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International Journal of Business and Economics Research

2014; 3(1): 15-28 Published online March 10, 2014 (http: !!!"sciencepublishin##roup"co$ % i%ber) doi: 10"11&48 %"i%ber"20140301"13

Tanzania in the face of international trade: the analysis of revealed comparative advantage from 2009 to 20 2
Nuran Ally Mwasha, Zabibu Kweka
1 2

'chool o( )cono$ics * +usiness ,d$inistration, -entral -hina .or$al /ni0ersit1, 2uhan, -hina -olle#e o( 3n(or$ation Mana#e$ent, -entral -hina .or$al /ni0ersit1, 2uhan, -hina

Email address:
nuranall141ahoo"co$ (." ," M!asha), 5abibu6!e6a4#$ail"co$ (7" 8!e6a)

To cite this article:

.uran ,ll1 M!asha, 7abibu 8!e6a" 9an5ania in the :ace o( 3nternational 9rade: 9he ,nal1sis o( ;e0ealed -o$parati0e ,d0anta#e (ro$ 200< to 2012" International Journal of Business and Economics Research. =ol" 3, .o" 1, 2014, pp" 15-28" doi: 10"11&48 %"i%ber"20140301"13

Abstract: 9an5ania is the $ost pro$isin# current and the destination $ar6et (or the !orld trade due to its copious resources and strate#ic location" 3t is !ell 6no!n in the re#ion as the trade hub as it pro0ides the in(luential and suitable trade solutions and in0est$ents" 9he aspiration o( this paper is to anal1se the ;e0ealed -o$parati0e ,d0anta#e (;-,) (or the top$ost e>port sectors and co$$odities in 9an5ania (ro$ 200< to 2012 b1 inspectin# and e0aluatin# its potenc1 and co$petence in the !orld $ar6et co$pared to e>ports (ro$ other countries" +alassa?s inde> o( -o$parati0e ad0anta#e (;-,) !as utili5ed to de$onstrate the co$petiti0e sectors and co$$odities co$parati0e ad0anta#e to#ether !ith e>port data (ro$ /. co$-trade and 3nternational 9rade -entre (39-)" 9he outco$es sho! that 9an5ania has si#ni(icantl1 stron# co$parati0e ad0anta#es in sectors o( traditional cash crops such as co((ee, tea and spices and co$$odities (ound in $ineral resources as the leadin# e>port sector and co$$odities (or the period o( (our 1ears !ith ;-, #reater than one" @o!e0er, $an1 sectors de$onstrated lo!er ;-, co$pared to indi0idual co$$odities and the e>port products ha0e been !anin# e0er1 1ear, the situation that needs the #o0ern$ent to initiate the i$$ediate $easures to o0erco$e such proble$" Keywords: ;e0ealed -o$parati0e ,d0anta#e, )>port Processin# 7ones, 9an5ania, 3nternational 9rade

1 !ntroduction
/nited ;epublic o( 9an5ania (/;9) is one a$on#st ,(rican countries in !hich its econo$1 is #ro!in# at a considerable pace acco$panied b1 the #reatest resource potentials and enor$ous in0est$ent destinations" 3t is a union o( t!o countries !hich are 9an#an1i6a and 7an5ibar united in 1<&4 and (or$ed 9an5ania" 3t is located in )ast ,(rica bordered b1 7a$bia, Mo5a$biAue and Mala!i to the 'outh, /#anda and 8en1a in the .orth, +urundi, ;!anda and Be$ocratic ;epublic o( -on#o to the 2est and 3ndian Ccean in the )ast !hich co0ers 800 6$D coastal lines" 9an5ania has a land area o( <45,000 sAuare 6$, surpasses all other )ast ,(rican countries (9an5ania .ational 9rade Polic1 (9.9P), 2003: 4 * 2an#!e, 1<<&), co$prise o( &2,000 sAuare 6$ (or inland !ater bodies and 3,350 sAuare 6$ o( !oodlands and (orest" ,ccordin# to /;9 (200E) cited b1 Fan#e, (2008), 9an5ania has a land sur(ace area o( <4"3 $illion hectors !ith one-(ourth reser0es land, a portion !hich is considered to be bi##er than an1 other sub-'aharan ,(rica, 5"1 $illion hectares are culti0ated and 10 $illion

hectares o( arable land !hich is not culti0ated" ,ccordin# to the .ational +ureau o( 'tatistics o( 9an5ania (2013), the population and housin# census o( 2012, 9an5ania has 44,<28,<23 people, !hich ensures the accessibilit1 o( adeAuate $anpo!er (or production and consu$ption (or both internal and e>ternal products" 9an5ania is the e$er#in# $ar6et in )ast and -entral ,(rican re#ion as it pro0ides the co$$ercial lin6s !ith the assort$ent o( !ell allocated co$$unication and transportation net!or6 to#ether !ith (ir$l1 established econo$ic in(rastructures (93-, 2013)" ,ccordin# to the Ministr1 o( 9ransportation in 9an5ania (MC9) (2011), 85 G o( international business is dependin# $uch on $arine transportation !hich in0ol0es inland and seaports" 9an5ania pro0ides natural access throu#h di((erent ports li6e a Bar es 'alaa$ seaport !hich is the bi##est and it (acilitates the e>portation and i$portation o( co$$odities and products in 9an5ania" ,ccordin# to Ministr1 C( ,#riculture, :ood 'ecurit1 and -ooperati0es M,:'- (200<: 4) H3t has built-in aptitude o( dr1 bul6 car#o o( 3"1 $n tonnes o( containeri5ed car#o and &"0 tons o( bul6 liAuidI" Cther ports are 9an#a and


.uran ,ll1 M!asha and 7abibu 8!e6a: 9an5ania in the :ace o( 3nternational 9rade: 9he ,nal1sis o( ;e0ealed -o$parati0e ,d0anta#e (ro$ 200< to 2012

Mt!ara seaports" 3n 2012, the Bar es 'alaa$ port reported to handle a total 0olu$e o( 12"1 $ tones and the #o0ern$ent e>pectin# to in0est J1"5 billion (or re(urbishin# and constructin# ne! (acilities and port in(rastructures (Portstrate#1, 2013)" Cn the other hand, 9an5ania has three #reat la6es !hich are =ictoria, 9an#an1i6a and .1asa !hich open the lin6s !ith nei#hborin# countries li6e /#anda, Be$ocratic ;epublic C( -on#o, 7a$bia, ;!anda, +urundi, Mala!i and other nei#hborin# states" ,bout a0iation industr1, 9an5ania has three $ain airports !hich are Kulius .1erere 3nternational ,irport (K.3,), 7an5ibar 3nternational ,irport (73,) 8ili$an%aro 3nternational ,irport (83,)" 9o#ether !ith other s$all local airports !ithin the re#ions $ore than 50 (M,:'-, 200<: 3) recei0in# 3nternational and do$estic (li#hts, it has (acilitated and increase the trade $o0e$ent !ithin and out o( the countr1 !hich opened up 9an5ania to the e>ternal !orld" :urther$ore, 9an5ania has endo!ed !ith the enor$ous natural resources, includin#, a$on# others, are $inerals li6e #old, dia$ond, 9an5anite, copper and coal to#ether !ith oil and #as (93-, 2013 * M,:'-, 200<)" 9hrou#h all these opportunities !ith political stabilit1, 0astl1 #ro!in# population, plenti(ul natural resources and its #eo#raphical location, $a6es 9an5ania to be a precise podiu$ (or intensi(1in# business opportunities in all re#ions" 9he speci(ic ob%ecti0e o( this paper is to anal1se the co$parati0e ad0anta#e that 9an5ania has in di((erent sectors and co$$odities in the !orld $ar6et (ro$ 200< to 2012" 9his period !as selected because o( the t!o $ain reasons; i" 9his is the period !here the #lobal $ar6et !as in a reco0er1 situation a(ter the #lobal econo$ic crisis o( 2008, (KurLiM *9eodoro0iM, 2011; :o>le1, 200< * Funo#elo et al, 2010)" ii" 3s the best period to e0aluate the ob%ecti0es o( )>port Processin# 7ones ()P7s) ,ct, !hich !as established in 9an5ania in 2002, and to be a$ended on 200& to (orti(1 and ad$inisterin# pro#ra$" ,ccordin# to /;9, )P7, (200&), )P7s ai$ed to attract and encoura#e in0est$ent (or e>port, hearten technolo#ical shi(t, boost the o0erseas e>chan#e earnin#s and to #enerate the e$plo1$ent" Moreo0er, this paper is #oin# to pro0ide a brie( econo$ic situation (ro$ 1<E< up to date and di((erent $easures ta6en b1 the #o0ern$ent to solidi(1 econo$ic per(or$ance li6e the econo$ic re(or$s (ro$ 1<8& to 2000, its participation and 0alue in international trade, 9an5ania co$parati0e ad0anta#e anal1sis and reco$$endations (or (uture research" 1.1. Tanzania Economic Situation and Reform 1.1.1. General Economic Performance :i0e 1ears be(ore the econo$ic re(or$ in 1<8&, is 6no!n as the crisis period !hereb1 the #o0ern$ent under#one hi#hl1 trade i$balance, e>port decline, (orei#n in(lo! decreased considerabl1 to#ether !ith de0aluation o( 15G, a(ter its in0ol0e$ent in !ar !ith /#anda (2an#!e, 1<<& *

