Report No. 6357-TA

Tanzania: An Agenda for Industrial Recovery(In Two Volumes) Volume II: Annexes and Statistical AppendixJune 30,1987

Africa RegionIndustrial Development and Finance Division

FOR OFFICIAL USE ONLY

Doeument of the Worid Blank

Tihis report has a restricted distribution and may be used by recipientsonly iWrfhe perform-ance of their official duties. its contents may not otherwisebe discdosed without World Bank authorization.

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FOR OFFCAL US ONLY

PREFACE

The subsectoral and firm-specific reviews presented in theseannexes are the integrated result of: i) generally available information;ii) the mission members' own visits and analyses; and, in some cases, iii)the results of the DRC efficiency review perfonmed with the MIES data.These complementary efforts to the general overview provided in the MainReport (Volume I) should be seen as an important step in the analysis of themajor problems affecting the various subsectors and many inditstrial firms.These annexes do not purport, however, to provide a definitive blueprint forthe subsectoral and firm-specific measures required in industry. Theinformation and DRC results contained here provide a preliminary indicationof the main issues which ought to be addressed and reviewed in more depth atthe subsectoral and firm level. Consequently, the next stage in thecollaboration between the World Bank and the Government would envisagecarrying odt action oriented studies for important industrial enterprisesand subsectors.

This document has a restricted distribution and may be used by recipients only in the performanceof their off0cial duties Its contents may not otherwise be disclosed without World Bank authorization.

TAINA: M ARN FOR INDUSTRJAL RECOVERY

ANNEXES AND STATISTICAL APPENDIX

Table of Contents

Page No.

ANNEX 1: SUBSECTORAL REVIEWS ... .........................*...... 1

A. Textiles, Cement and Leather ...... I.. ................... . 1a. The Textile Industry ................................... 1b. Cement Manufacture ... *........**........*.*.***. 7C. Leather and Leather Products ........................... 11

B. Food, Beverage and Tobacco Subsector ........................ 14C. The Metal Products and Engineering Sector ................... 17D. The Chemical and Rubber Industries .......................... 28

ANNEX 2: PUBLIC ENTERPRISE MANAGEMENT -ISSUES AND NEED FOR REFORM ............................ 36

A. Evolution of Public Sector Enterprises (PSE) ............ 36B. Organisational Structure and Control Mechanism .......... 42C. Issues Related to PSE Performance ....................... 46D. Evaluation of Institutional Framework ................... 54

ANNEX 3: THE MISSION'S INDUSTRIAL EFFICIENCY SURVEY (MIES):DATA AND METHODOLOGY .................................. 68

STATISTICAL APPENDIX ........ *...* ............ ................ 83

Part I: Based on Official Statistics ...................... 87Part Ils Based on Mission Industrial Efficiency Survey ..... 123

ANN E X 1

SUBSECTORAL REVIEWS

A - TEXTILES, CEMENT AND LEATHER

A. The Textile IndustryB. Cement ManufactureC. Leather and Leather Products

B - FOOD, BEVERAGE AND TOBACCO SUBSECTOR

C - THE METAL PRODUCTDS AND ENGINEERING SECTOR

D - CHEMICAL AND RUBBER INDUSTRIES

ANNE X 2

PUBLIC ENTERPRISE MANAGEMENT

A N N E X 3

THE MISSION'S INDUSTRIAL EFFICIENCY SURVEY:DATA AND METHODOLOGY

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ANN= I

A. TEXTILES. CM=T ADD LEATHER

Introduction

1. This abbreviated section discusses the present status, constraintsand potential for rehabilitation of the textile, leather and cementindustries. Many of the difficulties being faced by these subsectors arecommon to all three of them and indeed to most of the country's industrialactivities. In addition to the macroeconomic, exchange rate and tradepolicy factors discussed in the Main Report, the major constraints affectingthese sub2ectors are the following:

(a) Excessive and inadequately managed centralized planning, which hasresulted in many oversized investments which have remainedunproductive for long periods of time. Furthermore, cumbersomeand slow bureaucratic procedures hamper the ability of industrialenterprises to react efficiently to changing market and productionconditions.

(b) Short:age of managerial and technical staff with a broad knowledgeof project preparation, evaluation and implementation, and of thetechnical, organizational and financial aFpects of industrialmanagement. While there is a small core of competent staff, thereare no adequate professional cadres capable of providing an in-depth managerial structure in most of the public enterprises.

(c) Inadequate intersectoral allocation of investment and recurrentresources have resulted in many projects and firms havingdifficulties operating due to inadequate provision ofinfrastructure and utilities.

(d) The existing shortage of foreign exchange, largely the result ofpolicies that have fostered economic inefficiency throughout theeconomy and have discouraged exports.

a. THE TEXTILE INDUSTRY

Structure

2. The textile subsector (including factory-made garments) is thelargest in manufacturing in terms of total employment (24 percent ofmanufacturing) and the second largest by gross value of production and valueadded (21 percent and 19 percent, respectively), after the food, beveragesand tobacco subsector.

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3. There are 87 establishments engaged in the production of textiles(and 104 in making footwear and garments), but the number of important firmsin spinning and weaving number only 16, of which 9 operate integrated mills,and 6 of the latter are in the public sector and they account for 71.9percent of the spindles and 77.6 percent of the looms installed in Tanzania.Total productive capacity for woven fabrics is about 200 million squaremeters. Due to the numerous problems discussed below (para. 6), capacityutilization dropped from 61 percent in 1976 (and 47 percent in 1980) to only32 percent in 1984. Most of the production is based on locally producedcotton lint.

4. Production of knitted goods is in the hands of the private sector:there are about 25 plants making knitted fabrics and hosiery but they arepart of the garment-making industry. However, there are four garment plantsin the public sector. There are also two public sector plants producingbags and sacks and one making blankets; and, in the private sector, one firmspins sisal twine, one makes blankets, four small plants make kenafe andjute bags, and there are small manufacturers of carpets, fishing nets,upholstery and special fabrics. One of the public-sector textile mills (theMorogoro Canvas mill) is included in the Tanzania Leather AssociatedIndustries (TLAI); four others are part of Texco, a holding company formedin 1974, and one, the Kilimanjaro Textile Corp. (Kiltex) is 51 percent ownedby Texco.

Markets

5. The large majority of Tanzanian textiles are sold in the domesticmarket. Of the total value of sales of about T Sh 2.8 billion in 1984,exports accounted for only 7.1 percent, although these exports were secondonly to petroleum products among manufactured products exported in thatyear. In 1975, the Bank had projected 1982 production to be 122 m.m. andconsumption 171 m.m. But actual production in 1982 was only 61 percent ofthe forecast and both production and consumption continued to drop in thefollowing years. Total consumption of fabrics in 1984 is estimated at about81 m.m, i.e., less than 4 meters per capita.

Specific Problems

6. The most common specific problems found in the subsector arus

(a) Frequent Power Interruptions and Lack of Power. Powerinterruptions is a recurrent problem in all the plants but ithas been particularly acute in the Kiltex (Arusha) and Sunflagplants. Power generation problems are particularly acute in someregions and for some firms, and result in severe productionlosses, as in the case of the MwLaex and Mutex plants. Overalllosses in production due to power cuts are estimated at 122 inspinning and 161 in weaving.

(b) Inadequate Water SupPly. Mainly as a consequence of lack ofpower, water shortages have been serious problems in Mwanza andMwatex but, in 1984, they also accounted for 25 percent of thedowntime in the Friendship mill in DSM.

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(c) Shortages and Delays in Local Material Deliveries. Mainly becauseof transportation difficulties (lack of trucks and railway wagons,breakdown of equipment and lack of diesel oil and gasoline) butalso due to poor logistics, shortages of locally producedmaterials have at one time or another caused problems in thenormal operation of most factories, i.e.s cotton in Friendshipand Kiltex (Arusha); cotton yarn in J.V. Industries and Calico:fuel oil in Kiltex, Mwatex, Mutex and Sunflag; and nitrogen (forspinning PES yarn) in Sunflag.

(d) Shortages of Imported Materials. Lack of imported spares and dyesand chemicals is a constant problem for all plants, such as atFriendship (about 5 percent loss of production), Kiltex (bothplants), Mwatex, Mutex, J.V. Industries, Cotex and Sunflag.Shortages of some accessories - particularly shuttles for loomsand cones for yarn - have also been a serious handicap in theoperation of Cotex and Kiltex (Arusha). Cotex (Zanzibar) hasdifficulties in obtaining PES yarn and as a result is operating atonly 25 perceut capacity. Furthermore, the cardboard boxeslocally made by KIBO for Cotex are t4low international standardsand thus are generally unacceptable for exports.

(e) Technology and Staff Capabilities. The technology used inTaizania is of the conventional type. The mills use ring spinningand shuttle power looms. There are no open-end spinning frames orshuttleless looms. Operating staff and labor, however, lackformal training and incentives for improving performance aregenerally absent.

(f) Plant Location. Serious infrastructure-related difficulties havearisen from selection of some plants' sites on the basis of non-economic considerations. For instance, Cotex installed itsspinning mill at Iringa, far from the cotton-growing area.Texco's Mutex plant was located in Musoma, in a region wherecotton is grown, but where the provision of power is inadequate.

(g) Financial Difficulties. The financial situation for many textileenterprises appear to be deteriorating rapidly, partly due to theinefficiencies and bottlenecks mentioned previously, and (as oflate) partly due to declining levels of effective protection.

(h) Labor and Incentives. Many textile firms, particularly in thepublic sector, are significantly overstaffed for the presentlevels of production. There is little difference between theremuneration of efficient and inefficient management and workers.The rigidities in hiring and firing procedures applica_ble to allenterprises and the unrealistic limitations on wages and salariesimposed on public sector enterprises by the Standing Committee onParastatal Organizations (SCOPO) discourage improvements in laborproductivity and managerial accomplishments.

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Proiects Under Imlementation and New Proiects

7. In addition to the Morogoro Canvas Mill which started operationsin 1984, there are five public sector projects, of which, one (Polytex) hasstarted commercial production at about 50? of capacity, two spinning mills(Ta.bora snd Ubungo) are approaching commissioning, one (Mbeya), although 80-90 percent advanced, is still not operative and construction of two (sewingthread and terry towels) has been stopped.

8. Texco has other projects for which studies have been made but havenot yet been started: a central plant to make ipares (costing aboutUS$3.0 million), a project to manufacture shuttlet for looms and theKibo Fabric Project. In addition, it is implementing or has proposedrehabilitation projects for a total cost of US$43.3 million.

9. Total proposed investments in the private sector amount to aboutUS$10 million. The largest project ready for implementation is the J.V.Industries' 15,000 spind'i, 1,500 tuns-per-year (tpy) capacity spinning millwhich would supply the company with yarn for its weaving operations andeliminate frequent shutdowns due to the irregular supplies from theFriendship mill. (The Friendship and Kiltex spinning mills in DSM areencountering great production diffici?lties and their output is notsufficient to meet their own demand for weaving). Five other proposedinvestments in the private sector. total US$7.7 million.

Status of Existing Overations. Rehabilitation and Investments

(a) Friendship. Texco estimated that US$7.0 million would be neededfor rehabilitation but this would entail major investments whosejustification at this stage is unclear. At a later stage, thisrehabilitation would have to be reviewed in the context of abroader assessment of the needs and constraints of the textilesubsector. Improvements in the finishing section and in thepurchase of spares in good-sized orders may be justified. Theinvestment required for this short-term rehabilitation program isestimated at USS2-3 million.

(b) Kiltex. This company's rate of capacity utilization was only 26percent in 1984. The DSM spinning plant is now inoperative butunder present market conditions and the existing country-wide lowcapacity utilization, the proposal to install a new spinning mill(at an estimated cost of US$6.8 million) cannot be justified. Thesame applies to the proposed construction of a new weaving shed inArusha, which was to be built with EEC financing at a cost of6.5 million, but which is now--and should continue to be--inabeyance until market and production conditions prove it to beeconomically and financially viable. Consideration should begiven to transferring the garment-making section of Kiltex to theprivate sector. Also, the benefits from rehabilitating existingfacilities in Arusha at a cost of about US$2.7 million should bedemonstrated before the company makes any additional expenditures.

(c) Sunguratex. Capacity utilization was 43 percent in 1984 (and only40 percent in 1983) due to problems in the carding section, powerand water shortages and lack of spares. Rehabilitation has beenestimated by Texco to cost about US$6 million with possible

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financing to be obtained from the East Africa Development Bank(the project is not included '.n the CG document or in the 1985186budgetary allocation). The economic and financial viability ofthis relatively high-cost rehabilitation proposal is doubtful andthe alternative possibility of merging some of its operations withthose of Kiltex should be studied. Any decision shouald await asound financial and economic appraisal.

(d) Mwatex. The equipment in Mill No. 2 financed by the BankLoan 1128-TA) is in good condition but Mill No. 1 needs extensiverehabilitation and there is the continuing problem of lack ofpower and difficulties in the supply of fuel oil and consequentscarcity of water and steam. The rehabilitation of Mill No. 1 isunder way with financing from the Kuwait Arab Development Fund;contingency funds provided for in the Bank Loan were also used forimprovements in Mill No. 1, but no serious plan has been followedin the distribution of the production load between the two millsand no thought has been given to improving capacity utilization byinstalling about 1,000 RVA in stand-by generating capacity.However, the serious infrastructural problems have also resultedin the qualified managerial and technical staff leaving Mwatex.Channeling additional resources may not be warranted at thisstage, unless there are assurances that the infrastructural andthe human capital problems will be resolved in the near future.

(e) Mutex. This plant can produce yarn numbers 20 to 60 and wide(more than 1.40 m) fabrics acceptable in the EEC markets. Ezceptfor urgently needed spares and the acquisition of stand-by Dieselgenerators (1,000 RVA--costing about US$0.9 million), majorrehabilitation work should, however, be postponed since presentfinancial and infrastructural shortages will not, in alllikelihood, be fundamentally corrected until nearly 1990.

(f) Mbeva Textile Mill. This plant is not needed under present demandlevels and thus consideration may be given to mothballing itsequipment in order to avoid incurring additional losses. At alater date, when the market justifies it, the plant could bereopened.

(g) Ubungo Garments Limited. This parastatal firm has been operatingvery poorly. Because of the need to react rapidly to marketconditions, garment-making could be best left to private entrepre-neurs. At this stage, it is unadvisable to incur new expenses ina plant manned by staff inexperienced in the design and marketingof clothing.

(h) Tabora and Ubunxo Spinning Mills. Since country-wide yarn demandmay remain below the existing supply for some time to come, itmight be advisable to consider minimizing additional expendituresin at least one of these spinning mills. Since the potentialproductivity of Ubungo appears to be higher, the feesibility oftransferring part of the equipment installed at Tabora toFriendship should be weighed against operating it to supply thelatter's weaving requirement.

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(i) Tanzanian Bag Corp. Ltd. (TBCL). The company has two millslocated at Moshi. Although installed capacity envisagedproduction of 10 million bags annually, attainable caracity iscurrently estimated at 6.5 million. Budgeted rehabilitation costfor 1984/85 and 1985/86 was T Sh 24.9 million but virtually noexpenditures were actually incurred in this project. Theviability of any expenditures should be carefully appraised sincethis project may be uneconomic for the country.

(j) Polysacks. This plant makes woven polypropylene bags mainly forthe Tanzanian Fertilizer Corp., National Hilling Co., SUDECO andthe Urinza Salt Co. Its production and past investments have beenvery unproductive. The film tape extruder is in poor conditionbecause of voltage fluctuations and lack of technical know-how.Several weaving machines are also inoperative due to the lack ofspare parts. Rehabilitation is estimated to cost aboutUS$0.4 million, yet its economic benefits for the country appeardubious, warranting postponement until an assessment can be made.

(k) Other Texco Projects. Othe-; Texco projects - the Klbo Fabrics,Sewing Thread, Terry Towels, Shuttle Manufacturing and BlanketManufacturing Rehabilitation - should be shelved for the timebeing. When marketing, financial and economic studies prove theirviability, serious consideration could be given to joint financingarrangements which would permit larger participation from theprivate sector.

Issues and Potential for Rehabilitation

10. The per capita consumption of textiles in Tanzania (less than4 m/yr) is low even for the country's per capita income of US$240.Consumption of textiles are unlikely, however, to catch up with existingcapacity for many years and, therefore, investment proposals for capacityexpansion should be strongly discouraged. The focus of expenditures willhave to be concentrated on selected rehabilitation needs and on the provi-sion of spare parts and raw materials for productive firms. The first taskof a rehabilitation program will be to improve capacity utilization throughsmall investments (totalling about US$10-15 million) for the replacement ofsome equipment, the balancing of different mill sections and improvedmaintenance in potentially viable enterprises in the subsector. Such aprogram will be fully beneficial only if it is selective and it isaccompanied by policy changes and organizational and staffing modificationswhich fully recognize the importance of the financial and marketingfunctions of each viable firm.

11. In view of the problems being faced by the Tanzanian economy, ingeneral, and by the textile industry, in particular, the program to improvethe operations of the subsector could comprise the following elementst

(a) establishment of the macroeconomic and sectoral policy (such asimproved cotton pricing and marketing; reformed wage structure andincentives, etc.) conditions necessary to avoid the distortion ofcost and prices which creates wrong decision-making signals,causes scarcity of needed inputs and spares, and induces malaiseamong staff in the industries;

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(b) preparation of a restructuring/rehabilitation program aimed atimproving the operation of the viable facilities after theireconomic and financial analysis are critically examined;

(c) in the context of this program, review whether a phase-out of theKiltex DSM plant may be warranted, and study the possiblemothballing of the Mbeya plant and one of the Tabora/Ubunpospinning mills, or the transfer of equipment from Tabora toFriendship. Furthermore, divestiture of Texco's garment-makingfacilities should be explored; and

(d) avoidance oZ piecemeal work that does not take into account theneeds of the subsector as a whole, and relatedly, the postponementor cancellation of investments which do not respond to highpriority rehabilitation needs and are economically justified.

12. The scope of the Rehabilitation Program for the textile subse.2torcould be defined by independent consultants in close coordination wit}Government officials and industry representatives, and its implementationmonitored by a task group formed by Government officials and executives ofTexco and private firms. Successful implementation of such a programrequires the commitment of highly qualified staff with experience in projectexecutior. and a broad understanding of the technical, financial andmarketing problems of the subsector.

13. The textile firms' performance can be improved by the use ofexpatriate staff but this participation must be carefully planned endclosely monitored. Many of the firms now facing operational difficultieshave been managed or assisted by foreign companio's or experts. This islargely due to the limitation to management possibilities imposed by macro-economic conditions and government policies as well as to the limitedpreparation and experience of the counterpart staff assigned to workalongside expatriates. Since foreign expertise is expensive, carefulpreparation of local staff to take over their functions is indispensable.

b. CEMENT MANUFACTURE

Structure

14. The non-metal mineral industry subsector comprises mainly themanufacture of cement and cement products, glass and glass products,pottery, and bricks and other construction materials. The cement industryis in the public sector. The Tanzania Saruji Corp. was established in 1976as a holding company and it owns and operates three cement plants, oneceramics plant, a gypsum mining company, a trucking company and a traininginstitute. Two new plants are being commissioned (the Mbagala Sheet Glassand the Morogoro Ceramic Wares project), two glass container projects andthe Arusha Brick and Tile project are under construction and a plant to makeconcrete railroad ties (PCM) is scheduled for recommissioning. Five otherbrick plants and a cement project in the Lake zone are being studied. Thereare also small private firms manufacturing glass bottles and ceramicproducts.

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15. The installed cement production capacity in 1976 was 268,000 tpy,at which time the two kilns then operating at Wazo Hill, near Dar-es-Salaam,were unable to meet demand and part of the supply/demand deficit had to becovered bv imports. In 1979, a third kiln was installed at Wazo Hill,bringing total capacity to 520,000 tpy. Two new cement plants werephysically completed by 1980: one at Tanga, 300 km north of DSM(450,000 tpy capacity) and another at Mbeya (250,000 tpy), bringing totalcapacity to 1.22 miJllion tpy. Production has not, however, followed thegrowing trend of capacity, and utilization, which was almost 100 percent in1975, dropped to about 27 percent in the last three years.

Markets

16. The drop in production of cement in latter years is primarily dueto problems in the operation of the plants and secondarily to a drop indemand which is related to the general slump in the country's economicsituation. There are also regional imbalances: the Dar-es-Salaam plant isoften besieged by eager buyers, who have to wait to have their ordersfilled. At the same time the Tanga mill's output cannot be shipped mainlydue to transportation difficulties. Saruji executives and Ministryofficials express great optimism about the potential for exports toneighboring countries. The fact is, however, that there is cement plantovercapacity in the region. Relatively small volumes of cement can be soldin Burundi and Rwanda, and these countries have plans to build their ownplants.

Resources and Advantages. Constraints and Problems

17. Tanzania has limestone deposits but those most suitable for cementproduction are not located near important consumption center.s. The WazoHill plant, located 26 kms from Dar-es-Salaam, mines a quarry of limestonemixed with clay topsoil; this is in part an advantage because it is possibleto obtain the required mixture of calcium, alumina and silica from onesingle deposit. However, the material is very heterogenous and, to obtain auniform feed, the deposits must be mined from several fronts and theirmaterial has to be continuously analyzed in order to adjust the proportionsreceived from each face.

18. The main constraints faced by this industry are similar to thosealready mentioned for the textile subsector in paras. 6 and 7. Because ofthe low value of cement per unit of weight or volume, transportation costmust be minimized for its country-wide distribution. Unfortunately, thelack of appropriate port facilities outside Dar-es-Salaam, different gaugesused by the railway systems and poor condition of the roads maketransportation of this product excessively costly. Even the Wazo Hillplant, in spite of being so near Dar-es-Salaam, faces serious transportationdifficulties. The Tanga company has serious problems lack of railway wagonseven when it operates at 30 percent or less of capacity. The Mbeya plant islocated near the Tazara Railway, but also due to the great scarcity ofrailway wagons, it could not transport more than a small fraction of itspotential output.

19. Fuel oil supplies are also affected by deficient transportationfacilities. Power supply deficiencies are another serious constraint in

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cement production. The Mbeya mill could not be commissioned for three yearsafter being physically completed because of lack of power and there arefrequent interruptions of service in the other plants. Power failures notonly lower output but also can cause serious damage to the kilns. Lack ofefficient communication systems also constitute a serious problem. Forinstance, if it Is known in DSM that power is going to be cut or if minorspares have to be bought, The DSM office and the Wazo Hill mill office cancommunicate only by sending a messenger by car (and this is a two-houroperation) from one place to the other.

20. Other problems faced by the cement companies, in common with othersubsectors, are the lack of foraign exchange for spares, the need for betteroperators' training (a centralized training institution has been establishednear the Wazo Hill plant), and the overall lack of adequate incentives forthe companies' staff and labor.

Projects Under Way and New Projects

21. As mentioned above, there are five projects under way:

(a) The Moroaoro Ceramic Wares company (with an investment of aboutT Sh 60 million, financed 66.4 percent by Saruji) is virtuallyready for operations, and may prove to be economically viable.

(b) Most of the Mbagala Sheet Glass Co.'s equipment has been testedwithout load following an estimated investment of T Sh 180million. This project appears to have been implemented on thebasis of over optimistic assumptions regarding demand prospects.Furthermore, high transport costs are foreseen. In light ofpossible market constraints and high costs, a positive cash flowshould--at a minimum--be ascertained before start-up.

(c) Almost all the equipment for the Mwanza Container Glass project(costing T Sh 463 million according to the CG Document) hasbeen delivered since 1982 by Technip (of France) but some maybe damaged by now because of the long storage time. Moreimportantly, the market does not seem to justify the start-upof this plantt a brewery was to be built in the area but theproject fell through. Additional expenditures in this ventureshould be avoided at all costs.

(d) The Arusha Bricks and Tiles project was begun in 1978 withequipment supplied and financed by the D.R. of Korea; civil workshave been practically completed and most needed equipment tomanufac:ure bricks has been installed but there are some items notmanufactured in Korea which are still lacking; and it is plannedto add tile-making equipment supplied by Bulgaria. According tothe CG Document, the proposed investment is T Sh 181 million, ofwhich T Sh 104 million would be spent in 1985-86. Preliminaryindications suggest that this project may not be economicallyviable, and that additional expenditures should not be incurred.

(e) The HanAula PCM project for railroad tiles would consist of ta.arehabilitation of a plant used by the Chinese during the

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construction of the Tazara Railway. The cost is small andthe venture appears reasonable. However, the plant should betransferred back to Tazara railways.

(f) Coal Conversion. A long-term project for the conversion ofSaruji's kilns from oil to coal is being prepared. In light ofthe current prospects for relatively low oil prices, considerationshould be given to shelve this project.

22. Saruji has a number of proposals to improve the operation of theexisting cement plants. The main ones are the following:

(a) Tanzania Portland Cement Co. (TPC). The management of this mill,located in Wazo Hill, about 30 km from DSH, has been taken over byCementa International (of Sweden), financed by SIDA, which hasalso approved a program of SK 3.5 million for equipment andSR 15 million annually during five years for spares. The fundsassigned to purchase equipment are obviously insufficient formajor rehabilitation work. The newest mill was seriously damagedin 1984 when the kiln's wall broke near one end of the revolvingdrum due to lack of refractory bricks to replace worn bricks;a new section of the kiln drum had to be imported and is beinginstalled. Additional investments needed for normal operationof two of the three Wazo Sill kilns are estimated at T Sh 300million.

(b) Tanpa Cement Co. Ltd. This plant has a 1,600-tpd kiln (thelargest in Tanzania) and a 100-tph cement mill, but it lackssufficient quarrying equipment. Management of this company hasbeen taken over by DANIDA. A realistic rehabilitation estimatefor spares, refractories and laboratory supplies would be likelyto exceed TSh 50 million (US$3 million). Any sustained programfor exports to Burundi would necessitate an improvement of portfacilities at Kigoma, while shipments to Zanzibar, Mtwara andLindi would require improvements in the Tanga port. But theseinvestments could be justified only after a detailed marketsurvey. Trade and investment agreements with neighboringcountries (and the local government of Zanzibar) would first berequired in any case.

(c) Mbeva Cement Co. Ltd. This plant has the only kiln in Tanzaniathat can be fired by heavy fuel oil, coal or a mixture of both,and the existence of limestone deposits nearby is also anadvantage in the long term. However, the plant is located farfrom demand centers. Market prospects do not seem to warrantimplementing additional investments in this plant, particularly iftransportation costs from large demand centers continue to behigh, and the country-wide demand for cement is likely to fallbelow existing capacity for some time to come (see below).

Issues and Potential for Rehabilitation

23. The main issue for the cement subsector--other than the overallpolicy changes discussed in the Main Report--is the recognition that thereis excess capacity at present abd therefore that no new plant capacity

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should be considered for a long period of time. Furthermore, given thepresent level of cement consumption in Tanzania, operation of the Mbeyaplant would only result in making all three plants operate at a very lowlevel of capacity utilization. Assuming a 7 percent annual increase incement consumption in the next decade, total consumption by 1995 would beabout 650,000 tons. Even if the Mbeya plant is mothballed, the Wazo Hilland Tanga mills, operating at 75 percent capacity, would exceed such localdemand forecast by 100 percent.

24. In principle, production of only one of the plants would sufficeto meet current and prospective demand for cement during the next few years.In practice, however, the significant transportation difficulties faced byTanzania, which are unlikely to be alleviated in the short term, indicatethat keeping both the Wazo Hill and Tanga plants open may be justified.If further study of the situation confirms the viability of keeping bothplants running, it will then be necessary to coordinate carefully theproduction programs of the two mills, since their combined capacity willexceed demand in the future.

