A man works at a butane gas cylinder factory in Abidjan, Cote
d'Ivoire. Skills shortages and low ambition makes Tanzania one of the
hardest places to invest, according to recent research. PHOTO | AFP
In Summary
For it to deliver and realise its potential,
development and growth experts say it has to quickly address inherent
shortcomings and deficiencies that dent productive activities and hold
back efforts to improve livelihoods.
Dar es Salaam. The poor performance of the
national economy and its low levels of productivity have been cited as
major factors that limit Tanzania’s prosperity and make the country less
appealing to investors.
For it to deliver and realise its potential,
development and growth experts say it has to quickly address inherent
shortcomings and deficiencies that dent productive activities and hold
back efforts to improve livelihoods.
According to them, it is only when the economy
becomes efficiency-driven and propelled by innovation will Tanzania be
able to effectively exploit the abundant resources that it is endowed
with.
And that is the surest way to catapult majority
people from abject poverty and make the country a competitive economy
regionally and in the world, they add.
“Tanzania’s productivity problems, which greatly
affect its competitiveness emanate from the fact that it is a
factor-driven economy as opposed to being efficiency-driven or
innovation-driven,” noted researcher Johansein Rutaihwa, who was
involved in the preparation of the Global Competitiveness Report (GCR)
2013-2014.
As a factor-driven economy, he explained, the
country is still characterised by an unskilled labour force, the buying
and selling of natural resources, low productivity and low wages.
Modern and competitive economies are the opposite
of that, which were major features of production during the industrial
age in the 19th century.
The World Economic Forum (WEF) whose Global
Competitiveness Index (GCI) rates Tanzania 125th out of the 148
countries surveyed says highly innovative countries with strong
institutions continue to top international competitiveness ranking.
In these economies such as Switzerland, Singapore
and Finland that rank first, second and third respectively key aspects
are business sophistication.
“Innovation becomes even more critical in terms of
the economy’s ability to foster future prosperity,” argues WEF founder
and executive chairman Klaus Schwab.
“I predict that the traditional distinction
between countries being ‘developed’ or ‘less developed’ will gradually
disappear and we will instead refer to them much more in terms of being
‘innovation rich’ vs. ‘innovation poor’ countries.
It is therefore vital that leaders from business,
government and civil society work in collaboration to create education
systems and enabling environments which foster innovation.”
Mr Rutaihwa’s proposals on how to deal with Tanzania’s
productivity problems and enhance its competitiveness include provision
of support and incentives for research and development activities.
He is also of the view that Tanzania should
promote innovation and creativity by investing adequately in manpower
development and education.
He said the government has a big responsibility on
Tanzania’s competitiveness, including making more transparent policy
making and encouraging policy dialogue.
It should be more business friendly by
re-engineering systems and procedures to be more responsive and reduce
bureaucratic red tape that hinders business efficiency.
“Efforts should also focus on increasing
accountability and integrity of public services,” said the GCR survey
team leader in the country.
The GCI is computed on the basis of 113
indicators, which are organis ed into 12 pillars each of which is
considered to be an important driver of productivity and prosperity.
The indicators and pillars are diagnostic tools
which highlight the strengths to build on, as well as the challenges
that must be overcome, for a country to be productive, prosperous and
globally competitive.
Treasury expert John Mashaka said Tanzania’s drop
from position 120 on last year’s GCI should not be cause for alarm,
neither should it translate into some kind of diminished
competitiveness.
Instead, it means that as a nation the country
faces challenges that need to be addressed such as a wanting education
system, low level of technological readiness, poor health indicators and
high levels of communicable diseases.
The US-based expert said it took the most
competitive nations such as Switzerland, Sweden and the US hundreds of
years to be where they are today.
Being a young vibrant economy, he explained,
Tanzania was poised to raise its profile on the basis of having some of
the best and liberal economic policies in Africa and one of the
continent’s fastest growing economies.
“With its abundant natural resources, Tanzania is
poised to be Africa’s most competitive country in the next two decades
if proceeds from the natural resources are channelled into the right
areas.
Improving the country’s education system, infrastructure, ICT and
employment sectors can make it rival and overtake some of the Asian
giants,” he noted.
SOURCE: THE CITIZEN