2obst, 2001)" 9o un0eil (ro$ that situation, +i#sten and Banielsson (1<<<) clai$ed that, the #o0ern$ent initiated di((erent strate#ies and pro#ra$s li6e in 1<81-82, .ational 'ur0i0al, )cono$ic Pro#ra$ !as launched, (ollo!ed b1 'tructural ,d%ust$ent Pro#ra$ (',P) 1<82 83-1<85, )cono$ic ;eco0er1 Pro#ra$ ();P) 1<8&- 1<8<, and )cono$ic and 'ocial ,ction Pro#ra$, ()',P) in 1<8<-1<<1 <2 NibidO" Prior to );P the established pro#ra$s did not unra0el the pertinent issues !hich !ere e>pected such as acceleratin# econo$ic #ro!th b1 e((icientl1 allocates the resources, liberali5ation o( $ar6ets (or a#ricultural and o0er0aluation o( the e>chan#e rate" (,lso see the ,(rican Be0elop$ent :und, 200E; +r1lins61, 1<<&) 1.1.2. Economic Reform 1986 - 2000 9an5ania has been under#one di0erse econo$ic re(or$s so as to suit the do$estic and international business at$osphere" 9his has been resolutel1 in(luenced b1 the d1na$ic business en0iron$ents !hich are attributed to technolo#ical inno0ations and in0est$ents" 9he econo$ic re(or$ in 9an5ania co$$enced !ith P)cono$ic ;eco0er1 Pro#ra$ ();P) o( 1<8&-1<8<, !hich its $ain ob%ecti0e !as to re-establish the e>ternal and internal eAuilibriu$ in the countr1Qs econo$1 !hile speci(icall1, itQs ai$ed at a$al#a$atin# the e>chan#e rate, re$o0e the hindrance in trade, inspirin# the do$estic ser0in#, reinstate (iscal sustainabilit1 and bracin# e>ports (2obst, 2001: +i#sten * Banielsson, 1<<< * 2an#!e, 1<<&)" 9he pro#ra$ achie0ed a$on# its priorit1 tar#ets b1 succeedin# to rene! up the 'tructural ,d%ust$ent Pro#ra$ !ith 3M: (ro$ 1<8E-1<<0 (+i#sten * Banielsson, 1<<<: 15)" 9he econo$ic re(or$ started to #et a ne! i$pulse (ro$ 1<<5 !hen the #o0ern$ent re-establish and reAuest di((erent !orld donors to support 9an5anian econo$1" 3n response to that, the #o0ern$ent inAuires the assistance (ro$ the 3nternational Monetar1 :und (3M:) to establish the )nhanced )cono$ic ;eco0er1 Pro#ra$, !hich (inall1 na$ed as the Po0ert1 ;eduction and Rro!th :acilit1 in 1<<& 1<<E and 1<<8 1<<< (+i#sten * Banielsson, 1<<< * 2obst, 2001)" Cn the other hand, itQs continuous to recei0e $ore econo$ic assistance in 2000 !hen its debt !as reduced a(ter 3M: and 3nternational de0elop$ent ,ssociation a#reed to do so under the )nhanced 3ndebted Poor -ountries N3bidO" +eside so $an1 challen#es to achie0e the econo$ic re(or$ ob%ecti0es, it enhanced per capita increase up to 0"& percent annuall1, increased a#riculture and $anu(acturin# sector producti0it1, e>port co$$enced to return to its nor$al situation, broadened the do$estic and international trade and i$pro0e$ent o( construction industries" 'upportin# this ar#u$ent, ,(rican )cono$ic Cutloo6 (2002) ar#ues that, the econo$ic re(or$ reinstated $acroecono$ic stabilit1 a(ter the enhance$ent o( the (iscal condition led to do!nsi5in# the in(lation rate, stabili5e the e>chan#e rate and dilapidated the borro! rates" ,lso in the 1ear 2000, the industrial sector #ro!s to &"EG (ro$ 5"5 G in 1<<<, 4"8G increase in $anu(acturin# producti0it1, the ser0ice sector !idened its ser0ice (or &"4G co$pared to 1"8 G in 1<<< and

3nternational Kournal o( +usiness and )cono$ics ;esearch 2014, 3(1): 15-28


the !hole re0enue increased (ro$ 14 G o( RBP in 1<<< to 15"3G in 2000 N3bidO" -urrentl1, the 2orld +an6 and other donors are still pro0idin# $onetar1 assistance to 9an5ania to #ear up her e((ort to reach the $illenniu$ #oals include a$on# others po0ert1 reduction and education (or all" 9an5ania recei0ed the !orld?s lar#est Millenniu$ -hallen#e -o$pact Rrant about J&<8 $illion in 2008 (-3, 2orld :act boo6, 2014)" 9hrou#h the #o0ern$ent e((orts and assistance (ro$ international donors, 9an5ania has been able to solidi(1 its econo$ic in(rastructures b1 increasin# RBP, Purchasin# Po!er Parit1 (PPP) (ro$ esti$ated J&4"23 billion in 2010 to JE3"12 billion in 2012, and the increase o( RBP (ro$ &G 200< to &"<G 2012 N3bidO" 1.2. Literature Revie 1.2.1. Tanzania and t!e "nternational Trade 9he international trade has pla1ed a #reat role in the i$pro0e$ent and econo$ic prosperit1 o( $an1 countries includin# 9an5ania" 3n one !a1 or another, countries ha0e been in(luenced $uch b1 econo$ic acti0ities ta6in# place in other countr1 either throu#h business, technolo#1 trans(er, in0est$ents or hu$an capital" 9his is because !hen the countriesQ trade to each other there is co$$on bene(its #athered (ro$ that trade, o(ten called #ain (ro$ trade (8ru#$an * Cbst(eld, 200& * 2005: 1E)" @o!e0er, there are so$e people !ho are sceptical about #ainin# (ro$ trade considerin# technolo#ical and econo$ic 0ariations that one countr1 $a1 bene(it $ore than another N3bidO" 9he potentials o( international trade not onl1 pro0ide the opportunit1 (or the countries to speciali5e in a speci(ic product !hich can be e((icientl1 produced to a lar#e e>tent, but also allo!s international borro!in#, lendin# and e>chan#e o( international stoc6s and bonds that allo!s the counties to e>pand their econo$ic !el(are (Bi>it * .or$an, 2002; 8ru#$an * Cbst(eld, 200& * @ill, 2008)" 1.2.2. "nternational Trade T!eorie# :or an1 business to succeed, theories are 0er1 i$portant as the1 pro0ide #uideline and ans!ers o( si#ni(icant Auestions li6e !h1 to trade, !hich 6ind o( #oods and ser0ices can be traded and ho! it can be bene(icial (or each participant" 9here are se0eral theories o( international trade that anal1ses di((erent issues on trade b1 pro0idin# critical issues on trade liberali5ation" +1 e>plainin# (e! a$on# others, '$ith (1EE&) in his absolute ad0anta#e theor1 ar#ues that, a countr1 should ne0er produce #oods that it can bu1 cheapl1 in another countr1, and it should speciali5e in the production o( #oods that has an absolute ad0anta#e than other countr1, and trade the$ !ith #oods (ro$ other nations (@ill, 2008:48 * Pu#el, 2005)" 9his $eans that b1 speciali5in# in #oods that e0er1 countr1 has an absolute ad0anta#e, it !ill $a6e both o( the$ to #ain !ell in trade b1 $a>i$i5in# production (or do$estic and international $ar6et" ,nother i$portant theor1 is -o$parati0e ,d0anta#e theor1 b1 Ba0id ;icardo, (181E) !hich states that, it is better (or the countr1 to speciali5e in the production

o( #oods !hich it can produce (ar $ore e((icient and bu1 (ro$ other countries #oods that it is less e((icient in production" 9his !ill $a6e both countries to $a>i$i5e their production b1 increasin# output and $a6e their consu$ers pa1 less and utili5e $ore (or both #oods (@ill, 2008: -hin#arande et al, 2013; 8ru#$an * Cbst(eld, 200&: Pu#el, 2005 * M5u$ara et al, 2012)" 9he ;icardian theor1 has been supported $uch b1 @ec6sher-Chlin !ho o((ers $uch e0idence, considerin# the (actor endo!$ent, a countr1 is considerabl1 o( hi#h co$parati0e ad0anta#e i( it e>ploit !ell its obtainable resources (2id#ren, 2005 as cited b1 M5u$ara et al, 2012)" -o$parati0e ,d0anta#e o( a nation as it is characteri5ed b1 (ree trade is $ore a((ected b1 .ational trade policies !hich can (a0or e>ports and li$it i$ports (ro$ others and i$port duties on trade (Pu#el, 2005; @ill, 2008:10& * 8ru#$an * Cbst(eld, 200&) 2ith re(erence to di((erent studies, li6e Pearson * Me1er (1<E4), )i(ert, (2005), ,(rican )cono$ic Cutloo6 (2002) and Muchan1uri * M5u$ara, (2013), 9an5ania ha0e stron# co$parati0e ad0anta#es in di((erent sectors, but $ore co$petiti0el1 in a#ricultural production, touris$ and $ineral resources" 9an5ania is a $e$ber o( 0arious re#ional #roupin#s in the !orld and ,(rica in particular, !hich pro0ides her !ith the #reatest opportunit1 to trade in #oods and ser0ices to the $e$ber states (reel1" 3t has been e>portin# and i$portin# di((erent co$$odities and products (ro$ the partners? $ar6et countries, includin#, a$on# others, to )ast ,(rican countries li6e 8en1a, /#anda, +urundi and ;!anda as their i$ple$entation o( the ),- -usto$s /nion protocol (or the partner states to encoura#e e>port a$id $e$ber states (or econo$ic ad0ance$ent (3saac * ,thena, 2011 * M,:'-, 200<)" ,lso 'outhern ,(rican Be0elop$ent -o$$unit1 (',B-) $ar6et, !hich has $ade the $a#ni(icent de0elop$ent in achie0in# (ree 9rade ,rea (or its $e$ber 'tates co$$enced in 200<, so as to achie0e the econo$ic intensi(ication, po0ert1 reduction, establish$ent o( $utual political 0alues and i$pro0e the li(e standard o( their people (M5u$ara et al, 2012)" Cther $ar6ets are in the 2orld 9rade Cr#ani5ation $e$bers (29C), )uropean /nion ()/), the 3ndian Ccean ;i$ ,ssociation (or re#ional -o-operation, ,(rican Rro!th Cpportunit1 ,ct (ro$ /nited 'tate (,RC,), -hinese 'pecial and Pre(erential Mar6et ,rran#e$ent, -aribbean and Paci(ic -ountries (,-P) and )0er1thin# but ,r$s ()+,-)/) (M,:'-, 200<, 93-, 2013)" 9he $ain e>ports (ro$ 9an5ania is do$inated b1 a#ricultural products !hich pro0ide 85G o( e>port (-3, 2orld :actboo6, 2014 * 2an#!e, 1<<&), and 25 G Rross Bo$estic Product (RBP) (M,:'-, 200<: <) to#ether !ith $ineral resources" ,ccordin# to )cono$1 2atch, (2010) asserted that i$port and e>port in 9an5ania contributed &1"4 G to the RBP in 200& to 2008, !hile the e>ports increased (ro$ J 2"413 billion in 2008 to J2"E44 billion in 200<, the i$port dropped (ro$ JE"08 billion 2008 to J5"545 billion in 200<" 9he total e>port to )uropean /nion in 2008 !ere S 32&"2< $illion, !hereas i$ports increased (ro$ S404"24& $illion to S4E8"24& $illion 2008"9he e>port


.uran ,ll1 M!asha and 7abibu 8!e6a: 9an5ania in the :ace o( 3nternational 9rade: 9he ,nal1sis o( ;e0ealed -o$parati0e ,d0anta#e (ro$ 200< to 2012

sector has been (ir$l1 increasin# !hich is accelerated b1 e>portation o( #old as it recorded the e>port o( J 8"E billion in 2012, $ore than 18G o( the recorded percent in 2011, !hich !as E"4G, !hile i$port had a sli#htl1 incre$ent onl1 J0"E billion (ro$ J12 billion to J12"E billion in 2011 and 2012 respecti0el1 (,(rican )cono$ic Cutloo6, 2013)" 3n 2011 the econo$1 #ro!s at an a0era#e rate o( &"4G, !hile re$ainin# elastic and is catal15ed b1 $anu(acturin# sectors, a#riculture, transport and co$$unication, $inin# sectors,

and currentl1 the disco0er1 o( oil and #as about 33 trillion cubic (eet, !hich !ill lead the countr1 to access $ore than J10 billion to (acilitate the in0est$ents NibidO" 9here(ore, 9an5ania e>port (ro$ 2000 to 2012 ha0e been surpassed $an1 countries in the !orld, includin# Mauritius, Mala1sia, +ra5il, 9hailand and 9unisia, !hich $a6e the total $erchandise e>port in 2012 increased to about J 5"2 billion NibidO"

$i%ure 1. The top 5 Countries received more export products from Tanzania from 200 ! 20"2. #$ources% International Trade Centre&