25. Any new investments in the subsector should be minimal in theshort run and critically evaluated in all cases. In particular, theinstallation of the tile-making section of the Arusha Bricks and Tilesproject should not be undertaken unless it is fully justifipd; expendituresin the Mwanza Container Glass plant should be stopped unless a marketdevelops in the surrounding area and the economics of operating the MbagalaSheet Glass Co. must be demonstrated, at least on a sunk cost basis.

c. LEATHER AND LEATHER PRODUCTS

Structure

26. Except for very small or artisanal skin tanning operations, allleather production is carried out by public sector enterprises under theTanzania Leather Associated Tndustries (TLAI) which also owns a canvas mill,two shoe factories, one leatherboard plant, one unit to make leather goodsand the Tanzania Institute for Leather Technology. The private sectoroperates 11 small shoe and 2 leather goods factories in addition to manycottage enterprises.

27. The Tanzania Tanneries Ltd. plant at Moshi started operations in1969 and the two other tanneries, located in Mwanza and Morogoro, in 1977and 1978, respectively. Total attainable capacity is estimated at 2.47 m.m2

of finished and semi-processed (wet-blue and crust) leather and 340 tons ofvegetable tanned sole leather. Actual capacity utilizatior has been low:48 percent in the 1979-82 period and 37 percent in the last two years.

28. Total installed capacity of the footwear industry is estimated atabout 8.6 million pairs annually. The two largest enterprises, the TanzaniaShoe Co. Ltd. (Bora) and the Morogoro Shoe Co. (MSC), are owned by TLAI andhave a capacity of 7.3 million pairs annually. Capacity utilization of theMSC plant has been negligible (2 to 4 percent), while the Bora plant hasoperated at about 50 percent capacity.

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29. Leather goods have been traditionally produced in small shops.The Morogoro Leather Goods Co. Ltd. was incorporated as a saparate companyowned by TLAI in June 1982 as a part of the Morogoro Industrial Complexfinanced by the Bank and TLAI has also established a leather goods producingunit in the Moshi Tarnery. There are also several small plants in theprivate sector.

Markets

30. In 1S.82, Tanzania exported 1.28 m.m2 of leather for US$3.2 millionand although the volume exported dropped in 1983 it has begun to pick upagain due to a financial and marketing contract under the Swedish-sponsoredSeed Capital Program. The domestic market is well covered by the extensivenetwork of Bora outlets. Bora is the trademark that was inherited by theTanzania Shoe Co. when it was formed after nationalization of the Batacompany which had a long experience in local marketing.

Resources and Advantages. Constraints and Problems

31. Tanzania has the second largest livestock population in EastAfrica and this resource constitutes a suitable base for significantdevelopment of the leather and leather products industry in that country.However, there are significant constraints and problems for the efficientutilization of this resourcet (i) the Tanzanian off-take rate or ratio ofcattle slaughtered to cattle population (10.6 percent) is below the Africanrate and about half of the worldwide rate; this is partly due to the socialstatus value attached to cattle herds; (ii) the quality of the hides islow due to insect bites, to the large proportion of cattle not killed inslaughterhouses and the resulting inappropriate skinning, flaying andconservation of the hides, and to the high humidity and temperature thatmake conservation, even in the slaughterhouses, difficult; (iii) inadequatepricing policies that do not allow for an attractive mark-up for higherquality hides and encourage smuggling to neighboring countries; and (iv)poorly organized collection and distribution cf hides and skins due toinefficiencies in the parastatal company (Tanzania Hides and Skins, THS).

32. In addition to the hide and skin quality and distribution problemsand to the macroeconomic conditions, the leather and leather productindustries are facing the following problems: (i) an acute shortage ofhides and skins. Even assuming that all other constraints were removed,lack of hides and skins would limit production of the Horogoro Tannery to 40percent of capacity. In the case of the Moshi Tannery, it resulted in theloss of 117,400 man-hours in 1983; (ii) high absenteeism because of illnessand obligatory people's militia drillings; (iii) water shortages,particularly in Moshi; (iv) power shortagess at the Mwanza Tanneryelectricity is available only between 10 pm and 2 am and limited to 50percent of the design load; and (v) most enterprises are overstaff, as isthe case with most industries in Tanzania.

33. The Morogoro Shoe Co. is a particularly distressful case. ThisWorld Bank sponsored project was badly designed for the country conditions:it is a large plant which was based on an unduly optimistic assessment ofthe export possibilities (80 percent of its output was assumed to beexported). The company has not had competent management and did not secure

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either a suitable engineering firm during implementation or an adequatemarketing partner for its operations.

Pronosed Investments

34. At the request of the Government and financed by the Bank, UNIDOcarried out a study on the Rehabilitation of the Leather, Footwear andLeather Products Industry. The resulting report, submitted in October 1984,contains a number of policy proposals and a rehabilitation program estimatedto cost approximately US$15.0 million. These projects are not included inthe CO Document, which has no investments listed for TLAI enterprises.However, budgetary allocations totalling T Sh 97.7 million have been madefor the Morogoro Effluent Treatment Plant (part of the Bank financedMorogoro Industrial Complex project), for the Morogoro Leather Board Plant(which is not completed), and for the Tanzanian Industrial Boots Co. Bothof the latter should be postponed at least until an action plan isimplemented for the Morc-oro Tannery and shoe factories. In addition, asmall allocation (T Sh 18 million) for working capital for the efficientlyrun Horogoro Canvas Mill and T Sh 9 million for other minor capitalexpenditures have been made.

lesues and Potential for Rehabilitation

35. Host of the issues discussed in the textile and cement subsectorsare also applicable to this subsector. The options of closing down theMorogoro Shoe plant or of selling or assigning part of its equipment toother manufacturers should be seriously considered in the context of arestructuring of the subsector, which ought to concentrate on rehabilitationof the viable activities.

36. The rehabilitation of the tanneries can be justified independentlyfrom the decisions to be made for the footwear plants. The volume ofprocessed hides and skins should be increased and the quality improved. TheUNIDO Report makes a strong case for the rehabilitation of the TanzaniaTannerias Ltd. at Moshi and the Morogoro Tanneries. The Moshi tannery hasalready been able to secure a barter arrangement that has allowed it topurchase some of the most urgently needed chemicals and spares. However,the rehabilitation of the Mwanza tannery should be postponed in view of theserious shortages of power in the area and the difficulties in securingsufficient hides and skins of adequate quality.

World Bank LendinA

37.In retrospect, it is apparent that Bank Group lending to industry inTanzania has been flawed by some serious shortcomings. For instance;

(a) The Horogoro Industrial Complex's main component, the MorogoroShoe Co., as discussed, is an extremely unproductive venture. Theproject was poorly conceived, designed and implemented, and theBank did not adequately assess the difficulties associated withlarge-scale manufacturing of shoes in a developing country, andaccepted extremely optimistic export projections put forward bythe project's consultants.

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(b) The Hwanza textile mill was well built technically speaking.However, the Bank did not resist the tendency in Tanzania ofbuilding new textile mills. In addition, the Bank did notadequately monitor the installation of power to the mill.

(c) The Mufindi Pulp project is facing serious infrastructural,marketing and institutional problems and is unlikely to reach evenmodest financial and economic rates of return. The risks involvedin the huge investment required, the complex financing plan andthe lack of infrastructure should have been reflected more fullyin the project appraisal and design. Accounting for thesedifficulties at the design stage may have made it advisable not toundertake this project.

(d) Bank-financed indirect lending through DFCs has not been basedon subsectoral strategies or even coordinated with other lendingoperations. For example, the Bank has financed additionalspinning equipment in spite of the existing overcapacity shoe-making equipment of a similar type to those lying idlein Morogoro. Relatedly, the economic assessment of Bank-financedsubproject has been inadequate at best, and often lackingaltogether.

GENERAL CONCLUSIONS AND RECOMMENDATIONS: TEXTILES, CEMENT AND LEATHER

38. The largely unproductive investments made by the Government in theindustrial sector and the low efficiency of industrial operations ingeneral, require that the viability of each individual enterprise andproject be reappraised and, in light of this assessment, a restructuring andrehabilitation program be prepared. The restructuring program for eachsector will have to take a subsector-wide approach as well as designing anin-depth action plan for particular enterprises. The success of such aprogram is contingent on policy changes that will minimize price distortionsand protective measures in order to increase the efficiency in operationsand in investment decision-making. At the same time, planning by public andprivate sector officials and executives should be anchored in a morerealistic appraisal of the market and production conditions and in athorough assessment of the existing and potential bottlenecks affecting therelevant activities. Economic considerations ought to play a more prominentrole in production and investment decision-making. Specialized consultantswould be needed for the preparation of the rehabilitation program for thetextile, cement and leather industries.

B. FOOD, BEVERAGE AND TOBACCO SUBSECTOR

Structure

39. The food, beverage and tobacco (FBT), which constitutes 23 percentof all manufacturing firms (and 30 percent of value added) is the largest inthe manufacturing sector. FBT firms, in the aggregate, were more laborintensive than the other subsectors. The subsector is dominated by large

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publicly owned enterprises. Of the 161 firms in this subsector (69 arepublicly owned, and 13 employed over 500 workers. The large scale publicenterprises contributed 54 percent to its value added and 61 percent to itsemployment, while public enterprises as a whole contributed 81 percent tovalue added and 85 percent to employment. In spite of being more capitalintensive, large and publicly owned enterprises had a lower value added peremployee than other firms in the subsector, indicating lower levels ofefficiency in their use of capital and labor.

40. Food industries are the largest of the three in the FBT subsector.These industries process meat, fish, fruits and vegetables and dairyproducts, produce oils and fats and animal feed stuff, mill grains andrefined sugar. The major activities are sugar refining and production ofanimal feeds; these also constitute the main food exports, together withcanned beef and fish. There are 145 firms in food industries whichconstitute 90 percent of the subsector's establishments. The beverageindustry is the next largest in the FBT subsector. These industries producedistilled alcoholic drinks, beer, juices and carbonated soft drinks. Themajor activity is production of beer. The tobacco industry is the smallestin the FBT subsector. There are three large public enterprises that curetobacco and produce cigarettes, some of it for export to neighboringcountries--Rwanda, Burundi and Uganda.

PERFORMANCE

41. The FBT subsector's performance between 1977 and 1983 was aboutthe same as that of the manufacturing sector. Value added, in real terms,declined by 45 percent and employment also increased significantly in both.Value added per employee has declined by over 40 percent in the FBTsubsector and exports have declined from US$40 million to US$ 20 million,between 1981 and 1984. The average subsectoral performance masks variationsin the performance of food, beverage and tobacco industries since beveragesregistered an increase in value added of 65 percent between 1977 and 1983while food and tobacco value added decreased by about 60 percent.

42. The performance problems of the food processing industry aremostly caused by supply problems because food products are relatively priceand income inelastic. There have been shortages of domestic raw materials,the main inputs for these industries, and in some cases imported inputs, forinstance tallow, caustic soda and chemicals for oil production, have notbeen available due to a lack of foreign exchange. Domestic Resource Cost(DRC) ratios for three companies in the food industry suggest that on theaverage the food subsector is relatively efficient (low DRCs) and that the(potential) efficiency at higher capacity utilization would be even higher.However, there is some variation in the economic efficiency of differentproducts. Simple items like bread have very low DRC ratios of about .15whereas more complicated and more import dependent items like cooking oil,are being produced at negative value added.

43. The beverage industry has fared well between 1977 and 1983 inspite of the general decline of the economy and the manufacturing sector.Output increased by 29 percent, value added by 65 percent and employment by

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46 percent resulting in a 12 percent increase in value added per employee.Production of beer, the main industry, was maintained, although capacityutilization of the breweries declined from 85 percent to 50 percentfollowing a 70 percent expansion in installed capacity. Beer is anextremely important source of revenue for Government, so imports of malts,chemicals and corks are permitted to ensure production of about 5 millioncases per annum. Tanzania Breweries Ltd. is an old company, incorporated in1960, taken over by the Tanzanian Government after independence. The plantis efficiently run by well-trained and experienced technicians and managerswho have long years of service with the company. The economic efficiency ofthe plant is satisfactory.

44. The good performance of the beverage industry in general is theresult of (i) good management; (ii) natural advantages in domesticproduction; and (iii) adequate provision of foreign exchange for import ofconcentrates and chemicals. However, some companies, have fared poorly.Tangold Ltd., a parastatal which is the largest producer of fruit juices, isworking at 20 percent capacity and seems to be poorly managed. TropicalFruits, a private company which is also working at low levels of capacityutilization, appears to be better managed and relatively efficient inproducing fruit juices.

45. The tobacco industry experienced a 64 percent decline in valueadded during the 1977-83 period. Cigarette production, the major item, was,however, maintained but capacity utilization declined from 77 percent to 61percent following a 23 percent increase in capacity. Cigarettes, like beer,contribute significantly to Government revenues and so were allowed toimport their packing material needs. Tanzania Cigarette Company is an oldcompany bought by the Tanzania Government from British American Tobaccoafter independence. It has experienced technicians and management who havelongevity with the company. The Dar-es-Salaam plant is efficiently run andhas very low DRC ratios (of less than 0.5). This is the only industry inthe manufacturing sector that experienced a significant decline in employ-ment during this period suggesting that an effort was made to adjust to thedecline in production.

PROSPECTS

46. Prospects for the FBT subsector in Tanzania are intrinsicallygood. The demand for FBT products is income inelastic, the technology islabor intensive, domestic resources are the main inputs, and many productsenjoy natural protection. The DRC analysis corroborates this view inshowing that many PBT activities are economically efficient. These includevery important items like beer and cigarettes which are a significant sourceof revenue for Government. Other items in the food industry are also likelyto have DRC ratios less than one because they are based on domesticresources and labor intensive. However, there are some economicallyinefficient items in the PBT subsector that are import intensive likecooking oil.

47. The present incentive structure of protection through quotarestrictions and foreign exchange allocation favors capital and import

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intensive industries and is biased against the FBT subsector. Any policychange in incentives towards market forces will therefore ameliorate theanti-FBT bias and elicit a production response. This may only be possibleif several factories are rehabilitated. The brewery, cigarette factory andseveral carbonated drink bottling companies are in need of rehabilitation,rvinly replacement of worn out and obsolete machinery. Tanzania Breweries,i,cd. and Tanzania Cigarette Company have received allocations for rehabili-tation in 1985-86 budget and appear in the Consultative Group document.Since these companies are well managed, economically efficient and majorrevenue earners for Government, the appropriations are reasonable. However,allocations for expansion of the brewery are premature in view of thepresent low capacity utilization and stagnation of the economy.

C. THE METAL PRODUCTS AND ENGINEERING SECTOR

Structure

48. Metal products and engineering comprise five distinct industries:iron and steel and non-ferrous metals; metal products; non-electricalmachinery; electrical machinery; and transport equipment. These industries,in turn, comprise several activities with different technical characte-ristics. This grouip of industries has 97 establishments, 23 in the publicsector and 74 in the private. By size, 55 are small (10 to 49 employees),39 are medium (50-499 employees) and 3 are large (500 or more employees).By far the largest single activity of the group is motor vehicles and parts,with 3.3 thousand employees. Only two more activities, fabricated metalproducts and 'other machinery and equipment', have more than one thousandemployees. In 1981, the subsector as a whole accounted for 11 percent oftotal employment in Tanzanian manufacturing industry and 15.5 percent of itsvalue added. The public sector accounts for 44 percent of subsector'semployment and 47 percent of its value added. The public sector isprominent in iron and steel, non-electrical machinery, and basic metals,cutlery and hand tools, 'other' non-electrical machinery, and all transportequipment activities with the exception of motor vehicles. By size, smallfirms account for 11 percent of employment and 10 percent of value added,medium-size firms for 69 percent and 74 percent, and large firms for 20percent and 16 percent, respectively. Two of the three large firms in thesubsect-r (in cutlery and hand tools and railroad equipment) areparastatals; the remaining one, in 'other' electrical apparatus, is private.

Productivity

49. The subsector's average value added per employee in 1981, T Sh 44thousand, was higher than that of Tanzanian manufacturing industry as awhole, (T Sh 32 thousand) as a result of skill and capital intensiveactivities in the sector. There is, however, considerable variation inproductivity levels among different activities.

50. The Tanzanian metal products and engineering industry is at a verylow level of development. While simple metal products have beenmanufactured in the country for over two decades, and the major basic metalsplant has been in operation since 1963, the activities are still basedprimarily on imported materials and are confined to relatively simple

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finishing or assembly operations. The relative lack of backward linkagesapplies even more to new and more complex activities (in capital goods andtransport equipment). In addition, the economy lacks a natural resourceadvantage in the production of basic metals (though there are some, as yetunexploited, reserves of iron ore). The domestic market is too small tosupport many engineering activities which are highly capital intensive (ironand steel) or require long production runs (vehicle assembly).

51. Most conditions for efficient production are absent in Tanzanianmetals and engineering industry. Labor ii now not expensive by LDCstandards, but neither is it well-trained or efficient, it lacks motivation.Foreign investments have been absent for several years, the result ofTanzania's unfavorable location, poor infrastructure, bureaucratic obstaclesand the high efficiency cost of labor. More importantly, there is a verysmall base of technological and managerial skills. Local capabilities toselect and engineer new plants, to operate them at high levels ofefficiency, and to undertake the constant process of productivity-raisingimprovements which are essential for international competitiveness areextremely meagre. There are exceptions, but the general picture is one offacilities which are often toolsmall-scale to be competitive, equipment andtechnologies which are sometimes obsolete and at other times too complex forexisting skills, and plants which are poorly maintained and not subject tocontinuous productivity enhancement. The result is high cost, poor quality,technological obsolescence and rising levels of uncompetitiveness.

52. The highly protective trade regime has worsened the problems.Competitive pressures to improve efficiency and to learn the necessarytechnological and managerial skills have been absent. The normalpresumption of protective industrialization policy, that infant industriesgain in productivity over time is often negated: many activities getprogressively less efficient relative to world standards as foreign techno-logies move ahead and local technologies have deteriorated behind increasingbarriers. In the parastatal sector the problems have been accentuated,since in many cases they are also sheltered from domestic competition fromthe private sector have tended to take on more difficult and capital-intensive industries and have an even smaller base of technological/managerial experience than private firms. In addition, they often are notsubject to normal commercial discipline.

53. Manufacturing activities in the metal products and engineeringsector remain at the simplest, final stage level of finishing or assemblingimported intermediates and components. At this level, economies of scaleand skill requirements are generally not very high relative to those at moreadvanced levels of production. However, in many instances they are beyondthe market size and human capital base of Tanzania. For instance, economiesof scale dictate that the assembly of trucks be at a minimum of three tofive thousand units per annum, and much higher if backward integration intocomponent manufacture is envisaged. Tanzania today assembles around 150-200vehicles. Machinery manufacture is not very scale intensive, but is highlydemanding of production and mechanical engineering skills, and beyond thesimple assembly stage it also needs product design skills. Basic metalproduction can be very scale intensive, and also demanding of productionengineering capabilities to keep large, complex equipment in good order).In sum, even the first stages of many of the activities in the subsector maybe inappropriate to Tanzania's endowments and capabilities.

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54. It follows that the activities in the subsector in which Tanzaniacould develop a competitive advantage are relatively small scale, userelatively simple equipment and draw on available or easily transferableskills. To implant the activity firmly in Tanzania, to enable nationalsto operate it and build upon it, and (over time) to move from low to highproductivity techniques or activities must require the continuous develop-ment of indigenous managerial and technological capabilities.

Firm Level Performance

55. Iron and Steel. Tanzania has no integrated iron and steelproduction plant, nor does it produce any non-ferrous metals from firststages. The operations included under the activity comprise one steelsmelting facility (a small electric arc furnace using scrap metal, most ofwhich is imported) and several facilities for ferrous and non-ferrous metalfinishing (rolling, shaping and so on). Two of the main enterprises, bothparastatal, are considered here.

56. Aluminum Africa: A profitable parastatal, which is beingadequately run and has good technological capability, yet is veryinefficient for the country as 93 percent of the firm's output is producedat negative value added (particularly corrugated iron sheet and steelbillets), and would not become efficient if capacity utilization wasincreased. The structural inefficiency of this industry appears to be theresult of the inherent technological features of this capital intensive andcomplex industry, where the small scale of operations, use of outmodedtechnologies and reliance on expensive foreign personnel account for thehigh economic costs of production.

57. Tanga Steel Rolling Mills: The profitability of TSRM has beensteadily declining (net financial return of capital estimated to be 3percent) in spite of very significant effective protection (608 percent).The firm produces steel products very inefficiently (economic rate of returnat actual capacity is -25 percent, at attainable capacity it would be -18percent), the result of the lack of technological competence, maintenanceand operations within the enterprise and the small scale of production. YetTSRM has been engaged in setting up another wire rod and drawn wire plant, amisplaced priority, particularly when considering the importance ofimproving the performance and providing inputs and spare parts for theexisting plant (before channeling resources to expansion).

Metal Products

58. This set of activities mainly comprises relatively simple andsmall-scale operations to shape and fabricate metals, using largelyinexpensive general purpose machine tools, sometimes with a few specializedmachines. In spite of the relative simplicity of the activity, considerableskills, experience and effort are involved in achieving productionefficiency.

59. There are 43 metal products manufacturers in Tanzania, the largestgroup in the engineering subsector. Most of the units (31) are small (under50 employees), and privately owned. Domestic production of fabricated metalproducts is inadequate to meet the country's requirements. There is an

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urgent need (and an apparent economic justification) for much moremanufacturing activity of this sort to provide Tanzanian industry withspares and components which are presently imported, and which constitute oneof the tightest bottlenecks on its capacity utilization.

60. As opposed to more industrialized economies, it appears thatTanzania's large engineering companies do not have close links with localmetal products manufacturers which could supply them with spares andcomponents. Large manufacturers generally lack the technological capabilityto foster subcontractors, since the process of setting up a new supplynetwork demands considerable technical and managerial effort. The potentialor actual subcontractors are scarce, and generally lack the mechanicalengineering skills and entrepreneurial abilities needed to become reliable,cost-efficient suppliers. The firms provided some, relatively minor,suggestions for increasing the value of components they could make in-house,and a few ideas for using local raw materials as import substitutes. Therewere, however, practically no proposals to increase local subcontracting bysponsoring or assisting independent firms: even the awareness of this routeseemed to be absent. Some firms, like the truck assembler Scania, have madesome efforts to increase local subcontracting, but this vital ingredient ofenginenring-sector development is missing in the country.

61. ITbonso Farm Implements ( tI): There are two main production linesin UFI, both designed and supplied by the Chinese, who also provided themanufacturing know-how. The old production line (1970) makes hoes, ploughsand shares, while the new one (1978) makes only hoes. Until 1982-83, UFIhas serious technical problems in operating its plant, especially theoriginal production line. Output declined over time; by 1982, capacityutilization was down to 46 percent. After 1983, UFI underwent an impressivetransformation. Its management was completely changed, and an infusion oftechnically trained personnel and of foreign exchange for imports wasprovided. Capacity utilization went up dramatically, and for two productsexceeded rated capacity (104 percent for hoes and 140 percent for shares).The main product, hoes (72 percent of total output) is produced veryefficiently (ERC of 19 percent, LRDRC of 0.66), while effective protectionis non-existent (-1 percent). In the engineering subsector, these are thebest efficiency results from the MIES sample.

62. UFI's competitive performance is the result of a technology whichis simple and not scale-intensive and of the managerial and technical skilltransformation in 1983. Relatively old-fashioned equipment of the typesupplied by the Chinebe does not constitute a disadvantage if its mainte-nance and operation is successfully implemented. The enterprise has noforeign technicians or technology payments, thus saving on foreign exchange:however, the 'learning' of the simple technology is very recent.

63. Mbeva Farm ImPlements: This enterprise, also a parastatal underNDC, is not. yet in full operation, but it illustrates some problems withproject implementation and operation. Construction of the plant, to makehand tools and animal/tractor-drawn implements, started in 1977. Equipmentinstallation began in 1979 but was not completed in 1982 (when the SAPsecretariat study was conducted). Some components had not been received,while installed equipment had been cannibalized to keep a few machinesrunning. Management was reportedly weak, and technological capabilitiesinadequate to the task of revitalizing the plant.

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64. Metal Box is one of the oldest engineering manufacturers inTanzania, and is still using some of its original (30 year old) machinery.Careful maintenance and nursing of the equipment has kept it operative,though its protuctivity is low and could be greatly improved by newequipment. Unlike many newer plants, however, Metal Box does not need reha-bilitation. It has a small tool room to make the simple spares, and a well-trained work force. The factory manager, the factory engineer and theproduction engineer are expatriates. The technology agreement with MB (UK)seems unfavorable to Tanzania: the technology is very stable and little newknow-how is being transferred. The charging of royalty (of 0.5 to 2.5percent on total sales) seems unnecessary especially since there is aseparate, T Sh 300,000 per annum management contract.

65. These heavy foreign exchange costs, added to the high (andnecessary) import dependence for current inputs, makes the enterpriseinefficient in economic terms. Value added at international prices isnegative, and Tanzania would do better to import the finished cans than tomake them domestically. The very small scale of operation and the old tech-nologies in place are also likely contributors to its poor result. Clearly,even simple metal forming operations, with low capital costs and small scaleoperation, well managed and technically competent, can be economicallyundesirable if the technology is inherently unsuitable for this type ofactivity. In addition, heavy technology and expatriate management costsworsen the cost benefit balance.

66. The firm which Metal Box acquired in 1985, Tanzania Crown Corks,also shows negative value-added at international prices. However, its pastperformance has been far less creditable: it suffered losses steadily from1979 onwards despite a local monopoly, and the original production line wasbadly run down and ceased working totally by i982. The enterprise did nothave a workshop to carry out even minor repairs; it had no trained engineersto undertake preventive maintenance, and had been operating without aproduction manager since its inception. The quality of its products waspoor, and customers complained constantly. It was extremely weak infinancial management and planning, and the management made no effort toensure proper operation of the plant.

67. Jele Industries: Jeje Industries is a small private companystarted in 1978 to draw rods into wire (for making nails) and to make nailsand barbed wire. It is entirely import dependent (98-99 percent), usingrods purchased from Belgium. The equipment is well maintained and in goodworking order, but imbalances in the facilities which leads to attainablecapacity being 30 percent lower than installed capacity. The constrainedimport situation has prevented its correction forced Jeje to work at 11percent of installed capacity in 1984. The firm is producing veryinefficiently yet, at attainable capacity, it could become marginallyefficient, according to the DRC calculations from the MIES.

68. Vire Industries: Another private enterprise making wire nails,mesh, netting and barbed wire, as well as welding electrodes. It belongs tothe Chandaria (Comcraft) Group which started ALAP (see above). The shortageof imported inputs brought 1982 capacity utilization down to about 20-30percent of attainable capacity, and employment declined from 275 in 1978 to43 in 1982. As with other Chandaria enterprises, there is ample and good

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technical management. The equipment is in good running order, and there isa well-equipped workshop with facilities to make dies, cutters, shafts etc.for the firm's needs. The firm has positive value added at internationalprices (however, DRC figures were not calculated) and has exported in thepast to Zambia.

69. Palray Groupt The group started in 1955 with the Mohinder SinrhPalray Engineering Works for collapsible doors. By 1982 it had 8 manufac-turing units, making furniture, beds, plastic (melamite) ware, steel wool,artificial leather (PVC) and parquet flooring. The group also sold tech-nical services for the design and manufacturing of tools, dies and spares.In Tanzania the group has a monopoly on hospital furniture, steel wool andPVC. It won the International Africa Award in 1981. The group uses localwood for its furniture but is import dependent for other inputs. Accordingto the SAP Secretariat study, it was an efficient user of foreign exchange(i.e. it saved more in direct terms than it consumed) in 3 products (furni-ture, steel wool and melanite ware), but was inefficient in making PVC,parquet flooring and beds. It was not able to export any of its products.DRC calculations were not made for this group.

