INVESTMENT OPPORTUNITIES IN THE COTTON, TEXTILES, AND GARMENTS INDUSTRY IN TANZANIA - AUGUST 2019
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INVESTMENT OPPORTUNITIES IN THE COTTON, TEXTILES, AND GARMENTS INDUSTRY IN TANZANIA AUGUST 2019
This investment brief has been built based on ~35 stakeholder interviews
conducted with key players across the cotton, textiles, and garments value chain
Production Ginning & Yarn Fabric Final Product/ Garment Buyers Government/
Processing Processing Manufacturing Associations
Completed • Chato Ginning • Urafiki Tanzania Global • Prime Minister’s
Cooperative • Olam • 21st century • Mazava • Zara (Inditex) Office (PMO)
Union (CCU) • Alliance • Sunflag • Tooku • Ex-PVH contact • Textile and
• Ukiliguru • Sifa Threads • Mbeya Knitwear • East Africa Canvas Garment
Research Yarn processing • Sunflag* Limited Manufacturers
Institute • Tabotex • A to Z Textile* • Hennes & Mauritz Association
• Tanzania • 21st Century* (H&M) (TEGAMAT)
Cotton Board • World Bank
(TCB) Global/Regional Tanzania Consultant
• TAL Apparel • Best Western Hotel • Textile
• Crystal Group • Advent Construction Development
• Village Industry • Shanta Gold Unit (TDU)
• Shydee Mine/Acacia
• Rainbow packaging • Muhimbili Hospital
• Aga Khan Hospital
• Medical Stores
Department (MSD)
• Nabaki Afrika
Outreach n/a Ginning • Mwatex Global Global
complete, no • Gaki • NIDA • Carrollas • Max Fashion
interview • Columbia packaging • Phillips-Van Heusen
conducted Yarn processing • Big Agnes (PVH)
• Dahong • Walmart
2
*These players are vertically integrated in TanzaniaTanzania is a powerhouse for cotton production in East Africa; 30% of locally
grown cotton feeds the local textile industry while the rest is exported
PRODUCTION VOLUMES ACROSS MA JOR MARKETS FOR LOCAL COTTON
MA JOR COTTON PRODUCERS IN 2017 IN 2017
Total production, ‘000 MT Percentage of total production, % (2017)
217
15% 16%
78
13%
32
13
Ethiopia Uganda Kenya Tanzania
8% 30%
In year 2017 Tanzania was leading in cotton
production in the EAC region. With a 74% increase in
cotton harvest in 2019 Tanzania has become a cotton 18%
powerhouse in the EAC region
Local market Bangladesh Mauritius
However, 70% of the cotton lint produced in the
country is exported abroad mainly to Bangladesh, Export market Indonesia Others
India, and Indonesia. Only 30% of cotton lint is India
consumed locally
Source: FAOSTAT, Cotton production by each country, 2019; UNACTAD, Cotton and its by-products in the 3
united republic of Tanzania, 2016.; OEC, Where does Tanzania export Raw Cotton to?, 2017The majority of cotton that is sold locally is used to produce traditional fabrics
and garments for local and regional markets
Input Value-addition activities Output
Yarn processing Fabric processing Garment manufacturing
Bedsheets
Curtains
Finished non-
70% of ~14.6% of traditional fabric T-shirts
lint is yarn is
exported exported Polo
Garment
factories Sportwear
• Sunflag
• 21st Century Denim
• NIDA
Raw cotton Lint Yarn Fabric Non-traditional
Uniforms
fabric for garments
Shirts, other apparel
Local
tailors
Kitenge, Kikoy
Cotton seed Kanga
This segment of the value
chain is broken down in
more detail on the next slide Maasai shuka
Traditional fabric
Source: Dalberg interviews 4Once raw cotton is ginned, cotton seed is further processed into husk, cotton
cake, oil and linters used in a range of products for local markets
Input Value-addition activities Output
Animals feed
10%-14% of seeds
are reserved for
next season
Husk Natural Fertilizers
25%-27%
Soap & Cosmetics
Cotton cake
45%-55% Pharmaceuticals
Cooking oil
Cotton seed* De-linting Dehulling Kernel pressing
Or extraction Oil
12%-16% Margarine
Mattress stuffing
Linters Photographic films
8%-10%
* There is 4% waste cotton cumulated across all stages but not shown in the mapping above
5
Source: UNCTAD, Cotton and its by-products in the united republic of Tanzania, 2016,Local garment manufacturers catering to global markets in the US and EU
need to import yarn and/or fabrics to maintain global quality standards
Input Value-addition activities Output
Fabric processing Garment manufacturing
T-shirts
85% of fabric used
Denim
Imported fabric
Garment Baby clothes
manufacturing
15% of fabric used • Mazava
• Tooku
• A to Z Sportwear
Imported yarn Locally-manufactured
fabric
Polo
Imported
Source: Dalberg Interviews 6In the long term, Tanzania’s ambition is to improve the quality of locally grown
cotton such that it can be used in for value-added products in the global market
The Cotton-To-Clothing Strategy 2016- The Government prioritized the following
2020 prioritized the following objectives activities to meet these objectives:
for the cotton value chain:
• Increase production of cotton in Tanzania
• Improve economic outcomes to make it the leading cotton producer in
for farmers Tanzania. The long-term target is to attain
one million tonnes by 2023
• Improve employment • Improve domestic cotton processing within
outcomes, including Tanzania by facilitating investments along
profitability of the value chain the value chain and expanding value
addition at the AMCOs level
• Increase export value and • Facilitate financing through the Tanzania
volumes to regional and global Agriculture Development Bank (TADB) to
drive priorities above
markets
The Cotton-to-Clothing Strategy has been successful in increasing production, and it will now
need to shift its focus on increasing quality in coming years
Source: Government: Our Current, Future Plans for Cotton Sub-Sector (2019); Tanzania’s Cotton to 7
Clothing Strategy 2016-2020; Dalberg InterviewsToday, there are various barriers along the value chain that limit Tanzania’s
ability to develop value-added products, especially for the global market
Production & Garment
Yarn processing Fabric processing Market
Ginning manufacturing
Low quality cotton Lack of standalone fabric Lack of standalone fabric Garment production by Tap into US/EU markets
Tanzania currently produces mills for supply of yarn factories for supply of fabric importing fabric Global buyers are aiming for
medium staple cotton, which In Tanzania, existing fabric In Tanzania, existing Garment manufacturing (that “80% Africa 20% Asia”
Global market
converts into lower quality mills are vertically standalone garment factories will ultimately drive vertical sourcing strategy by 2025.
