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Report Contents
	Framework for AGOA National Strategy Development
	AGOA and Market Access Planning - A Strategic Perspective

AGOA and Market Access Planning - A Strategic Perspective

Strategy development requires a multifaceted, strategic approach. This section of the report highlights products within key sectors with export market potential; and makes recommendations on how to improve sector performance. This information is derived from multiple sources including: studies conducted by experts in the region, government trade policies, testimonials from ministry officials and businesses in the field and members of the international donor community

Key Recommendations to Enhance Sector Market Performance

Focus on Comparative Advantage

The Mission of the Government is to stimulate trade and production capacity in export oriented sectors to enhance competitiveness in regional and international markets.
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Tanzania offers investors many strategic advantages including an ideal geographic location with access to Eastern, Central and Southern African markets. Tanzania has a stable democratic government and land that is endowed with abundant natural resources. There is untapped potential for businesses to cultivate diverse agricultural crops and to develop industrial production, by adding value to raw products.

Traditional Agriculture Sector

Capitalize on supply chain and processing opportunities for cotton, cashew nuts, tea, tobacco, coffee and sisal. Build capacity for application of GVC at sector levels as the basis for addressing those constraints leading to market diversification and new product development.

Implement agricultural marketing measures that lead to fair vs. monopolistic pricing practices in crop procurement, processing and transportation.

Non-Traditional Agricultural Sector

Develop production potential for horticulture, floriculture, spices, oilseeds, lentils and pulses. Explore new AGOA markets for: palm oil, floriculture, organic spices, paprika, vanilla, green beans, mushrooms, mangoes, oranges and other citrus products

Brand Tanzanian spices; and create industry associations for marketing spices, horticulture and organic products.

Expand agro-processing facilities (already underway) to produce: juice concentrate, canned/dried vegetables/fruits, mango pickles, fruit-based wines, baby food products et al. Explore AGOA market opportunities for these goods presented as unique food products with new flavors that cater to a multi-ethnic market.

Build cold storage facilities and warehouses for perishable products that can be readily sold in the open market e.g. mangoes, avocadoes, passion fruits, pineapples and bananas. Further expand cold handling facilities proposed at DIA and already installed at KIA. Set up affordable cooling facilities in rural collection centers.

Increase and strengthen private sector associations. Expand training programs through extension services to cover the entire production and supply chain, from farm to fork

Tourism

There is no doubt tourism is one of the fastest growing export sectors in Tanzania. It has created new employment opportunities currently experiencing an average growth rate of 15%.

Wildlife safaris, deep-sea fishing, mountain climbing (Mt. Kilimanjaro) and nature treks in northern and coastal provinces are priority tourist activities for increasing numbers of travelers coming from East Asia, India, U.S. and Europe.

This encouraging growth trend has stimulated considerable investment in hotels, restaurant and ground service facilities,

The Ministry of Tourism and Natural Resources and Tanzania Tourist Board and the Zanzibar Ministry of Trade, Industry, Marketing and Tourism are now designing marketing strategies to lure investors in tourism infrastructure development

Tanzania needs to implement high quality tourism strategies; and has recently decided to work toward development of a regional tourism marketing plan

GOT must market its tourist destinations; and make data available to international tourist operators on existing and/or new facilities being developed.

Mining

The Tanzania mining sector has emerged as one of the fastest growing sectors attracting world-class multinational companies. Tanzanian and US companies can forge joint-ventures to exploit sales opportunities in mining; and develop facilities for indigenous small miners to process raw product into processed goods.

Mining provides employment opportunities for small-scale miners and young employees in the mines. The mineral sector has displayed dramatic growth rates in recent years with export earnings reaching US$ 471 million in 2002. Tanzania needs to form smart partnerships to halt illegal exports of gemstones and minerals; and the US can play a role in assisting Tanzanians to capitalize on the gemstone market through processing centers where stones can be cut, polished and set prior to shipment to export markets..

Transform Comparative Advantage into Competitive Production

The GOT has identified key sub sectors for export development and these include:

• Horticulture (Mango, Papaya, Passion fruit, and Green Beans)
• Spices (Pepper, Chile, Paprika, Cardamom, Cinnamon, Vanilla, Turmeric and Ginger)
• Fishery Products
• Gemstones
• Textiles and Garments
• Handicrafts and Leather
• Cut Flowers
• Beekeeping
• Timber Products

Products with high export market potential for AGOA markets include: agro-processed goods (mango juice/concentrate, mango pickles, fruit-based wines, dried fruits and vegetables, frozen fish products, palm oil and byproducts, spices, organic products, honey, timber products (furniture), gemstones, and a broad array of handicraft products.

USAID sponsored TA interventions that will enable Tanzanian exporters to gain greater access to US markets through AGOA sponsored programs.

USAID TA interventions should focus on products with proven AGOA market potential. In the near term handicrafts, leather and light textiles are "first tier" products whose export sales potential can be increased in a relatively short period of time through strategic, hands-on technical assistance and training. Later in this section TA recommendations are made regarding "second tier" non-traditional agricultural exports

During the AGOA conference and trade show held last year in Washington, DC -- buyers purchased samples and expressed keen interest in placing larger orders for the following items:

• wooden carvings (makonde and others),

• baskets, handbags with leather trimming,

• tinga tinga art (paintings, napkin rings etc),

• masai beaded jewelry,

• utility goods (wooden bowls, coasters, candle holders) and

• specialized textile products especially batik kitchen/bath accessories and cushion covers.