70. Cotex Metals and Machinerys This private firm was launched in1980 to make screws, rivets, pressure-cast aluminum parts, metal fabrica-tions, tools and dies, spares for automobiles and industrial plant andplastic (melanite) ware. The SAP Secretariat study found this to be theonly firm in Tanzania with pressure-casting facilities (which were beinggrossly underutilized). It also had sophisticated toolroom facilities, apress shop and a fabrication shop and it had shown ingenuity in developingnew products, in contrast to many other local firms.

71. Cotex had modern equipment, kept in good working order anddeployed to make good quality products. It had exported its melamite wareto neighboring countries. It was developing battery boxes and fuel tanks aswell as other simple components for the local Scania truck assembly plant.Though DRC rates were not calculated for Cotex, it appears to be a capableand dynamic firm which could provide a base for indigenous technologicaldevelopment.

72. National Engineering Company (NECO)s This parastatal makes steelstructures, tanks, containers and casting, and sells engineering services.It has 4 main shops: foundry, machinery, steel tanks and steel fabrication.NECO receives extensive technical assistance from West Germany. It employed7 German expatriates in 1983 (including 5 engineers), and imported inputsfrom Germany under a commodity aid scheme. The German government has beeneager to take back its expatriates (for whom it pays directly), but localengineers with the necessary skills have not been found. In the severalyears that NECO has been in operation, indigenous capabilities have not beenbuilt, the firm has adhered rigidly to a given product line, and has notinnovated new products to respond to evolving local needs.

73. Casting and machining technology is very skill intensive, andcasting also enjoys economies of scale. NECO's small foundry is thusuncompetitive, and suffers negative value-added at world prices. However,this accounts for only 5 percent of its activity, and its steel fabrication(82 percent) appears to be fairly efficient, with a long run DRC (under

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attainable capacity) of 1.0, while its sale of enigineering services ischeaper than the cost of comparable imports (DRC of 0.55). However, theseratios understate the true cost to Tanzania, since the seven expatriates arefunded out of aid and are free to the firm; however, once the aid programends and if expatriates are still needed, the foreign costs would shoot up.NECO is thus economically for much of its range of output, despite aretarded development of local capabilities, because of the presence ofseveral free expatriate technicians. Its long-run efficiency dependscrucially on its ability to speed up local learning to the levels required,and in phasing out its inherently uneconomical casting facilities.

Non-Electrical Machinery

74. Of the 15 firms in Tanzania making non-electrical machinery, onlyfive are medium size (50 to 499 employees); the rest are small. The mediumsize enterprises all make 'other' machinery, mainly for the agriculturalsector. The entire metal-working machinery industry is inhabited by small,privately owned firms that have simple workshop equipment that generallycannot make sinple general purpose machine tools. Firm-level information isonly available on one firm in the 'other' machinery sector.

75. Mana'ula Mechanical Machine Tool Co. (MMZTC): This parastatal,set up in 1970 by the Chinese to make spares for the construction equipmentused in the TAZARA railway was handed over to the NDC in 1977, when it wasupgraded for the production of rice hullers, maize mills, coffee pulpers andspares, as well as industrial oxygen, wood furniture and steel structures.MHMTC has become one of the largest mechanical engineering facility in thecountry, with 4 shops: foundry and forge; fabrication; oxygen plant; andwooden furniture. It also has auxiliary facilities for inspection andtesting, tool regrinding, heat treatment and so on. In 1982, it had 336employees, of which 9 were technically qualified.

76. A TISCO study of MMMTC in 1982 indicates that although the equip-ment was in reasonable working order, it was obsolete and incapable ofmaking high-tolerance products. The plant was located in a remote area andfaced a scarcity of skilled labor. Weak preventive maintenance and shortageof spares had affected rated capacity and output quality. Marketing skillswere lacking (there was no commercial manager) and product designs wereobsolete. (Some products were not saleable but were kept in production.)

77. There are serious weaknesses in both technical and commercialmanagement. Given high costs and poor quality of output, export potentialwas nil. TISCO estimated that value added at international prices wasnegative, i.e. the firm was extremely inefficient.

Electrical Machinery

78. Of the eight firms making electrical machinery, one (TANALEC) is aparastatal and the rest are private. There is one large firm (over 500employees), Matsushita, a private enterprise with foreign equity. These arethe two firms reviewed here, plus one which makes electrical-relatedproducts (cables) but not, strictly speaking, electrical equipment.

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79. Tanzania Electrical Goods Manufacturina Company (TANALEC). Thisfirm is joint venture between Norway and Tanzania, with equity divided 20-80between the two. The firm, started production in 1982 and makes fairlycomplex products - transformers and switchgear - with import supportprovided by the Norwegian aid agency NORAD. Its transformers go from 50 to750 KVA, with components and know-how provided by National Industries ofNorway, who has a separate technical contract (3 percent of sales) and amanagement agreement (4.5 percent of sales), which add significantly tothe foreign exchange costs of the operation. Although TANALEC's products arewell designed and conform to international quality standards, they areexpensive because of the small scale of local operations and the hightechnology and management fees. According to the SAP study, value addedis negative for all transformers below 500 KVA, i.e. the bulk of TANALEC'sproduction. Because the plant is new and managed by expatriates, technicalproblems have not arisen, but its high cost and the complexities of theproduct technology do not bode well for efficiency in the long term.

80. Matsushita Electric Company: This large firm (858 employees)makes dry batteries, radios, torches and fans in a plant in Dar es Salaam.It essentially assembles Japanese components supplied in CKD form. In theJapanese tradition, this well-maintained plant lays strong emphasis on localtraining. Its batteries are economical, and exported to Rwanda, Burundi andZaire, and also smuggled in substantial numbers to various countries. Thefirm is making efforts to develop new models of radios for export markets.In the absence of quantitative data, it is not possible to give a clearindication on its economic efficiency.

81. Tanzania Cables (TLC): It was set up in 1978 as a parastatal,with 29 percent local private equity and a management contract with Comcraft(Chandarias), to make aluminum conductors, power cables, PVC wires andenamelled wires. It proved to be highly profitable and by 1982 had repaidthe whole value of the investment in terms of dividends. However, theshortage of imported inputs caused profitability to decline sharplyby 1982. TCL pays heavy management fees of 1 percent of net sales and6 percent of pretax profits.

82. Nearly half of TLC's production has negative value added ininternational prices and its PVC cables although having positive valueadded, have unacceptably high long-run DRC of 2.74 at attainable capacity(7.71 at actual capacity), the result of the nature of the technology andthe burden of management fees.

Transport Eguilment

83. The transport equipment sector contains a variety of activities,information on which is fairly limited. Only four firms can be coveredhere, two parastatal and two private. The parastatals provide instancesof errors of industrial strategy and deficiencies in management, while theprivate firms are models of efficient operation in the Tanzanian context.

84. Tanzanian Automobile Manufacturing Company (TAMCO): TAMCO startedoperations in 1982 as an assembler of Scania trucks. The firm was a jointventure between the parastatal State Motor Company (90 percent of equity)and the Swedish firm Saab-Scania (10 percent), with financial support

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provided by the Swedish aid agency SIDA. The operation is very small-scale,consisting of assembling CKD packs of four models of Scania trucks and bus/chassis. Installed capacity is 1200 per annum, actual production was around200 in 1985 and import content was around 90 percent. The plant has alsotaken up the assembly of Valmet tractors (of Finland). There was supposedto be a separate Valmet assembly plant with a capacity of 1500 per annum,but the project was delayed and TAMCO's facilities are being used toassemble 50-80 tractors per annum.

85. The truck assembly operation was envisaged by the Tanzaniangovernment as the first step in a long-term program of the development ofautomotive manufacturing in the country. The program was as ambitious as itwas unrealistic and uneconomical. (The explicit long-term strategy was to'establish a miniature version of Detroit at Kibaba' to assemble a widevariety of vehicles.) Scale considerations mAake truck assembly unviable inTanzania, even at the preliminary level of assemblinl CKD packs. Furtherbackward integration would only make matters worse.

86. The mission's efficiency analysis indicates that the truck and busassembly operation are very uneconomic: all four production lines havenegative value added. At high capacity utilization the firm could produceat positive value added, yet its economic efficiency would still be verylow.

87. National Bicycle Corsan? (NABICO): NABICO, a parastatal underNDC, has been closed since 1982, although it was one of Tanzania's majorefforts in the transport equipment area. It was launched in 1974 under alicensing agreement with Atlas Cycles of India to manufacture 150 thousandcycles per annum. The cycles were the sturdy, heavy products used in Indiaand other developing countries. The management lay entirely with theparastatal, and, according to the SAP study, the firm was "one of the worstmanaged' in the parastatal sector. Despite being a local monopoly, NABICOmade large losses. The domestic cost of NABICO's cycles was 3 times that ofthe CIF price of Atlas cycles. There was no effort at cost reduction inplant; in fact, the management had instituted no cost control procedures atall. The top managerial and technical personnel were changed often, andseveral critical positions remained vacant for long periods. The firm was

1/ As shown in case after case of import substitution in the automotivesector in developing countries, raising local content at small scales ofproduction, and with inadequate technological capabilities, raised costsenormously and led to declines in the quality of output. Only a handfulof developing countries, with large domestic markets, advanced mechanicalengineering skills, diversified industrial structures and usuallysubstantial multinational participation, have been able to emerge asefficient automotive producers. None of these basic conditions obtained inTanzania, yet 'one of the NDC's arguments in the early stages of thenegotiation was that Scania's daughter company in Brazil had managed toreach a productivity level of over 90 percent in the manufacture ofcomponents locally' (Broden, p. 106). Despite Scania's reservations, itwas forced into an agreement to help start local manufacture of engines,gearboxes and drivetrains (the most complex and scale-intensive parts ofthe truck). Few tangible results can be expected, however.

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unable to generate a minimum critical mass of experience and know-how toachieve a modicum of efficiency, even though the activity was not technolo-gically demanding. In theory bicycle assembly is an activity ideally suitedto Tanzanian conditions. The product is an important 'incentive good', inenormous demand throughout the country and has no unnecessary frills. Thetechnology is relatively easy as far as engineering products go; the moredifficult items like hubs and tubes are imported from India while spokes,rims, etc. are made locally. The equipment and know-how was provided ready-adapted to Third World conditions, and could be assimilated with a modestamount of training and technical effort. Yet, the venture failed entirelybecause of mismanagement and the absence of conditions for even this modestamount of learning.

88. Afro Cooling Systems Ltd.: Afro Cooling is a local private firmengaged in the manufacture of car radiators. Its capacity was 15,000radiators, and it achieved 70 percent capacity utilization in 1984. Itsimport needs (88 percent) were met by foreign exchange earned from itsexport activity. The firm's main advantage was that it could make over 500varieties of radiators to good quality standards. It used very labor-intensive techniques, based on simple equipment but with an emphasis onstrict quality control. It substituted local brass and bronze fittings forimports and made all its own toolings in-house. The firm had three graduateengineers, four-five diploma holders and 60 skilled workers, and used themflexibly to produce almost tailor-made products. Apart from the hugevariety of radiators, it produced spares for various industries and soldtools designs etc. in order to drum up business. It imported a designengineer from India to standardize the design for radiator tubes andstructures. This standardization was a major technological improvement; itresulted in significant economies and turned out to be crucial to the firm'scommercial success.

89. Afro Cooling won an order to supply radiators to the TAMCO truckassembly plant, after its product was approved by Scania in Sweden. Itstarted exporting radiators in 1983, first to Sudan, then to the U.K.,Egypt, Kenya and the Gulf States. In 1984, 11 percent of output wasexported. Valmet approved its radiators for use as original equipment inits local tractors, and was considering them for use in its tractor plant inBrazil. For its export effort, Afro Cooling has used innovative marketingstrategies.

90. The competitive edge of Afro Cooling lies in its dynamic, quality-conscious and outward-looking management, which has been able to assimilateand standardize the technology of a labor intensive engineering product,adapt it, train local workers and market its products aggressively at homeand overseas. The learning-based competitive advantage more thancompensates for its small scale of operations and the simple facilities itoperates. Facilities and equipment are used flexible, under rigorousquality control, and the firm is constantly seeking to upgrade its product-nd process technologies. The firm would benefit from more modern equip-&ent. The HIES analysis results indicate that it is an (economically)efficient operation, with low DRCs.

91. Auto Mech Ltd.: This firm was set up by the same people who runAfro Cooling, and shares some of the top management. Operations started in

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mid-1984, and consist of the rehabilitation of automotive engines,gearboxes, differentials and electricals, as well as the sale of recondi-tioned engines. The plant employs several expatriate Indian engineers, manyexperienced in similar rehabilitation work. It searched out and procuredequipment from a variety of suppliers, in Italy, U.K., Australia, Japan,India and elsewhere, showing the pre-investment capability, rare inTanzania, to specify its technological needs and fulfill them economically(rather than getting an expensive turnkey plant from one supplier).Thereafter its operations have been very efficient, and it was expecting todeclare profits by end-1985.

92. According to the firm the cost of a reclaimed engine is 25-30percent of the cost of a new imported one. Before the firm startedoperations, most of the damaged or worn-out engines in Tanzania werescrapped, so that its activities are likely to be highly cost-effective tothe country. The firm is innovative on the shop-floor, modifying process toachieve better results, copying processes from developed countries andseeking to take on new activities. A large presence of expatriatetechnicians is the base for its learning and growth.

CONCLUSIONS

93. The few examples of efficient production in the metals andengineering subsector only serve to highlight the vast majority of firmswhich have not attained efficiency. The sample of firms surveyed above inaddition to the policy environment, suggests a variety of factors underlyinguncompetitiveness: (i) lack of economies of scale; (ii) poor product designor obsolete, inefficient facilities; (iii) lack of technological capability,leading to poor maintenance and operation, insufficient training andinadequate learning over time; (iv) poor organization and management (inclu-ding poor marketing); and (v) a shallow industrial base, with few backwardlinkages to local suppliers, equipment makers or engineering consultants.

94. The engineering sector has traditionally provided the mainlearning base in industrial development. The grounding in mechanical skillsit provides feeds into a very diverse set of manufacturing activities.Simple engineering products are not only suitable candidates for early,efficient import substitution, they also provide the vital spares and compo-nents to keep industry running in a foreign exchange constrained economy.At a later stage, capital goods production becomes a hub for the generationand transmission of new technolcgy across the economy. However, as shown,even 'simple' engineering activxties are demanding of scarce skills, and thesector contains some very scale and technology-intensive activities whichare costly or difficult to undertake. Yet Tanzania has chosen to launchinto many unsuitable investments without adequate preparation. Projectselection (as in the automotive sector) has often been irrational, but evenrational choices (as with bicycles) have been poorly implemented because thenecessary capabilities have been deficient. The economic costs engendered bymany existing engineering firms are a reflection of the inadequacies atvarious levels of project planning, implementation and operation.

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D. THE CEEMICAL AND RUBBE INDWSTRIES

Structure

95. This subsector includes three industries: chemicals, rubber andplastics. Chemicals comprises seven different industrial activities andrubber two. In 1981, the subsector contained 56 establishments, 8 in thepublic sector and 48 in the private sector. By size, 30 were small, 2!medium and 3 large. Of the three large establishments two were parastatals.The public sector accounted for 39.7 percent of employment, and 26.7 percentof the value-added in the subsector.

96. In 1983, the subsector accounted for 8 percent of total manufactu-ring employment, compared to 2.9 percent in 1965. It had 810 employees in1965, 6971 in 1977 and 8251 in 1983. Its large fall in value-added had beenaccompanied by increases in employment, with consequent sharp declines inlabor productivity (see below). The increase in employment since 1977 wasconcentrated in the chemical industry, where the number of employees rose bya third during 1977-83. In rubber employment declined by 8.4 percent and inplastics by 15.7 percent in this period.

97. At the level of specific activities, wide dispersions in capacityutilization make it difficult to rank industries by size. Employmentfigures indicate that the largest activities are basic industrialchemicals, fertilizers and pesticides, tires and tubes and soaps andcosmetics. Value-added figures show that the most important activities in1981 are tires and tubes (but note the apparent error in the value-addedfigure for small tire producers), other chemicals, soaps and cosmetics andplastic products.

Productivity

98. The subsector contains a large number of capital-intensive, high-skill activities which yield relatively high values of 7alue-addedper employee. Average wages are also higher than for all manufacturing,a result of the high skill requirements. However, value-added per worker inthe industry has declined dramatically in recent years. The fall was59 percent in chemicals, 67 percent in rubber and 36 percent in plastics.Shortage of imported inputs, and spares and poor maintenance of equipment,infrastructural deficiencies and inadequate management have contributed tOthis decline.

99. The public sector has lower average productivity than the privatesector, although both sectors have productive as well as unproductive firms.Smaller and medium-sized establishments appear to be more productive thanlarge enterprises (basic chemicals and fertilizers have extremely lowproductivity). Some medium-size firms are capable of reaping scaleeconomies while larger firms appear to be much more affected by technolo-gical and management problems associated with large size and technicalcomplexity.

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Performance and Constraints

General Evaluation

100. The chemical industry is technologically complex and capitalintensive at all stages of production exmept for the final formulation ofend products like pharmaceuticals, paints or pesticides. The sophisticationand continuous-process nature of the 'heavier' manufacturing processes placegreat demands on achieving high capacity utilization, stringent qualitycontrol, adequate maintenance, 'good housekeeping' to keep down operatingcosts and a range of chemical disciplines to optimize production in anygiven set of conditions.

101. In addition, the initial engineering of a plant crucially affectsits efficiency: unlike engineering products, where there are series of'shops' which can be adapted to use varieties of equipment or processes, achemical plant, once designed and erected, has fixed production parameters.A design which uses inefficient processes, or processes which are not suitedto local raw materials, output mix or scales, can be very expensive tooperate. Even an ideally designed plant needs constant technical monitoringand nursing to realize its full productive potential.

102. These characteristics make heavy chemicals a relatively difficultactivity for a developing country starting to industrialize. The costs oflearning can be very high where it is done in large expensive plants. Theunder-utilization of process industries creates greater wastage than inengineering-type industries. There is relatively little transferability ofskills from one process industry to another. The minimum scale requirementsof many 'heavy' chemical plants exceed the absorptive capacities of manydeveloping countries, and exports are difficult unless there is a naturalresource or locational advantage. In recent years, the chemical and petro-chemical industries of developed countries have suffered excess capacities,so that world prices of their output are very low, and may stay low forsome years to come. This makes international competitiveness that much moredifficult to achieve.

103. The 'easier' activities in this sector do, however, lendthemselves to efficient implementation in developing countries. The formu-lation of chemicals into some final products can be relatively small-scaleand technologically uncomplicated. The manufacture of simple rubberproducts and plastic extrusions is similarly 'easy'. However, an activitywhich is 'easy', in this relative sense,may still require skills which arescarce and production capabilities which have to be assiduously cultivated --their absence may lead to gross inefficiencies comparable to those observedin the engineering sector.

104. The subsector in Tanzania contains a broad array of chemical acti-vities, from the simple to the very complex. At the simple end there arepharmaceutical, agrochemicals, cosmetics and plastic-extrusion plants. Atthe complex end there are basic industrial chemicals, fertilizers, petroleumrefining and tyre plants. The simpler activities were launched around theearly 1960's, the complex ones in the early 1970's. Tanzania practicallyhas no domestic resource base for chemical, petrochemical or rubber activi-ties. Thus, all these industries are highly import dependent. Tanzania isalso very short of the specialized chemical engineering skills required tooperate the more complex of these activities: in some cases this leads to

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heavy foreign exchange costs for expatriate personnel, in others to grossinefficiency because plants are operated without critical technicalpersonnel. Since the domestic market is very small, many of the 'heavy'activities have been set up at uneconomic scales.

105. All these factors, added to the relatively short period oflearning for which the complex technologies have been operated in Tanzania,combine to create widespread inefficiency in the chemical and relatedindustries. Of the 25 product lines analysed in the MIES (for 10 enter-prises) in this subsector, 14 have negative value-added at internationalprices at actual capacity utilization (8 at attainable capacities), 10 morehave long-term DRCs of over 2 (10 at attainable capacities), and only 1 hasan acceptable DRC of below 2 (7 at attainable capacities).

106. The uneconomic operations exist in 'light' and 'heavy' activities,both new and old. Even at attainable capacities, only some plastic andsoaps show acceptable efficiency levels, while pharmaceutical and fertili-zers, as well as other plastics and soaps, remain inefficient. Clearly,firm level factors also determine the degree to which existing resourceshave been deployed economically (as well as industry-wide factor) technolo-gical competence has played a predominant role among these firm-levelfactors. Let us now review the experience of some selected firms. Pharma-ceutical and fertilizers, as well as other plastics and soaps, remaininefficient. Clearly, firm level (other than general industry level)factors determined the degree to which existing resources have been deployedeconomically. Among these firm-level factors, technological competence hasplayed a predominant role. Let us now review the experience of someselected firms.

Firm Level Performance

chemicals

107. Tanzania Fertilizer Companv (TFC): TFC started operations in 1972and was originally designed to produce 105 thousand tons of fertilizers perannum, consisting of 25,000 tons of ammonium sulphate, 25,000 tons of TSP(triple super phosphate) granules, 45,000 tons of NPK (compoundfertilizers) in 3 forms, and 15,000 tons of DAP (diammonium phosphate).Capacity was later expandad to 135 thousand tor.nes, but actual productionpeaked at 70 thousand tonnes. Fertilizer production is heavily importdependent. TSP monopolizes the entire fertilizer trade in Tanzania,including imports, production and distribution. The plwat is very small byinternational standards, 2 which raises production costs greatly, inducingthe government to give substantial subsidies to TFC. 3 In 1982, subsidiesaccounted for 60 percent of the firm's total sales revenue. According tothe MIES all of TFC products had negative value-added at internationalprices.

21 A minimum economic size for a fertilizer plant would be 500,000 tons perannum, compared to TFC's 135,000 (and actual production of 70,000 tons orless).

31 In 1982, subsidies accounted for 60 percent of the firm's total salesrevenue.

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108. Keko Pharmaceutical Industry: Keko is a parastatal set up in 1976by the Chinese to produce tablets, infusions, ampoules and eyedrops. Theequipment provided was slightly used, and the transfer of technologyineffective, which resulted in eye drops never being produced, the ampouleline being closed in 1979, and the tabletting line having to be rehabili-tated with Danish assistance by 1982. In addition, Keko had staffing andtraining problems. 4 Despite all these problems, Keko was planning (in 1983)an expansion with Danish assistance, although there was considerable excesscapacity in the private sector for tablets and infusions.

109. At actual capacity, Keko had negative value-added at shadow pricesfor both its products. At attainable capacities, its long run DRCs came to8.08 for tablets and 38.82 for infusions. The firm was thus clearlyuneconomic.

110. Tanzania Pharmaceutical Industry (TPI): TPI received technicalassistance from a Finnish company, Orion, which also took a managementcontract for 5 years. Production started in 1980; output included tablets,capsules, vials, syrups and suspensions. TPI pays higher prices than Kekofor its imported intermediates (from Orion). The Finnish collaboratorappears to charge high price4 for the active ingredients it supplies,although it is not a world class pharmaceutical company and has no technolo-gical monopoly on these ingredients. In addition, of TPI's technologycontract stipulates a management fee which is fixed irrespective of output,and in 1982 worked out at 16 percent of sales. The firm's production isvery inefficient for the country: at actual capacity, it produces atnegative value added, while at attainable capacity DRCs are 7.67 and 3.10,for tablets and capsules respectively.

111. Nansoor Daya Chemicals (MDC): This private sector firm pioneeredpharmaceutical production in Tanzania in 1965, and has engaged itself insimple formulation and tabletting operations and it has also produced otherconsumer goods, like toothpaste, aerosol insecticides, perfumes andtoiletriee. MDC have better market acceptance than Keko's and TPI as aresult of the higher quality of its pharmaceuticals. Before the breakupof the Community, it used to export to Kenya. Although MDC was well estab-lished, the government set up TPI foreign to produce almost exactly the samerange of drugs with expensive collaboration. MDC was deprived for foreignexchange allocations, resulting in severe underutilization of capacity.

112. Price comparisons by the SAP study showed MDC had much lowerprices on the average about 50 percent lower than TP.I and Keko. However,even MDC's prices were higher than the lowest quotations received for bulkdrug imports from India or Europe. In some products, MDC achieved positivevalue-added at international prices, but in other (some drugs, toothpasteand aerosol insecticides) this was negative. In general, MDC seems to bewell run and managed, but its small size and the international structure of

4/ In 1982, the positions of technical manager, commercial manager,production manager, chief engireer and development and research chemistwere vacant. An annual training budget of T Sh 720,000 was usedessentially as a 'holiday for the staff' (accord.sng to the SAP study).Tanzania as a whole had a shortage of qualified pharmacists and chemists.

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output -input prices makes it largely uneconomical for Tanzania. Of thethree drug firms, it is by far the most efficient.

Agrochemicals

113. Three Airochemical Producers: There are three major privatesector producers of pesticides, insecticides, fungicides and the like inTanzania: TwiRa Chemicals (subsidiary of ICI, U.K.), Hoechst Tanzania(subsidiary of Hoechst AG of W. Germany) and Sana Chemicals (set up by localGreeks). Twiga is the larges in terms of capacity to make liquid products,while Sapa is the largest in capacity for powdered agrochemicals.

114. All three companies simply formulate imported chemicals, obtainingonly fillers and packaging locally. Together they can meet about half oftotal local demand for agrochemicals. According to the SAP study, Hoechstis the most efficient in terms of direct foreign exchange savings Twigafollows with some direct savings and Sapa is worst (foreign exchange lossesfrom -26 percent to -68 percent). No further information is available onthe causes for these differences in performance.

115. Soans; There is no firm-level information at hand from the SAPstudies on Tanzanian soap and detergent manufacturers, but the Missionconducted DRC analysis into 2 producers of soap (EMCO and Tip) and I ofdetergents (Sabuni). The first 2 are private, the last is a parastatal.The manufacture of soap can be reasonably efficient at small-medium scalesof operation, and a variety of traditional to modern technologies isavailable to suit different conditions. By contrast, the manufacture ofsynthetic detergents is a scale and skill-intensive process, using complexmodern chemical technologies. Accordingly, although they are also economi-cally inefficient, (due to high import dependency) the soap producers showmuch better DRCs than the detergents manufacturer. EMCO has laundry andtoilet soap long-run DRCs (at attainable capacity) of 1.7 and 1.5respectively, while Tip has similar DRCs of 3.75 and 1.27. Sabuni, on theother hand, has 20.53 at attainable capacity and negative value added atactual capacity.

Rubber

116. eneral Tires (East Africa) Ltd (GTEA)s Negotiations between NDCand General Tire International of the U.S. were finalized in 1969 to set upa tire plant in Arusha. Production started in 1971; GT holds technical andmanagement contracts, currently valid till 1987. The overall quality ofGT's management was rated to be 'very high' by TISCO. The firm is involvedin setting up a rubber plantation to reduce its high import dependence.

117. The manufacture of tires and tubes is demanding of variousoperating and technical skills. GTEA was able to overcome the scarcity ofsuch skills by its expatriate personnel and emphasis on training. Thus, itslong-run DRC (at attainable capacity) showed very efficient operation: 1.11for tires, 0.78 for tubes and 0.69 for related rubber products. Of all themore advanced industrial activities surveyed by the Mission, this is one ofthe most efficient results, particularly in the parastatal sectors. Infact, although its current export activity is very low, the prices of itsexports have been among the lowest in East Africa.

