17 April 2019

Tanzania Seeks Broader Tobacco Prospects

THE government now plans to initiate talks with the member states of the Common Market for Eastern and Southern Africa (COMESA) to seek markets for tobacco in those countries.

Tanzania is second in Africa in tobacco production after Malawi. Data indicates that in 2017, tobacco brought in more foreign exchange to the country than coffee, cotton, tea, cloves and sisal combined.

However, tobacco production fell considerably over the third quarter of 2018, dropping by a third of the previous quarter's performance.

Agriculture Deputy Minister, Innocent Bashungwa informed the Parliament that Tanzania's ambassadors to Egypt and Algeria were set to prepare bilateral agreements that would enable reduced tax on Tanzania's tobacco to be sold in those countries.

"Talks with these two countries are now at a good stage and we are expecting that this would open up markets for tobacco for increasing income to farmers and country at large," Mr Bashungwa stated.

Apart from that, it is also expected that at the end of the talks, Tanzania can also sell tea to Egypt and Algeria, a move which would also generate profits for farmers, unlike the current situation whereby farmers only depend on selling their tea through Mombasa auction in Kenya.

The deputy minister's explanation came in response to Namtumbo legislator Edwin Ngonyani (CCM) who sought to know how the Agriculture Ministry collaborated with other ministries responsible for investment and foreign affairs and east African cooperation in looking for tobacco in Egypt instead of depending on selling the crop in Uganda and Kenya alone.

Mr Bashungwa noted that in 2014/15, production of Dark Fire Cured Tobacco (DFC) ceased in Ruvuma Region due to lack of markets.

However, efforts by the government saw Premium Active Tanzania Limited (PATL) showing interest to buy such tobacco.

The company told the government that there was a huge market of such type of tobacco in Egypt and Algeria.

The setback was that Tanzania's tobacco was sold at high prices in those countries because of charging high tax, compared to the same tobacco from Uganda and Kenya.

The reason is that Uganda, Kenya, Egypt and Algeria are all members of the COMESA and therefore enjoy some benefits of the regional body.

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