THE RISE AND FALL OF TEXTILE INDUSTRY IN TANZANIA AND ITS REASON
In history of textile Industries in Tanzania there was no problem but untill leadership change made be worsted ,history of textile industry and problem faced it has elaborated as shown down
Prior to economic reforms of early 1990s, the textile sector was thriving well. But faced with the withdrawal of government support, removal of trade barriers, and international competition, it soon the textile industry collapsed. Industries such as Mbeya Textiles, Musoma Textiles, and Mwanza Textiles went out of operation.
Manufacturing plants were sold off by the government to private investors, who have rebuilt the industry since the early 2000's. Much of the equipment bought at this stage was antiquated and inefficient, making it difficult for these companies to be internationally competitive; a major constraint they face up to the present.
Indeed, where companies have upgraded or replaced their equipment, it has inevitably been second- or third-hand, and for the most part globally uncompetitive, leaving the industry under great pressure and at considerable risk.
The collapse of the textile industry was due to inadequate supply of cotton lint, lack of power/power interruptions, high power tariffs, unfair competition from imports, and devaluation of Tanzania shilling, hence making it difficult to buy spare parts for the machines.
Today the textile industry is owned and operated by the private textile companies. Currently, there are 59 industries located in different parts of the country, 36 of which are based in Dar es Salaam. A few of these industries are those that were privatized by the government.
The government of Tanzania is trying hard to create a favourable investment climate for the textile industry, but the sector is still performing poorly and hence not contributing significantly to the country’s economy. Homemade textiles are of poor quality but very expensive as compared to those imported from other countries. As a result, most buyers have turned their attention towards purchase and use of second-hand clothes (mitumba) which are durable but affordable.
Problems facing the textile industry in Tanzania
- Outdated machinery:The machinery in most of the textile-manufacturing industries is old. Therefore, the final products manufactured by these industries are of low quality and thus not competitive in the market, both locally and internationally. These machines also have limited capacity which, in turn, limits production.
- High cost of power:The cost of power in Tanzania is considerably higher compared to other countries. This leads to high production costs and, consequently, high prices for textile products. Given that the products are generally poor, they are hence hardly sellable.Through power is very costly, it is also not supplied adequately and persistently mainly because of obsolete transmission system, drought and high oil prices, among others. This problem discourages many investors who would like to invest in the textile industry.
- High cost of spare parts:The cost of spare parts for textile machinery is very high. Sometimes these spare parts are not available in the market because the technology is old and outdated. Most manufactures have stopped manufacturing such spare parts. In addition, carrying out repairs for textile machinery is a very expensive task.
- Lack of skilled labour:The lack of skilled labour in Tanzania prompts dependency on imported labour and skills which are very expensive. Sometimes when machinery breakdown occurs, the operation has to be halted until the imported skilled labour is available to fix it. This leads to stoppage of production and hence, financial losses.
- Competition:The industry faces tough competition from second-hand clothes, known as mitumba, and high quality clothes imported from other countries. Due to this reason, the existing small market has considerably diminished the textile market even further.
- High taxes:Tanzania is one of the countries with many meaningless taxes. The high taxes levied on the textile industry by the government leads to low profits, a heart-breaking challenge to investors.
- High cost of chemicals: he chemicals used in the textile industry, such as sulphuric acid, are imported from abroad using the foreign currency. This, plus other reasons, makes the textile industry unprofitable and thus a difficult business to operate. Imports add highly to operation costs in the textile sector.
- Low capital:Many textile industries operate with limited capital which greatly curtails their abilities to increase production capacity, improve their machinery, or purchase raw materials and industrial chemicals.
- Poor infrastructures:Tanzania is among the countries with very poor transport and communication infrastructures. The poor state of infrastructures means increased transport cost of raw materials from production areas and finished goods from industries to consumers. High production costs lowers the profit margin and hence the capability of industries to operate in a sustainable manner.
- Poor management:The development of the manufacturing industry was previously hampered by poor and horrible management practices. The rate of corruption and poor management is still rampant in this country, a fact that makes it hard for companies with big financial muscles to come and invest in Tanzania in various sectors of the economy
- Textile industrial generally lacked the reason that are strong for establishment of industries, low capital,lack skilled labor, comptetive that's are strong in establishment o f any industries.