yarn and fabric that is not integrated. Thus, there are no source imported fabric. There integration) can first be This shift in sourcing strategy
accepted by global markets. players to take in any are no players to take in fabric tapped into through importing will drive buyers’ appetite to
There are several barriers to processed yarn from a from a standalone fabric mill. fabric. It is least capital- and push their manufacturers to
investing in high-quality standalone spinning mill even This is only relevant if quality of technical-intensive, and invest in Tanzania
cotton, including harvesting if it imports yarn. This is only cotton improves results in high employment
tools, poor ginning relevant if quality of cotton
equipment, availability of improves
high-quality cotton for
blending
Acceptable cotton quality Vertical integration by sourcing local cotton Expand on existing markets
for most buyers Through vertical integration that sources local cotton, Tanzania can capitalize on and expand and tap into higher-end
The medium staple cotton existing penetration into local and regional markets. Today, one vertically integrated local markets
Regional
market
produced today is generally manufacturer (sourcing local cotton) exports 60% end garment sales to regional markets, and the Quality of garments (both
acceptable by most regional rest of the 40% to local markets. There is a second vertically integrated player (sourcing local from a cotton and finishing
buyers, but may require cotton) who exports 20% of its end garment products to regional markets, and the rest of the 80% lens) produced will have to be
upgrading when high-end to local markets. Both manufacturers sell all their textiles to the local market improved if higher-end
buyers are targeted buyers in e.g. MENA, are
Vertical integration for new manufacturers that tap into local cotton can be done through 1) targeted
integration from within a company or 2) sourcing from standalone suppliers. A strong vertical
integration model built for local and regional markets build a strong base for vertical integration for
Acceptable cotton quality Saturated market by
global markets in the future
for all buyers Chinese imports
The medium staple cotton The local market is saturated
market
by Chinese imports of
Local
produced today is acceptable
for the textiles (e.g. kitenge, garments and traditional
khanga) and garment (e.g. T- fabrics (e.g. kitenge). Unless
shirts) produced for the local imports are curbed,
market expansion of local production
will be difficult
= High barrier = Medium barrier = Low barrier
8
Source: Dalberg stakeholder interviewsTanzania can take a three-step approach to overcome barriers and create a
fully integrated cotton-textiles-garments industry over 10 years
SHORT-TERM MEDIUM-TERM LONG-TERM
0-3 years 3-5 years 5-10 years
Inconsistent quality Improved quality of High-quality
Production
of local raw cotton local raw cotton local raw cotton
• The current quality of cotton does not • Efforts to improve quality of cotton • Over time, the quality of Tanzanian
meet global standards for garment production and handling will lead to cotton will improve and it will meet the
manufacturing catering to global improvements in staple length, which can quality standards and consistency
markets. This cotton can be used in the then be blended with higher-quality required by global markets
regional and local markets only cotton in the medium-term
9
Global markets
Imported yarn Garment Fabric Yarn processing Cotton lint High-quality
or fabric manufacturing processing Ginning local raw cotton
• Investors set up garment manufacturing • Investors (including existing garment • Manufacturers fully integrate into the
in Tanzania to access global markets manufacturers) begin to invest in fabric local value chain by sourcing fabric
• Manufacturers rely on imported fabric in processing and then yarn processing as and/or yarn made from local Tanzanian
the short term the quality of cotton begins to improve cotton, which will have better quality
x2 x4
Regional and local
the current the current
Garment Local raw Garment Garment
markets
export value export value
manufacturing cotton manufacturing manufacturing
• Manufacturers are all fully integrated • The improving quality of cotton allows • The high quality of local cotton allows
into the local value chain today, with manufacturers to expand into new manufacturers to expand into new
many players vertically integrated from products and regional markets within regions, such as the Middle East and
ginning to garment manufacturing local, EAC and SADC markets. This North Africa, and to expand access to
increases the volume of local cotton higher-value garments
flowing into local industries
9The Government of Tanzania can take several steps in the short-, medium-, and
long-term to achieve this vision of full value chain integration
SHORT-TERM MEDIUM-TERM LONG-TERM
0-3 years 3-5 years 5-10 years
• Improve harvesting and post-harvesting • As quality of cotton gradually improves, • As quality of cotton begins to optimize to
handling techniques to improve quality of blend local cotton with imported higher- the capacity of the existing seed variety,
Production
cotton for further value addition quality cotton from neighboring incentivize investments in ginning
• Revive or invest in drip irrigation countries factories focused on the use of rollers
schemes to provide consistent water instead of sawing machinery
levels to cotton farms
• Expand number of EPZA sites • Provide financing for investments in new • Create tax incentives/breaks for
• Finance ready-to-go premises for rent or or upgrading fabric and yarn processing manufacturers across the value chain to
Global markets
upgrade existing facilities not in use • Create tax incentives/breaks for use local raw materials, e.g. removal of
• Develop a fund to subsidize worker investors using local raw materials VAT similar to incentive provided in
wages during training period • Provide a power and water tariff subsidy Kenya
• Provide low-cost financing for garment for fabric and yarn processors
manufacturers ($3-4 million)
• Provide a power tariff subsidy
• Provide a price-based subsidy to farmers • Launch the Tanzanian Mercantile • Improve market linkages into additional
Regional and local
to hedge against price fluctuations, Exchange to develop financial markets for different garment varieties,
similar to countries like China instruments that can provide a hedge such as Middle East as well as other
markets
• Respect and strengthen collection of against price fluctuations markets
existing import levy on garments and • Invest in improvements in machinery to
traditional fabrics improve efficiency of fabric and yarn
• Improve market linkages into regional processing, where relevant
markets for different garment varieties • Provide power and water tariff relief to
reduce cost of production
10In 5-10 years, Tanzania can build a fully-integrated value chain to supply local
cotton yarn and fabric to ~20 garment manufacturers serving all markets
Raw cotton Lint processing Yarn processing Fabric Garment
production processing manufacturing
3 5 5 ~20
Lint processors in 5 Yarn processors in 5 Fabric processors in 5 Garment manufacturers
years years years in 5 years*
120,400 MT 48,200 MT 43,000 MT 39,000 MT 120 million
of cotton required to of cotton lint produced of all yarn required of all fabric required pieces of all garments
