Tanzania has relaxed a ban on importation and use of plastic bags for horticultural exports to save the country’s third-largest foreign currency earner from collapse.
A letter from the Tanzania Bureau of Standards (TBS) exempts exporters of horticultural produce from the ban imposed on plastic bags between 30 and 65 microns thick.
The decision was reached at the end of October after the Tanzania Horticultural Association (Taha) sought an exemption, expressing fear that the ban could destroy the $350 million industry.
The association’s executive director, Jacqueline Mkindi, wrote to the government saying that the industry was in crisis following the ban, with nearly 35,000 tonnes of cut flowers rotting in cold rooms for lack of packaging material.
The 30 microns thick plastic bags are the international standard for packaging cut flowers for export.
The government reportedly rescinded the ban upon realising that it went against the Tanzania Investment Act of 1997, which guarantees all investors consistent investment policies.
“Since horticultural exporters are bona fide investors, they ought to enjoy investment guarantees, particularly a predictable investment climate and consistent policies provided under the TIC Act number 26 of 1997,” a source said.
The Taha policy and advocacy manager, Antony Chamanga, told The EastAfrican the association had received the TBS exemption letter in late November.
“We are very grateful to the state for being considerate, otherwise we could lose a substantial number of investors,” Mr Chamanga said.
The ban would have hurt not only the horticultural industry, but also the government drive to woo investors, many of whom were sensitive to inconsistencies in policy.
Following the ban on plastics, a number of foreign investors in cut flowers were considering moving their capital and equipment to neighbouring countries, rather than operate at a loss in Tanzania.
The flower sub-sector is mainly based in Arusha and Kilimanjaro regions, where there are over 20 farms covering 200 hectares. The majority of them were established 20 years ago by foreign investors, employing nearly 6,000 locals.
In recent years, the Tanzanian horticulture industry has seen an 8-10 per cent increase in growth, making it the fastest-growing sub-sector of the national economy.
Horticulture, the third major foreign currency earner after minerals and tourism, has in the past three years brought home nearly $990 million. The sub-sector also employs nearly 350,000 local people, mostly unskilled labour.
In 2009, the industry earned a total of $310 million, while in 2010, it fetched the country $330 million and the year 2011, $350 million.
Ms Mkindi told The EastAfrican in an earlier interview that due to the ripple effects of the Eurozone debt crisis, the industry has trimmed its 2012 earnings forecast from $380 million to $358 million.
Last week, Taha received a $4 million grant from United States Agency for International Development’s Feed the Future Initiative to develop Tanzania’s horticulture sector.
Specifically, Taha will promote the Southern Agriculture Growth Corridor of Tanzania Centre, a region identified by the government of Tanzania as having significant potential for horticulture.
Since 2004, Taha has provided technical support, market analysis, and political advocacy services to a wide range of Tanzanian businesses in the sector.