Dar dodges EPA to protect industrialisation, budget

Saturday July 16 2016

Tanzania may never sign Economic Partnership Agreements (EPA) deal so as to protect Chinese-brokered industrialisation plan and safeguard its national budget.

Sources privy to the issue within the Ministry of Industry, Trade and Investment confided to The EastAfrican that Dar es Salaam has declined to sign the deal that would turn the country into a source of raw material for European Industries.

On different occasions, Tanzanian officials have said that Dar es Salaam is reconsidering an earlier decision to make sure that it is done to the best interest of the country.

Susan Kolimba, Deputy Minister for Foreign Affairs, East African, Regional and International Co-operation, said Tanzania is only cautious on signing the EPAs and it has gone back to government discussions before it is deliberated.

“At this stage we cannot say we are will sign or not but we must make sure that we sign or decline to the best interests of our people…we are still discussing to the Government level,” she said.

Clarifying on contentious issues, Minister for Trade, Industries and Investment Charles Mwijage Tanzania concerned is that the EPAs proposed zero rate for all imported goods will put Tanzania on a losing end.


“Under the Common External Tariff of the EAC when you raw material you charge zero percent levy, while intermediate products attract 10percent and finished products are charge 25 per cent while under…all these will not be there under the EPAs; we have to discuss this and see how we can lose under these agreements,” he said.

Mr Mwijage said Tanzania's budget relies on levy from imported products hence committing a country on EPAs would mean that the government will miss the revenue and then impacts negatively on the national budget.

He said EPAs also propose the removal of export levy on raw material which means Tanzania will have to export its resources for free to Europe as its infant industries cannot absorb them.

Permanent Secretary Dr Aziz Mlima said earlier that the decision follows fear that the world can experience economic tremor following Britain’s exit to the EU.

“We think it is not the right time for us to sign the agreement. There are still contentious issues which need to be settled to ensure Tanzania is not turned into a source of raw materials and markets for European goods,” Dr Mlima noted.

According to Mr Mwijage, Britain is Tanzania’s biggest trade partner in Europe and its exit from EU makes the EPA deal almost useless.

“Internationally we trade with Britain, China, India and South Africa, when you don’t have Britain in a deal with Europe how would you taking it? We have to think it over and it can take any duration to decide,” he said.

Pundits say that Tanzania's reluctance to sign the EPAs is a protectionist move for its manufacturing industry that is expected to boom in a few years as a result of China’s financing Tanzania’s development vision that is geared towards industrialisation.

Tanzania is now in full swing to implement a China-brokered industrialisation plan that hopes to get funding from the Chinese government’s allocation to Africa.

Investment will be based on agro-processing value addition industries.

According to information from the Chinese Embassy in Dar es Salaam, Tanzania had sent a delegation led by former president Jakaya Kikwete to negotiate deals geared towards the needs of Tanzania's industrialisation and that “most of the proposals were accepted”.