meet demand from 20 processed
garment manufacturers
60,185 900 3,000 2,500 20,000
Farmers engaged Lint/ginning workers Yarn workers across all Fabric workers across Garment workers
across all investors investors all investors across all investors
$1.5 million $10-20 million** $10-20 million** $3-4 million
Minimum investment Minimum investment Estimated investment Investment required
required for one required for one required for one for one processor
processor processor processor
DRAFT ONLY
Note: *The number of garment manufacturers in 5 years is based on the number of manufacturers in
Ethiopia by 2017; **The investment size of $10 million is estimated for a fabric processor with 8,400 MT 11
optimal capacity, however, this needs further validationIn the short term, Tanzania can start by exploring two specific investment
opportunities in the sector
1 I M M E D I AT E O P P O R T U N I T Y I N 2 M A N U FA C T U R I N G E X PA N S I O N
G A R M E N T M A N U FA C T U R I N G INTO REG IO NAL AND LO CAL
F O R G LO BAL MAR K ET S MARKETS
There is an immediate opportunity for Simultaneously, there is an opportunity for
Tanzania to tap into garment manufacturing Tanzania’s fully integrated local
to supply to the global markets in the US and manufacturers to expand into regional and
EU local markets
• In the short-term, garment manufacturers • Although there are opportunities along the
rely on imported fabric or yarn to ensure value chain, Tanzania can achieve greater
quality standards are maintained margins in garment manufacturing than
other manufacturing along the value chain
• In the medium to long term, garment
manufacturers integrate vertically into local • In order to expand into these markets,
cotton value chain Tanzania needs to focus on unlocking
existing bottlenecks rather than attracting
new investments
12IMMEDIATE OPPORTUNITY
1
IN GARMENT
MANUFACTURING FOR
GLOBAL MARKETS1
China alone accounted for USD 145 billion of global apparel/garment exports
in 2017, while all of Africa exported USD 9.5 billion only
G LO BAL DEMAND G L O B A L S U P P LY T A N Z A N I A ’ S S U P P LY
• Total global trade of apparel was • China, EU, Bangladesh and • The total value of apparel exports
valued at USD 455 billion while Vietnam remained the world’s top in 2017 was USD 60 million, a 1.5-
total global trade of textiles was four apparel/garment exporters in fold increase from 2014. Non-knit
valued at USD 296 billion in 2017 2017, accounting for 76% of the garments account for 70% of
market share apparel exports
• EU, US and Japan remained the top
three importers of apparel in 2017, • China is exporting less • The top export destinations for
together importing 62% of global apparel/garments and is playing an knit and non-knit apparel is the
apparel. China is quickly becoming increasingly critical role as a United States (31%), South Africa
one of the world’s largest textile supplier for many apparel- (17%) and Kenya (5%)
apparel/garment importers, exporting countries in Asia. For
experiencing nearly 17% annual example: 47% of Bangladesh’s
growth since 2010, which suggests textile imports came from China in
China’s declining dominance in the 2017, up from 39% in 2005. Similar
apparel/garment industry trends are seen in Cambodia (up
from 30% to 65%), Vietnam (23% to
• The shifting pattern of garment 50%) etc.
manufacturing from developed to
developing countries is also
influencing diversification of textile
imports. EU, US and China were the
top three largest importers of
textiles in 2017 (38% of the global
market), however, their import
share has dropped significantly
from over 50% in the 2000s
14
Source: WTO (2018), Just-Style Apparel Sourcing Strategy, ITC Trademap 20181
Global buyers are aiming for “80% Africa 20% Asia” sourcing strategy by 2025 to
capitalize on lower costs of production and current US import tariffs on China
China
US import tariffs on China have led
to waves of factories closing down,
many of which moved to Vietnam
Bangladesh
Bangladesh will not be able to
provide the power supply needed
if the capacity of manufacturers
increases significantly
EAC
Top global buyers (e.g. PVH, H&M) are Vietnam
shifting their sourcing base to EAC, Vietnam is the next target for US
aiming for a “80% Africa 20% Asia” India import tariffs, which does not
split by 2025. This is both an interest India does not provide a very guarantee investors’ long-term
in diversifying investments or sourcing conducive business stability
from across countries. They have environment for foreign
investors Sri Lanka
started with Kenya and Ethiopia, and
Sri Lanka’s production costs have
aim to diversify further. One company
risen significantly in recent years
will start sourcing from a Tanzanian
manufacturer this year
15
Source: Dalberg stakeholder interviewsWhen diversifying into East Africa, global buyers focus on garment manufacturing
1 in the short-term, and vertical integration into local value chains in the medium to
long-term
YEAR 1-3 YEAR 3-5 YEAR 5+
GARMENT FA B R I C YA R N
M A N U FAC T U R I N G PROCESSING PROCESSING+
Buyers’ demand drive the entire value Garment manufacturers’ demand Fabric processors’ demand drive
chain production. As the final drive the rest of the value chain the rest of the value chain
downstream activity, garment production. Once garment production. Once fabric processors
manufacturing is the closest step to producers are in EAC, they drive are in EAC, they drive investments
meet this demand investments in fabric processing in yarn processing using local
cotton
High labor intensive, resulting into × Highly capital- and technical-
lower costs for investors and high intensive, resulting in higher costs × Highly capital- and technical-
employment outcomes for investors and low employment intensive, resulting in higher costs
outcomes for investors and low employment
Least capital- and technical-
outcomes
intensive, requiring limited capital × The garment producer requires
and technical know-how upfront imported high-quality fabric. Local × The fabric processor requires
cotton does not often have the imported high-quality yarn. Local
There are fewer bottlenecks to quality required, hence not used in cotton does not often have the
unlock the short-term. Fabric quality required, hence not used in
× The buyer requires imported high- manufacturers integrate into the the short-term
quality fabric. Local cotton does not local cotton value chain in the long-
often have the quality required, hence run
not used in the short-term
16
Source: Dalberg interviews1
There is an immediate opportunity to attract garment manufacturers to
Tanzania, relying on imported fabric in the short-term
Potential target buyers for Tanzania, who have begun or shown interest in sourcing from East Africa,
particularly Ethiopia, include but are not limited to:
There are three top-tier manufacturers of export garments in Tanzania: (Tooku – denims, Mazava –
sportswear, A to Z – knitted wear). These manufacturers lack the capacity to meet the increasing demand
of large volumes from buyers. As a result, there is an opportunity for new investments or expansion in
garment manufacturing in Tanzania to meet this growing demand
Similar to global trends, all top-tier manufacturers in Tanzania who export garments to global markets
import fabric or yarn from China and India. The imported fabric has long length staple that Tanzania
cannot currently provide.
