Tanzania Distilleries Limited has criticised Kenya for retaining non-tariff barriers (NTBs) even under the East African Common Market.
It cited how it had been difficult for it to sell its popular Konyagi spirit brand in Kenya.
Other critical factors that have constrained manufacturers to expand their footprint in the country and become more competitive in the East African market include infrastructure snags, lack of sufficient skilled labour and limited access to finance and raw materials, according to Tanzania Distilleries Limited (TDL), managing director, Mr David Mgwassa.
Mr Mgwassa said at the weekend that those were the biggest challenges that are holding back Tanzania’s potential for manufacturers although they are pushing to make their presence known.
“Among the major challenges we have been facing include undeveloped infrastructure such as water development, power and good roads. This is because the demand exceeds the electricity supply.
Another challenge we have is non-tariff barriers (NTBs) when taking our local products like Konyagi brand into Kenyan market,” he told The Citizen in an interview.
He said the NBTs range from vast cultural differences to complex distribution channels, insisting that this situation has contributed significantly to the cost of doing cross-border trade.
For example, he noted that due to NTBs, the Kenyan legislation has forced TDL to produce the expensive 250ml bottle of Konyagi brand from 200ml it produces in Tanzania.
He urged the Kenyan government to remove NTBs, saying by doing so the two countries will be able to build the so-called economic group, which is very critical.
Mr Mgwassa said the importance of reliable electricity supply and improved infrastructure should be key factor for any future government policy, adding that the government needs to put more efforts in infrastructure development, electricity and water transport.
Manufacturing growth depends crucially on the inputs provided by core industries, especially electricity which has a weight of 60 per cent in the index of industrial production, according to him.
Meanwhile, the Managing director of Tanelec, Mr Jose Miguel has challenged the government to avail adequate power to ensure the survival of the big local manufacturers.
“Power shortage increases the cost of production leading to high prices of goods produced. This can make local producers fail to compete favourably in the international market.
Insufficient electricity is affecting the country’s export sector and killing any confidence for manufacturers to stay in business successfully,” said Mr Miguel.
According to him, for the time being, the local consumers’ ability to consume shrinks with increases in prices of almost every product and failure to have enough purchasing power.
Chief operating officer of Chemicotex, Mr Raja Swaminathan also supported that deficiency of power supply and inefficiency at ports are the threats to Tanzanian manufacturers’ competitiveness.