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Plastics

118. Tanaanvika Tear, Plastics (TTP)s This parastatal startedproduction in 1963. ln 1984, the main products were UPVC pipes (30percent), RDPE pipes (22 percent), polythene film (28 percent) and G.H. pipe(11 percent). Attainable capacity is much below rated capacity partlybecause of past shortages of spares and partly because of poor maintenance.The operation is almost entirely based on imported materials, and by 1984capacity utilization had fallen to between 4 - 16 percent of rated capacity,and between 27-50 percent of attainable capacity. TTP has no preventivemaintenance program, so suffers frequently from breakdowns. Productiontechnology is deficient; wastage rates are double acceptable limits. Thereis a shortage of qualified managerial/technical staff, as well as skilledoperatives like fitters, turners or mould-makers. Despite abysmal levels ofcapacity utilization TTP's employment kept increasing: from 250 in 1979 to337 in 1982.

119. The Mission's DRC analysis shows that TTP achieves near-competi-tiveness (at attainable capacity) in only one of its products, polythenefilm (long-run DRC of 1.29). Other products have extremely high DRCs (i.e.inefficient) with UPVC pipes, its main product, reaching 46.82. At actualcapacities, two products have negative value-added at world prices, andits best product has a long-run DRC of 5.50. Since the firm has littleor no foreign payments for personnel, the low economic efficiency of thefirm appears to be the result of its small scale of operations, poor main-tenance, high wastage and the use of obsolete technologies.

120. Polysacks Limited: Polysacks is another plastics products firmunder NCI, which started production in 1981, making polythene andpolypropylene bags. The equipment came from Austria, but there was noforeign equity or technical/ management contract. Installed capacity was 6million bags p.a., but attainable capacity in 1984 was only 73 percent ofinstalled capacity. Although Polysacks' equipment is fairly new, itspersonnel have not been adequately trained to service and maintain much ofit. The technology is fairly sophisticated, but the firm's engineering andproduction departments are extremely weak in terms of qualified manpower.The activity is producing at negative value added at international prices,largely the result of weak technological capabilities and the small scale ofoperations.

CONCLUSIONS

121. The findings for the Tanzanian chemical firms echo many of theresults obtained for the engineering sector. In chemicals, economies ofscales, process design and operating/ maintenance skills are perhaps evenmore important than in engineering. Backward linkages are, however, of farless significance, since process industries do not lend themselves toefficient subcontracting of component parts or process. However, the needfor efficient production facilities and for the capabilities to utilize themeffectively is equally critical. Only a few firms in the industry achievethis combination. Most are either crippled by uneconomic size or obsoletetechnologies, or saddled with manpower which is not capable of extracting

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tihe potential efficiency of existing plants. As with engineering, there isa dismal lack of technological development over time, reflecting the smallhuman capital base, the absence of a proper 'learning' environment and thesignificant distortions introduced by the Government's economic policies.

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ANNEX 2

PUBLIC ENTERPRISE MANAGEMENT -

ISSUES AND NEED FOR REFORM

A. Evolution of Public Sector Enterprises (PSE)

B. Organizational Structure and Control Mechanism

C. Issues Related to PSE Performance

D, Evaluation of Institutional Framework

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PUBLIC ENTERPRISE MANAGEMENT - ISSUES AND NEED FOR REFORM

A. EVOLUTION OF PUBLIC SECTOR ENTERPRISES (PSE)

1. At independence in December 1961, Tanzania had only a rudimentaryindustrial structure relying on a few medium- to large-size enterprises.Their production emphasized consumer goods for the domestic market with verylittle outward orientation. The manufacturing sector contributed about 5Sof GDP and employed about 20,000 people or close to 8? of total wageearners. Not surprisingly, private sector was the major economic force witAa public sector involvement largely limited to providing administrativeservices and infrastructure facilities. Initially, the Government based itsdevelopment program on an industrial organization and structure inheritedfrom the colonial powers. The industrial strategy focused on import substi-tution. At its initial stage encompassing mainly consumables but graduallyto be supplemented by manufacturing goods. In the longer term, the Govern-ment envisaged production of capital goods and the processing of local mate-rials for export. To overcome the lack of capital the Government tried toencourage private investments, in particular foreign, by way of introducingvarious incentives, such as accelerated depreciation allowances, tariffprotections and guarantees for profit repatriation. The Government hadindeed hoped that the private sector would play a major role in the develop-ment of Tanzania's economy and assumed a private investment share of 752 inthe industrial sector of its first Five-Year Plan (FYP) 1964-69.

2. In the mid 1960s, however, it became evident that private invest-ments were falling far behind Government expectations. Where investmentstook place they had often undesirable structural results in as far as theytended to foster traditional manufacturing sectors rather than broadeningand diversifying the industrial base. The main reasons for Governmentconcern were the following: (i) insufficient inflow of private capital fromabroad as Tanzania began to lean ideologically towards Eastern Blockcountries; (ii) inadequate growth of capital goods sector, since most of thelocal investments took place in the sector of consumer gooAs permittingshorter pFyback periods; (iii) increasing dependence on foreign technologydue to both capital and import intensive investments. The Government'sdisillusion with the above developments led to a reassessment of its indust-rial strategy and resulted in the Arusha Declaration (AD) of February 1967.The Government decided that dependency on foreign investment as an instru-ient of industrial development was not consistent with its principles ofpolitical independence, self-reliance and socialism. Consequently, thefocus of Government attention shifted to more socially oriented objectivessuch as employment generation and development of people hoping that growinginequality between urban and rural population could be reversed. It wasfelt that the public sector offered a more suitable environment for theimplementation of a development strategy reflecting the concept of equalityand self-reliance for the people of Tanzania. Only if ownership of majormeans of production and distribution were placed in the hands of the people,on whose behalf the Government would act, it was felt that the developmentof a socialistic society could succeed. As a consequence, the Governmentnationalized a large number of strategic firms either outright or acquired

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majority shares in them. In addition, the Government embarked on a programof promoting major new investments and the formation of new industrialenterprises in the public sector. In a complete reversal from the firstFYP, the second FYP (1969-74) envisaged that 882 of new investments wouldtake place in the public sector which would generate 84? of total output andemployment. As a result,the share of value added of public enterprises inthe manufacturing sector increased from 5? in 1966 to 39? in 1977. Duringthe same period the number of parastatal companies expanded from 17 to 43 inthe manufacturing sector alone.

3. In 1974 the Government adopted the "Basic Industry Strategy* (BIS)with the dual purpose to: (i) reinforce industrial growth by means ofgiving industry priority over other sectors and by maximizing the use ofdomestic resources; and (ii) initiate changes in the structure of productionby stressing the need for development of a wider range of capital andconsumer goods industries. The Government hoped that such reorientation ofthe industrial strategy would provide a better link between the desiredproduction structure and its development concept adhering to seven principlegoals: industrial growth, structural change, employment generation, incomeand regional distribution, workers' participation and self-reliance.

4. Tanzania's rapid growth of public sector companies was accompaniedby the introduction of a host of regulations and procedures leading to acomplex mechanism of indirect controls and quantitative restrictions oftencharacteristic for centrally planned economies. The most important were thefollowing: centrally controlled investment planning, selective allocationof foreign exchange through import licensing, price control exercisedthrough the National Price Commission, credit allocation according to theAnnual Finance and Credit Plan and wdge regulations introduced by thePermanent Labor Tribunal. Proliferation of direct controls and confinementpolicies has, no doubt, cast uncertainties on the role and future of theprivate sector. Faced with the potential risk of being nationalized,private enterprises were reluctant to increase their investment exposure andhence adopted a defensive rather than an expansive strategy. Furthermore,it appears that large scale and capital intensive public sector projectshave, to a certain degree, pre-empted private sector initiatives in caseswhere small scale manufacturing alternatives had been more opportune.

5. Knowing the present state of Tanzania's economy, it is not diffi-cult to conclude that over-reliance on public sector resources and acentrally regulated economy has failed to overcome most of its developmentproblems during a time span of nearly two decades. It is probably prudentto say that both ineffective public sector management and the emerginginefficiencies of many PSEs have been the most important factors contribu-ting to the deterioration of the countries overall economic conditions.Instead of promoting and encouraging development they have been a retardingelement leading to economic st.gnation and becoming an increasing financialburden to any economic revival efforts. Nevertheless, between differentsectors there is a fairly wide variance in role and performance of PSEs. Inorder to reach a better understanding to which extend PSEs in the manu-facturing sector were able to make a development contribution the followingparagraphs review their performance against the explicit objectivesoriginally conceived by the Government.

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Growth of Output

6. During the initial "post Arusha' period (1967 to 1973) the newGovernment concept seemed to succeed in as far as growth of value added wasconcerned. Manufacturing output grew by 7.8Z p.a. and the sector's share ofGDP contribution went up from 8Z to about llZ. During the same time span,the share of output by PSEs in the manufacturing sector increased from 5Xto about 32Z and continued to rise to 39? until 1977. This remarkableincrease in public sector contribution was essentially due to transfer ofproduction assets from the private sector as well as the implementation oflarge-scale industrial projects in the public sector. Following the firstoil crisis in 1973, industrial growth slowed down to 6?, approximately inline with the average GDP growth rate from 1973 through 1977. During thesubsequent 1978-1984 period, however, industrial value added declinedrapidly by 16X p.a. and caused a decline of the manufacturing share in GDPto about 5? by 1984. Manufacturing output dropped to about 40? of its valuein 1977 in real terms as a result of very low capacity utilization. For thePSEs, the average decrease in output was steeper than for the private sectorcompanies which demonstrated more resilience and were even able to realizesome temporary output gains at the turn of the decade. By 1984 PSE share inmanufacturing added value had shrunk to about 251.

Capital Formation

7. Investments in manufacturing were relatively large (about 7? ofGDP) throughout the 1970s in spite of the sector's declining productivity.This trend reversed only in the early 1980s when the private sector began toreduce its capital spending in a significant way. During the 19708 theinvestment share of PSEs in the manufacturing sector was on average slightlyabove their share of output. It was not until the early 1980s that thisrelatively steady investment/output relationship changed substantially in asfar capital expenditures of PSEs increased by about 35? thanks to thecontinuing in-flow of ODA while at the same time output fell drastically.Although availability of consistent data is scarce, evidence suggests thatduring the 1970s approximately two-thirds of the parastatal investments werefinanced through internal resource mobilization while the remainder wasprovided through external sources. In light of continued in flow of foreignassistance and declining "surplus" generation of PSEs, it is more thanlikely that since then the funding structure of fixed investments in themanufacturing sector has changed significantly and that the sector'sdependence on foreign resource financing has re-emerged.

Employment Generation

8. Industrial employment in the formal sector grew by 7? p.a. over1979-82 and reached at the end of the period 16? of total employment, morethan three times its share of industrial output. By 1982 value added peremployee was probably only half of what it was in 1966 in real terms. PSEsemploy about 55Z of total employment in the formal manufacturing sectoragainst their share of output of aboVt 25Z in 1984.

9. As a result of new acquisitions and expansion, public sectoremployment quintupled in the manufacturing sector from 1967 to 1972 from5,300 to 25,400. In subsequent years emplo ment by PSEs continued to grow

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at about 11? p.a. until 1979 when public sector employment reached a plateauof about 53,000 and average growth rates began to fall to less than 12.Although employment data are not necessarily very reliable nor up-to-date,indications are that during the years of 1977-79 industrial output perperson in the public sector was about half of that in private sector whilethe cost per employee were just about reverse. There is little reason tobelieve that labor productivity in PSEs has improved over the past years,since capacity utilization continues to remain on very low levels while theemployment level has little changed. 1

Export Earnints

10. Exports accounted for about 13Z of the value of manufacturingoutput in 1977, but declined to 7Z in 1981. The manufacturing sector'sshare of total export earnings remained, however, at an average level of 16Zsince agricultural exports performed equally poorly. Nevertheless, it isimportant to note that most of the manufacturing companies are unable toearn the foreign exchange requirements of their recurrent costs. In caseswhere companies manage to earn a substantial part of their foreign exchangeneeds, it is done either by exporting goods at a price as little as onethird of the prevailing domestic market price or through special arrange-ments such as payments in kind or bilateral barter agreements. In addition,foreign exchange components of working capital requirements are increasinglyfinanced--often over several operating years--with the assistance of donorfunding programs.

Sector Performance

11. The performance of the manufacturing sector in general and thePSEs in particular over the last 20 years is not very encouraging and castsserious doubts about the effectiveness of the two cornerstones of Tanzania'sdevelopment program, namely, the nationalization of strategic industries aspromulgated in the AD and the industrial strategy as advocated in the BIS.After nearly two decades, virtually none of the development objectivesoutlined in the AD have been achieved to a satisfactory degree. Even apossible claim of successful employment generation must be considered as adouble-edged result, since employment policies have engendered andperpetuated over-employment in PSEs in an indiscriminate fashion. Sustainedmarket interference and absence of a self-regulating mechanism prevented abalance sectoral and regional distribution and thus failed to create employ-ment opportunities where labor productivity is highest. Instead of beingable to close the wage gap between urban and rural workers by increasing theearnings of the rural population, the average purchasing power of industrialwages deteriorated over time, as a direct consequence of over-employment anddeclinirg productivity to such an extent that many workers/employees areprobably only little better off than subsistence farmers. PSE employees andcivil servants are increasingly forced to divert their energies and talentsto generate supplementary income in order to be able to support theirfamilies.

11 For the entire manufacturing sector 'Labor productivity declined by 55?between 1980 and 1984.

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12. The major causes for such dismal manufacturing sector performancecan be sought in the following areas: (i) industrial development strategy;(ii) industrial policy framework; and (iii) Public Sector Enterpriseperformance. Although the two former items are closely linked with the PSEperformance, their specific review is given in the report. While it may betrue that PSEs have operated in a less efficient manner than the privatesector, a large part of the fault must be sought in Tanzania's industrialdevelopment and policy environment, often setting the wrong economic signalsand not providing adequate reward to entrepreneurial initiatives. Many ofthe industrial policy features have had an equally negative impact on theoperation of both public sector and private enterprises.

PSE Performance

13. In assessing more specifically PSE performance, it is necessary toget a good understanding of the Government intention of the role and purposeof PSEs. As stated in the AD, the Government envisaged industrial PSEs as amajor vehicle to contribute to the Tanzania's economic development by under-taking manufacturing activities with the objective to (i) provide goods andservices in an efficient manner; and (ii) generate surpluses for the purposeof capital formation.

14. PSE concept is the major building-block of a development philo-sophy based on the objective of creating a self-reliant und socialisticsociety, and as such emphasizing equality of its people and minimizing itsdependence on foreign assistance. Ownership control of important andstrategic productive assets, was considered to be a relatively simple wayfor the Government to redirect industry in activities towards its basicsocial goals. However, little attention was given to institutional impli-cations by not devising an effective planning and monitoring systemto address in absence of a market mechanism vital factors such as:(i) linkage effects (complementarity among industrial activities and acrosssectors);(ii) comparative advantage position (towards external and domesticmarkets); and (iii) product mix and choice of technology. Although the BISwas supposed to overcome the strategic shortcomings of the AD by stressingthe need of adequate linkages between domestic raw materials, sectors,regions as well as the type of products (capital, intermediate and finalgoods), the Government never seemed to have succeeded in designing andimplementing an action oriented plan, apparently due to lack of institu-tional support. Thus, the BIS remained an ideological platform trying toguide industrial production towards what was called a *basic good strategy"(with emphasie on meeting the essential needs of the Tanzanian peoplethrough domestic resources), without ever being able to transform itsconcept into economic realities.

15. PSEs ended up with numerous intervention in day to day operationsby means of introducing cumbersome re6ulations and procedures instead ofstrategic direction towards the need of establishing basic building-blocksin an expanding manufacturing sector. All too often holding companiesconceived and planned new industrial projects in an ad hoc manner, dependingon the ambitions of empire-building managers in the public sector or thewillingness of foreign donors and equipment manufacturer to support variousisolated 'pet projects" more suited for publicity exposure than to fit intoan integrated development plan (para. 35).

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Indicators for Industrial Efficiency

16. It is not surprising that an interventionistic environment with amaze of regulations, little strategic guidance and deteriorating economicconditions due to misguided policies, impeded effective functioning of PSEs.Private enterprises were also affected, though to a lesser degree (showing adecline in output of about 13Z versus 262 of tho PSE during the period of1978-82). In an environment were state monopolies, supply shortages andcost-plus pricing policies are the norm, traditional indicators, for corpo-rate efficiency, such as profitability and internal resource mobilization orcapital structure become rather meaningless. Under these conditions speci-fic ratios relating to factor productivities are a more meaningful way ofmeasuring efficiency. Overall, the manufacturing sector showed risingincremental capital output ratios (ICORs) which turned negative in 1979. Inthe case of PSEs, which did not suffer from capital shortage, ICORs becamenegative already in 1977. This trend of deteriorating capital efficiencywas exacerbated by a continuing decline of capital and labor productivities.The reascns for the experienced productivity loss, given in greater detailin Section C, are highlighted by a number of internal factors such asabsence of an adequate incentive system, lack of setting targets for laborproductivity and weak managerial accountability as well as various externalconstraints such as shortage of basic inputs, raw materials and spare parts,lack of foreign exchange, interruptions of power and water supplies, andgeneral infrastructural problems (conditions of roads and tracks, availabi-lity of trucks, wagons and locomotives, and insufficient communicationnetwork).

Structural Adiustment Program (SAP)

17. The Government's answer to rapidly declining factor productivity,rising production costs (largely due to a Ocost plus" pricing system)andmounting deficits of PSE (either directly or indirectly through subsidies)was the initiation of a Structural Adjustment Program (SAP) in 1982, plannedto last for a three-year period until the end of PY 1984/85. The SAP was aninitiative directed towards All sectors of the economy of the country withthe ultimate objective to improve the Tanzania's balance of trade. Thefollowing synopsis relates primarily to goals and actions as far as theyrelate to the manufacturing sector or its Ministry concerned. The SAP wasbased on a two-strand approach to improve efficiency: firstly, on thesectoral level, the intention was to identify priorities for (i) rehabilita-tion on a subsector basis taking into account potential savings in foreignexchange (FE) and/or usage of domestic materials; (ii) allocation of FE byconsidering factors such as the potential for increase in capacity utiliza-tion and FE earning capacity; and (iii) improvements in product and sectorlinkages. Secondly, on the enterprise level efforts were to be made toovercome institutional constraints by formulating proposals which could leadto improve productivity of PSE such as payment by results, targeting oflabor productivity, increased accountability of managers, improved MIS,etc. In both areas, however, little actual progress was achieved, presumablydue to lack of a task force with overall responsibility for carrying out theproposed program. This prompted the Government to appoint two PresidentialCommissions (one for Government agencies including Ministries and a secondfor PSEs) in January 1983 to recommend measures for cost reductions,enhancement of efficiency and revenue generation. The two commissions

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estimated in mid 1983 that in the entire parastatal area combined savings ofapproximately T Sh 760 million (US$45 million) or about 3.7? of totalrecurrent expenditures in FY 1984/85 could be achieved. However, thepotential savings related to industry were estimated at not more thanT Sh 10 million. Although there are no specific reasons given why thisamount is so minute, it can be assumed that less restructuring activitieswere envisaged in manufacturing than in other sectors such as agriculture ortrade. Again, the implementation of the recommended measures wasessentially left to the agencies concerned. By mid 1984 it became apparentthat ministries as well as parastatals were not particularly enthusiasticabout the exercise and no effective cost cutting had been achieved. TheGovernment concerned by lack of progress, assigned the responsibility of thecost reduction program to a Minister of State to be assisted by aPresiden'tial Implementation Team (PIT). The main function of the PIT was todevise implementation procedures, monitor implementation progress andprovide overall coordination, while the PSEs were responsible - withguidance from the parent ministry - to formulate and execute a specificaction program.

18. Only very few and global data reflecting the achievements of thecost reduction program in FY84/85 were made available to the mission.According to this information, total savings amounted to about T Sh 1.2billion of which T Sh 0.1 billion were cost savings achieved in theMinistries themselves. About 20X of the savings are claimed to be resultsof cuts in the payroll, corresponding to a 'national' layoff of nearly19,000 employees of which about 4,700 were discharged by the Ministries,accounting for most of their cost savings. There are no factual dataavailable with regard to the manufacturing sector. Indications from variousdiscussions with senior PSE managers are, however, that actual cost savingsin industry are relatively small when compared to the sector's totalexpenditures or revenues. In many cases apparent cost savings appeared tobe more a matter of window dressing and were achieved by transferringemployees and certain expense categories within a group of companies ratherthan through effective cost cutting measures.

19. Most of the cost reduction measures (maintenance, repairs,stationary, payroll) have a relative small impact on the costs per unit ofoutput. The program has not yet addressed the problem at its roots, namely,to improve the input/output ratios (mainly conversion ratios for rawmaterial and energy) and to raise the absolute output level. The latteroption may require to shut down other marginal operations in order toreallocate the limited resources to production activities with highereconomic priority. Without a strategy of addressing these basic efficiencyissues, the above mentioned cost saving program will only have a minorimpact on the existing cost structure in manufacturing.

B. ORGANIZATIONAL STRUCTURE AND CONTROL MECHANISM

20. In January 1965 the National Developmcrt Corporation (NDC) wasestablished by absorbing the Tanganyika Development Corporation and theTanganyika Agricultural Corporation. According to its Corporate Act, NDCwas to promote economic development, ensure industrial growth of the publicsector and to provide a link between the Government and industrial PSEs.Initially, NDC was the Government's sole vehicle in transferring economic

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control from private sector to the public hand and took on the role of apeople's institution for economic ownership and expansion. Subsequent yearsof rapid increase of PSEs under NDCs umbrella made several phases of"restructuring" necessary in order to prune down the diversity of itsacquired activities to maintain a more manageable corporate structure.During tne first overhaul in 1969, NDC was split along sectorial lines andretained only its operating subsidies related to the Ministry for Industriesand Trade (MIT) while the remaining activities were incorporated into newholding companies reporting to their respective parent ministries. During asecond rationalization campaign in 1979 NDC's activities were essentiallylimited to the subsectors of iron and steel, pulp and paper, electricalequipment and engineering industries. All other manufacturing operationswere grouped according subsector lines and assigned to newly formed holdingcompanies with the exception of the cigarette and brewery companies. Atpresent, under the auspices of MIT are seven holding companies which overseesome 70 operating companies in the manufacturing area (Attachment 1). TheTanzania Cigarette Corporation and Tanzania Breweries are the only companieswhich do not follow a holding company structure and report directly to MIT.In the MIT two departments, headed by a director each, share the responsibi-lity of monitoring the performance of holding as well as operatingcompanies.

21. Both holding and operating companies have their own Board ofDirectors (BOD) with an average size ranging from 6 to 12 members. TheGeneral Manager (GM) of the operating company is normally appointed by theBOD of the holding company, while all other appointments (including hiringand firing of unskilled labor) has to be approved by the BOD of theoperating company. The chairman of its Board is in most cases the GM of theholding company. The GM of the holding company and the chairman of the BODof the holding company are appointed by the President of Tanzania while theother Board members are appointed by the MIT. Normally, the holding companyliaises between the operating company and MIT. Nevertheless, in matterswhich are considered to be important MIT tends to act directly through itsrepresentatives in the BOD of the operating company. Also, many of the GMsof operating companies have direct access to the secretary of MCI, which isespecially true for GMs appointed through management contracts.

22. The holding companies own the equity of their subsidiary companieson behalf of the Government. They play a dual role: firstly, to providefunctional services in areas such as long term planning, financial andoperational control and personnel and legal policies coordination; secondly,to encourage industrial development in their respective domain, bydesigning, preparing, promoting and supervising implementation of newprojects. Another less explicitly stated function of the holding companiesis to act as a coordinator and filter towards the parent and other centralministries. One has to realize that the intrinsic role of Tanzania'sholding companies is more one of an administrative superstructure than anorganizational enterprise concept with the objective of facilitating assetmanagement by taking advantage of scales of economy, achieving savingthrough synergism and redeploying financial and fixed assets to maximizereturn for the group. The management of holding companies represent morethe extended arm of the civil service bureaucracy than a driving entrepre-neurial force. The main reason for establishing holding companies was torelieve the parent ministries from manpower and budgetary constraints

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related to the supervision of parastatals. Through the means of creating anadditional administrative layer outside of the Government bureaucracy it waspossible to attract more qualified personnel at a higher salary scale thanthe one of civil servants. At the same time the Government resolved itsfunding problem by allowing the holding companies to charge between 1? and1.5Z service charge or management fee on the turnover of their operatingsubsidiaries. 2

23. Although the Government generally succeeded in attracting morecapable senior officers and improved the monitoring process of operatingparastatals, it extended many inadequacies inherent to government bureau-cracies to the holding companies. Quite often political considerations aremore important than professional skills in the appointment process of seniormanagers. The control function of operating subsidiaries is not so muchexecuted on the professional level of a line manager, but takes place in amore diffused political atmosphere of BOD who convene only once everyquarter. This approach works only when subsidiary companies have a strongmanagement team on their own, which is in most cases only true for companieswith joint partnerships or management contracts. 3 Many senior holdingcompany officers (e.g., director of operations) have not grown through theranks of line functions in the operating companies. Instead, they workedtheir way through staff positions in holding companies after completion oftheir academic training. Holding companies do not prepare consolidatedfinancial statements. In most cases, the holding company is able to show aprofit as a result of (i) dividend payments of subsidiaries and associatedcompanies andlor more importantly (ii) charging "management fees" which aredue whether the operating company generates a profit or a loss.4

2/ The size of the fee can vary even more than indicated by the range abovesince in some cases it relates to gross sales and in others to net sales(free of taxes and duties). Furthermore it does not relate to the valueadded created by a subsidiary. In many cases the percentage and thebasis of the fee depends on an assumed level of profitability.

3/ Although managerial talents and functional expertise are limited inTanzania, it should be avoided to give the impression that they are notavailable at all. Effective managers and functional specialists are withfew exceptions absorbed by the private sector which has more flexibilityto provide unaccounted benefits. The problem of salary structure will beaddressed in more detail elsewhere in this chapter.

4/ The ability of generating a profit depends often on factors which aredifficult to predetermine or to a large degree beyond the operatingcompany's control, such as foreign exchange allocations by donorcountries for working capital needs of a particular company, opening ofletter of credit through NBC, approval of a more generous price formulasby the Price Commission or ad hoc bilateral import arrangements which canbe channelled through an operating company and thus improve itsprofitability (e.g., when General Tyre imported 25,000 truck tyres fromJapan in 1985)

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24. As can be seen from the list of companies given in Annex 1, asubstantial number of operating companies have private equity partners(foreign as well as local) and/or management contracts. Except in the fewcases where the Government did not fully nationalize privately heldcompanies (e.g., Metal Box), most of the joint ventures and managementcontracts are concomittant with donor assisted projects. 5 In some cases theGovernment has succeeded in bringing back previous owners to provide manage-ment assistance (e.g., Comcraft of the UK). The majority of companies withexpatriate assistance are relatively well managed, but suffer in generalunder the same external constraints, particularly under shortage in foreignexchange (except in the few cases where donors finance recurrent costs).With very few exceptions, 6 expatriate management contracts are based onfixed fees and do not include any risk sharing formulas. Joint venturepartners and/or management contractors without ties to foreign aid programsare normally unable to repatriate neither dividends nor fees. 7

25. The control system is complex and in many instances not equivocalas a consequence of not very specific company charters, duplications inresponsibilities or conflicting roles of supervising agencies. The PSEs inthe manufacturing sector have to cope with two basic spheres of control.The first one is given by the formal bureaucratic structure and comprisesseven layers while the second one hinges on various government agencies whoare given the mandate to monitor specific corporate aspects and can havesubstantial bearings on the business behavior of PSEs. The followingparagraphs sumarize the essential control features while Attachment 2provides a more comprehensive description.