Tanzania can position itself for investments in garment manufacturing, as global buyers shift their
sourcing strategy to “80% Africa 20% Asia” by 2025. Tanzania can benefit from the following:
• Direct access to exports – by importing fabric, garments can be produced at a high quality to tap into
export markets through AGOA and EBA incentives
• Lower capital costs and technical requirements – garment manufacturing is c. 2-2.5x less costly than yarn
and fabric processing due to lower capital requirements. It also requires less technicalities
• High employment – Garment manufacturing employs c. 1.5-2x more workers than yarn and fabric
processing
17
Source: Dalberg interviews1
Investment case: A USD 3-4 million investment in garment manufacturing is
sufficient to set up a factory producing 500k pieces per month
INVESTMENT ECONOMICS UNIT COST BREAKDOWN
A minimum investment of USD 3-4 million in a USD/T-shirt2
garment factory in an EPZA with capacity to 1.8
produce 500,000 pieces/month
0.3
The factory would likely produce low-complex
products, such as knitted wear, for sale to
export markets. Export markets include US/EU 0.4
buyers of basic goods, e.g., PVH
1.0 0.1
Description Estimate
CAPEX requirement1 c. USD 2 M Illustrative profits
as this entirely
Number of 1,000 depends on what a
buyer decides to
employees pay a manufacturer
Time to breakeven 2+ years
Production volume 500,000
pieces/month
Raw Labor Utilities Profit Revenue
materials/inputs
Note: 1. CAPEX requirement includes machinery and construction costs. 2. Unit cost breakdown is illustrative using T-shirt as an example, and
excludes costs such as import, export, and transport costs. Total unit cost usually ranges from USD 1.5-2/T-shirt, and profits depend on what a
buyer decides to pay the manufacturer 18
Source: Dalberg interviewsTanzania will need to create incentives to attract investments in
1 garment manufacturing and in the long-run, integrate vertically into
the local value chain
A INCENTIVIZE INVESTORS INTO B I N C E N T I V I Z E I N T E G R AT I O N
G A R M E N T M A N U FA C T U R I N G I N T O L O C A L VA L U E C H A I N
Tanzania can incentivize investors to tap into Tanzania can create the right incentives to
the immediate opportunity in garment encourage vertical integration into the local
manufacturing cotton value chain in the long-run
• Foreign investors focus on cost advantages, • Vertical integration often starts with fabric
delivery speed and political stability. These manufacturing, and then expands into yarn
can determine incentive structures the manufacturing over time
Government puts in place
• Vertical integration can either be done
• Local investors in current or new garment through the garment investors own
manufacturing require incentives that can investments into fabric or yarn processing,
make them equally competitive in the global or through independent processors
markets as investors based within EPZAs in providing a service to a network of garment
Tanzania manufacturers. This is determined by the
type or sensitivity of the product quality and
oversight
19A
INCENTIVIZING INVESTORS
INTO GARMENT
MANUFACTURING1A
Improving overall attractiveness to draw one ‘lead goose’ foreign garment
investor can bring in waves of buyers and manufacturers
FLYING GEESE PARADIGM LEAD GOOSE GARMENT INVESTMENT IN ETHIOPIA
• This phenomenon has also been seen on the investor
level, as garment manufacturing moved into East
Africa, primarily Ethiopia
• In Ethiopia, PVH (buyer) and Huajian Group
(manufacturer) played the ‘lead goose’ roles that
attracted other buyers and manufacturers to build
the garment industry Ethiopia has today
• The Flying Geese Paradigm (FGP) is a concept LEAD GOOSE GARMENT INVESTMENT IN TANZANIA
used to describe transformation of industries
within individual regions or countries • Similar to Ethiopia, Tanzania can encourage one first
sizeable ‘lead goose’ garment investment that can
• The FGP was first used by Akamatsu to facilitate the attraction of other investments
describe East Asia’s catch-up with the West.
In the East Asia scenario, the lead goose • In many instances, this scenario works better when
meant introduction of a new industry that led investors move into one EPZA where efforts of
to the introduction of more advanced consolidating resources are focused
industries over time
Source: A Historical Pattern of Economic Growth in Developing Countries (Akamatsu, 1962),
“Multilevel Flying Geese and Spatially Concentrated Investment: Building Light Manufacturing in 21
Africa” (Mawji, 2017), Tanzania’s Industrialization Journey, 2016-2056 (2017)Governmental level invitation, commitments, and ability to deliver on
1A commitments are critical to attract and maintain top foreign buyers and
manufacturers
PRESIDENTIAL LEVEL GOVERNMENT
I N V I TAT I O N COMMITMENTS
Former Prime Minister of PVH/Ethiopia Case Study
Ethiopia Meles Zenawi
personally went to China and PVH has seen many
invited Huajian Group to set impressive national plans,
up shoe factory operations in but what impressed PVH
Ethiopia about Ethiopia was the
government’s willingness
Former President of and ability to deliver on its A ‘lead goose’
Uzbekistan Islam Karimov stated objectives investor will be
personally invited Daewoo
to set up joint-venture While neighboring countries
attracted to invest
automotive operations in such as Kenya fell through on in Tanzania
Uzbekistan certain commitments despite
providing higher labor
Founding father of Singapore productivity, Ethiopia
Lee Kuan Yew personally worked diligently and
attended CEO forums in transparently to make sure
New York and made a case that PVH’s needs were met
for companies to set up in
Singapore
Source: “Multilevel Flying Geese and Spatially Concentrated Investment: Building Light Manufacturing
in Africa” (Mawji, 2017), “Looking Beyond the Horizon: A case study of PVH’s commitment to 22
Ethiopia’s Hawassa Industrial Park” (World Bank, 2017)1A
In addition to Government commitment, top foreign brands have four key
considerations when selecting locations for garment manufacturing
QUALITY COST SPEED S TA B I L I T Y
• Quality is a ‘must-have’ • Key factors that impact costs • Key factors that impact speed • Key factors that impact
factor for investors, driven of production include fixed include worker efficiency stability include political (e.g.
primarily by buyer costs (e.g. built-in levels, consistency levels and risk of war) and economic (e.g.