One of the biggest hurdles confronting producers of specialty items and handicrafts are supply side constraints. Producers have difficulty fulfilling US market demands for large quantities of goods meeting high quality standards and pricing specifications. Most Tanzanian vendors represent SMEs or groups of SMEs making similar products so the production value chain needs to be organized in such a way that principle suppliers can monitor and control product quality and consistency in measurements and design.

Vendors, producers and suppliers need advice, guidance and assistance in that enables them to be more competitive in the US marketplace. TA interventions can be closely coordinated with training programs being or about to be developed by local institutions NGOs and BSOs.

Recommendations for "first tier" products:

1. Provide IT skills training to entrepreneurs on how to conduct market research through web based information resources and links to foreign commercial experts/organizations in the US market. (with SIDO, TCCIA)

2. Hire marketing experts to help producers create a "brand image" for consumer products that lead to enhanced product sales: provide hands-on training to help producers "adapt" product design and measurements to buyer specifications.

3. Market competition is strongly driven by price. Hire competent US business experts to advise Tanzanian counterparts on formulation of competitive pricing formulas, ensuring small producers adhere to standardized pricing techniques.

4. US buyers require product descriptions, including types of materials used, their provenance and where the article was made - so producers need hands-on training in preparing these descriptions, and selecting packaging, labeling materials.

5. Provide training to entrepreneurs on production consistency -- measurement, sizing, replication and finishing techniques.

6. Provide sponsorship to select entrepreneurs (as has been done in the past) to attend regional and/or AGOA training seminars, trade shows and specialized marketing events.

7. Hire logistics experts including customs officials, freight forwarders and port authorities to train exporters on how to avoid pitfalls in fulfilling AGOA requirements for goods clearance from point of departure to point of entry in the US.

8. Work with BSOs, NGOs and local organizations to expand outreach programs to entrepreneurs within EAC region selling "similar products" to US market; and explore ways in which synergies can be explored and a regional AGOA strategy for select commodities can be developed.

Recommendations for "second tier" products

TA interventions could make a substantial difference in product competitiveness within AGOA markets. These products include but are not limited to: cotton, spices, dried fruits, honey, palm oil, mango pickles and light fruit wines.

USAID TZ is expanding its agricultural/agro-processing TA portfolio. The US Embassy has hosted successful SPS training seminars for producers, growers and government officials in the regions; and now it is time for products to be developed and sold to market.

Since 80% of Tanzanians derive their primary income from farming and agricultural production it is quite important for USAID/REDSOE to prioritize TA interventions in this sector. Given limited budgets it is best where feasible to leverage resources with local counterparts and other donors.

Sample TA interventions include:

1. Hire business development specialists to assist small farmers and producer associations to create "brand names" for spices and honey produced in Tanzania.

2. Provide hands-on support to product specialists, farmers, extension workers and government officials on AGOA standards compliance procedures - working in tandem with Tanzania Bureau of Standards (TBS), DANIDA and locally based organizations.

3. Assist producers in packaging and labeling procedures that enhance traceability for each commodity group;

4. Provide marketing support to smallholder farmers to ensure contractual relations between producers and exporters result in fair farm gate pricing and payments. Work in tandem with IFAD AMSDP (Agricultural Marketing Systems Development Program) and Ministry of Cooperatives and Marketing on strategic interventions, including provision of cold storage facilities, warehouse receipt schemes, transport et al

5. Work with BSOs including TCCIA in building an agricultural/horticulture commodities database that monitors pricing, auctions, export sales and seasonal availability of crops.

6. Examine relative values of rural technologies being developed by SIDO, enterprise works, Approtec and other suppliers to farmers in the field. Determine additional training and/or interventions required to enable producers to transform raw products into agro-processed commodities.

7. Assist cotton growers to increase production and to build capacity to meet importer demands for high grade quality product in countries that manufacture and process garments and textiles with 3rd party fabric e.g. Kenya, South Africa and Mauritius

THE WAY FORWARD

According to TPSF, SIDO, TCCIA and other members of the National AGOA Committee it would be extremely useful to organize a non-generic workshop that focuses on sector wide AGOA strategy building

Organize Workshop where break-out sessions result in identification of key strategic sector issues related to potential export products - see Workshop Framework Model in Attachment A

Highlight successful case studies and feature testimonials from Tanzanian exporters selling to AGOA markets. Invite select US companies working with Tanzania and/or exploring market opportunities to share views on how to do business in US

Designate workshop sponsor - MIT and TPSF -- and work with members of the National AGOA Committee to identify panelists, finalize program agenda and logistics.

Identify keynote speakers and organize invitation list, including background materials to be presented to workshop participants on sector wide strategy development and updated AGOA III provisions.

National AGOA Committee Lead Agency, TPSF, will identify viable, bankable projects for potential US investment and produce an AGOA country document featuring Tanzania progress in sector wide development. Sectors with high growth potential will be featured and closely mirror the sectors described in the preceding section.

KEY PUBLIC AND PRIVATE SECTOR CONTACTS IN TANZANIA