The Role of Cooperative Organizations in Tanzania’s Industrialization

Abstract

The Tanzanian Development Vision 2025 outlines the country’s aspiration to become a semi-industrialized country for which the contribution of manufacturing to the national economy must reach a minimum of 40% of the GDP. In 2016/2017, the manufacturing sector account for an average of 9% of the national aggregate GDP. To achieve this, Tanzania is transforming itself from being dominated by natural resource exploitation activities and extractive industries (agriculture, tourism and mining) to become an economy with a broad and diverse base of manufacturing, processing and packaging industries that will lead both the productive as well as the export trade sector. Foreign Direct Investments (FDIs) are expected to provide the capital for the desired industrial development. This process requires proper polices, regulations, technology and active institutions. In this paper I argue that Tanzania has a sound network of cooperatives throughout the country suitable to guide the industrialization process, what is often missing is the political will to utilize the existing cooperative network to facilitate the coordination and implementation. Cooperatives are institutions capable of translating government industrial intentions, explicit or implicit, into action. Flexible institutions like cooperatives and responsive governance can correct for structural imbalances, and also eliminate differences between sectors and regions. This article uncovers the ways in which cooperatives can be used as vehicles for rural industrialization. It specifically answers two questions: (i) In what ways can Tanzania’s industrialization process benefit from the existing network of cooperatives in the country? (ii) What is the likelihood that such efforts of cooperative organizations can be sustainable in the long run?

Dr. Katundu is a senior lecturer at the Moshi Co-operative University (MoCU), Tanzania . He works under the Department of Community and Rural Development specializing in the area of rural development .