1.2.&. Revealed 'om(arative )dvanta%e *R')+ ,s ha0e been alread1 discussed, the countr1 co$parati0e ad0anta#e #enerall1 depends on the econo$ist 0ie!s about the trade pattern and production capabilities !ithin a countr1" 3n the absence o( trade, the co$parati0e ad0anta#e is $easured indirectl1 as (ar as it cannot be disco0ered b1 anal15in# it b1 appl1in# the co$parati0e prices1" Bi((erent scholars ha0e e>plained the ;e0ealed -o$parati0e ,d0anta#e di((erentl1, but (ocusin# $uch on !hat countr1 is intensi0el1 capable o( producin# b1 e>a$inin# the trade $odel and its producti0it1" ;e0ealed -o$parati0e ,d0anta#e 3nde> re(ers to the ratio o( the countr1?s total e>port o( the hi#h producti0it1 co$$odit1 in its total e>ports and the share o( the !orld e>ports o( the si$ilar co$$odit1 in total !orld e>port N3bidO" ;-, is a $easure o( the acAuired output b1 the countr1 in the current trade pattern (M5u$ara et al, 2012)" 3t e$plo1s the trade patterns to spot out the hi#hl1 co$petiti0e econo$ic sector in the countr1 b1 e0aluatin# the !orld a0era#e !ith the countr1?s trade pro(ile" 'erin * -i0an, (2008) describe the +alassa 3nde> as a $easure o( a certain nation, ordinar1 and pre(erence e>port portion considerin# ho! !orth are other nationQs e>ports in the si$ilar industr1 in the !orld ($ore

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re0ie! in 2id#ren, 2005 * +atra * 8han, 2005)" 3t !as e$anate b1 Fiesner and i$pro0ed $ore b1 +alassa in (1<&5) as the $ethod and a (abulous techniAue to anal1se and $easure the potenc1 and the (eeble sectors in the countr1" 3n re(erence to +atra * 8han, (2005) a((ir$ed that, a$on# the aspects that i$pro0es the re0ealed -o$parati0e ,d0anta#e are increased !orld de$and o( a certain co$$odit1, alteration in the structure and speciali5ation" -onsiderin# the ;-, inde>, $eanin# the (ollo!in# si#ni(icances can be depicted such as it assist to reco#ni5e #ood sectors (or in0est$ents and the co$$odities o( priorities, it is hi#hl1 Auali(ied (or d1na$ic en0iron$ent (or trade as it reduces !asta#e o( e((orts to disad0anta#eous co$$odities, led to speciali5ation !hich is suitable (or the co$petiti0e $ar6et and it sho!s (actors that can cause the trade patterns such as trade policies and (actor endo!$ents" +alassa inde> has been used b1 di((erent studies and researches to $easure and co$pare di((erent sectors o( econo$ies #loball1" -hin#arande et al, (2013) used ;-, to in0esti#ate the co$parati0e ad0anta#e o( )ast ,(rican -o$$unit1 (),-) $e$ber state and their econo$ic per(or$ance" 3t depicted that all $e$ber states ha0e ;-,, ho!e0er, in a (e! products and ha0e !ell per(or$ed econo$icall1" +atra * 8han, (2005), e>a$ine the structure o( the co$parati0e ,d0anta#e o( -hina and 3ndia in the !orld $ar6et and reali5ed a$on# other thin#s, there are

3nternational Kournal o( +usiness and )cono$ics ;esearch 2014, 3(1): 15-28


si$ilarities in structure o( co$parati0e ad0anta#e, althou#h there !as no correlation bet!een $anu(acturin# sectors in -hina and 3ndia in the !orld $ar6et" :urther$ore M5u$ara et al, (2012) has used +alassa ;-, inde> (or 'outhern ,(rican Be0elop$ent -o$$unit1 $e$ber 'tates, and concluded that, all $e$ber states ha0e ;-,; ho!e0er the1 ha0e (e!er products !ith co$parati0e ,d0anta#e" 3t !as also used in +ra5il e>a$ine Pthe source o( co$parati0e ad0anta#e? b1 Muriel * 9erra (200<) in t!o seasons, !hich (ound that, +ra5il re0ealed a pro(usion in land, capital and a shorta#e o( s6illed labour" ;e0ealed -o$parati0e ,d0anta#e utili5ed to illustrate -hina?s trans(or$ation o( its e>port pattern !hich indicated the dissi$ilar e>ports, a$idst inland and the coastal -hina (Tue, 2001, as cited b1 M5u$ara )l al, 2012)"

" Methodolo#y
9he anal1sis o( this paper is #oin# to use +alassa?s inde> (1<&5) o( ;-,, as a reliable techniAue #loball1, to e>a$ine the co$parati0e ad0anta#e in 9an5ania sectors and co$$odities" ,rith$eticall1, the $ethod is as (ollo!s;

2hereas; Ui% - is the e>port o( product P%? in countr1 Pi? ViUi% - 9he total e>port in countr1 Pi? V%Ui%W 9he total e>port o( product P%? in the !orld ViV%Ui%W 9otal e>port o( all product P%? in the !orld 9he description o( +alassa?s inde> is as (ollo!s; i( the countr1 e>hibits the ;-, #reater than one, ob0iousl1 it !ill ha0e ;e0ealed -o$parati0e ad0anta#e in that product (;-, X 1)" ,nd i( it displa1s the ;e0ealed -o$parati0e ,d0anta#e less than one (;-, Y1), clearl1 the countr1 !ill ha0e a co$parati0e disad0anta#e in that product (+alassa 1<&5 * 39- user Ruide: 42)" H, positi0e 0alue o( the +alassa inde> indicate that the countr1 is speciali5ed in the selected industr1?s e>ports, but does not necessaril1 $ean that this sector contributes positi0el1 to the national trade balanceI (39- user Ruide: 45)" 9his paper also has used data (ro$ /nited .ations -o$$odit1 9rade 'tatistics Batabase (/. -o$trade) to calculate the 9an5anian e>port data in 200< and 2012, and to anal1se the co$parati0e ad0anta#e o( the @' 4 di#it le0el" 9hen 3t used 3nternational 9rade -entre (39-) e>port data to pro0ide the #eneral account (or sectoral per(or$ance (ro$ 200< to 2012"

!orld $ar6et" 3t !as led b1 co((ee, tea, $ate and spices !ith ;-, o( 28"&, contributed to 15"5&G o( all share o( the 9an5ania ;-, and 0"&EG as the share o( the !orld e>ports" 3ts e>port 0alue in the !orld $ar6et is #ro!in# up to 2&G per 1ear" 9he second is 0e#etable te>tile (ibres nes; paper 1a$ and !o0en (abric !ith ;-, (28"5), !hich is 15"50G (or 9an5ania ;-, and 0"5EG a share o( the !orld e>ports !ith its #lobal #ro!in# e>port 0alue o( -11 G" 9he third is ores; sla# and ash !ith ;-, (18"3) contribute to <"<5G" 3n 2010, 32 sectors out o( <E ascribed 9an5ania ha0e ;-,, !hereb1 it e>ported a total o( 1,E03 products to the #lobal $ar6et !hich a$on# the$, 4E3 (ound to ha0e ;-," 9he sectors that pioneered the e>port industr1 !ere co((ee, a tea$$ate and spices !ith ;-, (1E"8), hold about <"E8G o( the total ;-, shares in the countr1, and the #lobal #ro!th in e>port 0alue o( 3G annuall1" Cres sla# and ash !as the second sector contained ;-, o( (1&"5), eAuals to <"0EG o( all ;-, share !ith the !orld #ro!in# e>port share o( 53G per 1ear" 9he third is tobacco and $anu(actured tobacco substitutes ;-, (15"<), contributed about 8"E4G o( the 9an5ania co$parati0e ad0anta#e in the international $ar6et" 3n 2011, about 1E55 products !ere e>ported to the #lobal $ar6et in !hich 380 products had ;-," , sector !hich has hi#hest ;-, represented b1 0e#etable te>tile (ibres nes, paper 1arn, !o0en (abric !ith ;-, (1<"0) sa$e to 13"5G o( the total 9an5anian ;,-, !hile e>periencin# the decline o( its #ro!in# e>port 0alue (or -2G per annu$" 3t !as (ollo!ed b1 co((ee, tea, $ate and spices !ith ;-, in (1E"0) eAuals to 12"1G o( all ;-, !hich is attributed to the #ro!in# 0alue to the !orld $ar6et (or 12G annuall1" 9he third co$$odit1 that ta6es pleasure o( the #lobal $ar6et ad0anta#e is the Cres, sla# and ash !ith ;-, o( (15"5), contribute 11G o( all 9an5ania ;-," 9he 1ear 2012 e>perience the sudden drop o( $ore that 25G o( the products e>ported to the !orld $ar6et (ro$ 1,E55 in 2011 to 1,1E< in 2012, and the e>ported products !ith ;-, dropped to 353 (ro$ 380 in 2012" 9he sectors that ha0e the bene(it o( the ;-, !ere 2E out o( <E, !hile the leadin# sector !ere tobacco and $anu(actured tobacco substitutes !ith ;-, (&3"1) sa$e as 24"2G; co((ee, tea, $ate and spices ;-, (3<"3), eAuals to 15G o( all ;-, and the third !as 0e#etable te>tile (ibres nes, paper 1a$, and !o0en (abric !ith ;-, o( (2&"0), eAuals to <"<EG o( all ;-, share in 9an5ania" &.1.1. Sector# 9here is a substantial 0ariation in per(or$ance bet!een sectors" -o((ee, tea, $ate and spices !ith @' (0<) sector, per(or$ed !ell and lead other sectors (or the period o( 200< and 2010 !ith ;-, o( 28"& and 1E"8 respecti0el1" Cther t!o periods bet!een 2011 and 2012, the =e#etable te>tile (ibres nes, paper 1arn, !o0en (abric sector (@'" 53) and 9obacco and $anu(actured tobacco substitutes (@'" 24), share the top position !hen the (@' 53) lead all sectors at @' 4 di#it le0el in 2011 !ith the ;-, o( 1<"0 and sector (@' 24) lead to hi#her per(or$ance in 2012 !ith the ;-, o( &3"1"

$ Analysis and %indin#s

&.1. Sector# and 'ommodit, anal,#i# *-a#ed on "T' E.(ort /ata+ 3n 200<, 9an5ania had 2E sectors !ith re0ealed co$parati0e ad0anta#e out o( <8, co$prised o( 1&1& products e>ported, !hereas 400 products had ;-, in the


.uran ,ll1 M!asha and 7abibu 8!e6a: 9an5ania in the :ace o( 3nternational 9rade: 9he ,nal1sis o( ;e0ealed -o$parati0e ,d0anta#e (ro$ 200< to 2012

