PROBLEMS FACING TRADE IN TANZANIA

 

  • Smuggling: Some people sneak in goods from other countries and at the same time export TANZANIA’s products to such countries through the black market. Such trade is detrimental to the economic growth of the country because such traders avoid paying taxes.

8 BENEFITS OF THE TENNESSEE RIVER VALLEY AUTHORITY


  • Nature of TANZANIA’s imports and the unfavourable balance of trade: Most of the imports are heavy industrial materials and finished products. These products are expensive as compared to TANZANIA’s exports thus results in a large deficit balance of payment.

  • Value of TANZANIA’s Exports: TANZANIA’s exports are mainly based on processed raw materials. Minerals and processed agricultural materials from TANZANIA are generally bulky and of low value. Thus the total production and export cost is not commensurate with the profit accrued from such sales.

  • Poor trade Pattern: TANZANIA's patterns of trade still follows the line of flow established by her former colonizer Britain being mainly a supplier of raw materials; the developing countries provides the manufactured goods that TANZANIA requires so they form better trading partners.

  • Inadequate transport and communication facilities .Transport and communication network not well developed between TANZANIA and other African countries. This affects the flow of goods to and from these countries.

  • Trade barriers. The imposition of quotas regulates the supply from each country to avoid any economic glut, which has negative effects on TANZANIA that depends heavily on particular commodities for export. Coffee, a major export from TANZANIA, has for example, suffered with the introduction of quotas by International Coffee Organization.

  • Overreliance on agricultural products. Given the fact that TANZANIA’s trade items are mainly agricultural, they are vulnerable to climatic changes, pests and diseases. The fact that most of the other African countries also produce agricultural goods and other primary products the demand for TANZANIA’s goods among the neighbouring states is reduced.

  • High charges. Traders are charged high fees in form of trading license in order for them to carry out their businesses. High fees make the traders to earn little profits from the sale of their goods.

  • Poverty among the people. Majority of TANZANIANS are poor making them offer a very small internal market. Some cannot afford the very basic needs in their homes.

  • Insecurity. Sometimes traders are attacked by thugs who steal their goods or take away the money earned. Some businessmen are even killed in the attacks.

  • Scarcity of goods. There are times in the remote areas of TANZANIA that the goods needed by people are not available in the markets or shops. Then scarcity makes such goods expensive.

  • Inadequate capital. Most traders engage in small retail businesses because they lack adequate finances to expand their activities.

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