26. (i) Managers of operating companies are responsible for day-to-daydecisions; (ii) BODs represent ownership and advise management on majordecisions, review operating results and carry statutory responsibility forparastatal behavior and results; (iii) Holding companies "manage theaffairs' of their subsidiary companies and are expected to "take actions toavert and minimize losses" as well as to expand business by new projects;(iv) each holding company has a BOD who is accountable for the management,establishes general policies and approved corporate plants, budgets capitalexpenditures and annual financial results and distribution of profits; (v)each PSE, both operating and holding companies, is responsible to MIT, theparent Ministry which approves corporate plans, budgets, annual accounts,and investments, supervises performance and requests necessary actions to betaken; (vi) of the central ministries, Development Planning and Treasuryexercise considerable control. The former approves investments of new

5/ Due to foreign exchange shortage it is difficult for Tanzania to concludecontracts without foreign aid assistance.

6/ For example, the contracts of General Tyres and Southern Paper Mills arelinked to sales volume and staff training.

71 One of the very few exceptions is General Tyre International which wasable to earn foreign exchange by selling sisal abroad on behalf of theTanzanian Government through its marketing network. The receipts fromsisal sales were then exchanged against local currency credits.

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projects and Treasury approves the annual budget plan, supplies funds forcapital expenditures, sets financial targets, monitors financialperformance, gives advise for improvement and decides on dividend payments;(vii) The ultimate responsibility for the whole system lies with the Cabinetand the National Assembly.

27. Besides the above formal control structure, the Government hasover time introduced an array of control measures applied through variousagencies. Tax Concession and Foreign Investment Protection Act certificatesare issued by the Tanzania Industrial Incentives Promotion Committee.Utilization of foreign aid is under direct control of Treasury. Importlicenses are controlled by the Bank of Tanzania; tariffs are administered byTreasury; export rebates are controlled by MIT. Dividends and remittancesof foreign profits and capital are scrutinized and controlled by the Bank ofTanzania. Management Agreements are examined by an Inter-MinisterialCommittee after being reviewed by the Ministry of Development Planning.Industrial licenses are issued by MIT; work permits and visas forexpatriates are administered by the Ministry of Labor. Foreign Exchangetransactions of all kinds are controlled by the Bank of Tanzania. Pricesare subject to the control of the Price Commission. The Standing Committeeon Parastatal Organizations (SCOPO) approves companies' organizations andsets salary levels for employees. In addition, there are some less directcontrol areas such as credit and investment control through NBC and TIB;scrutiny of employment agreements through the Permanent Labor Tribunal.

28. There are clearly too many hierarchical layers and Governmentagencies involved in monitoring and controlling of operating companies, withthe consequence that no single entity feels fully responsible for theirsupervision and performance. A heavy bureaucratic superstructure anddispersed control functions prove to be more hindrance than support toentrepreneurial activities. In order to eliminate entrepreneurial lethergyit is paramount to design a control mechanism which depends on fewer butbetter defined layers of control and at the same time engenders commercialflexibility and most importantly increased accountability. The followingsection will discuss key issues hampering PSE performance.

C. ISSUES RELATED TO PSE PERFORMANCE

29. As stated earlier, the main objective for the creation of PSEs isto accelerate economic development based on the principles of socialism andself-reliance. In addition, industrial PSEs are expected to accomplish arange of other goals including: reinforcizl industrial growth, introducingstructural changes, providing sectoral linkages, contributing to regionalbalances, employment generation, income distribution, and workers'participation. The implementation of a development strategy which down-grades the role of market forces and neglects private sector resourcemobilization, faces formidable difficulties in an economic environmentaffected by major constraints in capital, technology, managerial andtechnical skills, and infrdstructure to name a few.

Performance Indicators

30. An implicit objective of any development strategy is that imple-mentation should take place with a maximum degree of efficiency in order not

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to waste valuable means such as capital and human resources. The tradi-tional way of measuring efficiency is done by analyzing the profitability ofan enterprise or any other corporate venture (para 3.14). However, in aregulated environment like the one in Tanzania where the general pricingpolicy is based on a 'cost plus" concept, market oriented evaluationcriteria based on a profitability concept would result in misleadingconclusions. In order to make a fair judgment on the accomplishments of anindustrial development strategy under this set of circumstances it isnecessary to apply economic indicators as surrogate criteria (e.g.,effective rates of protection, domestic resource costs, incremental capitaloutput ratios, etc.) which are described elsewhere in this report.

Development Plan

31. One of the most fundamental aspects of formulating a developmentplan is to establish areas, subsectors and/or product groups where a countryhas potentially a comparative advantage. Identified sectors or productshave to be reviewed and evaluated in light of future market developments,technology, need for foreign assistance, capital requirements, linkageeffects and implementation as well as operating risks. This will allow theranking of development projects according to their relative economic benefitto the country. Such basic and comprehensive approach, flexible enough toallow adjustments with changing economic parameters, would permit a projectmix strategy intended to maximize economic welfare and to minimize inherentrisks. In a free market economy this planning process is automaticallyexecuted by many individual investors in accordance with their willingnessto accept risks. It appears that this central planning function has notbeen adequately performed by the Ministry of Planning in conjunction withthe sectoral ministries concerned.

32. Instead, it seems that more an ad hoc approach was followed whichwas largely guided by advise from individual members of the donor community,equipment suppliers or certain groups with vested interests at the micro-level. The result was a little coordinated and inadequately prepared'industrialization plan" whose implementation depended largely on projectideas presented by holding companies, donor country assistance, interestedequipment suppliers and international development institutions supportinglarge-scale industrial projects. Rigorous evaluation concerning the impacton the country's foreign exchange position, need for infrastructure develop-ment, technology requirements, international competitiveness and linkageeffects was only infrequently performed. For that reason a significantnumber of "show-case" projects were executed depending heavily on foreignexpertise and capital, and optimistic growth of domestic demand. In spiteof their relatively large-scale nature, production costs were often aboveinternational norms. At the same time, advanced technology projects defiedthe concept of gradual industrial growth path. Furthermore, these 'modelprojects" created in many subsectors state monopolies or at least anoligopolistic structure due to their large installed capacity, eliminatingsufficient competitive pressure to reduce costs. While ownership changedhands, the Government remained in many cases dependent on the private sectorfor management assistance. This approach probably impeded rather thanimproved industrial efficiency since management neither faces capital risknor finds encouragement through profit incentive. The decision to createPSEs in nearly every sector of Tanzania's economy was probably the result of

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an over-reaction to the disappointing results of an ill-conceived industrialdevelopment strategy in the early 19609. It will be difficult to remedy thepresent situation without introducing drastic management and policy changes,some of which may politically difficult to make. The remainder of thissection addresses a number of selected problem areas which have a signifi-cant bearing on PSE performance and where urgent reforms are needed.

Investment Process

33. The investment process can be divided into three basic phases.Firstly, the promotional phase for expansion of existing facilities ordesign of new grass-root plants is the specific task of holding companies inthe context of subsector development. This means essentially identificationof investment opportunities and the initiation of feasibility studies.Secondly, the review and evaluation phase falls into the domain of MIT,Ministry of Development Planning (MDP) and the Treasury. If projects arefavorably received, it is at this stage that on the initiative of theholding company concerned and/or MIT discussions will be conducted withsuppliers of technology/equipment, bilateral agencies, and potential donorsand/or joint venture partners concerning financial and implementationalaspects. Provided a project appears to be financially viable and hasattracted sufficient financial and technical backing-- usually from abroad--it will normally be supported by MIC, subsequently approved by MDP andfinally cleared by Treasury as long as it does not create serious imbalancesin resource allocation. The third phase is project implementation whichfalls under the responsibility of newly formed *operating* companies underthe auspices of the sponsoring holding company. The execution of theinvestment process appears to be affected by the following institutionalweaknesses: (i) Holding companies receive too little guidance from theMinistries in terms of direction and emphasis of subsector development,engendering often project proposals which reflect more an attitude of empirebuilding than a rational economic approach; (ii) at the time of ministerialapprovals considerations such as donor or expatriate support carry often amore weight than economic aspects such as linkage effect, competitiveadvantage, product mix and marketing strategy, availability ofinfrastructure and implementation risk. Since the GovernmRent's developmentconcept is rather vague, it is difficult to establish specific projectoriented priorities which are followed through in the context of a develop-ment plan based on increasing scarcity of resources; and (iii) projectimplementation suffers most frequently from restrictions imposed by an over-regulated economy, resource constraints, over-dependence on expatriateproject management and limited supervision capabilities.

Choice of Technology

34. As indicated earlier, one of the major problems PSEs are facing isthat foreign technology makes them not only dependent on expatriateassistance during the phase of project implementation but also during theoperational phase. Many projects have foreign exchange requirements whichrange from 30Z to 50Z of production costs, not including foreign debt-service requirements. On the other hand, the foreign exchange earning capa-city of most PSEs is not very bright for the following reasons: (i) limitedand sporadic export potential to neighboring countries due to their owneconomic and foreign exchange constraints; donor countries support sometimes

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similar projects in neighboring countries contributing to excess capacityfor the entire region; and neighboring countries often prefer to import frominternational suppliers to avoid uncertainties in delivery by regionalproducers; (ii) access to international markets is limited due to highproduction costs and often unreliable deliveries. In order to generate someforeign exchange, products are frequently sold abroad below cost and severaltimes below domestic market prices. Naturally, ir.Jernationally highproduction costs are exacerbated by a foreign exche .ge rate which bears norelation to the scarcity of foreign exchange in Tanzania or the exchangerate paid in the unofficial market. Although the Government has made someefforts to improve the operational limitations imposed by foreign exchangeshortages through introducing a scheme of foreign exchange retention(ranges between 30? and 100? depending on company and product category) onbehalf of the generating company, the pool of foreign exchange is just notlarge enough to permit all PSEs to operate at reasonable levels. Some PSEsare completely at the mercy of international or bilateral aid organizations.In addition to the costs of expatriate management, they often finance theforeign excharge costs of raw matezrials and spare parts for several yearshoping that through the retention system enough foreign exchange can beaccumulated over time to allow the establishment of a self-supportingforeign exchange account. The unfortunate effect remains, however, thatPSEs charge the local consumer prices substantially above costs tocompensate for losses experienced in exports. Hence, the domestic consumeris further penalized by being forced to subsidize exports and the foreignexchange earnings capacity of PSEs.

Infrastructure

35. Many parastatals have been established without necessary conside-ration given to the availability of sufficient infrastructure (good examplesare Musoma Textile Mills and Mbeya Cement Factory). Without workinginfrastructure, be it the supply of utilities, transport facilities or tele-communications, efficiency and profitability will suffer in both public andprivate sectors. PSEs management cannot be held accountable for badperformance caused by insufficient infrastructure, rather responsibilityfalls on the shoulders of parent and central ministries as well as GeneralManagers and Board of Directors of holding companies. In this respect,future projects will definitely require better coordination between Govern-ment agencies concerned; in the meantime thought should also be given totemporarily shut-down factories which suffer from lack of infrastructure.

Maintenance

36. The other problem area in many PSEs is inadequate maintenance.Insufficient maintenance is often a function of age and diversity of equip-ment, required skill level and availability of funds. Many equipment itemsare so old that is difficult to find the suppliers of spares, especially ifrespective supply contracts have expired. Spares often have to be retrievedfrom the second-hand market which can be a time consuming exercise, particu-larly in instances where the equipment is not manufactured anymore and tech-nical judgement is required. Other factors contributing to poor maintenanceare lack of operational tools as well as manuals for maintenance and opera-tions. Preventive maintenance poses a special problem due t" foreignexchange shortage and an attitude reflected in the saying 'If it ain'tbroke, don't fix it'.

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Training

37. As a consequence of short supply of skilled and experiencedpersonnel, appropriate training programs are crucial in a country likeTanzania at a technical and managerial level. Since PSEs are unable toconmpete directly with private sector for quaalified staff, their performanceis more severely affected by lack of competent personnel than privatecompanies. The answer to this problem may be to emphasize more basic educa-tional and operational/practical oriented training versus long-term graduateprograms abroad. Also, increased supervision and guidance if necessary byexpatriates, or promotion of staff who meet the practical job requirementsbut lack educational degrees may provide some relief.

38. From its discussion in the field, the mission concludes thatacquiring of technical skills is less of a problem given proper trainingthan the development of managerial capabilities. Especially, on theoperating side it is difficult to find capable managers as indicated bythe existence of long term management contracts in various operatingcompanies. For many Tanzanians it seems to be more desirable to earn anadvanced degree abroad, and return to accept an administrative/civil servantposition, than to prepare systematically for managerial responsibilitiesrequiring "hands on' work and bearing inherent risks of possible failure.This attitude is also reflected in the hiring practices by holding companiesmentioned in para. 2.04. Probably, the only way out is again a morepractical exposure to managerial tasks, more supervision and guidance by theGM and BOD and most importantly more attracti"e financial incentivesreflecting reward by results.

Salary Structure and Incentive System

39. Although gross salaries vary to some degree in the corporatehierarchy, as a result of the progressive tax rate, the net salaries arerelatively uniform and do not reflect adequately the differences in academictraining, responsibility and most important:ly actual performance. Seniorofficers just below the GM of a holding company earn approximatelyT Sh 6,000 (about US$350) per month gross salary. At a tax bracket of 401the net salary amounts to about US$200 equivalent, not accounting for socialsecurity contributions, etc. At this salary level the incremental tax rateis 80Z and increases to 95Z at a monthly gross salary of T Sh 20,000(US$1,170). At a salary scale like this, it is not surprising, that evensenior officials can not depend oi. their official salary as the only sourceof income considering the little purchasing power of US$200 if converted toT Sh at the official exchange rate. A more realistic idea of the localpurchasing power can be given by applying the exchange rate of the parallelmarket which results in a US$ equivalent of a monthly salary varying betweenUS$25 and US$36. Consequently, most civil servants and managers of PSEssupplement their salaries with income from 'moonlighting' activities such assubsistence farming, animal breeding, leasing of vehicles and renting ofhouses. Another way of "generatingft additional income is frequent travelingabroad, which permits officials to buy goods otherwise not affordable in thedomestic market. A third possibility, though financially somewhat lessattractive, is to attend as many board meetings as possible, thus qualifyingfor an allowance of T Sh 800 for each attendance. Time consuming effortsdevoted to generating supplementary income as well as organizing procurement

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of essential goods for daily life lead to a high rate of absenteeism.Similar effects can be observed with personnel at the operating levels whoare often idle due to low capacity utilization. In many instances the rateof theft has gone up substantially. At the same time it is very difficultto take any punitive actions as a result of union and party influer,ces.

40. Although the Government claims that PSEs have introduced variousincentive programs to increase the motivation of the work force, discussionswith PSE management reveal that most of these so called "productivityprograms" are ineffective since they do not address the specific needs ofindividuals. They usually comprise benefits such as free medical care,transport, uniforms subsidized lunch, housing allowances, etc., which areall uniformly applied. Only in rare instances is a bonus based on achievedtarget production. In some instances prices are awarded for the "bestworker". Apart from the fact that many of these uniform programs providelittle incentive to individual performance improvement, they do not alwaysmeet the real needs of the recipients. Cases where workers sell their lunchcoupons or occupy company housing facilities while renting their own housesout for a higher rent are no exceptions and are an indication that monetaryrewards are more appreciated as performance incentive than uniform services.

41. The establishment of an effective compensation and incentivesystem in PSEs must be considered as an essential issue, though politicallyhighly sensitive, since any program focusing on the motivation of indivi-duals is likely to be interpreted as a contradiction of the principle ofequality.

Financial Management

42. As mentioned earlier, profitability of PSEs is not necessarilya reflection of their operating efficiency and financial performance inan environment where "cost plus" pricing policies are dominant. Most opera-ting companies in the manufacturing sector show either relatively (Annex 1)small profits or losses. The mission reviewed the 1983 preliminary finan-cial results of the sample of 61 PSEs monitored by the Bureau of Statistics(BOS) which is also used as a data base for the annual publication of the"Economic Survey". Notwithstanding certain inconsistencies, the datacompiled by the BOS indicate that 42 parastatal firms made a total pretaxprofit of T Sh 703m in 1983, while 19 firms made combined losses amountingto T Sh 545m. Most of the financial profits were concentrated in fiveparastatals (cigarettes, breweries, Portland Cement, Print Pak andAlumAfrica), while three loss-makers (Mwanza and Friendship Textiles,National Milling Corp.) accounted for 82Z of the losses. Subsidies in 1983,amounting to T Sh 400m, were equivalent to the total of taxes collected plusdividends distributed by the manufacturing parastatals.

43. Government officials often mention inadequate capital structureand the subsequent heavy reliance on short and long-term loans as the majorcause for dissatisfactory financial performance of PSEs. This may be truefor PSEs in general, but little evidence was found in support of theargument for PSEs in the manufacturing sector. To the contrary, many PSEshave relatively little long term debt on their books. In the few caseswhere capital structure is unfavorable (e.g., Mwanza Tannery, Morojoro ShoeCompany or TANELEC), it appears to be more a result of poor operating

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performance than an overburdening by financial charges. In the past manycompanies have accumulated substantial reserves as retained earningsresulting quite often in a fairly high "net worth". Most financialproblems, if not due to operating losses, are more related to the area ofworking capital management. Many PSEs have high working capital require-ments when compared to fixed assets or annual revenues, largely due to highinventory levels and/or outstanding receivables. Only relatively fewcompanies in the manufacturing sector maintain a negative net workingcapital. Though working capital management would clearly deserve someimprovement, 8 it is not clear to which extent progress is feasible in theimmediate future considering the present constraints of input supply andslacking economy in general. It is unlikely that substantial improvement inworking capital management can be achieved without raising capacity utili-zation which depends in turn largely on progress in trade and industrialpolicy reform and/or resource allocation action (e.g., access to PE).

44. The management information systems (MIS) 9 of operating andholding companies which were reviewed by the mission on a random basisproved to be fairly well designed and functioning. The operational/financial reporting is often tailored to the specific needs of the operatingcompany based on the experience of the management contractor. Apparently auniform reporting system applying to the industrial PSE does not exist.Though not a major problem, it makes the preparation of consolidated reportsat the level of the parent ministry more difficult. While in general MISsystems at the level of the operating and holding companies appear to be ofsatisfactory quality in the manufacturing sector,10 there is aninstitutional problem of not having established a consistent framework anddata base for sectorial analysis. Firstly, it is very difficult to findconsolidated information at all, neither at the level of the parent Ministrynor in the central Ministries. Secondly, each agency uses its owndefinition of the manufacturing sector h which makes the comparability ofsector data next to impossible. Also, the data being processed by differentagencies vary frequently for no obvious reason.

45. In general the parastatal sector has the reputation of applyingrather lax accounting practices. 12 Of 205 parastatal organizations whose

8/ TAC mentions in its annual report that at occasion finished goodsinventories appear to be overvalued by not properly discounting goodsdifficult to sell due to quality problems.

9/ Covering normally monthly, quarterly and yearly reporting periods.

10/ Presumably, this could be different in sectors, which depend to lesserextent on expatriate consultants.

11/ The mission noticed at least three different samples, each given by MCI,Bureau of Statistics (BOS) and TAC. In addition, there is no cleardifferentiation between operating companies and projects underimplementation.

12/ Out of approximately 350 parastatal organizations the annual accounts of170 are in arrear for more than one year. Some as far back as 1974.

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accounts were audited during the first half of 1985, only 392 were givenunqualified auditors opinion, 442 received a qualified opinion and 182 weregiven disclaimers or adverse opinion. However, only 5 manufacturing PSEsunder the auspices of MIT received qualified opinions for relatively minoraccounting oversights, and only one company (Tanzania Crown Corks) which hadsevere operating and management problems was given a disclaimer of opinion.Apparently, many Government agencies do not appreciate fully the need forthe usage of proper accounting standards and subsequently do not enforcethem vigorously enough in the entities falling under their responsibility.A major portion of 'accounting delinquents, falls under the auspices of thePrime Minister's Office, Ministry of Agriculture and the trade wing of MIT.

46. In summary, accounting practices do not appear to be a majorproblem in manufacturing PSEs where sufficient supervision and guidance isprovided and management takes an active interest. There are, however, twoperipheral aspects to be noted. Firstly, access to recent annual accountsof the holding companies is normally difficult since the only copy of theaudited annual report is frequently stuck in the printshop for extendedperiods; apparently for lack of paper. 13 The second aspect is that auditedreports are not published in a consolidated form. 14 The format of AnnualReports is normally based on the 'cost method' in which investments (inshare capital of subsidiaries) are recorded at cost and income includes onlydividends, management fees, development levies and interest received. Theimpact of financial transactions within the group and income of subsidiarieson the holding company is therefore not fully reflected in the annual reportwhich relates to the question of role a.d functions of holding companies inTanzania's public sector.

Role of Holding Companies

47. In the Tanzanian context the role of holding companies isambiguous. They are performing a hy'Lrid function which overlaps with boththe role of the parent ministry and the functions of operating companies.The former is essentially responsible to ensure that PSEs follow Governmentdirections and operate in the public interest, while the direct responsibi-lity for the productive activities rests with the GMs and BODs of operatingcompanies. Hence, in as far as holding companies monitor sectoral progressand ensure that Government policies are followed, they try to perform aministerial task without having the full responsibility or authority. Onthe other hand, where holding companies execute a control function ofongoing operations they are duplicating the role of managements and BODs ofoperating companies. Though the functional line managers of the holdingcompanies can interfere with the daily operation of the operating companies,there is often neither a clearly delineated responsibility nor authority.It is not clear which of the aforementioned seven control layers decideswhether performance is satisfactory and/or in the public interest or not.Nor is it obvious which party should initiate remedial actions. The result

13/ In many instances the 1982 annual report was the latest publisheddocument.

141 One apparent exception in the 1986 annual report of NDC.

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is a lengthy decision making rocess with the tendency for evading responsi-bility by all participants. 5 Therefore, it is doubtful whether theinstitution of a holding company has provided a satisfactory solution to theproblem that the parent ministry is unable to deal with a large number ofoperating companies directly.

P EVALUATION OF INSTITUTIONAL FRAMElWORK

48. While evaluating the institutional framework of parastatals in themanufacturing sector, one has to keep in mind that various resourceconstraints caused by misguided economic policies are the main factor forthe presently dismal performance of industrial PSEs. However, institutionalshortcomings and a deteriorating policies, business environment havecontributed to the steady decline of industrial competitiveness andefficiency since the mid-1970s. As described above, the Government'sobjectives dwell very much on social goals and call upon the people's groupeffort to contribute uniformly to economic growth and improvement of socialwelfare. The AD contains only a vague indication that the main ingredientto successful industrial performance is efficiency on both the operating andadministrative level. Efficiency can only be achieved through adequatemotivation of individuals and/or working teams by providing a sufficientreward system. In order to reward efficiency improvements it is necessaryto establish a system of performance indicators which permit proper measure-ment of the contribution by individuals and/or work teams to the overallachievements. This intrinsic objective that all industrial operations haveto be carried out in the most efficient way has never been given theimportant focus it really deserves.

49. Also, corporate objectives have not been sufficiently explicit.Open ended objectives such as generation of 'reinvestable surpluses' are notvery meaningful in relation to productivity, efficiency or overallperformance. Enterprises can operate very efficiently and still produce(for other reasons) losses and vice versa. The need for improving existingefficiency plays often only a subordinate role in corporate plans.Presently the Government tries to improve corporate efficiency by imposing atop-to-bottom type cost reduction program on PSE management withoutrealizing that arbitrary cost cutting measures can lead to even greaterinefficiencies as shown by the limited impact of the cost reduction programunder SAP (para. 1.18). Considering the very low levels of capacity utili-zation at which many companies operate presently, there are really only twooptions available which could bring a significant impact on the operatingefficiency: (i) increase of capacity utilization and/or (ii) improvement ofinput/output ratios. Both options are to some degree interrelated anddepend to a large extent on the availability of FE. In order to increaseefficiency in the economically most viable undertakings the Government mayhave to consider shutting down operations which yield lower economicbenefits. This more fundamental aspect is completely disregarded or ruledout in the current cost cutting exercise.

15/ As a point of case, diffused responsibility and insufficient engagementhas greatly contributed to the failure of the Morogoro Shoe Company.

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50. In order to provide management with a realistic chance to meettheih targets two conditions are normally essential: (i) availability ofagreed resources or inputs and (ii) provision of authority which reflectsthe assumed responsibility. Both conditions are not adequately met underthe present economic circumstances and institutional arrangements.

51. Assuming a clearly defined role, the formation of holdingcompanies responsible for several subsector related companies is a laudableconcept. The reason why holding companies have in many cases not kept upwith expectations is more a matter of the weakness of the institutional set-up than a shortcoming of the basic idea. The mission concludes from fieldinterviews that well managed operating companies depend very little on thefunctional services of their holding companies. Although the extent ofguidance provided by different holding companies varies to some degree,their main purpose, as perceived by management of operating companies, is aliaison function to canvass support or approvals from the parent ministry orother government agencies. In most cases, support activities by the generalmanager of the holding company are recognized as most useful, particularlytowards influencing the members of the BOD of the operating company. Thequestion which arises is whether these types of service functions require anelaborate superstructure. The number of professional personnel in holdingcompanies ranges from 33 (TKAI) to 204 (NDC), though these figures includestaff involved in project development. In their present form it appearsthat holding companies do not fulfill their apparent role in an economicway. To the contrary, they may contribute not insignificantly to thedilution of responsibility and accountability. Furthermore, it appears thatonly a relatively small part of ca3h generated by operating subsidiaries isdirected toward the support of new projects, while a substantial portion isused to meet operating expenses of the holding company. 16

52. The parent ministry has two basic roles to play; one is theregulatory function for the manufacturing sector and the other is tocoordinate and oversee government investments in industry. The firstfunction involves setting up the industrial policy framework, preparation ofbroad sectoral goals in coordination with the Ministry of DevelopmentPlanning, and defining the role of public and private sector enterprises.The second function involves (a) review and approval of new projectssubmitted by holding companies, 17 and (b) monitor and evaluate performanceof existing PSEs, e.g., make strategic decisions to reallocate limitedresources between PSE, to increase efficiency in priority industries andclose down others with lower national priority or lower competitiveadvantage position (possibly on a temporary basis). MIT does not seem tohave succeeded in playing an active leadership role in the development and

161 For example, in 1982 and 1983 NDC had an average gross income equivalentto about 4? of net assets which was applied in the following way: 57Xfor general overheads of the holding company; 26? covered financial andother provisions; and the balance of only 17? for profit before tax.

17/ With emphasis on economic viability, development priority, linkage withexisting programs, availability of infrastructure, utilities andfinancial resources.

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implementation of an integrated industrial strategy. Rather it has subsidedto a more passive role following the initiatives of holding companies andlimited itself to more administrative functions. An impression which isalso confirmed by the fact that its participation in discussions withcentral ministries often carries less weight than that of holding companies.

53. Of the central ministries, the Ministry of Finance or more speci-fically the Treasury Registrar plays the crucial role in supervising thefinancial performance of PSEs. There are, however, doubts about howeffectively this task is performed and how much leverage Treasury has toenforce actions to be taken or retain funds if conditions for theirdisbursement are not met. Furthermore, it is not clear how actively theTreasury participates in the decision process of distributing and allocatingany surplus funds generated by operating companies.

54. The main reasons for a unsatisfactory functioning of the institu-tional framework can be categorized as follows: (i) general economicconditions; (ii) lack of monetary incentives; (iii) little costconsciousness; (iv) too many control levels with inadequately defined res-ponsibility and insufficient authority (para. 26); (v) lack of managerialcompetence in holding companies, combined with political patronage, nepotismand rapid expansion; (vi) ministries suffer from insufficiently skilled andtrained manpower; (vii) absence of uniform reporting requirements andinformation systems, and (viii) interference from too many regulatorygovernment bodies.

