community
EMC: Engineering, Manufacturing and Construction
EU: European Union
FAO: Food and Agriculture Organization
FMM: Federation of Malaysia Manufacturers
FSDT: Financial Sector Deepening Trust
FYDP: Five Year Development Plan
GDP: Gross Domestic Product
GOT: Government of Tanzania
GREEN: Global action for Reconciling Economic Growth and Environmental
Preservation
HEST: Higher Education, Science and Technology
HP: Horsepower
HRDF: Human Resources Development Fund
ICT: Information and Communication Technology
IFAD: International Fund for Agricultural Development
IFC: International Finance Corporation
IFPRI: International Food Policy Research Institute
IGC: International Growth Centre
IIDS: Integrated Industrial Development Strategy
ILO: International Labour Organization
Inc.: Incorporated
ISCED: International Standard Classification of Education
ISCO: International Standard Classification of Occupations
ISIC: International Standard Industrial Classification
ISO: International Organization for Standardization
ISOs: Industrial Support Organizations
IUMP: Industrial Upgrading and Modernization Project
JBIC: Japan Bank for International Cooperation
JICA: Japan International Cooperation Agency
KCB: Kenya Commercial Bank
KOICA: Korea International Cooperation Agency
LLPTI: Leather and Leather Products Technology Institute (Ethiopia)
MAFC: Ministry of Agriculture, Food Security and Cooperatives
MFI: Microfinance Institution
MIC: Middle Income Country
MIT: Ministry of Industry and Trade
MIVARF: Marketing Infrastructure, Value Addition and Rural Finance Programme
MLFD: Ministry of Livestock and Fisheries Development
MoEVT: Ministry of Education and Vocational Training
MUST: Mbeya University of Science and Technology
MUVI: Muunganisho wa Ujasiriamali Vijijini
MVA: Manufacturing Value Added
NACTE: The National Council for Technical Education
NAIVS: National Agricultural Input Voucher Scheme
NBC: National Bank of Commerce
NBS: National Bureau of Statistics
NGO: Non-governmental Organization
NMB: National Microfinance Bank
NPL: Non-performing Loan
NTA: National Technical Award
NVA: National Vocational Award
NVTI: Nakawa Vocational Training Institute
OD: Ordinary Diploma
ODOP: One District One Product
OJT: On-the-Job Training
OSHA: Occupational Health and Safety Authority
PASS: Private Agriculture Sector Support
POPC: President's Office, Planning Commission
SACAW: South Africa Council of Confederation of Agriculture
SACCOS: Savings and Credit Co-operatives
SADC: Southern African Development Community
SAGCOT: Southern Agricultural Growth Corridor of Tanzania
SDL: Skill Development Levy
SIDO: Small Industries Development Organization
SME: Small and Medium Enterprise
SUA: Sokoine University of Agriculture
TADB: Tanzania Agricultural Development Bank
TBS: Tanzania Bureau of Standards
TCCIA: Tanzania Chamber of Commerce, Industry and Agriculture
TCU: Tanzania Commission of Universities
TDC: Technology Development Centre
TELMS: Italia-Tanzania Technical Education and Labour Market Support Programme
TEMDO: Tanzania Engineering and Manufacturing Design Organization
TET: Technical Education and Training
TFDA: Tanzania Food and Drugs Authority
TIB: Tanzania Investment Bank
TIC: Tanzania Investment Centre
TIN: Taxpayer Identification Number
TIRDO: Tanzania Industrial Research and Development Organization
TLO: Technology Licencing Office
ToT: Training of Trainers
TPSF: Tanzania Private Sector Foundation
TVET: Technical and Vocational Education and Training
TVETDP: Technical and Vocational Education and Training Development Programme
UNIDO: United Nations Industrial Development Organization
URT: The United Republic of Tanzania
UUT: Upgrading Unit of Tanzania
VET: Vocational Education and Training
VETA: Vocational Education and Training Authority
VSO: Voluntary Service Overseas
WB: The World Bank
WRS: Warehouse Receipt System
EXECUTIVE SUMMARY

1 Introduction
Entering the 2000s, Tanzania has experienced a steady economic development. Yet
the poverty rate remains still high, and the efforts for poverty reduction have not seen
significant improvement so far. The poverty in Tanzania largely stems from that of rural
areas, and the growth in the agricultural sector, in which three quarters of the working
population are engaged, is the key for poverty reduction. The Government of Tanzania
(GOT) in Tanzania Mainland has set the policy for modernization and commercialization
of agriculture; however, the progress has not been highly satisfactory.
Looking at the manufacturing sector, most of the manufacturers are micro and small
enterprises. Thus, raising the levels of micro, small and medium enterprises is significant
to induce further development and attract both foreign and domestic investments in the
sector. On the other hand, those enterprises have not had enough opportunities to gain
financial supports and business development services such as advice on technological
development and business management. In addition, the absence of proper human
resource development system in the sector hampers the growth of the industry.
Against this backdrop, this study aims at understanding the current situation of
agro-industry promotion and analysing its challenges in order to consider possible future
supports in the sector. In addition, the study also collects data on the current situation
and the needs of industrial human resource development to examine possible
interventions.
The study was conducted with the following procedure. First, the study team
identified high potential agricultural commodities and conducted their value chain
analysis to clarify the areas of intervention. Second, the team collected the data on
present situation and constraints of agriculture and business finance as well as
agro-industry promotion. Third, the team collected the data on present situation and
constraints of industrial human resource development with focus on the manufacturing
sector to understand the skill development needs. Finally, the team consolidated the
findings and recommendations in terms of agro-industry promotion and industrial human
resource development.

i
2 Agricultural Processing and Marketing
2.1 Data Collection of the Production, Exports and Imports
Food self-sufficiency in Tanzania has almost been achieved. However, the
production is vulnerable to the weather largely due to its rain-fed agriculture system.
Food deficiency is caused in the rural areas, because of the difference in their production
yields and poorly developed infrastructure for agricultural marketing. The northern
areas in Tanzania plunged into food shortage in 2010/2011 due to the short rainfall during
the rainy season. The production trends of major agricultural products in Tanzania show
significant increases for every crop except cassava, which decreased 0.88-fold from the
amount in 2008/09 to that in 2012/13. Both maize and rice, major staple foods,
increased 1.6-fold and sunflower seed and sesame increased significantly.
Traditional export crops such as cashew nuts, tobacco, dried peas, coffee and cotton
occupy top positions in the export items of agricultural products every year. Sesame
shows a rapid increase in export due to global demands for sesame seed in recent years.
The export of processed agricultural products from Tanzania includes by-products such as
bran of wheat and maize, cake of cotton and soybean seed, and cotton lint, but these
products are not highly value added ones.
Though there are some variations in import amount by year, it can be estimated that 1
million tons of wheat, 200,000 tons of palm oil and 100,000 tons of refined sugar are
continuously imported annually in Tanzania. Other constant imported products are
barley and malt for beer production. Rice is also imported occasionally, but not in every
year.
The import situations for major agricultural and processed agricultural products in
neighbouring countries are very much similar to those to Tanzania; namely wheat,
vegetable oil such as palm oil and refined sugar occupy the high position in every year.
Kenya and Mozambique import some amount of rice every year. Thus, it is apparent
that the strategy to challenge the development of agricultural and processed agricultural
products for Tanzania is to increase sugar and sunflower oil production as import
substitutes and rice for export promotion to neighbouring countries.

ii