Ta0le 1. The top three sectors and their potential commodities 'ith hi(hest RC) in each *ear from 200+,20"2. &ear '( )ode 0< "--. 53 2& 0< "-12& 24 53 "-11 0< 2& 24 "-1" 0< 53 (ector descri*tion +)A ,1 -o((ee, tea, $ate and spices =e#etable te>tile (ibres nes, paper 1arn, !o0en (abric Cres, sla# and ash -o((ee, tea, $ate and spices Cres, sla# and ash 9obacco and $anu(actured tobacco substitutes =e#etable te>tile (ibres nes, paper 1arn, !o0en (abric co((ee, tea, $ate and spices Cres, sla# and ash 9obacco and $anu(actured tobacco substitutes -o((ee, tea, $ate and spices" =e#etable te>tile (ibres nes, paper 1a$, and !o0en (abric +)A 28"& 28"5 18"3 1E"8 1&"5 15"< 1<"0 1E"0 15"5 &3"1 3<"< 2&"0 ) )ode 0<0< 0<01 5300 2&1& 0<01 0<02 2&1& 2&02 2401 2402 5300 0<01 0<02 2&1& 2&02 2401 0<01 0<02 5300Z )ommodity descri*tion +)A ,1 9ea -o((ee (.o an1 co$$odit1 portra1ed the ;-, at @s 4di#it le0el)" Precious $etal ores and concentrates" -o((ee 9ea Precious $etal ores and concentrates Man#anese ores and concentrates 9obacco un$anu(actured; tobacco re(use -i#ars, cheroots, ci#arillos * ci#arettes" (.o an1 co$$odit1 portra1ed the ;-, at @s 4di#it le0el)" -o((ee 9ea Precious $etal ores and concentrates Man#anese ores and concentrates 9obacco un$anu(actured; tobacco re(use -o((ee 9ea (9here is no an1 co$$odit1 portra1ed the ;-, at @s 4- di#it le0el)" +)A 5E"0 24"1

834"5 18"1 2<"3 3E<"E 2<3"E 45"& 2"2

15"5 24"8 381"0 33&"3 188"1 35"0 44"E

'ource: 3nternational 9rade -entre database .ote:-" -ode W -o$$odit1 code; 5300Z - ,ll co$$odities in =e#etable te>tile (ibres nes, paper 1a$, and !o0en (abric do not sho! its ;-, at @s 4-Bi#it le0el"

;e(errin# to table 1, illustrate the e>port per(or$ance in top three sectors and its constituent co$$odities !ith ;-, #reater than 1 (;-, X1) since 200< to 2012" -olu$n one (ro$ the pa#e ri#ht side sho! the period (1ear) (ro$ !hich the ;-, !as calculated !hile colu$n t!o it is the @ar$oni5ed '1ste$ (@') it ha0e been used to classi(1 di((erent products (39- /ser #uide: 3), then colu$n 3 it contain di((erent sectors, colu$n (our is ;-, (or sectors, colu$n (i0e is co$$odit1 code (special nu$ber to describe each co$$odit1), colu$n & are the co$$odit1 !ith ;-, eAual or #reater than one and the last colu$n is ;-, (or co$$odities a0ailable in each sector" :or the !hole periods (ro$ 200< - 2012, sector, !hich portra1ed the stron#est and the hi#hest per(or$ance !as 9obacco and $anu(actured tobacco substitutes !ith ;-, in &3"1 abo0e the $ini$u$ !hich is one (1)" 9here !as no a considerable chan#e (or these leadin# sectors ;-, since 200< to 2012, as $ost o( the$ plu$$eted or hoist one position" @o!e0er, the $ain chan#es ha0e been obser0ed in the 0alue o( ;-,, as $an1 sectors lose their co$parati0e stren#th as ti$e elapsed" )>a$ple, co((ee, tea, $ate and spices !hich per(or$ed !ell at the be#innin#, its ;-, sho!ed the be# o(( 0alue (or three 1ears consecuti0el1 as it drops (or about 40"5G (ro$ 28"&, 1E"8 and 1E in 200<, 2010 and 2011 respecti0el1" ,lso, 0e#etable te>tile (ibres nes, paper 1arn and !o0en (abric, decreased (ro$ ;-, (ro$ 28"5 in 200< to ;-, 2&"0 in 2012 about 8"EG" Cres, sla# and ash, its ;-, 0alue decline decisi0el1 (ro$ ;-, o( 18"3 in 200< to ;-, 15"5in 2011, and disappear in top three sectors !ith hi#h ;-, co$pletel1 in 2012" 9he onl1 sector that de$onstrated the positi0e trend in t!o consecuti0e periods is P9obacco and $anu(actured tobacco substitutes?, e$er#ed

in top three in 2010 !ith the ;-, o( 15"< rise to ;-, o( &3"1in 2012" &.1.2. 'ommoditie# Cn the side o( co$$odities, e0er1 sector enclosed dissi$ilar co$$odities !hich in one !a1 or another it can contribute to the stren#th or !ea6ness o( the sectors in the !orld $ar6et" @o!e0er, each co$$odit1 can as !ell stand itsel( (ro$ the co$petition !ith other related co$$odities in the international trade" Man1 co$$odities hold b1 di((erent sectors re0eal hi#h per(or$ance in ter$s o( ;-," ,ccordin# to the anal1sis, the co$$odit1 (@' 2&1&), precious $etal ores and concentrates ran6ed in the top position !ith the hi#hest ;-, o( 834"5 (ollo!ed closel1 b1 $an#anese ores and concentrates !ith ;-, o( 33&"3; 9obacco un$anu(actured, tobacco re(use ;-, o( 188"1; 9ea ;-, 5E; -o((ee !ith ;-, 35"0 and -i#ars, cheroots, ci#arillos * ci#arettes !ith ;-, 2"2" Cther sectors li6e 0e#etable te>tile (ibres nes, paper 1a$, and !o0en (abric !hich its co$$odities ran#e bet!een the (@' 5300) to (5311), it did not sho! their ;-, althou#h in its a##re#ate le0el it per(or$ed !ell" ,s it !as in di((erent sectors, also the co$$odit1 co$petence in the #lobal $ar6et sho! a discrepanc1 in re(erence to ti$e" Man1 co$$odities ;-, 0alues !ere not retained and other co$$odities e>perienced a per(or$ance slu$p !ith ti$e" )>a$ple, tea and co((ee had ;-, o( 5E"0 and ;-, 24"1 in 200< !hich dropped to ;-, 15"5 and 24"8 in 2011 be(ore it rose a#ain to ;-, 35"0 and ;-, 44"E" Precious $etal ores and concentrates ;-, 0alue decreased (ro$ 834"5 in 200< to 381"0, in 2011 be(ore it (ades a!a1 in top three co$petiti0e co$$odities entirel1 b1 2012"

3nternational Kournal o( +usiness and )cono$ics ;esearch 2014, 3(1): 15-28


Man#anese ores and concentrates to#ether !ith tobacco un$anu(actured; tobaccos re(use is a$on# the (e! co$$odities that e>perience a positi0e ;-, trend in 2010 and 2011, !here it hold an ;-, to 2<3"E and ;-, o( 45"& lastl1 rose to ;-, 33&"3 and ;-, 188"1 durin# 2011 2012" -i#ars, cheroots, ci#arillos * ci#arettes in tobacco and $anu(actured tobacco substitutes sector, appeared once in top t!o co$petiti0e co$$odities !ith ;-, #reater or eAual to one and then under#o per(or$ance ine((ecti0eness a(ter!ard" &.2. 'ommodit, )nal,#i# *-a#ed on 12 'omtrade+ &.2.1. 'ommodit, Performance 3ndi0idual co$$odities pla1ed a #reat role in e>port industries in 9an5ania and are si#ni(icantl1 6ept #ro!in# as the in0est$ents in the countr1 is $ountin#" 'o$e o( the co$$odities ha0e hi#her ;-, !hile others ha0e lo!er, althou#h their e>port 0alue is bi# enou#h" :or the period since 200< to 2012, so$e co$$odities $aintained their status (or both ;-, and their e>port 0alue !hile others decline considerabl1 and shi(t (ro$ the top ten e>port co$$odities transported in the #lobal $ar6et" 3n all 1ears, #old, non-$onetar1 ()>cl" Rold, ores -oncentrate) (@' <E10) hold the (irst position in e>port 0alues (ro$ 9an5ania to the !orld $ar6et, (ollo!ed b1 Metalli(erous ores and $etal scrap (@' 28<1)" Cther -o$$odities !hich reser0ed
)ommodity descri*tion /)omm descri*tion 0 Rold, non-$onetar1 ()>cl" #old, ores -oncentrates) Metalli(erous ores and $etal scrap Po!er-#eneratin# $achiner1 and eAuip$ent 'pecial transaction not -lassi(ied 9obacco and tobacco $anu(actures 9e>tile (ibres Medicinal and phar$aceutical products 9e>tile 1arn, (abrics, $ade-up articles, n"e"s" etc 9!ine, corda#e etc 'esa$e('esa$u$) seed .)2 Metalli(erous ores and $etal scrap Cth" .on-(err" $ental !aste -opper ores and concentrates +)A "--. 28"01 &<3"<5 4<"83 0"34& 44"25 45"<0 0"E&& 1"032 53"E5 1E1"EE 1orld +ank22 25 124 2 5< E< 114 <& 1&4 1& <5 12 <3 <1 151 20 13E 23 140 & 102

its e>port status (or about E5G !ere po!er-#eneratin# $achiner1 and eAuip$ent (@' E11), te>tile (ibres (@' 2&31), tobacco and tobacco $anu(actures (@' 1212) and sesa$e ('esa$u$) seed !ei#ht (@' 2225)" .e0ertheless, since 200<, the (@' <E10) ;-, 0alue decreased in unprecedented rate (ro$ ;-, 28"01 in 200< to ;-, 20, in 2012" 9he plun#e o( #old e>port in the #lobal $ar6et, !hich contribute to 35G o( 9an5ania e>port earnin#s in recent 1ears had ne0er been e>perienced e>cessi0el1 since 1<81 (Ker0in#, 2013), !hich dropped (ro$ 3G, (ro$ J 2"24 billion in 2011 to J 2"1E billion in 2012 (+ari1o, 2013)" 9he sa$e case to Metalli(erous ores and $etal scrap !ith @' (28<1), t!ine and corda#e !ith (@' &5E5) and 'esa$e ('esa$u$) !ith (@' 2225) seed, !hich its ;-, and its e>port 0alue decreased (ro$ ;-, &<3"<5, ;-, 53"E5 and ;-, 1E1"EE in 200< to ;-, 181"8E, E"14 and ;-, 112"E5 in 2012 respecti0el1" 9he decline in the e>port co$petence and ;-, (or so$e products co$$odities did not encounter $erel1 b1 the co$$odities e>isted in the e>port industr1 (or a lon# ti$e, but also bu$ped into the ne! e$er#ed co$$odities li6e Metalli(erous !ith ores and $etal scrap !ith (@' 28EE) and Cth none-(err $etal !aste !ith (@' 2882), !hich its 0alue dropped (ro$ ;-, 320"25 and ;-, 15"24 in 2010 to ;-, E<"52 and 0"<3 in 2012"

Ta0le 2. RC) for the top ten Commodities exported to the -orld .ar/et from 200+, 20"2. ) )ode <E10 28<1 E11 <310 1212 2&31 542 &585 &5E5 2225 28EE 2882 2831 +)A "-123"24 41&"&8 45"&8 0"&1E 4<"4& 1<"08 1"035 33"<< E<"&3 83"08 320"25 15"24 1orld +ank 2< 123 4 &1 85 112 114 158 14 << 1< <E 101 144 15 13< 48 13E < 10& 4 &0 38 141 +)A "-11 2E"455 2<<"0< 53"01 0"0&5 3<"503 <"850E1 0"E2< 2E"1E 15"24 131"<1 44E"88 1"018 1orld +ank 2& 122 5 E0 110 11& 112 152 14 8E 23 <4 104 141 21 13& 3< 134 5 103 3 &1 81 13& +)A "-1" 20"88 181"8E &0"40 0"4E3 5<"&& 20"5< 0"<22 18"E1 E"143 112"E5 E<"52 0"<33 1<"E& 1orld +ank 28 113 E E0 10& 108 <5 13& 11 8E 14 <1 <8 12< 20 125 43 124 5 <4 5 55 8E 12& 1E &&