E. POSSIBLE STRATEGY FOR PSE REFORM

55. It cannot be overemphasized that any institutional reform processhas to be preceded by adequate policy reforms. Secondly, any practicalreform process should be guided by the ultimate objective to increase therole of the private sector in the future. However, one has to realize thatthere are limitations with regard to the speed of broadening private sectorinvolvement for the following reasons: (i) existing political/social struc-ture and future objectives of the country's political leadership; (ii) fearof creating privately held monopolies or oligopolies; (iii) concern thatstrategic industries could fall under the influence of minorities; (iv) non-existence of a capital market; and (v) hesitation of foreign investors inlight of past experience.

56. Judging from the little impact recommendations of variouscommittees, high level task forces and consultant studies have had in thepast on the efficiency of the parastatal sectors, it must be deduced thatany approach which does not have a strong political bearing is likely topeter out without achieving much change. What is necessary is willingnessof the Government to introduce in a phased manner fundamental reforms whichwill gradually lead to a more self-regulating manufacturing sector. If suchlong-term strategy were accepted in principle by the Government, a multi-year plan could be prepared, identifying for each phase specific targets anda well defined action program. In regard to the institutional frameworksuch a plan should comprise the following elements:

(i) Development of an organizational structure for holding companieswhich assimilates as much as possible features of the privatesector;

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(ii) introduction of a salary and incentive systems which providerewards in proper relation to achieved results;

(iii) installation of a performance evaluation system vhich encouragesefficiency improvements;

(iv) reorientation of role and functions carried out by MIT andTreasury with regard to PSE supervision; while MIT may focus onsector/subsector issues and policy framework, Treasury couldemphasize monitoring of financial performance of PSEs;

(v) streamlining of Government interference by cutting back procedureshampering day to day operations and reducing the number of Govern-ment agencies which currently intervene in management of PSEsoutside the functional lines.

(vi) clarification of scope of authority and responsibility of eachstructural control level to stimulate effective decision making;

(vi) installation of a uniform and multi-purpose information system.

57. An institutional reform of PSE management would have to addressthe roles and functions of the major actors in the institutional hierarchy.Without elaborating on details a streamlined system should probably be basedon the following basic premisest

Xi) Decentralization of overatins companies should be maintained inorder to encourage implementation of joint venture and managementarrangement where not already in place. It would also facilitatephysical restructuring activities, redeployment of assets orpossible transfer to private sector. The managerial autonomy ofoperating companies should, however, be widened. More autonomyshould be given in particular in areas such as: budgeting,procurement, personnel and setting of performance targets. At thesame time attempt would have to be made to depoliticize the BODand to improve its professional character. The size of the BODshould be limited to 6 or the most 8 members (mainly professionalsfrom private and public sector), focusing on performance controlin general and strategic decision making.

(ii) The size of holding companies could be reduced substantially, say,to 10 or 20 professionals who would carry out 4 main functionst(a) ownership control and financial guarantees when necessary; (b)coordinating link with Government agencies, ensuring uniformity ofpolicy application and information systems; (c) monitoring andreviewing the need for improvements in logistics, infrastructure,utility and raw material suppiy on a subsectoral basis; (d) promo-tion of new projects in the context of its subsector and provideguidance and supervision to the implementing project team. The 6-8 members of the BOD should be composed of both senior governmentofficials and senior managers.

(iii) The role of the parent ministry, MIT in the case of manufacturing,would essentially be limited to the formulation of sectoral

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policies to be carried out within the nationwide framework ofdevelopment strategy. MIT would be given a seat in the BOD ofholding companies.

(iv) Treasury would be responsible for monitoring--through the holdingcompanies--the financial performance of PSEs and assessing theirimpact on the national budget.

A institutional structure along those lines--admittedly of very preliminarynature--would reduce the number of control levels to two. This approachwould also have the advantage of following subsectoral lines rather thanarbitrarily designed areas of responsibilities of parent ministries.Therefore the consolidation of Tanzania's industrial activities could begreatly facilitated on a central ministerial level.

58. The other important factor of a public sector management reformrelates to an integrated incentive and performance evaluation system. Thiscomplex and politically sensitive question can probably only gradually beresolved. The design of such a system and the kind of rewards forperforming to objectives depends very much on the degree of "liberalization"the Government is willing to accept for the manufacturing sector and mayrequire the formation of an independent senior level council with anattached secretariat. The main criteria for designing an incentive systemshould be to improve efficiency. The use of certain performance indicatorsmay vary with specific nature of subsectors and depend also on the envisageddegree of market orientation.

59. A third crucial aspect is that probably only a major long-termstaff training and management development program can mitigate the chronicshortage of skilled and competent personnel, especially at the ministeriallevel. The solution may be a broad-ranged "on the job" training program,concentrating on various but specific task areas (e.g., financial control,performance evaluation, etc.). Based on past experience it is recommendedto use a counterpart system in order to ensure transfer of methodology,technique and know-how. Right from the beginning, local staff would getactively involved in the process of problem solving while closely supervisedand guided by functional experts. Depending on training progress opera-tional responsibility of local staff would gradually be increased while atthe same time expatriate support can be phased out. This approach mayrequire a long-term consultancy effort.

60. Overall, one can say that the heavy emphasis on PSEs in Tanzania'sdevelopment concept for the manufacturing sector has not met the highexpectations of the Country's leadership. The major reasons for poorperformanze of PSEs and their disappointing contribution to Tanzania'sindustrial development can be designated to four broad areas: (i) politicalnature of decision-making structures; (ii) political patronage;(iii) shortage of manpower; and (iv) lack of control. All four problemareas are closely linked to the society and political structure of Tanzania.It is doubtful that the above recommendations to increase the effectivenessof the existing institutional framework will accomplish sizeable orsustainable results if they are not accompanied by a gradual return togreater reliance on market mechanisms.

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61. Market forces provide a much more effective means to changeingrained behavioral and institutional pattern than Government regulationsand controls could possibly achieve. They also are a powerful tool toencourage cost-benefit awareness at Government and enterprise levels. Inabsence of a sufficiently developed consciousness of cost-benefitprinciples, it is likely that economic decisions will continue to be madewithout adequate consideration of their potential impact on the country'swelfare or economic development. Efficiency considerations develop best inan environment where market forces determine economic success or failure.Only if the need for efficiency as an economic rational is accepted by indi-viduals, it will be possible to institutionalize efficiency awareness at themacro level. A more market oriented economy will clearly help to pave theway for a future divestitures of at least part of the PSEs which must beconsidered as an essential measure to complement above institutionalrecommendations. The extent to which Tanzania's manufacturing sector can berevitalized on a sustained basis will largely depend on the Government'sintention to draw on the resourcefulness and ingenuity of private sectorentrepreneurs.

Attashut tPage -I-f 3 -'

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ItO. _ Ihdo & FbsXte ToolsIl. Steel l11ta gV1fits S Dntet 4,529 (7,310)12. Tmlumi Okbtes tO IWL ONiraft, UK 8.689 8,713. TAEIMM 20 tbt'l 1m&tstry National tad., bzw 499 (636)14. Soutlern Pier illls stotlert nternet'l, (mda15. Ktllbuannj hc-hine Tools 15 AX1W E 6him Hiiot O'leartaIh. Ught Sorce Iasxacturt., 33 MM1D awPr,4 movary17. bttirk 8tcycle (mqz1 40 M80 H i-lton Id.. Imia ND18. Air omicatton 'ehdegktqes 1019. Wkttc A.ably tbpan20. LtgmrgS Iron & Steel PO21. t&m Parm Fq4uijt tO22. befrigeat an Sqaplnt PO

1t. State Ittor (brp. 84 33.449(SC)

1. Tamnts tbtor Owrpration2. Pbtor Services3. Rldab )btor4. Mma4ht Trator Vehic. 4_s. 1,15S. FPAt Af ria lbtor Ausae,1l.tq 7466. tiq,resa Tanta7. o*ns & BaS. Trallers & t1i lAnes (Tralico) Vd1a Gortce, tavela9. Tractor lhiafecturiag (Tram) mlat, Ptard .22,14410. ThanzLA Auto. lmf. (1hc) 10 Saab Scant Sab Scads, n 20,201

Ill. Seruji Grop (SC)137 2,A66

1. bazania Portlmat (Otent 0Intv, SedV 19,2122. Thap a ent Smi4th, Ikwart 11,3433. mbeya Ont ND4. Ilae Clans Ibtks5. lbrmrd; ofpu6. Tu1arla 8seet Clams braft, tX (15.482)7. Ibroo (eramirs 30 DHlG) Qaaraft. tll8. Tawrnla Clay Proucts9. Ibopla Prefabrctale Cowrete ND

10. Seruji ?ttk1 rg 101

Attachment 1Page 2 of 3

Private Opera- mbor of 198 Profit(toa) Il94 Profit (jos)Partietpatin Private t10ment tioal a/ b>1oees hfore Thue bfore Toms C/

lbldnen teies Operating O eX in % Shareholder (ntragt with Stag) (1tn5) In 1000 Th in low 'Tn

IV. lbttam l Chemical 42 2.703ImAlstry (MCI)

1. Aeral Tyre 28 On, tUA Gmeral Tre bnternt'l, USO 11,201 60,3722. Tanzania Pharmaimtical lW. (2,485)3. Kieo ihr etlcal ld.4. Polysacks 0a_Y5. ubbber i strles (5)6. Tegry Plastics 11,3287. SbdIn ldustrles 15 TDFL (8.291)8. T 1sua Perttltzr Q_sy KClodr, F(a99. V t T lTazw a Starch lkmjfacturers Ntivba, rbllam

V. Nt~tonal Taxtile 118 .5,221(brporattan (TEWCO)li521

1. Pritenlship Textile fll1s (46,283)2. towa Texttie ttill Sagpls, Pakistan (107,364) (251,930)3. lbqg i 1yelug & 1wvtU

?Ills (SUIIM) _4.1 Rom Txtile Mills 9Saefer Kag., France5. Tanzanda Itb Grporatton (1,938)6. Btm*ets lbalfacturers 9,431 6827. UhaI Gaan*s 4,1548. Kittmnaro Textlle MIlts 42 Others Saigols, Pakistan 8,059 (21,641)9. ibu %,4ptnid M ill N.A. ND 1

10. tMaa Taxtiles Texth, (a NDIt. Pnigor Palyester Teaxt tle UODX fllineetg, Belgim12. Maboa Spimjg N.A. FO13. l bazania Packages tkzusacturers N.A. PO

a! N): &vv- Operative. PI: Pre4)perattonal. If not o*henwse Lnlicated then operational.

y 1M83 Profit (Los) figurs ae only given for cosanles whidc are tnclued In survey of the wereas of Statistics.

cl Selected 1984 Profit (Lass) f iies eoxuld be extracted froa TAC's Annsl &rWi Seat Repxrts.

Al Includtiq Operat [ua.

(S-47d)

Attachment 1Page 3 of 3-

Private opera- __Nber of 1983 Proftt(oes) 1984 Proftt (laow)Participation Private t Ugment tinl 8/ afloyees Before Tans Before Tames Cf

lbldtrn, rnajiles Operating qanXies in X Sharehlder (bxtract wiith Stage (1985) in 1000 1T in 1000 1m

VI. l iuaia KAratast 33 TAC 0.04& AsxatateiIndastrtes (WAI) 1. Printpk 44,978

2. Kibo Paper lrAxstries to 1WL 57,283. East Afrtcan 1'&ttcatton 3944. Tanz{na Pudbishtng lbuse 6,5475. ?atiomd Prtnt ng Cqmny 13,115

VIt. Tanrzania Letler 72Associated Industrles(TlAt) 1. Tbuanla Tnineries 6,739 9,808

2. Ibrogoro Tnatweres 2,1643. MIma Tanucrtes (3,555) (4,080)4. lArania .uoe (qpn (4,930) 11,1175. Ibrogoro Shoe Qsyny (16,601) (33,00)6. ibrovro Cvas M41l WIK, HlamIta (8,351) 3,6757. Mbrogoro Leather Goods (2,170)

D NOW 2PANIES

1. lmtanla C4garettes 1,756 d/ 156,035 197,774 1

0.

11. lTnzaa Brewries 2,822 d/ 66,961 212.5t

1. llL Fans 2,2092. 1brew3. Tania 1bItlng

at N): tm Operative. PO: Pre-Operationl. Tf nDt otlerwise indicated then operattonal.

b/ 1983 Profit (LEs) figures are only given for canies dhtch are Inclided in survey of the Ibreau of Statistics.

c/ Selected 1984 Proftt (los) figures could be extracted fra Wm's Ansl ad Sad It-ports.

dI ltnIg Oper itions.

'S47d)

Attachment 2Page 1 of 5

SUMMARY OF CONTROL MECHANISM FOR PSEs

1. Organizational Layers with General Supervision and Control Functions

1. Workers Council: Approves corporate plan and budget.

2. BOD of Operation Company: Accountable for the management of corporation, establishes general

policy of corporation, approves corporate plans, budgets, annual

accounting, capital investments and personnel appointments except

General Manager (GM).

3. Management of Holding Accountable for management and financial performance of group of

Company: companies.

4. BOD of Holding Company: Similar to (2) above, but on company group level, approves

appointment of GM of operating company and personnel in Holding

Company except GM.

Attachment 2Pase 2 of 5

5. Parent Ministry: Appoints the members of the BOD except Chairman and General Manager;

gives directions of general and specific character; supervises

performance and requests necessary actions to be taken; approves the

corporate plan, the budget and the annual accounts and capital

investments; submits statement of accounts of the corporation to the

National Assembly.

6. Central Ministries:

(a) Ministry of Planning Approves investments in new projects.

(Devplan):

(b) Ministry of Finance Approves the annual budget, investment plan; supplies necessary

(Treasury): funds; sets financial target; supervises the financial performance

and advise on actions to be taken to improve the performance;

directs the corporation to pay dividends.

Attachment 2Page 3 of 5

(c) Ministry of Manpower Monitors education/training programs of companies, labor produc-

Development tivity, production targets and decides if employees qualify for

bonus payments.

(d) Ministry of Labor and Prepares workers' rights legislation, (e.g., security of

Social Welfare: employment, severance allowance, national provident fund) and

monitors enforcement; issues work permi.'s and visas for expatriates.

7. National Assembly: Establishes statutory corporations, follows all activities of PSEs

and bears ultimate responsibility for their performance, seeks

resignations of senior officers if necessary.

(a) Parastatal Account- Recommends measures to be taken to improve accounting practices;

ing Commissions recommends to the National Assembly actions of reprehensions of

(PAC) senior officers in case of negligence.

(b) Party Standing Follows-up the recommendations made by PAC, advises parent minis-

Committee: try on steps to be taken to rehabilitate and/or develop companies.

8. President: Establishes PSEs and appoints Chairman and GM.

Attachment 2Page 4 of 5

11. Government Agencies with Specific Monitoring and Control Functions

1. SCOPO: Apprroves the corporate structure and sets salary level of

employees.

2. Government Party (CCM): Supervises that Party Policy is obeyed.

3. Tanzania Accounting Reviews companies' accounts, issues audit (opinion) reports and 0

Corporation (TAC) submits annual report on PSE to National Assembly after approval by

the President.

4. Permanent Labor Tribunal: Monitor-, omp]o;ymek1t agreements.

5. Inter-Ministerial Approves management contracts for expatriate consultants.

Committee:

6. Price Commission: Administers price control mechanisms.

Attachment 2Page 5 of 5

7. Tanzania Investment Control and approve all transactions involving foreign exchange.

Bank (TIB) and

National Bank of

Commerce: (NBC)

0%l4

- 68 -

ANNEX 3

THE MISSION'S INDUSTRIAL EFFICIENCY SURVEY (MIES):

DATA AND METHODOLOGY

- 69 -

THE MISSION'S INDUSTRIAL E1mICIENCY SURVEY (MIES):

DATA AND ODOLOGY

Introduction

1. The analysis presented throughout the report relies heavily on thedata collected by the mission's industrial efficiency survey (MIES). Thisis because data analysis based on domestic prices is often misleading, when,as in the case of Tanzania, there is an overvalued exchange rate and high(and variable) levels of protection given to domestic industries, whichresult in large divergences between domestic and international prices.Thus, values of production measured in domestic prices include elements ofprotection as well as of actual production. To capture actual productiontrends and structure, it is then preferable to measure production values atinternational prices since this ignores the artificial price biases inducedby domestic protection. Generally, however, it is difficult to measurethese economic variables at world prices, since the required data is notavailable.

2. For this report, the Bank, in collaboration with the Tanzanianauthorities, conducted a detailed survey of over 120 industrial activitiesthat account for one-half the output of the sector. As described in detailbelow, all industrial subsectors and types of firms were represented(public, private, large, medium and small -- excluding non-factoryenterprises) in the sample. This comprehensive representation of allsegments of industry, in addition to the large share of industrialproduction captured by the sample (and the knowledge of the weight of eachtype of firm in the sector as a whole) permitted the simulation of theindustrial sector in 1984 to analyze in detail the industrial structure andits performance, efficiency and protection. The calculat'ions presented inthis report on economic (and financial) rates of return, Domestic ResourceCosts, Rates of Protection (see definitions below in Chapter Three) andvalues calculated at world prices for 1984 uriginated from tbe mission'sindustrial efficiency survey (MIES). As expected, the results indicatedthat there are large discrepancies between values calculated at world pricesand values at domestic prices.

The Survey

3. A comprehensive questionnaire (see Attachment I) was distributedto 56 firms involved in about 135 productive activities. During the October1985 mission each firm was visited by at least one mission member and astaff from the Ministry of Commerce and Industry. Each lengthy visit to thefirm had the aim of completing the questionnaire with the enterprise's chiefaccountant and his staff, or when the questionnaire had been substantiallycompleted prior to the visit by the mission, the purpose was to check allthe information provided, complete gaps and correct inconsistencies.

4. A preliminary review of the questionnaires was done in the field.When gaps or inconsistencies were detected, the firm was visited again.Upon return to Washington, the data was coded and inputted into the computerand a comprehensive consistency analysis was performed. Gaps and some

- 70 -

inconsistencies were detected in about one-half of the questionnaires. Thecomputer analyst responsible for the survey's execution returned to Tanzaniain January/February 1986 and visited each firm where data problems has beenfound. Following these visits, preliminary checks were done again in thefield and consistency analyses done in Washington, which indicated that thedata collected was complete and satisfactory for 48 firms (118 productiveactivities) out of the original 56 firms chosen.

5. The data provided by 2 firms vas not fully satisfactory, and thequestionnaires for 6 firms were never fully completed. The successfulsample of 48 firms, representing 118 activLties became therefore the basisfor the efficiency analysis in this report.

6. The eight page long questionnaire asked each firm to provide about250 pieces of information for 1984 which covered quantity and prices(domestic and international) of the firm's outputs, recurrent inputs (rawmaterials and spare parts), labor and capital costs, energy use, dutiespaid, transportation, freight and insurance costs. The questionnaire alsorequested information on existing capacity utilization, installed capacity,and attainable capacity utilization (defined as the capacity utilizationthat could be attained if the required recurrent inputs and foreign exchangeto purchase them was available under present demand conditions). Inaddition, some over-time information (from 1982 to 1985) was requested,particularly for capacity utilization, imported inputs, exports and foreignexchange allocation. (see Attachment I for details).

7. Samle Re2resentation and Sample Biases. Firms in all subsectorswere represented in the sample. I Within each subsector, public, private,large, medium and smaller activities were represented virtually withoutexception. The original sample was generated by first stratifying it intopublic and private and by subsector, and selecting the firms within eachcell randomly. It was decided not to generate the sample randomly for thewhole industrial sector because three important objectives of the surveywere Ci) to cover a significant fraction of industrial production within theconstraint of surveying about 120 industrial activities; (ii) to havea particularly comprehensive coverage of the public sector., and (iii) toensure that all industrial subsectors were represented. Consequently,public sector activities, which tend to be larger, were significantlyoverrepresented in the sample. Thirty out of the forty eight enterprises inthe sample were parastatals. Smaller firms, which are largely privateand more labor intensive, were underrepresented. Non-factory small scaleenterprises were not included in the sample. These biases were carefullytaken into account in the sectoral efficiency assessment by constructingactivity-specific weights. The sample biases towards public sector andlarger activities resulted in the sample collected comprising over one-half(53 percent) the outDut nroduced by the industrial sector in Tanzania.

1/ Food processing, beverages, tobacco, textiles, leather and tanneries,rubber, glass, wood and paper, cement, plastics, pharmaceuticals,chemicals, fertilizer, iron, steel and metal products, machinery andtransport equipment.

- 71 -

Border and Shadow Prices

8. The conversion from financial values to economic values (forDomestic Resource Cost and Economic Return on Capital Calculations) requiredthe use of shadow conversion factors and border prices.

9. Border Prices for OutRuts and InRuts. In order to evaluatesystematically both revenues and intermediate input c6sts at financial andeconomic prices, it was necessary to obtain the volumes and prices, domesticand international, of outputs and inputs. Information on volumes anddomestic prices were available at the firm level. For the final goods,respective unit average ex-factory prices were applied, and for inputsaverage unit landed costs incurred by the firm up to the gate of thefactory. Conversely, the information on international prices was oftenunavailable at the firm level, particularly for output border prices.

10. All directly imported inputs and other tradeable inputs which werenot directly imported by the survey firms, and the final goods manufacturedby the import-substitution activities were valued at their respective c.i.f.prices in order to arrive at their economic opportunity cost. All locallyprocured inputs which are also exported and export final goods, were valuedat their respective export f.o.b. prices. International prices for directlytraded inputs were sought at the firm level. For all remaining locallyprocured inputs which are internationally traded, and import-substitutionoutputs their c.i.f. prices were identified from (i) import invoices of themajor importers in Tanzania; (ii) bills of entry held with the CustomsOffice in Dar-Es-Salaam; (iii) quality and price certificates for importsissued by the representative office of the Societd Gen4rale de Surveillancelocated in Dar-Es-Salaam; and as the last resort, (iv) c.i.f. prices forZambia, Uganda, Madagascar and Mauritius obtained through similar surveyscarried out in 1984 and early 1985.

11. In the price selection, the quality of imported inputs wascarefully assessed in each case by comparisons with other Eastern Africancountries. In case of multiple price choice for the same item, theselection was always made in favor of the one with the lower price,consistent with the approach taken throughout the industrial efficiencysurvey and the calculations, which was to always make 'lower bound"assumptions to ensure that any resulting biases would be in the conservativedirection. The number of items which could not be assigned an internationalprice was very minimal. For these items, the economic value wasapproximated by its domestic market price.

12. Importance was given to the issue of quality assessment in theselection of international prices for the outputs. Consistent with theconservative approach menitioned above, whenever fairly acceptablesubstitution was encountered, the obtained c.i.f. import price was selectedas the reference international price, without any adjustments. In thesituation of evidently pronounced quality differences, however, the c.i.f.import prices were subject to a moderate downward adjustment (rangingbetween 5 and 20 percent) if similar product quality was not internationallytraded. When it was possible to identify the imports of the competing finalgoods coming from similar Eastern African countries the internationalprices vould be selected among those.

- 72 -

13. Conversely, international prices of the iron and steel productswere adjusted upwards to account for the presumption that currentinternational prices of the iron and steel products have been temporarilydepressed. International output prices (c.i.f.) of the all iron and steelproducts were thus increased on average by about 15 percent.

Shadow Price of Foreitn Exchan&e

14.. During the first half of 1984 the official exchange rate wasUS$1 - T Sh 12.5, while the official exchange rate stood at US$1 = T Sh 17during the second half of the year. Thus, the average official exchangerate for 1984 was US$1 = T Sh 15.3. Throughout 1984, however, the exchangerate was significantly overvalued. Data and analysis stemming from IMFR.E.D. reports, from a Bank paper on exchange rate overvaluation inTanzania, and our own analysis indicated that a reasonable range for theaverage shadow exchange rate throughout the year was T Sh 35-45 for thedollar, i.e. over twice, and up to three times, the official exchange rateat the time. The mid-point US$1 - T Sh 40 was selected for all the economiccalculations. Sensitivity analysis suggested that the results would notvary significantly if either an exchange rate of T Sh 35 or T Sh 45 waschosen instead. The assessment of sectoral efficiency would change only iffor 1984 the shadow exchange rate was to be assumed to be below T Sh 30(sectoral inefficiencies would be larger), or above T Sh 55 (sectoralinefficiencies would be smaller).

15. The adjustment factor for converting the official exchange ratefor shadow exchange rate therefore was 2.61. All outputs and tradeableinputs were subject to this conversion factor.

Shadow Price of Labor

16. The shadow price of labor was indirectly subject to a significantdownward adjustment from market prices measured in (official) foreignexchange terms. This was the outcome of the substantial adjustment of theshadow price of foreign exchange. Thus, the marginal productivity of laborof a worker earning a market wage of US$100 was assessed to be only US$53,i.e. the overall conversion factor -- accounting for the exchange rateconversion factor -- was 0.53.

17. The real wage deterioration in Tanzania's labor market over thepast eight years has been extremely severe for all categories of workers: inconstant T Sh, or dollar terms, workers in industry earn today only afraction (less than one-seventh in most cases) of what they earned in thelate seventies. The magnitude of the real wage drop suggests that themarket wage does not diverge very significantly from the opportunity cost oflabor. Consequently, applying the implied conversion factor of 0.53 was,again, regarded as a conservative assumption, (aiming at minimizing thepossibility of understating the true value of any output produced inTanzania and of overstating the true opportunity cost of any input or factorof production).

18. An additional adjustment was made on the quantity axis of theemployment sector. As suggested above, wages have adjusted dramatically inTanzania to approximate its opportunity cost. However, restrictions on

- 73 -

employment mobility has resulted in virtually no adjustment on industrialemployment. Most industries carry large numbers of excess workers for itspresent levels of capacity utilization. Thus, particular care was exercisedin determining whether the activity would require any additional labor toproduce at attainable capacity utilization levels. In most cases the firmsindeed responded that they would either need no additional labor, or at mosta less-than-proportional increase in employment. An adjustment of laborcosts at attainable capacity utilization was thus done for each activity,where in many cases no nominal increase in labor costs was imputed whenincreasing output to reach attainable capacity. Consequently, the resultingopportunity cost of labor as a fraction of output was substantially lowerfor the attainable capacity utilization calculation.

Shadow Price of CaDital

19. An effort was made to capture the market value of the variouscapital assets for each firm. Such information was not always available, soadjustments were made (with the input of the firm's chief accountant) to thebook value or replacement value estimates. As in most other instances ofcapital asset measurement, a margin of error always remains, suggesting thatthe capital costs estimates ought to be treated with caution. At any rate,whenever in doubt, the approach was to accept a lower bound estimate.

20. Estimates were calculated for the import content of the capitalequipment in each firm (which generally ranged between 70 and 80 percent).The market value of the imported capital component was adjusted by theshadow exchange rate conversion factor, while the domestic component wasleft unadjusted. The resulting total shadow value of capital was thenannualized by utilizing rent-equivalent (finite) annuity formulaes. Thereal opportunity cost of capital was assumed to be 10 percent.

21. The most important objective of the data collection and analysiswas to assess the efficiency of industry in Tanzania, for which the maincriteria indicator utilized was the Domestic Resource Cost (DRC)methodology. A simplified presentation of the rationale behind the DRCmethodology and its interpretation is provided in Chapter Three of the MainReport. A sample questionnaire utilized in the MIES survey is attached tothis annex.

- 74 -

Attachment I ofAnnex III

CONFI1)DNTIAL

TANZA Page I

WDRLD DANK INDUSTRIAL. SECTORK MISSION

QUESTIONNAIR FOR INDUSTRIAL ENTERPRISES

a. Ge:al Iformation

X. Enterprise Name, Maling Address and Telephone Numbers:

COMPANY LMITED

2. Holding Corporation to which Enterprise is Affiliated:

N/A

3. Year of Incorporation:

N/A

4. Year production began:

5. )Eai Activities:

.NNUVACTURERS ANO ISTRIBUTION OF CIGARETTES/PIP TOWACCOS

6e Type of Oinrship: Private (X) Public (X) 100

7. The Oivership by Local (X) 100 Foreign (Z)Nationality

.~ 2t

It. INFORftAtION ON PRtOUUC?W

Year 1953/4 (PFV4)

1. Plenne identify, at mat, the firm's three leading pro4cets vt term of Total Produettoa

nwTICs -A ExSugLF.$ . nc.