requirements infrastructure) and variable speed of transportation (lead access to FOREX) risks
• Key factors that impact costs (e.g. electricity) time) • Tanzania has a 20% political
quality range from the cotton • Tanzania’s relatively low • Low worker productivity is stability premium and easier
quality itself to the results of labor costs is core to its value similar across East Africa, access to FOREX, making her
product handling (e.g. sewing proposition. However, poor however, significantly lower more attractive for investors
skills of a worker) labor productivity (50-60% of than global standards. Lower • Manufacturers who have
• Tanzania’s cotton of medium international levels) increases productivity is slightly decided to invest in Tanzania
staple does not meet top overall costs. mitigated by low labor costs expressed that the country’s
global buyers’ standards that • Tanzania also has high • Tanzania’s lengthy and costly high stability is a crucial
require higher quality cotton construction, electricity and trade and logistic procedures factor that drew them to
of long staple water costs relative to is perceived to be a challenge Tanzania as an investment
• Tanzania can invest in regional peers. Tanzania is by buyers. Tanzania is destination
improving the quality of currently making investments currently improving custom
cotton in the short-term and in electricity and ports that is processes – including length
integrating into the global likely to improve Tanzania’s and cost of processes –
value chain in the long-run competitiveness as through the Blueprint. These
improvements are realized improvements can improve
lead time for shipments
23
Source: Dalberg stakeholder interviews1A
Tanzania will need to improve investments in plug-and-play premises to be
competitive regionally to attract foreign investments for global exports
Tanzania Kenya Ethiopia Recommendations
Cross-cutting incentives
Incentives Key incentives include: Key incentives include: Key incentives include: • Similar to Ethiopia, low-interest loans can be
• Tax holiday for 10 • Tax holiday for 10 years • Tax holiday for 8-10 offered to upgrade the technology of the sector
years • VAT exemption and years • Similar to Kenya, Tanzania could offer VAT
• VAT exemption on customs import duty on • Duty-free import of exemption for EPZA manufacturers who source
utilities and inputs, as well as on local raw materials and raw materials locally. This will become
construction purchases of goods and capital goods increasingly important as garment manufacturers
materials services supplied by • Loans at an interest pursue vertical integration in the long-run
• Duty-free import companies in the Kenyan as low as 3-4%
duty on capital customs territory interest are offered
goods and raw • Investors who construct to upgrade the
materials their buildings are able to technology of the
• Duty-free access refund the costs sector
through AGOA • Duty-free access through • Duty-free access
(US)/EBA (EU) AGOA, EBA through AGOA, EBA
Fixed costs
Plug and Play premises Partial Complete Complete • Option 1: TADB can set up a fund to invest in
building factory sheds across strategic EPZAs.
EPZA can focus on building all premises in one
industrial park, and replicate for others
• Option 2: Leverage existing facilitates that are not
in use (e.g. mills, factories) to be upgraded and
folded into EPZA premises for new investors
Premises for expansion Restricted Unrestricted Unrestricted • EPZA can expand number of EPZA sites to attract
new investors and encourage expansion of
existing investors
Road infrastructure Road quality varies Most roads are in poor Most roads are in poor • Road infrastructure outside of the Central Zone
greatly across the condition condition, especially in (e.g. Lake Zone, Southern Highlands) can be
country rural areas improved
= High barrier = Medium barrier = Low barrier
Source: Dalberg stakeholder interviews, Tanzania Cotton to Clothing Strategy (2016-2020), World Bank 24
“Ease of Doing Business” Report (2019), Dalberg Garments Industry in Ethiopia Report (2017)1A
Tanzania will need to decrease costs of electricity and water to be competitive
regionally to attract foreign investments for global exports
Tanzania Kenya Ethiopia Recommendations
Variable Costs
Labor costs USD 60-70/month USD 110-150/month USD 50-60/month • With higher labor costs than Ethiopia,
Tanzania workers can be better trained to
have higher productivity
Electricity costs1 USD 0.1/kWh USD 0.1/kWh USD 0.02-0.04/kWh • Tanzania’s electricity costs can be lowered to
match that of Ethiopia through a power
subsidy
• Power supply stability should be improved,
especially as upstream activities (e.g. fabric
mills) will require consistent power supply
Water costs1 USD 0.89/m3 USD 0.62/m3 USD 0.12/m3 • Tanzania’s water cost can be lowered to
match those of Kenya and Ethiopia,
particularly with fabric manufacturing
Import customs costs2 USD 1725 USD 948 USD 870 • Tanzania’s import border compliance cost
(USD 1350) need to be significantly reduced
40 FT container factory to USD 850-2000 USD 885 USD 1590 • Transport costs could be lowered if existing
port costs railways are able to transport cargo
Export clearance costs2 USD 1435 USD 334 USD 347 • Tanzania’s export border compliance cost
(USD 1160) need to be reduced
40 FT shipping costs3 US: USD 1500-2500 US: USD 1500-2500 US: USD 1300-1800 NA
EU: USD 2000-2400 EU: USD 1800-2200 EU: USD 1300-1800
= High barrier = Medium barrier = Low barrier
Note: 1. Electricity and water unit costs are values before VAT exemption. 2. Import and export costs include border
and documentary compliance costs. They are sourced from the “Ease of Doing Business” Report, and may be
adjusted for garment/textile imports and exports. 3. Shipping costs are provided by shipping companies
Source: Dalberg stakeholder interviews, Tanzania Cotton to Clothing Strategy (2016-2020), World Bank “Ease of
Doing Business” Report (2019), Dalberg Garments Industry in Ethiopia Report (2017), Addis Ababa Water and 25
Sewage Authority, Nairobi Water and Sewage Company1A
Factory construction costs in Tanzania are 43% higher than Ethiopia because
Ethiopia builds factory sheds for potential investors
Tanzania – costs of investing in a 500k pieces/month Ethiopia – costs of investing in a 500k pieces/month
capacity garment factory, USD capacity garment factory, USD
3,000,000 3,000,000
2,500,000 2,500,000
1,260,000 225
2,000,000 2,000,000
1,500,000 1,500,000
1,260,000 0
1,000,000 930,000 1,000,000
500,000 500,000
0
0 0
Construction Machinery Land Lease Construction Machinery Land lease
TADB can set up a fund to invest in building factory sheds across strategic EPZAs or upgrade existing unused
factories into potential EPZA sites for investors
Note: All costs above are given by manufacturers and adjusted accordingly to the calculated capacity. China
