Tanzania Diagnostic Trade Integration Study (DTIS) Update Concept note

Diagnostic Trade Integration Study (DTIS) Update 2016

Tanzania has been implementing the Diagnostic Trade Integration Study (DTIS) Action Matrix validated in 2005 through a Tanzania Trade Integration Strategy (TTIS), National Export Strategy (NES) in Zanzibar and Trade Sector Development Program approved in 2009. The DTIS has been overtaken important economic and policy changes. There have been a number of developments at the international and national levels that warrants deepening the implementation of initiatives for more beneficial integration of the Tanzanian economy into the global economy on one hand, and expediting the process of mainstreaming trade into the government institutional framework, strategic planning and budgeting system, on the other hand. An updated DTIS is the ideal instrument for handling the challenges related to effective use of the trade development process to provide the links between regional and global markets and a rapidly transforming economy.

At the international level, there are ongoing developments to come up with a new strategy to carry forward the mantle of MDG objectives, even as there are new concerns regarding poverty and related issues that require a new approach and vigour at the national and international levels. As Tanzania remains in the LDCs group, the government sees new opportunities to use the preferential treatment accorded to this group to implement economic transformation measures that will expedite the transition to a middle income developing economy.

There are also developments at regional level. In 2010, Tanzania and other East African Countries signed a protocol for the establishment of EAC Common Market and in 2013, the protocol for the establishment of Monetary Union. In the SADC, The Free Trade Area was launched in 2008. There are also ongoing efforts by EAC, SADC and COMESA to establish a Tripartite Single FTA involving the three regional groupings. There are also developments in the EPA negotiations between EAC and the European Union. All of these are drivers for economic development which need to feature substantially in development policies and strategies.

Domestically, the Government remains committed to the goal of Tanzania’s National Development Vision to graduate from the LDCs group and become a middle income economy by year 2020 in Zanzibar and 2025 in Tanzania Mainland. The remaining period towards 2025 has been divided into three Five Year Development Plans (FYDPs) whereby each one focuses on a few priority areas. The first FYDP covered the period from 2011/12 to 2015/16 while and the second is under preparation and due to start in year 2016/17. Tanzania has also adopted a new system of implementation and monitoring interventions in the priority areas of the economy through the Big Results Now (BRN) framework and Reform for Prosperity (R4P). Trade has to adapt to this new thrust and DTISU is considered to be the instrument to recommend how trade can best fit in the new framework as well as inform the formulation of the second FYDP.

Furthermore, the emergence of oil and gas sector as significant game changer in the economy of Tanzania, opens a number of trade opportunities for the country. This may require trade policy changes necessary for preparing Tanzanians to tap this potential. DTISU is seen as a method for availing trade opportunities in the sector and recommend necessary measures for Tanzania to tap the opportunity.

The first DTIS sector took the analytical comprehensive approach, as a result coming up with 120 proposed interventions. Spreading of limited resources over a large number of priorities was not possible; hence a number of interventions were not implemented. This delayed the potential for rapid transformation that would have been possible through focused interventions. In this regard, Tanzania is considering a paradigm shift from sub-sector to value chain approach where focus is given to one product at a time, with a view to building world class excellence along the value chain. Based on the above arguments Tanzania had decided to undertake DTIS Update.

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