CC" o TotalStIC Wtomn- Production Value ex-factory Value UVtt prtee etf

clatuare Prod.wt Unit Quattty Quantity in TS%.('OwO) Uitt Priee mtttt in tSbt.('OUO) t_mrt .or "a

I . 2 3 4 5 6 7 8 9 esrt. (to for-

(if await- °000 * eoigm Ot eec!alee) 30

-. A MYA. 3 l ;s4i,4e 3,38,, 1929,972 554/SO 450530 25,545/rn 6.3 tUS8 o

- S PA MAO StCSm11i 219

Jf~~~~~~~~~~~~~~~~~~~~~~~~-

C.

* quantty not '00'o?-fe

.e ,~~~~~~~~~~

/~~itw

.cmtp:nu or an UNIT or tWPOuMD 0a300S PUWS* 512 aT LANDED

ARTICLES or RSSaRE I& I-C S ToIt DO caSt c or (4) fQR .9S45_ W~~~~~~~~LA Or TIME VEAR TIIC VER or Tw£ vr4m .ba - EM

Km t#inzuC PAPER 40.15t 84gbjj Per SbWi 1qm40d 440? 2000 3396 123.07 70317.63 60.9 1.15 20 5

CiCaitr PaDOt 36.10 a 22479 10706 t 6141 104.12 2984,557.4 6.2t 1.10

coK TlIpping 4t0. * 144S2 0090 9031 161.?1 2,790,652.05 8.56 1.50 a

0.WuIIst roIL 76.10 Sa*" per 1 4I301 13034 6743 282.57 2,60,624.94 16.15 2.00

IttlS .10 tIC S Fmf pW (itiO pt:) * fSO0 1242000 754400 10.40 6,456,740.00 10.49 1.l0 U

RisCOSC rflUt -. OlfIt c mm Patl * 269t 4470 3362 4.19 1157,259S.4 2.52 .45

r1L9c BOX A0 8.3 * * * ?384 7079 @ 414 15.16 45,677.00 0.78 .15

TAM OF RIO 3". * * 249 - 1775 97.77 63,369.90 5.02 .65

BUNDLE A 5 40".0 * * 108491 435S 900 28.9? t,SS9.4?.59 1.51 .25 a

SwEE ma POUCiS fI 9 42.02 8I Plea" P. (tOin P.) * 11550 19010 86540 359.70 150,4".10 14." 2.40

PIPC CLCaM 96.02 S PLO" POt (1lo0 e) * 640060 * 32720 57.3? 1179)3l.0 1.96 10.e

* PECKt L*OCLS 40.19 Plea" Loel 82226600 65052000 5T?W0 95.00 9l16309 5.4 .9i5

PAKET STRAPS 48.19 P1 e * 11941O0 239n4000 44280600 5.so 5o3897.5 0.31 * I

ENO LmkLS 4.9 * * 1202000 11690300 31240M0 2800 521,59e.00 1.60 .25 *

OARD:0 COIWiAISS 41.16 8 * OwPie a 197461 6246? 12248 22.49 3,091,115.56 1.29 *20 I

CONTAItCO t L.Ct.S 480.9 a i a 9756 15700 15782 0.49 4,740.26

aWstCSIV/Qs 3S.06 B £05 992 IttS a 9345 15260 21719 59.00 1,350.274.00 3.3? e

Krra Pp.. LirctaS Pip s Pat pjc a 240300 100000 260800 0.23 10,20S.00 -

Bo.0 ctUKO TAPES Sim 40.1S RD11 PW 2.1U 3144 7302 0936 17.04 259730.40 0.97 .15

tilS )32.13 A 1. Per Kga * Kt321 SO 218 146.00 22,136.00 8.14 1.45

1AU STAiCI * a lotd 342S 1740 60.00 13,2W00.0 4.57 .e0 0

SGlLtATS 34.02 A a 530 - StO S6.0O 1,540.00 3..O 5a

PAKET LAULS SPORTUUU 48.t9 1lo0 PCS " - G _ 5_ _ .92 aIICLU0ES LAOCLI llPOlD 51.60 - 2.96 .S2

Jl50629

III. lnTONAIIOW ON11 T P^-.

rv 1ssx

1. ri... indleicate major 4trreat and tAtdreft tnptt for your tvediog pr sdurts

rTMiq QUA'ITITT USE.

Ttade "ns~f- cil .vESTiC III T tt l

elatare tIMPORtt IRICE. Storks at Purcohses Sto'lk. UNIT VALUE In TSb. citr WICF

(tn foreign )$5PORTEU the beginning to the course at the end LAIJUD (0OQ) (to fore*tp

avail- PROUWCT rurrenuy) INPUTS USED UNIT OR LOCAL of thw year of the year of tha year COST (7e+7b-lc)a(#) eurrenry)able) 2 3 4 S 6 7- Ib IC 9 90

A.CA9~~. ) a. Lear 72 2,2 ........ ) ; Tobacco go Local 4i,547,988 3,736,553 4,860,50 37.24 128,226

). evping mate dile a I pr att ed sheot hdule 'A'

) 0.

I I 1.: I I I I I I. 5.

C. ......

b.

4.

C ... 4..

___ __- _ _ ~~~~~~~~.. _. _.._.__..

- 78 -

1. Locally purchased inp'lrts, which are sorr.etimes irroorted.

C '-F In T..Shs T.ShsDutv

Sportsman Packet Labels $

per 1000 PCS 2.96 .52 10.33

2. Employrent Vturmbe r Cost

Ciqarettes 15"0 Skilled 1253 21,-05Un skilled 31? 5, 4-8

Ple Tobacco 12 12 20'

Management 56 56 2,858

1638 1638 30, 249

3. Tobacco used Processed Kes Used Kgs

Cigarettes 3,550,667 3, 417, 6'9

Pipe Tobacco 5,570 5,570

3, 556, 237 3, 423, 249

4. Gums Kss

Cigarettes 22.849 99.84

Pipe Tobacco 37 16

Total 22,886 100

IV, IntOMYTIOI OW F*KkGY COtOSIM1011 tp

I'leww, 4b prnftde tInformnt nq owr Pm.. -gy Conzamptton for enwh pre4net seper.tely, I t1ottna: (t) total qmwttty consusod (2) unit of 0*&smre td. t1J Vetot ~t,wnandq. ot nht 11 oNf (TSb)-

FIXi o.l.L;T ntrsFt nw.oiL FO OIL FOOl:tND CRRCOAL tAu

QOwot It y ;nhIt Value Qwmnt * ty 1 tt Volue nt I ty unit Value qant ty Untt t lv,e QnrktIty UOt t Vteet.Sh. TSIb TSb . TSth

('000) ('00) ('u00) ('000 ('eO

P1,4p 2 KVA 2.44 126,563 Utim 7?0 363,373 teas 1,526 ./A I

T. .......

V. 1IQ')VNATtOW 01 FIXED ASSETS VI. _t ORFtATIOt On £*wWt*oNT

fY1984 .F19S4

Expected Replacement* AVFtRACE TOTAL (CASH)F.eonottr Valoe In FYE4 WO. OF WAGKS AUD PAYMINTS

CQ.tu.nry LSle TSW(000) TYPE OF E*9PUnYFeS EMPLOYM.KS SALARIES tI KSOSYs3air 2 3 2 3 4

TSh( 'O00) TSh( 'OOO)Loral Cost Foreign Coat

I. NANACEftNtT 56 2,859

1. Plant 10 45,000 250,000

2. Land & tSdtnga 50 218,000 _ 2. PROFESSIOVAL/tIECNICAL ._

3. Veht tles 4 38,000 _3. SILLtED WORKERS

4. Toi I. - - -Cgit

5. Fixtures and Prodcet A ......... 1,265 a1 91_5Ftlt(ag wre d10 46,000 _ Product . .P A. -T°P¢9 °3-).

A. Otltr. (speetfy) - - Product C .

7. Spare Parts N/A 600 1,000 "TAL

, 8.Maintenance fl/A _- 4*. UlSKILLZO WORItRSand repair Product A ,C,iam,,tt,sCosts 317 5,478 -i

.______________ _______... _____ .eproduct £ 5RO PP.J9f4 9co.* Please breakdown -total replacement value into local Product C .. ,

and forpign currency cost for each of the above TOTULlisted. categories. 1,638 309249

NOTEt Pieae tndtcate tn Column 2 the average nmber of emplo,ees.Colum 3 s the total wNges &ae salaries p?R.

Ineludtng substatere, Bhosng.transportation, penston, sortilserurity.

Column 4 : the total cuot to the mployer ofgoods and ervtce. give to theemployees.

For slalIed and usktilted workers, plea;. bre*kdoew csttated ft1by major products.

Page 7VII. INFORMATION ON CAPACITY UTILIZATION

FY 1q84

TOTAL pRtoDICT A PRODUCT a PRODUCT C

- rat"d raperity uttll.atlon of ymor plant 75% )- actuat 'aparity. uttltzatton of your plant 50%

- ntmher of days worked In FYI9S4 )

- number of hmors worked per day in Y11984 8 eCigarette PLpe Tobacco NI

- number of shtfti -orked itn FY1984 2 3- duration of earh ehtft In hours 8 )

(ineluding nver*Xe amount of overtime)

HhNv muh foretgn exrhange did you recetve:

FY1983 FY1984 FT1985

ForeIgn' US $ 1Spertfy foreign currency

eiu"hange receIved 1,861,037.2 1851,57?. OD

Appited exchange 12*5199 18.1459 _

- If yout had recetved the reqtested amount of foreign exchange,what rapacity utilization would you have achtived tn FY84.. 2

- Wontld yoi have needed additional labor? No

- It Yen. pleane estlmte the fnr-repmntal requirements Category Prodturt Product Produntby each rategory of employees: N/A A 8 C

ManaRvmnt ) TA"/__.~~ __.

Prof -fS'Pa

SkItedi

Un@ktil.d ) * _ _

Total_ _ .__ _ __ _ _ _

- 82 -

In addition, it is extremely important that you answer the following questions:

Xp Actual capacity utilization in

a) FY82 b) FY83 c) FY84 d) FY8553 46 41 31

2. Total imported inputs (approximately US $ value)s

a) FY82 b) FY83 c) FY84 d) FY852424 627 1605 569

3. Total exports (approximately US $ value):

a) FY82 b) FY83 c) FY84 d) FY85

2127 2173 1695 894 (August ,85)

4. Foreign exchange retention as a percent of export proceeds

a) FY82 b) FY83 c) FY84 d) FY85

89.8 78.9 13.5 432 (August, 85) %5. Specify uses of retained foreign.exchange:

a) FY82 b) FY83 c) M4 d) FY85 MS )1,773 2152 249 442 Inluding 8p sze '

6. Foreign exchange allocation received through Sank of Tanzania

a) FY82 b) FY83 c) FY84 d) FY85 11840 34 2844 275 JMS 00001 8113 544 299 195 SPARES '000' $

7. Is your firm under the ConfinmenAt Scheme?

8. Are your leading products subject to price controls?- NO

9. Are the domestically purchased inputs that you use subject toprice controls? NO

10. Are the imported inputs that you use subject to price controls?NO

- 83 -

STATISTICAL APPENDIX

PART I

BASED ON OFFICIAL STATISTICS

- 84 -

STATISTICAL APPENDIX

PART I: BASED ON OFFICIAL STATISTICS

PART II: BASED ON THE MISSION INDUSTRIAL EFFICIENCY SURVEY (MIES)

PART I

Al INDUSTRIAL PRODUCTION

A1l. Subsectoral Changes in Output and Value Added in Medium/Large-Scale Manufacturing

A1.2 Structure of Output, Value Added and Employment in Large-ScaleManufacturing

A1.3 Value Added in Large-Scale Manufacturing (T.Shs millions at constant 1976prices)

A1.4 Value Added in Large Scale Manufacturing (T.Shs umillion at current prices)

A1.5 Value of Output in Large Scale Manufacturing (T.Shs millions at constant1976 prices)

A1.6 Value of Output in Large Scale Manufacturing (T.Shs million at current prices)

A1.7 Production in Selected Industries

A1.8 Value Added/Output in Large Scale Manufacturing

A1.9 Capacity Utilization in Selected Industries

Al1.10 Role of Public Sector in Medium-Large Scale Manufacturing Industry, 1981

Al.ll Appendix Table: Ownership and Size Distribution of IndustrialEstablishments

A1.12 Comparison of Industrial Structures of Tanzania and OtherSelected Developing Countries

A2 EMPLOYMENT AND WAGES

A2.1 Employment in Large Scale Manufacturing

A2.2 Structure of Employment in Large Scale Manufacturing

A2.3 Employment, Value Added and Labor Costs in Manufacturing Enterprises

A2.4 Value Added per Employee in Large Scale Manufacturing

A2.5 Wage and Salary Structure in Medium and Large ManufacturingIndustry (1981)

- 85 -

A2 EWLOYMENT AND WAGES (cont'd)

A2.6 Factor Productivity and Wages by Subsector, 1981And Comparison with Kenya, 1980

A2.7 Factor Intensity By Size of Enterprise (1981)

A2.8 Factory Value Added and Employment by Activity for 1978 and 1981

A2.9 Comparative Data by Activity for All Factory Iladustries for1978 and 1981

A2.10 Labor Productivity, Capital Intensity, Labor Costs by Ownership (1981)

A3 EXPORTS AND IMPORTS

A3.1 Exports of Manufactures

A3.2 Import Substitution in Manufacturing 1961-83

A3.3 Import Substitution, Export Promotion, and Domestic Productionin Tanzanian Industry

A4 CAPITAL AND INVESTMENT

A4.1 Fixed Assets at End-1979 and Net Additions in 1979-80 and1980-81 by Ownership and Industry

A4.2 Gross and Net Rate of Return on Capital in Medium and Large ScaleManufacturing

A4.3 Sectoral Allocation of Budgetary Appropriations to Industry

A4.4 Status of Industrial Parastatals' Investment Programs

A5 MACROECONOMY

A5.1 Economic Indicators

A5.2 External Trade

- 8. -

PART II: TABLES BASED ON THE MISSION INDUSTRIAL EFFICIENCYSUPVEY (MIES)

T-8a Table Oa: Industrial Sector Efficiency Assessment - With Names(Sub-sectoral classification of 48-Firms)

T-6 Table 6: Efficiency of Product Lines at Actual Capacity

T-7 Table 7: Efficiency of Psoduct Lines at Attainable Capacity

T-9 Table 9: Domestic Market Activities In Export Firms(Reprint for the Margins)

T-10 Table 10: Tanzania Export Activities

T-13 Table 13: Allocation of Foreign Exchange Through the Bankof Tanzania

T-14 Table 14: Bank of Tanzania's Allocation of Foreign Exchangeto 48 Manufacturing Firms

T-15 Table 15: Subsectoral Efficiency of Industry: 1984

T-16 Table 16: Summary of Weighted Total Actual DRC at Shadow Prices

T-17 Table 17: Summary of Weighted Total Actual DRC at Shadow Pricesat Subsectoral Level

T-18 Table 18: Summary of Weighted Total Attainable DRC at ShadowPrices

-19 Table 19: Summary of Weighted Total Attainable DRC at ShadowPrices at Subsectoral Level

T-25 Table 25: Share of Value Added in Total ManufacturingProduction (1965 and 1984) I

T-26 Table 26: Structural Transformation and the Productivityof Investments by Subsectors 1965 and 1984

T-28 Table 28: Structural Transformation and the Productivityof Investments by Subsectors 1984

T-29 Table 29: Protection and Effic'ency in Industry 1966 and 1984

T-31 Table 31: Cofinement Scheme and Price Control

T-32 Table 32: Effective Protection and Economic Efficiency

- 87 -

TABLE Ai.1

SUBSECTORAL CHANGES IN OUTPUT AND VALUE ADDEDIN MEDIUM/LARGE-SCALE MANUFACTURING 1/(TSh at 1976 prices, and percentages)

., ~ ~~~~~~ I .Value Added Total Output

x 1977 1983 change 1977 1983 change

GRAND TOTAL 1,888.1 992.3 -47.4 5,995.8 3,409.6 -43.1

. , . ..

CONSUMER GOODS 1,036.9 494.8 -52.3 3,047.8 1,755.5 -42.4

Food & Food Products 472.1 211.6 -55.2 1,391.2 712.4 -48.8Beverages 63.4 104.1 64.2 221.8 285.5 28.7Tobacco 89.7 31.7 -64.7 i0.0 77.4 -59.3Textiles 285.6 769.4Apparel 126.0 147.5 -64.2 475.4 680.21 -45.

INTERMEDIATE GOODS 680.0 398.1 -41.5 2,076.8 l,240.0 -40.3

Tanneries & Leather Products 27.2 44.5 63.6 92.7 151.2 63.1Wood & Wood Products 57,7 30.9 -46.4 100.11 100.31 0.2Paper & Paper Products 33.9 77.7Printing & Publishing 57.7 54.6 -40.4 163.4 173.5 -28.0Indus. Chemicals, Petroleum lProducts, Pharmaceuticals 237.3 127.1 -46.4 674.3 318.0 -52.8and Fertilizer

Rubber Products 96.0 29.3 -69.5 205.2 82.7 -59.7Plastic Products 26.3 14.2 -46.0 74.8 36.0 -51.9Glass Products & Building IMaterials 21.2 42,6 100.9 113.4 96.0 -15.3

Iron & Steel 63.9 266.6Metal Products 58.9 56.8 -53.7 264.5 282.3 -46.8

CAPITAL GOODS 122.5 92.0 -24.9 669.0 378.9 -43.4I~ I I-Machinery 60.1 25.2 -58.1 334.2 89.8 -73.1Transport Equipment 62.4 66.8 7.1 334.8 289.1 -13.6

OTHER MANUFACTURING 48.6 7.4 -84.8 202.2 35.1 -82.61

1/ Firms with 10 or more employees.

Source: Ministry of Finance and Planning, Survey of Industries, 1965, Surveyof Industrial Production, various years and Economic Survey, 1984.

TABLE A1 . 2 STRUCTURE OF OUTPUT, VALUE ADDED AND R4PLOYMENT IN LARGE SCALE MANUFACTURING(Percent)

Output Value Added Employimnt1965 1973 1977 1983 1965 1973 1977 1983 1965 1973 1977 1983

GCRMD TOTAL 100 100 100 100 100 100 100 100 100 100 100 100

CONSUMER GOODS 72 57 51 51 56 59 55 50 68 69 64 63

Food & Food Products 37 28 23 21 36 23 25 21 34 25 25 25Beverages 4 4 4 8 4 4 3 11 1 3 3 3Tobacco 2 4 3 2 1 8 5 3 4 6 6 3Textiles 27 14 13 )20 11 19 15 )15 25 28 20 )32Apparel 2 7 8 ) 4 5 7 ) 4 7 10 )

INTERMEDIATE GOODS 23 33 34 36 40 33 36 40 29 25 26 29

Tanneries & Leather Products 3 2 2 4 2 2 1 4 1 1 1 5Wood & Wood Products 4 3 2 3 9 4 3 3 14 6 7 5Paper & Paper Products )2 1 1 )5 )3 1 2 )6 )3 2 2 )4 CPrinting & Publishing ) 3 3 ) ) 4 3 ) ) 3 3 )Industrial Chemicals, Petroleum ) ) ) ) ) ) ) ) ) ) ) )

Products, Pharmaceuticals and ) 5 )11 )11 )10 ) 8 )10 )13 )13 ) 3 ) 5 ) 6 ) 6Ferttlizer ) ) ) ) ) ) ) ) ) ) )

Rubber Products - 2 3 2 )1 2 5 3 - 2 2 1Plastic Products - I I I ) I I I - I 1 1Glass Products & Building Material 2 2 2 3 1 3 1 4 1 4 3 3Iron & Steel )7 4 5 )8 )16 3 4 )6 )7 )I 1) 4Metal Products ) 4 4 ) ) 3 3) ) ) ) _.

CAPITAL GOODS 1 9 11 11 3 7 6 9 2 4 5 7

Machinery 1 3 5 3 3 3 3 2 2 2 2 2Transport Equipment - 6 6 8 - 4 3 7 - 2 3 5

OTHER MANUFACTURING 4 1 4 1 1 1 3 1 1 2 5 1

Source: Surveys of Industrial Production, Economic Survey, 1984 and data provided by the Bureau of Statistics.

- 89 -

TABLE AI.3: VALUE ADDED IN LARGE SCALE MANUFACTURING1I(T. She millions at constant 1976 pricesl'/

1977 1981 1982 1983

GRAND TOTAL 1,888.1 1,345.0 1,089.3 992.3

CONSUMER G0DS .1,036.9 631.4 542.3 494.8

Food & Food Products 472.1 224.3 232.8 211.6Beverages 63.4 43.8 112.3 104.1Tobacco 89.7 41.7 34.8 31.7Textiles 285.6 289.1 ) 162.3 )147.5Apparel 126.0 32.6 ) )

INTERMEDIATE GOODS 680.0 613.6 437.8 398.1

Tanneries & Leather Products 27.2 40.3 49.0 44.5Wood & Wood Products 57.7 58.4 34.1 30.9Paper & Paper Products 33.9 26.6 ) 60.1 ) 54.6Printing & Publishing 57.7 51.0 ) )Industrial Chemicals, Petroleum ) ) ) )Products, Pharmaceuticals and ) 237.3 ) 127.1 ) 137.8 )125.2Fertilizer ) ) )

Rubber Products 96.0 121.9 32.3 29.3Plastic Products 26.3 20.6 15.6 14.2Glass Products & Building Material 21.2 51.8 46.9 42.6Iron & Steel 63.9 40.3 ) 62.1 ) 56.8Metal Products 58.9 75.5 ) )

CAPITAL GOODS 122.5 89.7 101.2 92.0

Machinery 60.1 24.5 27.7 25.2Transport Equipment 62.4 65.2 73.5 66.8

OTHER MANUFACTURING 48.6 10,4 8.0 7.4

Source: Ministry of Finance and Planning, Surve= of Industries, 1965,Survey of Industrial Production, various years and Economic Survey, 1984.

1/ Firms with 10 or more employees.2/ Current price figures were adjusted to constant prices with an index developed from a

manufacturing GDP current & constant price series in the 1985/1986 Budget Speech byB. P. Mrsaba, Minister of Industries, page 28.

TABLE A1.4: VALUe ADDED IN LARGE SCALt )WIUTACUUtI /(T.Shs million at current prices)

1965 1969 1973 1977 1981 1982 1983

GRAND TOTAL 221.0 475.4 914.3 2,074.8 3,362.6 3,203.8 _3,307.6

CONSUMER GOODS 124.3 281.6 538.4 1,139.4 1,578.5 1,594.9 1,649.4

Food & Food Products 80.4 125.7 208.5 518.8 560.7 684.7 705.2Beverages 8.9 28.3 40.6 69.7 109.4 330.4 347.0Tobacco 2.4 28.6 66.6 98.6 104.3 102.4 105.5Textiles 24.1 89.2 175.0 313.8 722.7 ) 477.4 ) 491.7Apparel 8.5 9.8 47.7 138.5 81.4 ) )

INTeRMEDIATE GOODS 87.6 142.7 302.8 747.4 1,533.9 1,287.7 1,327.1

Tanneries & Leather Products 3.8 1.1 19.8 29.9 100.8 144.1 148.4Wood 6 Wood Products 20.0 26.8 33.1 63.4 145.9 100.3 103.0Paper 6 Paper Products ) 7.2 0.9 8.4 37.3 66.5 ) 176.8 ) 182.1Printing & Publishing ) 17.7 35.1 63.4 127.5 ) ) 0Industrial Chemicals, Petroleum ) ) ) ) ) ) )

Products, Pharmaceuticals and ) 17.3 ) 52.8 ) 91.3 ) 260.8 ) 317.8 ) 405.3 ) 417.4Fertilizer ) ) ) )

Rubber Products 1.5 2.2 16.6 105.5 304.8 94.9 97.7Plastic Products - - 12.7 28.9 51.4 45.9 47.3Glass Products & Building Material 3.4 20.7 30.7 23.3 t29.6 137.8 142.0Iron & Steel ) 34.3 ) 20.5 28.9 70.2 100.8 ) 182.6 ) 189.2Metal Products ) ) 26.2 64.7 188.8 ) )

CAPITAL GOODS 6.0 48.2 63.3 134.6 224.1 297.5 306.5

Machinery 5.5 7.2 28.8 66.0 61.2 81.3 83.8Transport Equipment 0.6 41.0 34.5 68.6 162.9 216.2 222.7

OTHER MANUFACTURING 3.1 2.9 9.8 53.4 26.1 23.5 24.5

Source: Ministry of Finance and Planning, Survey of Industries, 1965, Survey of Industrial Productiont, various years.and Economic Survey. 1984.

I/ Firms with 10 or more employees.

- 91 -

TABLE A1.5; VALUE OF OUTPUT IN LARGE SCALE MANUFACTURING1 /(T. Shs millions at constant 1976 prices) 2 f-

1977 1981 1982 1983

GRAND TOTAL 5,995.8 40412,3 3,753.0 3,409.6

CONSUMER GOODS _3,047.8 2,182.5 lp933.0 1,755.5

Food & Food Products 1,391.2 906.4 783.9 712.4Beverages 221.8 185.9 315.5 285.5Tobacco 190.0 102.0 85.2 77.4Textiles 769,4 818.5 ) 748.4 ) 680.2Apparel 475.4 169.7 ? )

INTERMEDIATE GOODS 2,076.8 1,701.4 1,364.5 1,240.0

Tanneries & Leather Products 92.7 182.2 166,3 151.2Wood & Wood Products 100.1 138.1 110.3 100.3Paper & Paper Products 77.7 62.8 ) 190.9 ) 173.5Printing & Publishing 163.4 138.2 ) )Industrial Chemicals, Petroleum ) ) ) )Products, Pharmaceuticals and ) 674.3 ) 417.5 ) 349.9 ) 318.0Fertilizer ) ) ) )

Rubber Products 205.2 189.3 91.0 82.7Plastic Products 74.8 52.0 39.6 36.0Glass Products & Building Material 113.4 176.0 105.7 96.0Iron & Steel 266.6 148.0 ) 310.6 ) 282.3Metal Products 264.5 197.4 ) )

CAPITAL GOODS 669.0 480.8 417.0 378.9

Machinery 334.2 131.8 98.8 89.8Transport Equipment 334.8 349.0 318.2 289.1

OTHER MANUFACTURING 202.2 47.6 38.6 35.1

Source: Ministry of Finance and Planning, Survey of Industries, 1965,Survey of Industrial Production, various years and Economic Survey, 1984.

1/ Firms with 10 or more employees.T/ Current price figures were adjusted to constant prices with an index developed from a

manufacturing GDP current & constant price series in the 1985/1986 Budget Speech byB, P. Mramba, Minister of Industries, page 28.