and US are used as illustrative import (raw materials) and export (end products) destinations. 26
Source: Dalberg interviews1A
Operating costs in Tanzania are 28% higher than in Ethiopia, primarily driven by
high electricity costs, followed by import customs and shipping costs to the US
Tanzania – costs of investing in a 500k pieces/month Ethiopia – costs of investing in a 500k pieces/month
capacity garment factory, USD capacity garment factory, USD
1,800,000
741,700 1,850 1,200 2,960 7,400
1,700,000
1,600,000
1,500,000
1,400,000
1,300,000 5,700
271,000 310 1,590 720
1,200,000
1,100,000
1,000,000 60,000 55,000
894,000 894,000
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
3,225 5,930 9,000 1,200 1,000 5,630 4,480 1,590
0
Rent Shipping Import Port to Raw Labor ElectricityWater Factor Export Shipping Rent Shipping Import Port to Raw Labor Electricity Water Factor Export Shipping
from customs factory material y to clearance to US from customs factory material y to clearance to US
China port China port
Current investments in infrastructure projects will likely reduce the cost of electricity in the country. In the
interim, a power tariff subsidy would help improve Tanzania’s competitiveness
Note: All costs above are given by manufacturers and adjusted accordingly to the calculated capacity. China and
US are used as illustrative import (raw materials) and export (end products) destinations. 27
Source: Dalberg interviews1A
Tanzania will also need to improve labor productivity and reduce custom costs
to be competitive regionally to attract foreign investments for global exports
Tanzania Kenya Ethiopia Recommendations
Speed
Labor unit productivity1 20 T-shirts/day 25 T-shirts/day 20 T-shirts/day • Tanzania can provide a fund to support all
Although similar to manufacturers to conduct training before or
regional levels, global while investments are made (e.g. scale
standards are at 42 T- National Skills Development Programme)
shirts/day • Tanzania can ease barriers to accessing
foreign trainers required for training
Import customs days2 27 10 11 • Tanzania’s import border (240 hours) and
documentary (402 hours) hours need to be
significantly reduced
Export clearance days2 8 1.5 5 • Tanzania’s export border and documentary
hours (both at 96 hours) need to be
significantly reduced
Shipping days3 US: c. 42 days US: c. 42 days US: c. 32 days NA
EU: c. 30 days EU: c. 27 days EU: c. 20 days
Stability
Finance fluidity & FOREX Medium Medium-High Low • Banks can lower collateral requirements for
working capital and other financing
Lending rates 18% 14-18% 8.5% • Banks can lower lending rates, possibly
through deploying development capital
Country stability High Medium Low • The Government can capitalize on Tanzania’s
high stability to attract investors
= High
Note: 1. barrier
T-shirt = Medium
production is used barrier
as a garment = Low barrier
example to compare productivities across countries. 2. Import
and export days include border and documentary compliance time. They are sourced from the “Ease of Doing
Business” Report, and may be adjusted for garment/textile imports and exports. 3. Shipping days are provided
by shipping companies. Source: Dalberg stakeholder interviews, Tanzania Cotton to Clothing Strategy (2016-
2020), World Bank “Ease of Doing Business” Report (2019), Dalberg Garments Industry in Ethiopia Report 28
(2017)1A
Labor productivity accounts for the binding constraint in determining entry
and expanding investments within a country
CHALLENGES C A S E S T U D Y: N AT I O N A L S K I L L S
DEV ELOPM ENT PROGRA M M E
• Labor productivity has become a binding • The National Skills Development Programme (2015-2021) is a
constraint for existing foreign and domestic program under the Prime Minister’s Office – Labour, Youth,
garment and textiles manufacturers Employment and Persons with disabilities aimed to improve the skills
• First, there is a lack of trained workers, largely and knowledge of the national workforce to cope with competitive
impacting garment manufacturing. In garment landscapes in local and international markets
manufacturing, labor productivity in Tanzania • To achieve set objectives, the program focused on increasing the
is on 50%-60% of global average availability of skilled labor for garment manufacturing. PMO entered
• Second, there is a lack of expertise for into an MOU with various Garment Manufacturers and provided daily
technical roles which contribute to the allowances to laborers while garment manufacturers invested in
majority of positions in textiles processing. For training.
technical roles, it has become increasingly • To date, the government has disbursed a total of TZS 330 million to
difficult for expatriates with skilled expertise 1000 trainee workers at Tanzania Tooku Garment Company Limited,
to obtain work permits in Tanzania as daily allowances in the first 3 months of initial training. This
• Currently, VETA supervisors are not well- provided some relief to the recipient company, primarily
trained and hence cannot properly train their
students. VETA equipment is also too P OTE NTI A L SO L UTIO N
obsolete, resulting in students needing to learn
from scratch when they start work at a factory • Tanzania can either set up a TZS 6-8 billion fund to support training
of 20,000 garment workers for 5 new or existing investors interested
• It can take up to 2 years to train their staff in expanding garment manufacturing for export markets, similar to
and bringing productivity levels up. Skills the National Skills Development Programme
Development Levy (SDL) Fund paid for by
manufacturers has not been effectively used to • Alternatively, Tanzania can set up a TZS 240 million fund that
upskill labor for the industry supports the training of 200 supervisors who in turn can train 20,000
workers. On average, one manager would supervise 50-100 factory
workers
29
Source: Dalberg stakeholder interviews1A
Tanzania’s political stability and easier access to FOREX could make it a more
ideal long-term investment destination versus Ethiopia
Tanzania Ethiopia Tanzania Premium %
Political risk – short-term 4 6 33%
(on a scale of 1-7, 1=lowest,
Export transactions
7=highest) • Likelihood of a risk caused by political and assimilated events, e.g. political unrest, natural
disaster, connected to cross-border transactions with a risk horizon of up to 1 year
Political risk – medium/long 5 6 17%
term
• Likelihood of a risk caused by political and assimilated events, e.g. political unrest, natural
(on a scale of 1-7, 1=lowest,
disaster, connected to cross-border transactions with a risk horizon beyond 1 year
7=highest)
Commercial risk Above average Average NA
(on a scale of 1-7, 1=lowest,
• Commercial factors that affect the payment capacity of all debtors/obligors in a country include
7=highest)
currency depreciation, high interest rates, an economic recession, widespread corruption etc.