'ource: -alculated (ro$ /. -o$trade )>port data ZZ - 9he nu$erator represents the position o( 9an5ania a$on# other countries !hich e>port the sa$e co$$odit1 or product, and deno$inator represent total nu$ber o( all countries e>ported that co$$odit1"

9able 2, sho! the ;-, o( the top 10 co$$odities e>ported (ro$ 9an5ania to the !orld $ar6et (ro$ 200< to 2012, e0aluatin# its co$petence and stabilit1 in the $ar6et, it sho!s that the co$$odit1 that lost its co$petiti0e ad0anta#ethe1he e$er#ed and the one !hich $aintained its

position" :irst colu$n describe the co$$odit1 e>ported (ro$ 9an5ania to the !orld $ar6et, second colu$n sho! the co$$odit1 codes to identi(1 the co$$odit1, third is co$$odit1 ;-, (or 200<, the (orth colu$n sho! the e>port position or ran6 hold b1 that co$$odit1 product in !orld


.uran ,ll1 M!asha and 7abibu 8!e6a: 9an5ania in the :ace o( 3nternational 9rade: 9he ,nal1sis o( ;e0ealed -o$parati0e ,d0anta#e (ro$ 200< to 2012

$ar6et, (i(th colu$n sho!s the ;-, o( all co$$odities in 2010, si>th is its position in the !orld $ar6et, se0enth ;-, (or 2011, ei#hth colu$n is position o( product in 2011, ninth colu$n is co$$odit1 ;-, in 2012 and colu$n 10 is the ran6 (or co$$odities e>ported in 2012" &.2.2. R') 3ariation *R') 4ovement+ ,nother i$portant and noticeable point is that, there is a decline o( e>port o( $an1 co$$odities in the t!o 1ears successi0el1, !hich is 200< and 2010 and so$e up to 2011, !hile sho! the sudden reco0er1 in 2012" 9his can be seen throu#h di((erent product per(or$ance as (ollo!s; Rold,
A 1" 2" 3 1" 2" (ectors that #ained +)A co((ee, tea, $ate and spices 9obacco and $anu(actured tobacco substitutes (ectors that lost the +)A =e#etable te>tile (ibres nes, paper 1arn, !o0en (abric Cres, sla# and ash +)A X1 28"&-3<"< 15"<-&3"1 A 1" 2" 3" 3 1" 2" 3" 4" -" 15"<-&3"1 B" 1" 2" E 1" 2"

non-$onetar1 ()>cl" #old, ores" -oncentrate), $etalli(erous ores and $etal scrap, 9!ine, corda#e and 'esa$e ('esa$u$) seed, (all in total a0era#e o( 45"1G" ,t the sa$e ti$e, others en%o1ed the co$parati0e abilit1 in the #lobal $ar6et" )>a$ple tobacco and tobacco $anu(actures (@' 1212), rose (ro$ ;-, 44"25 to 4<"4& an incre$ent o( 10"5G; te>tile 1arn, (abrics, $ade-up articles n" e" ' ;-, 1"03 to 33"<<, sa$e as a <&"< G increase; t!ine and corda#e ;-, 53"E5 to ;-, E<"&3 accounted (or an incre$ent o( 12"1G and $edicinal and phar$aceutical products ;-, 0"E& to ;-, 1"03, eAuals to the increase o( 2&"2G"

Ta0le &. The RC) movement for sectors and commodities in Tanzania in 200+,20"2 )ommodities that #ained +)A Po!er-#eneratin# $achiner1 and eAuip$ent 9obacco and tobacco $anu(actures 9e>tile 1arn, (abrics, $ade-up articles, n"e"s" etc )ommodities that lost +)A Rold, non-$onetar1 ()>cl" #old, ores -oncentrates) Metalli(erous ores and $etal scrap 9!ine, corda#e etc 'esa$e('esa$u$) seed 9e>tile (ibres New )ommodities that emer#ed and #ain New )ommodities that emer#ed and lost Metalli(erous ores and $etal scrap Cth" .on-(err" $ental !aste )ommodities with com*arati5e disad5anta#e Medicinal and phar$aceutical products 'pecial transaction not -lassi(ied +)A X1 4<"8-&0"4 44"2-5<"& 1"0-18"E 28-20"8 &<3"<-181"8 53"E5-E"14 1E1"E-112"E 45"<-20"5

28"5-2&"0 18"3-15"5

) 1"

New sectors emer#ed 9obacco and $anu(actured tobacco substitutes

320"2-E<"5 15"2-0"<3 0"<2 0"4E

(ectors with )om*arati5e disad5anta#e22

ZZ 9here !as no an1 sector in top three !ith co$parati0e disad0anta#e 'ource: 3t !as $ade usin# data (ro$ 39-

9able 3 abo0e portra1s the ;-, $o0e$ent (or both sectors and co$$odities (ro$ 200< to 2012" -olu$n 1 sho!s the sectoral nu$bers in a speci(ic cate#or1 !hich is labelled b1 letter ,-B, colu$n 2 are the sectors, colu$n three sho!s increase or decrease in sectors ;-,, colu$n (our are the nu$bers and letters (or co$$odities in a special cate#or1, colu$n (i0e are the co$$odities and colu$n si> represent the increase or decrease o( ;-," 9he co$$odities !hich sho!ed Auic6 reco0er1 and rise in 2011 and 2012 !ere Po!er-#eneratin# $achiner1 and eAuip$ent (@' E11), raised (ro$ ;-, 53"01 to &0"40; 9e>tile (ibres (@' 2&31) #ro! up (ro$ ;-, o( <"8 to ;-, 20"5< and 9obacco and tobacco $anu(actures (@' 1212), increased (ro$ ;-, 3<"50 to ;-, 5<"&&" 9he $ain reason (or these incre$ents is the assurance (ro$ its #uaranteed ,RC, $ar6et in the /', !hich b1 2011 9an5ania e>ported #oods 0alued J 5"E $illion includin# tobacco (Bail1 .e!s, 2013)2" 3t has been disco0ered that, so$e co$$odities ha0e #reat 0alues in the !orld e>port, but contain (e!er or less than one ;-, in the !orld $ar6et" 'o$e co$$odities appeared in

the top $ost e>port lists in 9an5ania contained $ore than 800 co$$odities !hile ha0e 0er1 s$all or less than one ;-," )>a$ples o( these co$$odities are PMedicinal and phar$aceutical products (@' 542)? !hich hold the tenth (10) position in e>port 0alue and P'pecial transactions and co$$odities not classi(ied accordin# to 6ind (@' <310)?, hold (ourth position !ith ;-, o( 0"E& and ;-, 0"34 in 200<, !hich re$ained beneath the reAuired ;-, until 2012, ha0in# ;-, o( 0"<2 and ;-, 0"4E, and hold the ei#hth (8) and t!el(th (12) position respecti0el1" , co$$odit1 !hich #rips the $a>i$u$ nu$ber o( ;-, also depicted the stren#th o( that co$$odit1 in the !orld $ar6et to!ards others in the related industr1 !here Metalli(erous ores and $etal scrap !ith the total a0era#e o( ;-, 3<E"8< (ollo!ed b1 sesa$e ('esa$u$) seed !ith ;-, o( 124"8E and the third is po!er #eneratin# $achiner1 and eAuip$ent !ith ;-, o( 52"23" &.&. Sector# it! 'om(arative /i#advanta%e 3n re(erence to 39- e>port data 200< to 2012, there are so$e other sectors !ith ;-, less than 1 but so$e o( its constituent co$$odities re0eal a co$parati0e ad0anta#e in the !orld $ar6et" +1 $entionin#, include, a$on# others, are 'hips, boats and other (loatin# structures !ith (@' 8<), sho!

http: !!!"dail1ne!s"co"t5 inde>"php (eatures 2132<-tobacco-cashe!-nuts-ta n5ania-s-potential-a#oa-e>port-bailout"

3nternational Kournal o( +usiness and )cono$ics ;esearch 2014, 3(1): 15-28


the ;-, o( 0"1 in a##re#ate le0el, !hile !ithin the co$$odit1 le0el the tu#s and pusher cra(t (8<04) sho!s an ;-, o( 14, !hich is hi#her than the one" ,nother sector is (@' <E), !or6s o( art, collectors? pieces and antiAues !hich

in 2012 re0ealed a co$parati0e ad0anta#e o( 0"E, !hile its constituent co$$odit1 !ith (@' <E05), !hich is the collection piece o( the 5oo, botanic and histor1 !hich has the ;-, o( E"

Ta0le 5. Commodities 'ith RC) (reater than one #0"& in $ectors 'ith Comparative 1isadvanta(e in 20"2. '( code 8< <E (ector accounts 'hips, boats and other (loatin# structures !or6s o( art, collectors? pieces and antiAues +)A 0"1 0"E '( )ode 8<04 <E05 E204 E2 3ron and steel !ith 0"5 E214 E223 100& 100E )ommodity the tu#s and pusher cra(t (8<04) collection piece o( 5oo, botanic, histor1 (errous !aste and scrap; re$eltin# scrap in#ots or iron or steel +ars * rods o( iron non-al s, n(! than (or#ed, hr, hd, hot-e>truded !ire o( stainless steel ;ice Rrain sor#hu$ +)A 14 E 2"4 1"8 1 2"4 1"8


-ereals sector


'ource: Made (ro$ 39- e>port data

;e(er to table 4, it sho!s a$on# the e>port sectors !ith a co$parati0e disad0anta#e !hile so$e o( their co$$odities hold co$parati0e ad0anta#es" -olu$n one sho!s the @' code (or sectors, colu$n t!o are sectors, colu$n three is an ;-, (or sectors, colu$n (our are co$$odit1 codes, colu$n (i0e sho!s speci(ic co$$odities and the si>th colu$n sho! the ;-, (or co$$odities 3ron and steel sector (@' E2) e>hibit less the one ;-,, but at co$$odit1 le0el it carries su((icient co$parati0e bene(its" 2ithin this sector there are three co$$odities !ith #reater ;-,, !hich are (errous !aste and scrap; re$eltin# scrap in#ots or iron or steel (@' E204), +ars * rods o( iron non-al s, n(! than (or#ed, hr, hd, hot-e>truded (@'E214) and !ire o( stainless steel (@' E223), de$onstrated the ;-, in 2"4, 1"8 and 1 respecti0el1 2012" :urther$ore, ;ice (@' 100&) and Rrain sor#hu$ (@' 100E) in the cereals sector (@' 10) !ith ;-, 0"5, re0ealed a co$parati0e ad0anta#e o( 1"< and 2 !hich is abo0e the accepted le0el" &.5. General $indin%# ;e0ealed co$parati0e ad0anta#e depicted se0eral 6e1 issues about 9an5ania e>ports b1 usin# data (ro$ /. -o$trade and 3nternational 9rade -entre )>ports" 9his paper used (our (4) di#it le0el o( @' cate#ori5ation (or both 1ears (ro$ 200< to 2012" 9he anal1sis portra1ed that, 9an5ania has a #reat co$parati0e ad0anta#e throu#h indi0idual co$$odities !hich e>cels e0en in the sectors !ith co$parati0el1 disad0anta#ed" Man1 sectors sho! instabilit1 in its re0ealed co$parati0e ad0anta#es co$pelled so$e o( the$ to (all dra$aticall1 (ro$ the top$ost le0el and lost their co$petence in the #lobal $ar6et" 9raditional products li6e co((ee, $ate spices and tie, to#ether !ith tobacco and its in#redients are the onl1 sectors that e>hibited the increasin# trend since 200<" 9he1 ha0e been doin# !ell in their co$$odit1 le0el b1 sho!in# the positi0e trend" Cn the side o( co$$odities $ore than 50G did not $ana#e to $aintain its re0ealed co$parati0e ad0anta#e, and so$e o( the$ has a co$parati0e disad0anta#e !hile others

