How government plans to cut Sh2.5 trillion spare parts import bill

By Louis Kalumbia Dar es Salaam. The government is finalising a plan that will see the country saving part of the Sh2.5 trillion that the economy spends to import spare parts each year. To begin with, the Minister of Industry and Trade, Prof Kitila Mkumbo, said through the Tanzania Revenue […]

By Louis Kalumbia

Dar es Salaam. The government is finalising a plan that will see the country saving part of the Sh2.5 trillion that the economy spends to import spare parts each year.

To begin with, the Minister of Industry and Trade, Prof Kitila Mkumbo, said through the Tanzania Revenue Authority (TRA), the Kilimanjaro Machine Tools Company (KMTC) had an increased demand for spare parts for various sectors.

“TRA data show that, in a period of four years (2016-2019), Tanzania spent Sh10 trillion in foreign currency to import spare parts,” he said. The amount used for the imports was equivalent to Sh2.5 billion annually, with spare parts being used in industries energy, minerals, water, agriculture, transportation, works, forestry, etc.

Prof Mkumbo said KMTC was now spending Sh760 million from the government to construct a galvanising plant constituting five tanks – construction of which has been completed by 95 percent.

“Chemicals for the factory were to be ordered last month ready for commencing operations at the end of this year when the project is to be completed,” said the former University of Dar es Salaam (Udsm) don.Another Sh1.685 billion has been set aside by the government in its 2021/22 budget for constructing a foundry for producing castings that will be used as raw materials for manufacture of industrial spares.

According to him, the company has continued producing different spare parts for minerals smelting factories, cement, chemicals and agriculture.

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“The government is making efforts to improve the company’s contribution to the development of industries,” he said.

Prof Mkumbo also said that KMTC will be used for the downstream processing of iron from the Liganga mine project.

He said the National Development Corporation (NDC) has signed a Memorandum of Understanding (MoU) with the Tanzania Electric Supply Company Limited (Tanesco) to produce electricity towers for power transmission from the Julius Nyerere project to Chalinze when it is completed.

Meanwhile, Prof Mkumbo said the Tanzania Industrial Research Development Organisation (Tirdo) reviewed the Liganga iron mine project to determine the type and quantity of minerals in the deposits.

“Review found the presence of 70.39 percent of iron which is 14 percent low as compared to 56 percent reported by the Chinese investor in its feasibility study.

“It had 12.94 percent titanium (TiO2), 2.94 percent low as compared to investor’s declaration,” he said.

Vanadium was 0.52 (V2O5), about 0.8 percent lower than investor’s findings and 8.63 percent aluminium that wasn’t reported by the investor.

Regarding investment in Economic Processing Zones (EPZ) and Special Economic Zones (SEZ), Prof Mkumbo said 174 registered companies have invested $2.23 billion and created 57,563 jobs.

“The government is discussing with the CMPort of China and the Omani government investment authority for development of the Bagamoyo Special Exonomic Zone (SEZ) that should start as early as possible,” he said – adding that the duo and industrial parks were the government’s priority.

Prof Mkumbo said an assessment was done on 156 privatized industries, finding that 88 of them were operating, while 48 other industries and – one of them a parastatal – had lost qualification as viable industries.

According to him, while 20 privatised industries had already been returned to the government, 27 others were at different stages of also being returned to the government.

“The ministry has received a mandate from the relevant authorities to re-privatise the firms whose transfer processes have been completed,” he said.

Regarding the sector’s achievement after 60 years of political independence from foreign rule on December 9, 1961, Prof Mkumbo said the value of annual expors have increased to $6.371 billion, up from $800 million in the year of political independence, 1961.

https://www.thecitizen.co.tz/tanzania/news/how-government-plans-to-cut-sh2-5-trillion-spare-parts-import-bill-3623350

Shaqil Heaton

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