Political violence risk 4 6 33%
(on a scale of 1-7, 1=lowest,
• Political violence refers to a concept broader than ‘war’ and include i) ‘terrorism’ and ii) political
7=highest)
violence damage. Acts of both internal and external conflicts and conflict potential are taken into
Direct investments
consideration
Expropriation and government 5 5 0%
action risk
• Expropriation risk encompasses all discriminatory measures taken by a host government which
(on a scale of 1-7, 1=lowest,
deprive the investor of its investment without any adequate compensation, e.g. events of
7=highest)
embargo, change of regime
Currency inconvertibility and 5 6 17%
transfer restriction risk
• The currency inconvertibility and transfer restriction risk refers to the inability to convert and
(on a scale of 1-7, 1=lowest,
transfer out of the host country any funds related to the investment
7=highest)
= High barrier = Medium barrier
30
Source: Credendo Credit Insurance Group1A
Further, Tanzania will need to provide comparative incentives to local investors
similar to those provided to investors in EPZAs
OVERVIEW
• There is 1 large investor manufacturing higher-quality garments for global markets. Another player currently
exports to Europe, they export comparatively smaller volumes of garments that fetch lower prices
• Local investors tend to use a 60%-40% strategy in entering into global markets, 60% of their production is sold in
export markets and 40% in local and regional markets
• Tanzania will need to provide comparative incentives to investors outside EPZAs, including the current incentives
(tax breaks on imports) as well as the proposed incentives (e.g. labor productivity fund)
Expand existing incentives provided to foreign Introduce additional incentives for both foreign and
investors to local investors outside EPZAs local investors*
• Tanzania can expand existing incentives provided • Premises: Tanzania can open up plug and play
to investors outside EPZAs. Currently, very few premises for investors through upgrading existing
local investors access EPZAs and many are likely to unused factories and investing in new buildings
shift their existing manufacturing sites for export • Power tariff subsidy: In addition to keeping
markets. This includes opening up existing existing VAT exempt on utilities, Tanzania can offer
incentives available to investors outside EPZAs, a power tariff subsidy to lower the cost of
including: electricity
• Tax incentives: EPZA can provide a tax relief on • Labor productivity: Tanzania can open up a fund
capital goods and raw materials imported by for foreign and local investors interested in
local manufacturers exporting outside EPZA expanding garment manufacturing for high-end
• Power consistency: Tanzania can improve export markets
power consistency to non-EPZA investors
* These recommendations have been discussed in the previous section 31
Source: Dalberg stakeholder interviewsB
INCENTIVIZE INTEGRATION
INTO THE LOCAL VALUE
CHAIN IN THE LONG RUN1B
In the long term, garment manufacturers can pursue vertical integration by
investing in their own or outsourcing to existing fabric or yarn processors
1 VERTICAL INTEGRATION 2 VERTICAL INTEGRATION VIA SOURCING
WITHIN ONE COMPANY FROM A STANDALONE SUPPLIER
Company A Company A Company B Company C
garment Garment Garment Garment
manufacturer manufacturer manufacturer manufacturer
Company A Company A Company B Company C
fabric processor Fabric processor Fabric processor Fabric processor
Company A Yarn processor(s)
yarn processor
Yarn processors of either model will source local cotton from domestic ginners and farmers. In order to
achieve this goal, Tanzania will need to improve the quality of cotton produced
33
Source: Dalberg interviewsEfforts to improve quality of cotton will be necessary for vertical integration;
2B although farmers have access to the right seed variety, poor harvesting
techniques and the type of machinery used reduce cotton length
Factors Impact on quality of cotton Current efforts in Tanzania
Seed variety Seed variety is the base determinant on the quality of Tanzania uses UKM08 which optimizes the strength and
cotton, which is determined by Micronaire (MIC) a resistance of cotton fibers. UKM08 falls within the long
measure that assesses fiber strength and maturity. A range of cotton seed variety. Tanzania is looking to introduce
tensile strength above 26 grams/tensile is favored an optional seed variety, UK173, which has better crop
resistance and yield, but lower fiber length than UKM08
Climatic Rainfall influences length and quality of cotton. The Drip irrigation is necessary for optimal planting, however,
conditions ideal rainfall for cotton production is 50mm-100mm. there is minimal irrigation used in the production of cotton in
Too much water result in solidification of water on Tanzania. There are multiple irrigation schemes in the Lake
plants Zone that are under-developed or under-utilized
Harvest and Poor harvesting and post-harvesting techniques Farmers use poor harvesting and post-harvesting
post-harvest reduce cotton quality. Use of combined harvesting techniques. Farmers use combined harvesting and also mix
techniques techniques over hand-picking as well as pre-mature stones and sand to cotton to add to the weight at which a bag
harvesting can damage cotton quality of cotton is sold
Ginning The type of ginning machinery used reduce the quality Ginners in Tanzania have switched to the use of saw
machinery and length of cotton. Rollers pulled seeds causing machines over rollers to improve efficiency and reduce cost
limited damage to the length of the fiber. Saw machines of ginning. Given current market conditions, ginners do not
are used for improved efficiency, however, damage have incentive to switch back to the use of rollers
cotton fiber
Spinning Spinning machinery impacts the fineness of yarn made. Investments spinning machinery in Tanzania is only relevant
machinery Newer technology have the ability to produce finer yarn when there is a ready market for yarn. There mixed capacity
than outdated technology. Technology transformation among spinners, and may require 2-3 buyers/investors in
has made spinning preparatory step critical for the fabric or garment manufacturing for the economics to work
quality and economy of outgoing products in the textile
industry
Key: This table highlights the importance of key determinants in the quality of cotton as well as current efforts
to improve these determinants
Source: Effect of Cotton Fibers and Their Trash Characteristics on the Performance of Spinning Preparatory 34
Processes (2016); What is a Micronaire in Cotton, and Why Does it Matter? (2015); Dalberg Interviews2B
Blending cotton can improve cotton fiber length and smoothness; improvements
in harvesting techniques will be vital
• The process of blending or mixing cotton helps improve overall length and smoothness of yarn produced. Optimal smoothness of
yarn needs to be above 20s and can go up to 45 Ne, depending on type of product. The difference in fiber length to be used for
blending cotton is only 2mm. Higher differences between fiber length increases defect
• There are limitations of blending current Tanzanian cotton to help improve length and smoothness of yarn for global markets.
Although Tanzania’s seed variety can produce long length cotton (32mm), current agronomic practices reduce fiber length to
medium length cotton (often 28mm or lower). As a result, Tanzanian cotton can only blended at maximum 30mm.