lost their e>port position 0alue b1 decline a$icabl1 and $o0e a!a1 (ro$ the top ten o( the 9an5ania e>port co$$odities" 9hese include Rold, non-$onetar1 ()>cludin# #old, ores -oncentrates), Metalli(erous ores and $etal scrap, t!ine, corda#e etc" and 'esa$e ('esa$u$) seed" Moreo0er, other co$$odities li6e tobacco and tobacco $anu(acturers, po!er-#eneratin# $achiner1 and eAuip$ent and 9e>tile 1arn, (abrics, $ade-up articles, n"e"s !ere able to enlar#e their e>port per(or$ance and ;-, 0alue" 9he $ain distin#uished point here is that, it is not so custo$ar1 (or co$$odities or sector to $aintain its ;-, !hen e>a$ined accordin# to @' 4 di#it le0el to!ard others in the !orld $ar6et" , sector !ith (@' 53), 0e#etable te>tile (ibres, nes, paper 1a$, and !o0en (abric !hich has ;-, in 2&"0, appeared to ha0e no co$parati0e ad0anta#e in an1 o( its co$$odities !hich $a6es it stand itsel( as a sector !ith ;-, #reater than one" 3n this case e0er1 sector in 9an5ania !hich did not sho! ;-, #reater or eAual to one accounted (or E2G o( all sectors, can be eAuipped, !ell throu#h 0arious resources to ad0ance and intensi(1 the countr1Qs e>port industr1" ,ccordin# to this anal1sis, 9an5ania e>ported a total o( &253 products in the !orld $ar6et (ro$ 200< to 2012, a0era#el1 15&3"25, but onl1 23"5G to 2&G ha0e been re0ealin# co$parati0e ad0anta#e to international $ar6et" 9he total a0era#e is decreasin# e0er1 1ear as the data sho! that, in 200< the total e>port !ere 1&1&, !hich decreased spontaneousl1 to 1,1E< e>ported products in 2012, eAuals to 2EG decline" 3n addition to that it has been reali5ed that, the products !ith ;-, !hich is #reater than one also de$onstrated the decline o( its 0alues in e>ports since 200< (ro$ 400 to 353 in 2012, the decrease o( 11"E5G, sa$e to 2"<G each 1ear" 9his is not #ood results (or a countr1 li6e 9an5ania !hich has trade de(icits (,(rican )cono$ic Cutloo6, 2013; ;euters, 2012) as it is supposed to increase and speciali5e $ore in e>port products !hile i$pro0in# the internal $ar6et" 9an5ania #rasps the $a>i$u$ opportunities in precious $etal and $an#anese ores products as the1 ha0e the hi#hest ;-, than an1 other product or co$$odities


.uran ,ll1 M!asha and 7abibu 8!e6a: 9an5ania in the :ace o( 3nternational 9rade: 9he ,nal1sis o( ;e0ealed -o$parati0e ,d0anta#e (ro$ 200< to 2012

$i%ure 2. The (ro'th of export products $uppl* in Tanzania and the International Trade from 200 ! 20"2. #$ource% ITC calculations 2ased on 34 C5.TR)1E statistics&

9he clari(ication in (i#ure 2 is as (ollo!s; 9he hori5ontal a>is represents the 9an5anian share in the !orld e>ports (or (i0e 1ears !hile the 0ertical a>is represents the i$port #ro!th #loball1 (or the pre0ious (i0e 1ears !hile" +ubbles appear on the ri#ht side o( 0ertical a>is e>hibit the co$$odities that 9an5ania ha0e ;-, and is $ore speciali5ed on its e>port" Tello! bubbles represent 9an5ania as a net i$porter o( that product !hile blue bubbles sho! 9an5ania as a net e>porter o( that product" 9he re(erence bubble !hich is bro!n, represents bubbles !hich did appear due to lac6 o( #ro!th rate indicators" 3n addition to that the si5e o( the bubble is proportional to e>port 0alue" ,ccordin# to 39- /ser Ruide, this chart is structural since the 0ariation o( prices does not ha0e an i$pact in !orld i$ports ascribed in 0olu$e ter$s and there is no substantial disparit1 in the $ar6et" &.6. Recommendation ,ccordin# to the results o( this anal1sis, 9an5ania has re0ealed co$parati0e ad0anta#e in 0arious sectors and co$$odities, althou#h $ost o( the$ are basicall1 do$inated b1 pri$ar1 products" 9his situation $ade the countr1 to use $an1 e((orts to produce so as to earn $ore si$ilarl1 or closer to industriali5ed nations" :or $ore i$pro0e$ent in e>port sectors and co$$odities the (ollo!in# should be considered; &.6.1. "m(rovement of Sector# 9an5ania has so $an1 sectors !ith lo! or no co$parati0e ad0anta#es !hile so$e o( its constituent co$$odities re0ealed co$parati0e ad0anta#e" Ro0ern$ent should put $uch e((ort to sectors that portra1 hi#hl1 co$parati0e ad0anta#es b1 $a6in# sure that, the1 $aintain or increase

re0ealed co$parati0e ad0anta#es b1 clearl1 e0aluatin# the per(or$ance o( each sector Auarterl1 and pro0idin# technical and (inancial assistance so as to i$pro0e and re$o0e the i$pedi$ents in its structural chan#es" ,lso, dependin# on the #lobal and en0iron$ental chan#es, di((erent strate#ies should be set periodicall1 in order to alle0iate uncertainties !hich $a1 a((ect the potenc1 o( the e>istin# sectors and restore other sectors !ith no ;-," 9he #o0ern$ent should set priorities !hich sector should be e((ecti0el1 e$po!ered in a certain period dependin# si#ni(icantl1 the needs o( the do$estic and the international $ar6et" ,dditionall1, the #o0ern$ent has to establish inter-sectoral e>port co$petition e0er1 1ear b1 anal1sin# and enhancin# the co$petence o( do$estic $ar6et, ai$in# at $oti0atin# and increasin# the e>port rate and institutin# $ar6et liberali5ation" ,ll these !ill potentiall1 ha0e ad0erse positi0e e((ects on sectoral per(or$ance" &.6.2. Sectoral Policie# Policies pro0ide the director1, plans and or strate#ies on ho! to ad$inister the acti0ities or pro#ra$s to attend the pro%ected ob%ecti0es" 9an5ania #o0ern$ent has set policies to #o0ern and i$pro0e di((erent econo$ic sectors (or the ai$ o( alle0iatin# po0ert1, i$pro0in# li0in# standard and increase the RBP" )>a$ple, the ,#ricultural and Fi0estoc6 polic1 o( 1<<E (/;9, 1<<E), ai$ed at rehabilitatin# and i$pro0in# all a#riculture in(rastructures to#ether !ith 9rade polic1 2003, ai$ed at enhancin# 9an5ania to establish and e>pand its econo$1 in the hi#hl1 co$petiti0e (ra$e!or6 (/;9, 200<)" Man1 policies (ailed to reach its e>pected ob%ecti0es due to di((erent (actors a$on# the$ is lac6 o( enou#h resource to (acilitate the i$ple$entation o( the policies" 9he #o0ern$ent should set policies that are

3nternational Kournal o( +usiness and )cono$ics ;esearch 2014, 3(1): 15-28


rele0ant to econo$ic situation so as to acco$plish the intended ob%ecti0es in e0er1 sector in an e((icient !a1" Policies should be !ell detailed and clari(ied, lea0in# no roo$ (or a$bi#uit1 and should (ocus $uch on ho! to counterchallen#e the co$petition (ro$ other producers? countries b1 stren#thenin# econo$ic in(rastructures" &.6.&. E#ta0li#!ment of Proce##in% and 4anufacturin% "ndu#trie# 9an5ania is dependin# $ore on the e>port o( pri$ar1 products in the !orld $ar6et" 3n establishin# industries !ithin the production areas, the countr1 !ill be able to produce $ore $anu(actured products in di((erent Aualities? dependin# on the e>istin# $ar6et, !hich ob0iousl1 !ill lo!er i$port dependence and increase the products and co$$odities in the internal $ar6et and (or e>port as !ell" ,lso, it !ill create and increase the e$plo1$ents in the co$$unities !hich !ill raise per capita inco$e and the #ro!th o( the national RBP, b1 increasin# the consu$ption o( co$$odities and products !hich ulti$atel1 sti$ulate the #ro!th (or both industries" +1 establishin# the processin# industries as the (irst step to!ard the $anu(acturin# industries, this !ill abrid#e the traditional $ethods o( processin# co$$odities !hich too6 a lon# ti$e be(ore e>portin# to the !orld $ar6et and it !ill sti$ulate other econo$ic sectors li6e ban6in#, a#ribusiness and insurances" ,ccordin# to /.3BC, (2012) $anu(acturin# (or e>port sector in 9an5ania has been #ro!in# steadil1 (ro$ 2000 to 2005, and then au#$ented rapidl1 (ro$ 200& up to 2010 co$pared to the sub-'aharan ,(rican and the !orld" 3t #ro!s up !orthil1 (ro$ J 12< $illion to J1<04 $illion accounted (or an increase o( 45G annu$" &.6.5. "nve#tin% muc! in )%ro -u#ine## 9an5ania is one o( the countries that depend $uch on a#riculture as the en#ine o( the econo$1 and is one a$on# the leadin# sectors that pro0ide e$plo1$ent (or $ore than E0G o( 9an5anian (M,:'-, 200<)" Mostl1, the a#ricultural products in 9an5ania are predo$inantl1 produced (or (ood, reported about &5G RBP in a#riculture and (or dail1 subsidiar1 NibidO" C!in# to that, the #o0ern$ent should in0est in a#ribusiness sector, !hich is $ain catal1st and underpin to industrial production and de0elop$ent" Man1 countries ha0e $ana#ed to trans(or$ their econo$ic and social structure b1 re(or$in# a#riculture sector !ith $odern technolo#ies" 9hrou#h a#ribusiness it !ill help to i$pro0e the traditional (ar$in# s1ste$ b1 e>pandin# $ore areas (or production, throu#h introducin# the re#ular crop culti0ation (not rain based) b1 usin# technolo#1 and inno0ati0e (ar$in# s1ste$, !hich (inall1 !ill increase the production o( (ood (or (a$il1 securit1 and arouse the econo$ic !el(are o( the nation" ,lso, it !ill $a6e the countr1 to substantiate and acco$plish the $illenniu$ #oals (or 9an5anian a#riculture P8ili$o 8!an5a?3, !hich is to (eed the !hole population

