Industrial upgrading and modernization in Tanzania

Context

The Tanzania industrial upgrading and modernization (IUMP) project is the result of joint efforts of the Ministry of Industry and Trade (MIT) of Tanzania and the United Nations Industrial Development Organization (UNIDO) to strengthen the capacity of the supply side of the national manufacturing sector, and to improve the competitiveness of locally processed goods on national and international markets. Launched in 2012, the project is a component of the UN Country Development Framework for 2011-2015, which is in line with the national development priorities and commitments.

Strategy

The overall objective of the project is to promote competitive industrial production, improve the quality and quantity of industrial output, and facilitate the access to national, regional, and international markets for local manufacturing small and medium enterprises (SMEs). The project also intends to improve the institutional and technical capacities of industrial support organizations in order for them to deliver upgrading services for the wider community of local industrial enterprises. In addition, it aims to strengthen the business community’s capacities to monitor and manage managerial and technological change and adapt to the demands of regional integration and international competition.

To achieve these goals, a team of UNIDO international experts and trained national consultants provides enterprise with diagnostics services and coaching assistance in implementing upgrading plans. This service portfolio is based on the UNIDO Upgrading Methodology which has been successfully implemented in several North African and Sub-Saharan countries. According to the UNIDO Methodology, the Enterprise Upgrading Process (EUP) consists of four phases, namely overall strategic diagnosis, upgrading strategies, formulating and financing, and implementation and monitoring. More details see the brochure here.

Outcomes

During the period of 2012-2016, UNIDO successfully implemented the pilot national industrial upgrading and modernization programme in Tanzania. As a result of the pilot phase (2012-2015), beneficiary enterprises operating in the dairy, edible oil and food processing sectors increased 38 per cent of local sales in average, while two of them doubled their exports. The performance of the beneficiary enterprises was also improved through reducing resource losses during the processing process, resulting in a total of USD 1 million in savings.

UNIDO has undertaken industrial diagnosis for 19 enterprises in the dairy, edible oil and food processing sectors and trained 50 national experts on industrial upgrading methodologies. The project also introduced an effective and systematic method of South-South technology transfer through the successful construction of a sunflower oil semi-refinery using local materials and expertise. More significantly, the project demonstrated that SMEs can overcome most of their challenges through the promotion of business linkages. This has been most evident in the Dodoma Sunflower Oil cluster which was supported by UNIDO.

The interventions in the Dodoma Sunflower Oil cluster improved the quality of the sunflower oil and consequently increased the sales and the income of the processors. By the time of the project completion, seven SMEs were ready to order the semi-refinery oil. Meanwhile, steps were undertaken to relocate processors operating in residential areas to the Chamwino Industrial Park. Overall, the initiative of the Dodoma Sunflower Oil cluster is a model for developing oil and other crop processing clusters for SMEs. 

Project Office:
Kimweri Avenue, Msasani, P.O. Box 23235
Dar es Salaam, Tanzania
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