• As agricultural practices improve, the length of cotton will improve which will open up opportunities to blend with higher length
cotton from neighboring countries, such as Uganda and Rwanda, who produce cotton with 30-32mm length. In the long-term,
GAP will need to improve significantly to achieve optimal length of the current seed variety which produces long-length cotton
Short-term Long term
Quality of Tanzania
Properties blending blending
Yarn current
opportunities opportunities
Count Range Smoothness of yarn: Count range below 20s Ne would not be Below 20s Ne 20s – 32s 33s – 45s
(Ne) sufficient for apparel garments or bedsheets for global markets
Fiber length Natural length of fiber: Long staple cotton is an important factor in 26-27mm 28-30mm 30-32mm
manufacturing at high count ranges
Micronaire Air permeability of compressed fiber: value determines if there is 4-4.6 3.6-4.2 3.5-3.8
adequate fineness and maturity. Higher micronaires is associated
with more processing waste, knots, lower spinning performance,
dye appearance and eventual quality of yarn/fabric.
Strength Gram per tensile: this is the force that can be applied to the fiber 24-27 27-30 29-31
without it breaking. This is important as the thread is exposed to
strenuous forces during the manufacturing process.
Maturity Degree of fiber wall thickness: Immature fibers result in low dye 0.85 0.84 0.84
uptake, increased fiber breakage, fabric defects, and waste
352 MANUFACTURING TO EXPAND INTO REGIONAL AND LOCAL MARKETS
2
The demand for finished garments and fabrics is high in local and regional markets,
however, suppliers are unable to compete with cheap imports
MARKET COMPETITIVE LANDSCAPE
• The market size for garments in Tanzania is Importers are dominant players in the
approximately ~73,000 MT today. The population supply of finished garments in both local
has been growing by 3.1% annually and is expected and regional markets. Manufacturers
to double by 2050 from the current 53 million supplying garments - 21st century, Sunflag,
• Tanzania has access to both the East African and A to Z - sell ~40% of products in the
Community (EAC) and the Southern African local markets and 60% in either regional or
Development Community (SADC). It enjoys near global markets
free trade agreements with member states,
resulting in access to more than 470 million Local consumers prefer imported finished
consumers. Currently, South Africa is the second garments from China, due to price despite
biggest importer of Tanzania apparel exports lower quality products that last ~1 year.
Compared to Chinese imports, second-hand
clothing had comparatively lower impact on
the demand and supply of garments.
According to garment manufacturers, there
is stiff competition from low-cost Chinese
Tanzania products than second-hand clothing.
SADC member Regional markets also face the same influx
states of competitive garments and fabric from
• Market access will further increase if Tanzania
joins The Common Market for Eastern and China
Southern Africa (COMESA), which comprises of
over 460 million consumers
Source: Tanzania Invest; SADC Joint Meeting of Ministers of Energy and For Water Held Statement May
2019, Southern African Development Community; About EAC (2017), East Africa Community; Dalberg 37
interviews2
There are various pain-points along the value chain that reduce the
competitiveness of finished garments and fabrics in regional and local markets
Cross-cutting challenges Fabric processing Garment manufacturing
A • Fluctuation of global prices impacts The productivity of producing fabric is • The current quality of cotton B
predictability of local price and higher in China compared to Tanzania, limits access to higher-end
ultimately, the economics of the yarn resulting in lower prices buyers in regional and Middle
and textile industry. Government East markets, as well as in
• Inefficient and outdated local
intervention in setting higher prices of opening up opportunities for in
technology reduces productivity,
farmers impact local industries vertical integration with garment
increases cost of producing garments,
manufacturers targeting higher
• Lower valuation of imported fabric and decreases quality of fabric and
end global markets in the long-
result in traders paying lower taxes and garments
term
ultimately, in lower-priced imported
• High power tariffs and inconsistency
products in the local markets. With of power can highly influence fabric
lower costs of production than Tanzania, manufacturing. First, high tariffs drive
China has a cost advantage that is up production costs. Second,
further exacerbated for garment inconsistency of power breaks down
manufacturers due to lower taxes the machine which impacts the
• Tanzania is reliant on imported non- machine
cotton inputs (e.g. dyes, chemicals, • Poor access to water results in high
polyester), which ultimately increases production costs. Traditional fabric
cost of production compared to China use a lot of dye (15-20 grams of dye
who produce most non-cotton inputs per meter)
• Poor local infrastructure leads to higher
transport cost of transporting raw Given manufacturers take a 60%-40% approach to
materials to fabric manufacturing as markets, investments in improving fabric processing
well as final products to markets than in technology and tariffs can be delayed until there is an
China opportunity to expand products in local markets or
regional buyers are secured
38
Source: Dalberg interviewsGlobally, countries have tried different measures for curbing fluctuating
2A cotton price information to protect farmers and support growth of local
industries
PRICE-BASED DIRECT INCOME COMMODITY RISK
SCHEMES SUPPORT PROGRAMS MANAGEMENT TOOLS
• The scheme offers farmers a • Provide support (subsidy) to cotton • This is a market-based solution that
minimum price to protect farmers growers, without linking them to facilitates actors impacted by price
through government subsidies production decisions (farmers and ginners) to rely on
hedging to protect themselves from
• These schemes are easier to • The subsidy is provided as a function
price volatility
administer than other programs of land ownership, historical yields,
and budgetary allocations. It • This has limited burden on the
• United States, China, Turkey, Brazil
incentivizes farmers to produce crops Government
and Egypt have used this model
with the highest market value
Risks: • This scheme is used in Mexico (cotton)
• European Union, Mexico, and the and Guatemala (coffee)
• The scheme is costly and United States have used this model
unsustainable, given it puts the full Risks:
burden of price variability on Risks: • This solution requires (i) competitive
government • It is difficult to define eligibility based well-functioning local markets (ii)
on informal land ownership transparent prices, (iii) high skill
• Farmers have limited incentive to
respond to market signals • The scheme can be costly, but not levels, and (iv) high infrastructure
higher than price-based schemes investments
• Tanzania hasn’t implemented a price- • There aren’t any specific programs in • Tanzania is currently designing the
based cash subsidy program. The Tanzania focused on providing direct Tanzania Mercantile Exchange (TMX),
Government provided subsidy in the support to farmers which will be able to offer commodity
form of seeds and pesticides this year risk management instruments
to incentivize farmers
39
Source: Managing Price Volatility in Egypt (2001)You can also read