and to produce (or surplus" 3t !ill pro0ide an opportunit1 (or the societ1 to learn the $odern !a1 o( culti0ation and strate#ies to $a>i$i5e the a#ricultural bene(its and $onopoli5e both the internal and e>ternal $ar6ets" .e0ertheless, the #o0ern$ent should increase $ore ,#riculture e>perts b1 increasin# the enroll$ent in a#riculture trainin# colle#es, increasin# $ore a#riculture uni0ersities than dependin# solel1 on 'o6oine /ni0ersit1, pro0idin# adeAuate subsidies to (ar$ers and e0aluate its per(or$ance annuall1, (acilitatin# re#ular a#ricultural co$$unit1 education and to (orti(1 a#riculture annual bud#et and transparenc1 upon its disburse$ent" &.6.6. E.(ort Re#triction to 0e Reduced Man1 countries in the !orld introduce i$port or e>port duties (or di((erent ai$s, but $ostl1 to pre0ent the internal $ar6et (or co$$odities or products (ro$ the (orei#n countries" 9hese duties in one !a1 or another ha0e the i$pact on e>port (or do$estic producers and (ir$s, as traders across the borders !ill ha0e lo! de$and (or co$$odit1 e>port dependin# on the current $ar6et and the countr1 #eneral econo$ic situation" )>a$ples, (or (ar$ers to e>port their co$$odities outside 9an5ania there are special ta>es ha0e to be paid" +ut di((erent studies, li6e M,:,P, (2013), e0idenced that those ta>es ha0e no bene(it to (ar$ers rather to add a cost burden on their shoulders, the (act that $a1 co$pel the reduction o( the e>port process" 9here(ore, the #o0ern$ent to e$po!er the e>port sectors in 9an5ania b1 increasin# the e>port rate, the polic1 $a6ers ha0e to 6no! that introduction o( ta>es on e>port !ill al!a1s i$pede it, hence the1 ha0e to restructure the e>port policies b1 $a6in# an inter0ention on di((erent barriers to see ho! the1 can (acilitate the e>port acti0ities and also !ill not %eopardi5e the !hole e>port s1ste$ b1 discoura#in# the i$petus (or indi0idual producers and (ir$s" &.6.6. )ttractin% more $orei%n /irect "nve#tment *$/"+ :orei#n Birect 3n0est$ents, pro0ide an opportunit1 (or the countr1 to recei0e (orei#n in0estors in di((erent sectors o( the econo$1" :or a countr1 li6e 9an5ania to i$pro0e its e>port per(or$ance, it has to in0est $uch in $anu(acturin# sectors, since in $anu(acturin# products has less co$parati0e ad0anta#es (or a lon# ti$e" +1 in0itin# and attractin# :B3 in $anu(acturin# sectors, 9an5ania !ill be able to produce $ore $anu(actured #oods to be sold do$esticall1 and (or e>port, !hich !ill act as a 0ehicle to produce $ore co$$odities in di((erent sectors" Cther e>pected in(luence (ro$ :B3 includes the technolo#1 trans(er, e$plo1$ents and co$petiti0e hu$an capital !or6(orce" @u$an capital is a 0er1 i$portant aspect o( production as it contains the 6no!led#e and e>perience related to di((erent sectors !hich is intended to increase the e>pected 0alue (M!asha, 2013)" ,dditionall1, the incre$ent in :B3 !ill e>pand the 9an5anian $ar6et, includin# a$on# others )ast ,(rican -o$$unit1 $ar6et, 'outhern ,(rican Be0elop$ent -o$$unit1 (',B-) $ar6et, the )uropean /nion and ,R, in /'," 9here(ore 9an5ania has to use e((ecti0el1 the partners $ar6et especiall1 nearb1 countries

8ili$o 6!an5a W 9hese are '!ahili !ords !hich b1 direct translation $eans H,#riculture (irstI, insistin# on pro$otin# the a#riculture sector in the countr1"


.uran ,ll1 M!asha and 7abibu 8!e6a: 9an5ania in the :ace o( 3nternational 9rade: 9he ,nal1sis o( ;e0ealed -o$parati0e ,d0anta#e (ro$ 200< to 2012

!hich !ill cost, (e!est a$ount in e>port and also pro0ide the chance (or s$all business to #ro! as the1 can e>chan#e trade and ser0ices throu#h boarders !hich ulti$atel1 increase the national re0enue and increase per capita inco$e" &.6.7. Stren%t!enin% t!e 'urrenc, and 'ontrollin% "nflation Rate 9an5anian shillin#s (9'@) ha0e been depreciatin# considerabl1 a#ainst the /nited 'tates Bollar (/'B) !hich is used as the $ain base currenc1 (or international e>chan#e in 9an5ania" 9his has been in(luenced b1 $an1 (actors, but the trade de(icit, !hich is acco$panied b1 hi#her i$port than e>port hold the #reat portion" 9he #o0ern$ent has been de0aluatin# the currenc1 since 1<8&, at that ti$e ai$ed at allo!in# the protected sectors to accli$ati5e to $ar6et i$petus since 9'@ ha0e been $anipulated $uch b1 $ar6et de$and and suppl1 (Maehle et al, 2013)" +ut also the policies that #o0ern the e>chan#e rate s1ste$ is not !ell i$ple$ented, as there are $ushroo$in# o( e>chan#e rate centre?s and blac6 $ar6et (or (orei#n e>chan#e (Morris, 1<<3), !hich in $1 understandin# beco$e di((icult (or the #o0ern$ent to control so as to ha0e a uni(or$ e>chan#e rate" ,lso, so$e o( the bi# shops and super$ar6ets ha0e introduced the dollar s1ste$ in shoppin#" ,ll these (actors !ea6ened the currenc1 (9'@) !hich ulti$atel1 reducin# the purchasin# po!er in the international trade" Cn the side o( in(lation rate, 9an5ania is (acin# the proble$ o( production resources such as $achines and itQs peripherals !hich $ost o( the$ are i$ported e>pensi0el1 (ro$ abroad and po!er sources !hich currentl1 dependin# on electric current !hich is not reliable but also e>pensi0e" 9he i$portation o( (uel and #as (ro$ outside also is 0er1 e>pensi0e" ,ll these !ill au#$ent the co$$odit1 prices and other ser0ices led to the rise o( in(lation" @i#h in(lation rate attributed to hi#her interest rate !hich !ill al!a1s deteriorate the do$estic currenc1" 9his situation !ill ha0e the ad0erse i$pact on e>ports in the !orld $ar6et" 9here(ore the #o0ern$ent should !or6 hard to co$bat the in(lation rate and control the e>chan#e rate s1ste$ !hich is the potential (actors (or restructurin# e>port" &.6. /irection for $uture Re#earc! 9he anal1sis o( 9an5anian re0ealed co$parati0e ad0anta#e ha0e unco0ered i$portant areas !hich need (urther studies (or the de0elop$ent o( e>port and i$pro0e$ent o( Aualit1 and Auantit1 products and co$$odities in the !orld $ar6et" 9he (ollo!in# areas need the co$prehensi0e studies; Man1 sectors a0era#e E2G de$onstrate co$parati0e disad0anta#es !here as out o( a total a0era#e o( 15&3"25 products e>ported (or 4 1ears is onl1 an a0era#e o( 2&G ha0e co$parati0e ad0anta#e" 9hese results are not i$perati0e potential (or the #ro!in# econo$1 li6e 9an5ania" ;esearch is needed to be conducted intensi0el1 to e>a$ine and anal1se the $ain source o( the proble$, 9an5ania has abundant resources and has portra1ed potential (eatures that

it can co$pete !ell in international $ar6et, but is onl1 (e! sectors and co$$odities $ana#ed to co$pete, !hile as the ti$e elapses $ost o( the$ lose their e>port and ;-, 0alue" ,lso, the stud1 has to pro0ide the (ra$e!or6 on !hich $easures should be ta6en b1 #o0ern$ent and co$$unities to restore sectors and co$$odities !hich lost their ;-, ho! to #ear the$ up and $aintain the e$er#in# one" ,lso the anal1sis disco0ered that, so$e sectors ha0e the hi#hest co$parati0e ad0anta#e !hile its constituent co$$odities does not ha0e, at the sa$e ti$e so$e co$$odities has ;-, !hile in its a##re#ate le0el has co$parati0e disad0anta#e" 9he stud1 has to e>a$ine the in(luential (actors (or that situation, ho! does the ;-, in a##re#ate (sectoral) and co$$odit1 le0el can a((ect each other and !hat !ill be its i$pact in the econo$1" :urther$ore, to#ether !ith the #reatest e((ort !hich ha0e been e$plo1ed b1 the #o0ern$ent to i$pro0e the e>port sector b1 establishin# t!o econo$ic 5ones, the )>port Processin# 7ones ()P7s) act 2002 and 'pecial econo$ic 7ones (')7s) (/;9, )P7, (200&), the anal1sis e>hibit that, the nu$ber o( e>ported products in @' 4 di#it le0el is decreasin# si#ni(icantl1 at an a0era#e rate o( 2"<G e0er1 1ear acco$panied b1 hi#her (luctuation rate in e>port 0alue" ;esearch is needed to deter$ine the in(luence or i$pact o( e>chan#e and in(lation rate to the decline o( the e>port and to !hat e>tent does these t!o 0ariables a((ect the e>port" ,nother i$portant area to be studied is that, to !hat e>tent does the policies in e0er1 sector to#ether !ith e>port polic1 a((ects the do$estic production and e>port rate to the !orld $ar6et" Ro0ern$ents create and establish rules and re#ulation to #o0ern speci(ic pro#ra$s and pro0ide the (ra$e!or6 on ho! social econo$ic acti0ities can ta6e place" 3nclude a$on# others, the #o0ern$ent policies that $1 a((ects the trade, !el(are, includin# e>port are tari((s, duties, ta>es, Auota and other e>port restrictions" ;e(erence to +onarri0a et al, (200<), b1 considerin# !hich 6ind o( restriction !ill be e$plo1ed; it !ill either reduce the 0olu$e o( e>port or i$pin#e on e>port prices !hich ulti$atel1 !ill denature the !hole e>port process" 9here(ore, (urther stud1 is needed to elucidate ho! does this polic1 a((ect the production and e>port and to su##est the 0aluation $easures that !ill sti$ulate e>port led econo$1 !hich !ill reduce the current 9an5anian trade de(icit"

6 )onclusion
9his paper anal1ses 9an5ania ;e0ealed -o$parati0e ,d0anta#e in di((erent sectors and co$$odities b1 usin# @' 4 di#it co$$odit1 le0el, usin# e>port data (ro$ /. -o$trade to e>a$ine the co$parati0e ad0anta#e o( the top ten e>port co$$odities in 9an5ania and 3nternational 9rade -entre (39-), !hich pro0ide e>port data (or both sectoral per(or$ance and its co$$odities" ,ccordin# to the anal1sis, 9an5ania e>port per(or$ance is subseAuentl1 increasin# in collaboration to its ;e0ealed co$parati0e ,d0anta#e as it !as (ound that there !as onl1 t!o co$$odities !hich had hi#her e>port 0alue !ith less than one ;-, na$el1

3nternational Kournal o( +usiness and )cono$ics ;esearch 2014, 3(1): 15-28


Medicinal and phar$aceutical products and 'pecial transaction not -lassi(ied" ,lso 9an5ania de$onstrated concurrentl1 (ro$ 200<-2010 that it has abundant $ineral resources such as #old, Metalli(erous ores and $etal scrap as a leadin# e>port sector" 9an5ania has a stron# co$parati0e ad0anta#e in these co$$odities in the !orld $ar6et acco$panied b1 other co$$odities !hich !as anal1sed in this paper" 9he i$portant thin#s the #o0ern$ent should do is to $a6e the potential plans a(ter the disappearance o( these $inerals as $ost o( the$ are non rene!able, !hat other sources o( e>port !ill replace these leadin# sectors" ,lso the #o0ern$ent should initiate the pro%ects !hich !ill co0er the position o( these $inerals a(ter it?s 0anishin#" Policies re#ardin# $ineral sector should be !ell detailed and $ore (ocused on the best !a1s to $a6e $ineral industr1 $ore co$petiti0e !ith other producer countries" 9he a#ree$ents to in0est in these sectors and others $ust be open and the societies around the in0est$ent areas ha0e to be in0ol0ed in polic1 $a6in# and ho! the in0est$ent is #oin# to bene(it the surroundin# co$$unities"


+onarri0a, K" 8osciels6i, M" * 2ilson, )" (200<), )>port -ontrols: ,n C0er0ie! o( their /se, )cono$ic )((ects, and 9reat$ent in the Rlobal 9radin# '1ste$; International Trade Commission, !or6in# paper no" 3B W 23, /',, p" 0&-10 +r1lins61, 9" (1<<&) $tructural )d9ustment7 the Environment and $ustaina2le 1evelopment% /nder !hat conditions !ill QsensibleQ econo$ic policies ha0e unintended social, econo$ic, and en0iron$ental conseAuences[\ -ase o( 9an5ania, (Fondon: )arthscan, 1<<&):10E - 12E" -hin#arande, ,", M5u$ara, M", * 8ara$ba6u!a (2013), -o$parati0e ,d0anta#e and )cono$ic per(or$ance o( )ast ,(rican -o$$unit1 (),-) Me$ber 'tates; J Economics, 4(1): 3<-4&(2013)"



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9he authors !ould li6e to e>press their #reat than6s and appreciation to Mr" 2en Pen# ('uper0isor) (or his ad0ice about !ritin# this article and Mr" 2ei 2ei (-ourse tutor) (or his support upon the acco$plish$ent o( this article" Fi6e!ise, !e are indebted to Mr" 'ali$u ,bushiri Kin1e0u as the (irst re0ie!er and his co$$ents to!ards the i$pro0e$ent o( this oeu0re"

N1O ,(rican Be0elop$ent :und, (200E), Pro%ect co$pletion reports (P-;) o( 'tructural ,d%ust$ent Foan ('al); ;epublic o( 9an5ania; 6overnance7 economic and financial reforms department, March 200E"pp 02-1& ,(rican )cono$ic Cutloo6, (2002), 9an5ania; C)-B ,(B+, 2002; pp 2E<-2<0" (Cnline) a0ailable: http: !!!"oecd"or# countries tan5ania 182&4&2"pd( ,(rican )cono$ic Cutloo6, (2013), 9an5ania http: !!!"a(ricanecono$icoutloo6"or# (ilead$in uploads a eo 2013 PB: 9an5aniaG20G20,(ricanG20)cono$icG20 Cutloo6"pd( +ari1o, ." (2013), 9an5ania 2012 Rold )>port )arnin#s Brop 3G on Tear W -entral +an6" (Cnline) ,0ailable: http: !!!"euroin0estor"co$ ne!s 2013 02 20 tan5ania-201 2-#old-e>port-earnin#s-drop-3pct-on-1ear-central-ban6 122 1&1<< (:ebruar1 20, 2013) +atra, ,", * 8han, 7" (2005), ;e0ealed -o$parati0e ,d0anta#e: ,n ,nal1sis (or 3ndia and -hina: Indian Council for Research on International Economic Relations8 2C;83.R P,P); .C" 1&8; 3ndia @abitat -entre, .e! Belhi +i#sten, ," * Banielsson, ," (1<<<), 3s 9an5ania an )$er#in# )cono$1[ , report (or the C)-B pro%ectI )$er#in# ,(ricaI, '!eden" pp 08-24







.uran ,ll1 M!asha and 7abibu 8!e6a: 9an5ania in the :ace o( 3nternational 9rade: 9he ,nal1sis o( ;e0ealed -o$parati0e ,d0anta#e (ro$ 200< to 2012 ost-script tan5ania-sha6e-up N34O Pu#el, ,", 9" (2005): International Trade, 12th )dition" Published b1 McRra!-@ill )ducation (,sia -o") * -hina ;en$in /ni0ersit1 Press" p" 1E-14< N35O ;euters (2012),9an5ania 9rade Be(icit Bouble due to oil de$and (Kune 5,2012)" (Cnline) ,0ailable : http: !!!"reuters"co$ article 2012 0& 05 tan5ania-de(icit-i d,:F5)8@5<&M20120&05 N3&O 'erin, =", * -i0an, ," (2008), ;e0ealed -o$parati0e ,d0anta#e and -o$petiti0eness: , -ase 'tud1 (or 9ur6e1 to!ards the )/" Journal of Economic and $ocial Research 10(2) 2008, 25-41 N3EO 9an5ania +ureau o( 'tatistic (2012) Population and @ousin# -ensus 2012: (Cnline) ,0ailable: http: !!!"nbs"#o"t5 sensa ne!"ht$l N38O 93-, Pri$e $inister?s C((ice, (2013)"9an5ania in0est$ent Ruide 2013-2014"pp 0E-1& (Cnline) ,0ailable: http: !!!"tic"co"t5 $enu 1E< N3<O /.3BC, (2012), 9an5ania 3ndustrial -o$petiti0eness ;eport 2012; Ministr1 o( 3ndustr1 and 9rade o( the /nited ;epublic o( 9an5ania (M39), pp 2<-2< N40O /. co$trade, (2010) /nited .ation -o$$odit1 9rade 'tatistics Batabase" (Cnline) ,0ailable: http: co$trade"un"or# db N41O /;9, (2003), .ational 9rade Polic1; 9rade Polic1 (or a -o$petiti0e )cono$1 and )>port-Fed Rro!th, Ministr1 o( 3ndustr1 and 9rade, Bar es 'alaa$, pp" 15-21 N42O /;9, (200<), 9an5ania 9rade 3nte#ration 'trate#1, 200<-2013; Ministr1 o( 3ndustr1, 9rade and Mar6etin#, pp 10-13 N43O /;9, Pri$e Minister?s o((ice (----) 3n0est$ent Potentials and opportunities in ,#riculture: 9an5ania 3n0est$ent -entre N44O /;9, M, : ' - (200<) 3.=)'9M).9 PC9).93,F ,.B CPPC;9/.393)' 3. ,R;3-/F9/;) (-;CP '/+-')-9C;); (Cnline) a0ailable http: !!!"a#riculture"#o"t5 hi#hli#hts ,R;G20PC9).93 ,FG20;)=3')BG20.)2G20=);'3C.G20:inal-2-G2 0.)2"pd( N45O 2an#!e, '", M" (1<<&) )cono$ic re(or$s and Po0ert1 ,lle0iation in 9an5ania; )$plo1$ent paper E, )$plo1$ent and trainin# Bepart$ent, 3nternational Fabor C((ice Rene0a N4&O 2i5ara 1a /chu6u5i (2011), 9aari(a 1a Mia6a 50 1a /huru !a 9an5ania +ara (1<&1- 2011), (Bese$ba 2011), pp" 32-4& N4EO 2obst, P" (2001) 'tructural ,d%ust$ent and 3ntersectoral 'hi(ts in 9an5ania; , -o$putable Reneral )Auilibriu$ ,nal1sis: ;esearch ;eport 11E, International ?ood :olic* Research Institute7 2ashin#ton, B"-

N21O Ker0in#, '" (2013) 9an5ania -oncerned Rold 'lu$p Ma1 Pro$pt Mines to 'hut; +loo$ber# 'ustainabilit1" (Cnline) ,0ailable: http: !!!"bloo$ber#"co$ ne!s 2013-04-1& tan5ania-conc erned-#old-slu$p-$a1-pro$pt-$ines-to-shut"ht$l (,pril 1E, 2013) N22O KurLiM, F", * 9eodoro0iM, 3" (2011) Rlobal -risis, ;eco0er1 and the -han#in# 2orld: E/onoms/i :re(led, &2 (5-&)" pp" 233-24E N23O 8ru#$an, P", ;" * Cbst(eld, M" (200&) 3nternational )cono$ics: 9heor1 and polic1; Eth edition, published b1 Pearson )ducation ,sia Ftd" p 4-205 N24O Fan#e, '" (2008) Fand 9enure and Minin# in 9an5ania; -M3 ;eport" (Cnline) ,0ailable http: !!!"c$i"no publications (ile 3008-land-tenure-and-$ inin#-in-tan5ania"pd( N25O Funo#elo, @"+", Mbilin1i, ,", * @an#i, M (2010) Rlobal :inancial -risis Biscussion 'eries; Paper 20: 9an5ania Phase 2; 5verseas 1evelopment Institute, 111 2est$inster +rid#e ;oad, Fondon, p 01-0E N2&O Maehle, .", 9e(erra, @" * 8hachatr1an, ," (2013) )>chan#e ;ate Fiberali5ation in 'elected 'ub-'aharan ,(rican -ountries: 'uccesses, :ailures and Fessons; 3nternational Monetar1 :und, !or6in# paper 13 32, pp" 3<-45 N2EO M,:,P, (2013), ;e0ie! o( (ood and a#ricultural policies in the /nited ;epublic o( 9an5ania" M,:,P -ountr1 ;eport 'eries, :,C, ;o$e, 3tal1" pp" 52-&5 N28O Morris, '" (1<<3), 3n(lation d1na$ics and the parallel $ar6et (or (orei#n e>chan#e; Journal of 1evelopment Economics ;ol. <= #"++5&7pp. 2+5,>"= N2<O Muchan1uri, +" * M5u$ara, M" (2013), 3nter-'ectoral -o$parati0e ,d0anta#e o( 9an5ania and 3$pact on 3nternational Purchasin#: 6reener Journal of Business and .ana(ement $tudies8 =ol" 3 (8), pp"3&1-3&8" N30O M!asha, .", ," (2013), ,n C0er-0ie! o( Cnline ;ecruit$ent: 9he -ase o( Public and Pri0ate 'ectors in 9an5ania; European Journal of Business and .ana(ement, =ol"5, .o"32, 2013" pp" 11-21 N31O M5u$ara, M", -hin#arande, ,", * 8ara$ba6u!a, ;" (2012) ,n ,nal1sis o( the ;e0ealed -o$parati0e ,d0anta#e in 'outhern ,(rican; Journal of $ustaina2le 1evelopment in )frica (=olu$e 14, .o"8, 2012)" 3''.: 1520-550<" pp 50-E4 N32O Pearson, '", ; * Me1er, ;", 8" (1<E4), -o$parati0e ,d0anta#e a$on# ,(rican -o((ee Producers" )merican Journal of a(ricultural economics8 =olu$e, 5& (2): pp

N33O Portstrate#1, (2013) 9an5ania 'ha6e-up" (Cnline) a0ailable: http: !!!"portstrate#1"co$ ne!s101 insi#ht-and-opinion p