1

TABLE A1.6: VALUE OF OUTPTrr IN LARGE SCALE MANUFACTURING1 /(T.Shs million at current prices)

1965 1969 1973 1977 1981 1982 1983

GRAND TOTAL 1,091.6 1,522.6 3,045.3 6,588.8 11,030.7 11,038.2 11,365.4

CONSUMER GOODS 779.1 963.7 1,741.2 3,349.2 5,456.3 5,685.1 5,851.6

Food 6 Food Products 403.4 545.8 844.5 1,528.8 2,265.9 2,305.5 2,374.7Beverages 41.6 54.9 119.3 243.7 464.7 927.8 951.6Tobacco 19.3 80.5 136.9 208.8 255.1 250.5 258.0Textiles 291.5 234.0 429.8 845.5 2,046.3 )2,201.3 )2,267.3Apparel 23.2 48.4 210.7 522.4 424.3 ) )

INTERMEDIWTE GOODS 256.0 391.8 966.4 2,282.2 4,253.4 4,013.2 4,133.4

Tanneries & Leather Products 32.8 8.7 57.2 101.9 455.6 489.2 503.SWood & Wood Products 45.5 70.8 88.5 110.0 345.2 324.5 334.2Paper & Paper Products ) 20.0 3.4 31.2 85.4 156.9 ) 561.4 ) 578.2Printtng & Publishing ) 36.0 81.8 179.5 345.5 ) )Industrial Chemicals, Petroleum ) ) ) ) ) ) )

Products, Pharmaceuticals and ) 59.8 )136.9 )338.7 )741.0 )1,C43.7 )1,029.2 )1,060.0Fertilizer ) ) ) ) ) ) )

Rubber Products 3.2 5.7 73.3 225.5 473.2 267.7 275.7Plastic Products - - 28.8 82.2 129.9 116.6 120.1Glass Products & Buildlng Material 22.9 46.1 67.5 124.6 440.1 311.0 320.3Iron & Steel ) 71.8 ) 84.3 119.4 293.0 369.9 ) 913.6 ) 941.0Metal Products ) ) 110.0 290.7 493.4 ) )

CAPITAL GOODS 14.3 1hC.2 269.3 733.2 1,201.9 1,226.4 1,263.1

Machinery 12.0 29.2 100.1 367.3 329.5 290.7 299.4Transport Equipment 2.3 111.0 169.2 367.9 872.4 935.7 963.7

OTHER MANUFACTURING 42.2 26.8 38.4 222.2 119.1 113.7 117.1

Source: Ministry of Finance and Planning, Survey of Industries, 1965, Survey of Industrial Production, various years.and Economic Survey, 1984

1/ Firms with ior more employees.

- 93 -

TAiBLE A1.7:- P0ODUCTION In SELICTED tXDUSTRIES(1976-100)

1977 1978 1979 1980 1981 1982 1983 1984

Sugar1I 100.0 96.2 126.0 122.8 149.7 106.4 75.7 87.7

Wheat flour 111.4 121.0 74.7 43.5 35.9 37.5 66.5 48.7

Doer 111.6 122.6 113.2 96.0 96.7 96.6 98.3 104.0

Cbibuku 111.3 131.7 191.3 116.2 122.6 143.7 171.4 129.7

Cigarettes 108.1 116.2 113.5 127.0 105.4 127.0 102.4 97.0

Textiles 95.4 88.1 102.9 112.6 116.2 90.1 72.2 83.7

Leather 125.6 98.7 200.0 166.6 139.7 133.3 130.7 130.1

Shoes 195.0 197.5 157.5 132.5 60.0 72.5 65.0 47.5

Gunny bags 64.9 97.3 110.8 143.2 143.2 93.2 129.7 148.7

Fishnets 212.9 189.5 214.5 85.1 71.4 45.6 48.8 27.0

Plywood 151.0 124.4 99.8 108.4 88.3 95.5 53.6 58.7

Pyrethrum 71.7 52.2 37.7 34.1 28.3 26.1 32.6 39.1

Fertilizers 87.5 105.5 110.3 120.7 163.8 32.4 74.0 122.3

Paints 102.1 157.0 84.2 45.7 61.2 46.3 46.3 39.0

Petroleum Products 83.2 71.7 75.2 78.8 64.5 67.7 61.0 81.0

Tyres and tubes 106.5 118.4 93.6 115.2 45.6 38.1 104.8 53.0

Cement 101.2 102.9 123.0 126.6 161.9 151.2 110.3 151.2

Rolled steel 113.4 156.4 171.0 175.4 156.9 115.3 115.3 94.8

Galvansied Iron sheets 103.2 114.0 96.6 71.0 47.9 53.4 60.2 86.3

Hoes snd ploughs 65.8 63.3 83.0 115.0 146.0 94.8 165.4 202.5

Radios 107.1 98.0 102.9 92.9 64.6 45.8 20.0 16.7

Dry cell batterles 111.7 122.5 123.3 136.8 135.2 126.3 81.7 64.5

1/ Uased on 1977-lOO

Source: Bureau of Statistics, Ecoromie Survey, Ministry of Industries.

TABLE A1.8: VALUE ADDED/OUTPUTr N AG SCAMLE KNUPACTURWN/(Percentages)

1965 199 1973 1977 1981 1982 1983

CRAIND TOTAL 20 31 30 31 30 29 29

ConsIN GOODS 16 29 31 34 29 28 28

Food Food Products 20 23 25 34 23 30 30Beverages 21 32 34 29 24 36 36Tobacco 12 36 49 47 41 41 41Textiles 8 38 41 37 35 )22 )22Apparel 37 20 23 27 19 ) )

INUTURMKDIE GOODS 34 36 31 33 36 32 32

Tnneries 6 Leather Products 12 13 35 29 22 29 29Wood & Wood Products 44 36 37 S8 42 31 31Paper & Paper Products )36 26 27 44 42 )32 )31Printing & Publihnlg ) 49 43 35 37 ) )Industrlal Chealcale, Petroleum ) ) ) ) ) ) )

Products,. Parnaceuticals and )29 )39 )27 )35 )30 )39 )39Pertliser )

Rubber Preducts 47 39 23 47 64 35 35Plastic Product - - 44 35 40 39 39Claw Products & Building Material 15 45 45 19 29 44 44Iroa & Steel )48 )24 24 24 27 )20 )22Natal Products ) ) 24 22 38 ) )

CAPITAL GOODS 42 46 24 18 19 24 24

achinery 46 25 29 18 19 28 28

Transport Equipment 18 37 20 19 19 23 23

OTU MANUACTURIUG 7 11 26 24 22 21 21

Source:t Minstry of Finance and Planindg. Survey of IYdust ies. rs6s. Survey of Industital Production, varous years.

iU Economic Survey. 1984.I/ Firm With 10 or remeployees.

TABLE Al.9: C4PACtTT tItLZZA?tlO IN SKBCIh tluPStuS

,t1476 I"l t32 14q83 1984 1976 *963 19102 *t96 I* 197* ml to" noTrttj 3..

1 (.1) 9n,0(1 2nn.n 200.0 20n.0 200.0 5.0 5.5 74. ,t .2 *1 4 &I DC.s...t 74105 (0(10) 34.n0 1.1(10.0 1.02n.0 3.no.0 8,350.0 275.0 5.5 74.9 597.? 0..n 63 4 4 U 3Ctgertt.a Caes (atII) 6.3 * 9.1 *.1 10.0 S3O S.l S.1 5.2 S.$ ?9, is St " wP.1..t. *iuImer (bitl) 4., 5.q 5.9 5.9 5.3 3.1 4.1 5.2 1.5 6 so as U1Psi Kts Litr. (**IS) S.0 S.b 10.3 I4., 10.3 3.2 1.5 1.? 3.6 3.2 0 1 US 4 12I rItIIzr. T.. (000) 1(1,. 154n 154.0 13540 134.0 41.6 b9.0 133.? 1J.2-e 8. 40 S,t 23 39

5.... Pairs (.tit) *.0 14.0 14.0 n 34.0 4.n 4.0 2.9 2.9 8.9 61 2 21 it tot 7r . to o m r ( 0) 43O.R s34.0 53".0 33N.0 580.0 375.0 170.6 2019.0 393.7 *98.? '9 3 3 3 Numml'ee Ibr 10() - 35(1.0 1sn.n - - - *1.k ..

? - _ _ 9 3 * - -L-thv ?4oaw fast (. ) 31.6 5t2. 32. 1 32.5 12. 7.6 13.4 30.4 10.2 le 2 5 48 32 is S

Noasiptash. *Tons (OM) 2.0 141 1.0 3.0 3.8) 3.? 2.5 1.6 2.1 I A t3 53 9 5l3'C.wcr..tet It.' shasta I b n ho (1) s2. 4 43.0 43.0 30.n 34.4 13.0 21.1 23.0 547 S G

* l. " l.t q eN u m h.v ( m I I I ) . .0 4. 0 .0 6 1.86 .7 0 .1 3 0 . 9 0 . 6 1 4 8I r2 8 5 Orv rol battries hobr (*III) -f. 14.1 93.0 4 05 7 2

8),,r 6e1 ftotv.l. ah, s11 A 9. 40 94.0 9;4. 54.6 78.0 ?3.3 31*4 13.6 57 of 76 39 w9tru' 6 S ct. TMn (0w) 7n.O 3D.0 11.0 1t.0 30.0 12.2 16.5 12.8 9.1 to. 4*1 55 43 30 3m rP4 (mwi) In.0 tn.0 In.0 t0.0 t5. 3.M 5.1 1.5 4.4 3.5 3? 53 35 46 3.

d"cnjr-vr~ - To"* (0n0) l 15.0 89s.0 39.0 - - 1s.3 3. - - _ 5_ - _C . jt o lk - Imp t ( . 1t 1) 6 1.A 3% .e *9 6. 0 3 8 .0 t 5 0.0 7 4. 7 . 2 4 4 . 4 2 .0 5 6. 1 3 2 * 4 1 3 5 3 2 1ChI)w*a Utr.t (will) 21.7 21.7 28.? 21.? 21.7 t13. 34.2 16 9.11 115.0 5e t5 9 93 49

.... f#' * ¢-lotrv .tt _ __ _rio

s - 96 -

TABLE Al.10

ROLE OF PUBLIC SECTOR IN MEDIUM-LARGE SCGLEMANUFACTURING INDUSTRY, 1981

(Percentages)

No. of Public lSector Share Share Share in Share

Sector Establishments in in Net Fixed in(Total) Value-Added Output Assets Employment

Food & Food Products 63 (145) 81.6 80.0 87.9 83.1Beverages 3 (13) 55.1 72.5 53.6 82.5Tobacco 3 (3) 100.0 100.0 100.0 100.0

Textiles 47 (80) 62.0 57.9 44.1 78.4Apparel 2 (63) 13.1 9.1 4.6 23.3Tanneries, Leather 7 (25) 73.9 79.2 95.6 78.6

Wood, and Products 23 (132) 24.2 23.9 52.9 40.4Paper, and Products 4 (8) 82.3 78.5 79.0 84.7Printing 3 (49) 51.2 42.1 44.1 38.7

Chemicals 5 (42) 24.8 34.0 55.2 31.2Rubber Products 2 (9) 26.0 1/ 48.4 (neg.) 2/ 77.3Plastic Products 1 (5) 42.8 42.9 31.2 39.9

Glass, Cement 7 (23) 71.7 71.5 71.3 57.6Iron and Steel 5 (5) 100.0 100.0 100.0 100.0Metal Products 6 (43) 48.7 36.2 10.5 38.2

Machinery 4 (23) 35.6 13.9 46.1 33.5Transport Equipment 8 (26) 19.2 9.7 69.5 37.0Other 3 (16) 58.6 66.9 87.6 71.8

Total 196 (707) 55.0 55.4 65.7 67.619~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

1/ There seems to be some error in the value-added figures reported for theprivate companies in rubber, which inflates their share and reduces thatof the public sector.

2/ Depreciation in the parastatal tire producer over 1979-81 was larger thanthe value of net fixed assets, yielding this stran$e accounting result.See Appendix Table 0

Source: Unpublished data, Bureau of Statistics.

- 97 -

t TABLE Al,1l . OWNERSHIP AND SIZE DISTRIPUTION

OF INDUSTRIAL ESTABLISHMENTS

(1961)

Velue-Added/Estabilshment Site Distribution(TSh million) of Establishments

sector-Public Privato Total 10-49 50499 500 or mo

Food 7,3 1.2 3.9 78 59 9

fbeverae 20.1 4.9 8.4 5 7 .1Tobarco 34.7 _ 34.7 - - 3Textiles 9.5 8.3 9.0 16 50 14

Apparel 5.4 1.2 1.3 45 17 1

Leather 10.6 1.5 4.0 13 10 2

wood 1.5 1.0 1.1 105 27 -

Paper 13.7 3.0 8,3 2 5 1

Printing 21.7 1.4 2.6 36 13 -

Chemieals 15.7 6.5 7.6 24 16 2Rubber 39.6 24.2 33.9 5 3 IPlastics 22.0 7.4 10,3 1 4 -

China, Glass, Pottery 0.6 5.0 2.8 4 3 1Cement 31.3 1.5 8.0 7 6 2Iron, Steel 20.2 - 20.2 - 5 -

Metal Products 15,3 2.6 4.4 31 11 1

Non-Electrlc Machinery 4.9 1.0 1.8 10 5

Electric Machinery 7.1 4.0 4.4 3 4 1

Transport Equipment 3.9 7.3 6.3 11 13 2

Other 5.1 1.1 2.0 11 2 -

Total 9.4 3.0 4.18 407 259 41

Source: Unpublished data, Bureau of Statistics.

- 98 -

TABLE A1.12

COMPARISON OF INDUSTRIAL STRUCTURES OF TANZANIAAND GTHER SELECTED DEVELOPING COUNTRIES I/

I1 -4Country (Year) Distribution of Manufacturing Value Added (Percent)

- 4 v 4 4-

Food, Textiles, Machinery,Beverages, Clothing Transport, Chemicals 4/ OtherTobacco 2/ Footwear 3/ Equipment Mfg.

Tanzania (19e.") 35 19 9 12 25Ethiopia (1981) 27 27 - 2 44Mali (1981) 30 53 5 1 11Malawi (1981) 54 10 - - 36

Uganda (1981) 54 25 - j - 21Kenya (1982) 26 10 31 8 25Zambia (1982) 16 24 10 12 38Zimbabwe (1982) 21 19 10 11 39

Nigeria (1981) 33 18 12 11 26Bangladesh (1981) 30 37 4 17 12India (1982) 15 16 20 14 35Pakistan (1981) 46 14 7 16 17

Indonesia (1982) 29 7 7 12 45Philippines (1982) 39 13 9. 9 30Malaysia (1982) 20 7 22 5 46Korea, Repub. of (1982) 15 22 20 11 46

Singapore (1982) 5 3 53 5 34Brazil (1982) 15 10 23 13 39Mexico (1981) 19 8 20 12 41

1/ Tanzania distribution is only for medium-large establishments.2t Labelled 'Food and Agriculture' in WDR, includes beverages and tobacco.3/ Labelled 'Textiles and Clothing' indWDiR, includes leather and leather

products.4/ The WDR defines chemicals to exclude petroleum refining, so this has been

excliuded for Tanzania.

Source: Tanzania data from Economic Survey, other countries from WorldDevelopment Report, 1985, Table 7.

TABLE A2.1: EMPL0YMwNT IN LAR6E SCALE mwnUFACTURNGl/

1965 1969 1973 1977 1981 1982 1983

GRAND TOTAL 28,054 43,402 63.355 84,175 104,873 101,320 103,346

CONSUMER GOODS 19,016 30,978 43,591 53,648 65,784 63,968 65,251

Food & Food Products 9,407 11,870 16,142 20,955 21.901 25,306 25,813Beverages 387 640 1,611 2,096 3.050 2,999 3,059Tobacco 1,097 2,174 3,789 5,298 3,434 3,190 3,256Textiles 7,042 14,573 17,379 17,230 33,212 ).32,473 )33,123Apparel 1,083 1,721 4,670 8,069 4,187 ) )

INTERMEDIATE COODS 8,095 10,230 16,099 22,817 31,125 29,594 30,184

Tanneries & Leather Products 242 79 455 897 5,164 5,038 5,138Wood & Wood Products 3,886 4,026 3,825 5,378 5,422 5,489 5,598Paper & Paper Products ) 806 1%12 851 1,478 1,668 ) 4,212 ) 4,297Printing & Publishing ) 1,184 1,625 1,919 2,589 ) )Industrial Chemicals, Petroleum ) ) ) ) ) ) )Products, Pharmaceuticals and ) 708 ) 1,546 ) 2,852 ) 4,640 ) 6,072 ) 6,056 ) 6,177Fertilizer ) ) ) ) ) ) )

Rubber Products 102 133 1,056 1,492 *,368 1,341 1,367Plastic Products - - 458 839 770 693 707Glass Products & Building Material 428 1,770 2,362 2,456 3,714 2,732 2,786Iron & Steel ) 1,923 ) 1,350 610 779 1,336 ) 4.033 ) 4,114Metal Products ) ) ) )

CAPITAL GOODS -- .555 1.365 2,884 3,888 7,124 6,918 7,05

Machinery 415 563 1,428 1,794 2,213 2,188 2,231Transport Equipment 140 802 1,456 2,094 4,911 4,730 4,824

OTRER MANUFACTURING 388 829 781 3,822 840 840 858

Source: Ministry of Finance and Planning, Survey of Industries, 1965, Survey of Industrial Production, varlous years.and Economlc Survey, 1984.

1/ Firms with 10 or more employees.

- 100 -

TABLE A2 . 2

STRUCTURE OF M?LOYIENT IN LARGE SCALE MANUFACTURING(percent)

Employment_ 1965 1973 1977 1983

Grand Total 100 100 100 100

Consumer Goods 68 69 64 63

Food and Food Products 34 25 25 25

Beverages 1 3 3 3Tobacco 4 6 6 3Textiles 25 28 20 32

Apparel 4 7 10

Intermediate Goods 29 i25 26 29

Tanneries & Leather Products 1 1 1 5Wood & Wood Products 14 6 7 5Paper & Paper Products 3 2 2 4.Printing & Publishing 3 3Rubber Products - 2 2 1Industrial Chemicals, Petroleum Products,

Pharmaceuticals and Fertilizer 3 5 6 6Plastic Products - 1 1 1Glass Products & Building Material 1 4 3 3Iron & Steel 7 1 1 4Metal Products

Capital Goods 2 4 5 7

Machinery 2 2 2 2Transport Equipment - 2 3 5

Other Manufacturing 1 25 1

Source: Appendix Table

TABLE A2'.3 EMPLOYMENT, VALUE ADDED AND LABOR COSTSIN MANUFACTURING ENTEPRISES 1/

(1976 prices)_/

1976 1977 1978 1979 1980 1981 1982 1983

Value Added (TSh m) 2096 2230 1815 2368 1689 1183 1089 992

Labor Cost (TSh m) 776 754 644 803 663 403 420 378

Labor Cost as a Xof Value Added 37.0 33.8 35.5 33.9 39.3 34.1 -38.6 38.1

Employment (000's) 78.1 84.2 96.4 105.8 102.3 101.3 101.3 103.3

Value Added/Worker (000's) 26.8 26.5 18.8 22.4 16.5 11.7 10.8 9.6 -(Index) (100) (99) (70) (84) (62) (44) (40) (36)

Labor Cost/Worker (000's) 9.9 9.0 6.7 7.6 6.5 4.0 4.2 3.7(Index) (100) (91) (67) (75) (65) (40) (42) (37)

I/ Establishments with 10 or more employees.

2/ Data from Tanzania: Country Economic Memorandum, World Bonk for 1976 to 1981 were converted from1966 to 1976 constant prices by factors developed from a Manufacturing GDP series in Mr. B. P. Mramba'sMinister of Industries, Budget Speeches 1984/85 and 1985/86.

Source: Economic Surveys, Bureau of Statistics.

- 102 -

TABLE A2.4 VALUE ADDED PER E4PLOYEE IN LARGE SCALE MANUFACTURING /(T. Shs millions at constant 1976 prices) 2

1977 1981 1982 1983

ORAND TOTAL 22.4 12.8 10.8 9.6

CONSUMER GOODS 19.3 9.6 8.5 7.6

Food & Food Products 22.5 10.2 9.2 8.2Beverages 30.3 14.4 37.5 34.0Tobacco 16.9 12.1 10.9 9.7Textiles 16., 8.7 ) 5.0 ) 4.5Apparel 15.6 7.8 ) )

INTERMEDIATE GOODS 29.8 19.7 14.8 13.2

Tanneries & Leather Products 30.3 7.8 9.7 8.6Wood & Wood Products 10.7 10.8 6.2 5.5Paper & Paper Products 22.9 16.0 )14.3 )12.7Printing & Publishing 30.1 19.7 ) )Industrial Chemicals, Petroleum ) ) ) )

Products, Pharmaceuticals and )51.1 )20.9 )22.8 )20.3Fertilizer ) ) ) )

Rubber Products 64.3 89.1 24.1 21.4Plastic Products 31.4 26.8 22.5 20.1Glass Products & Building Material 8.6 14.0 17.2 15.3Iron & Steel )157.6 )86.7 )15.4 )13.8Metal Products ) ) ) )

CAPITAL GOODS 31.5 12.6 14.6 13.0

Machinery 33.5 11.1 12.7 11.3Transport Equipment 29.8 13.3 15.5 13.9

OTRER MANUYACTURING 1 12.49- 8.6

Source: Ministry of Finance and Planning, Surey of Industries, 1965,Survey of Industrial Production, various years and Econecl Survey_1984.

1/ Firms with 10 or more employees.T/ Current price figures were adjusted to constant prices with an index developed from a

manufacturing GDP current & constant price series in the 1985/1986 Budget Speech byB. P. Mramba, Minister of Industries, page 28.

- 103 -

TABLE A2.5

WAGE AND SALARY STRUCTtRE IN MEDIUM AND LARGE MANUFACTURING INDUSTRY(1981)

Operativea Non-Operatives TotalLabor Payments (average p.a. I i

Total Payments (TSh '000) 8.4 22.0 11.6

Public Sector (TSh '000) 18.2 20.3 |11.4

Private Sector (TSh '000) 8.8 27.7 12.0

Small BEtablishments (TSh '000) 1(10-49 employees) 9.7 19.9 11.4

Medium Establishments (TSh '000)(50-499 employees) 8.4 23.2 11.8

Large Establishments (TSh '000)(500 or more employees) 8.2 21.4 11.4

Numbers Employed ('000)

Total Nos. Emaloyed (%) 80.4 (76.7) 24.5 (23.3) 104.9 (100)

Public Sector (%) j 52.2 (73.7) 18.6 (26.3) 70.9 (100)

Private Sector (X) 28.1 (82.8) 5.9 (17.2) 34.0 (100)

Small Establishments (2) 7.7 (82.8 1.6 (17.2) 9.3 (100)

Medium Establishments (2) 32.5 (76.6) 10.0 (23.4) 42.5 (100)

Large Establishments (1) I 40.2 (75.7) 12.9 (24.3) 53.1 (100)

Source: Unpublished data, Bureau of Statistics.

TABLE A2 .6 vACI sUic TY AM M BY = Msu , 1981,MO) CCPARM WMI , 190.

Taluda Keya Tawzeada lmaTotal Rak Total Rak Merg Ran Average Ratk

wituxtwW V^1* Value Added Wge WaPer Employee Per Employee

_US $? (IS) (US $) (Us $)rkaue hlo

1. FOad & FooPrcSs 3,090 15 5,779 8 1,183 14 2,147 132. B8ge 4,357 9 11,214 3 1,941 5 3,356 63. Toacc 3,663 12 16,364 1 1,079 18 6,149 14. Textel 2,626 16 2,92 17 1,160 15 1,9 175. Appmrl 2,347 18 2,756 16 1,133 17 1,544 16 otemdiae CAMd

6. Tmdes & leather Products 2,356 17 4,857 12 1,689 10 1,817 157. Wod& Wood PreduEts 3,Z20 14 2,006 18 1,158 16 1,169 188. Fpqer & Paper PFoducts 4,813 17 8,778 6 1,800 8 3,238 79. Ft1ltig 6& ftbledn 5,943 6 5,324 11 1,891 6 3,480 310. T. O.enr, Pet. Prod., Ptar., Fertil. 6,317 5 9,969 4 2,110 3 3,955 2II. uAber Products 26,900 1 9,370 5 1,648 11 3,377 512. Plastic Products 8,064 3 5,566 9 1,833 7 2,132 1413. sG Piod. & Buildirg Materdals 4,214 9 4,162 15 1,312 13 2,673 1114. Irn & Steel 9,111 2 6,002 7 1,954 4 2,737 101S.Iotal Prioucts 79543 4 4,581 14 2,281 2 2,883 8

Cotal Gomls16. VIsdbmy 3,338 13 13,195 2 z,322 1 3,4D7 417. Tauspomgt Equlpmnit 4,004 10 5,443 10 1,550 12 2,80D 918. Ottr Mamfeaturlig 3,753 11 4,733 13 1,745 9 2,244 12iia*uted Auwerae -) 3,871 5,425 1,399 2,302ERm Cotrelatim CofficLectsEbUimn Tarzaia and Kanya -) 0.37 -) 046

TABLE A2.7 FACTOR INTENSITY BY SIZE OF ENTERPRISE (1981)

('000 TSb)

Smell -Estabi lslments (10-49 pIovees) Medium and Large Establishments (50 + plovaes)

Total ttag tNn-wage Total Wage Nn-Wage

Seot Value-Added Rank Value-Added Rank Value-Added Rank Value-Added Rank Value-Added Rank Valu&-Addad Rank

per Employee pr Employee P Employee per Employee pe Employee per Employee

GDS- _,FO. & FD Produets 29 9 9 15 20 9 25 13 10 14 Is 12

Beveages 69 3 17 2 52 3 35 8 16 5 19 1t

lo cco 0 18 0 18 0 16 30 11 9 18 21 9

TextI Se 19 IS 9 14 10 15 22 15 10 15 12 13

pprel 24 12 It 12 13 12 18 17 9 17 9 15

INTEREDOSATE GO6OSTan ies A Leather Prod. 29 10 12 10 17 11 19 16 14 9 5 18

Wood & tod Products 39 7 10 13 29 6 17 16 to 16 8 17

PWer & Pap Products 24 i1 6 16 17 10 40 7 15 8 25 7

frIntIg& Publishing 42 6 15 5 26 8 53 5 16 6 37 5

led. Chao,, Petrol. Prod., .

Pharm. and Fertilizer 74 2 15 6 59 2 50 6 18 3 32 6

Rubber Products 1,926 1 12 9 1,914 1 72 2 14 10 59 2

Plastic Products 17 16 18 1 (1) 18 68 4 15 7 53 3

Glass fod. Bldg. Ht. 38 8 11 11 26 2 35 9 11 13 24 8

Iro ttoel 0 17 0 17 0 17 75 1 16 4 59 1

Motel ProdUCts 44 5 14 7 31 5 68 3 20 1 48 4

CAPITAL GOODSMchiney 26 1 1 15 4 1 1 13 28 12 20 2 8 16

Transport Equipment 23 14 13 a to 14 34 10 13 12 21 to

Othe mntuactuing 50 4 17 3 33 4 23 14 14 11 10 14

Total 60 11 48 29 12 18

Sour.. I 0Mpblished date, Bureau of Statistics*

TABLE A2.8 FACTIOT VAhIN AWn MD FJPUXWNN 3? A?VtlFnR qla AMS 1RIq

Pwrr.nwntap.0 iibt be Pereet agt* e mt #3 .tWte Pescwig OttriU.tla Wtt.m 90t vte

of tuplov._t of Wsite AdAed of ployspo Value f

ISICt1049 iftwev 30-49 3049 1I 1w .

Cole Aett vitv 7wwplpovea L Cqplo .tav Rqetoroe Eq'tOYeeg 1tem 9NtIinS owls""

394 Faod Prodrnrto goverasten. 1nh.n , IS.42 27.n2 -_I 24.4t 2n.92 20.2n t0." 2S.42

320 tvx(t#q, Clt<Rtvwt tostl - v,

FPootwear 21.tlL 42.4t 37.92 29.52 17.52 42.2 4.92 .t

11tl bood Producti. FuNrtture. Piqt,r. S.AS 1.,hit 22.42 1.42 26.02 3.22 7." 12 _.I

310 Paet, Pritttnit tnd Pholseseg 4.bS 3.72 I.S2 0.32 9.3S 3.0? c.2 S.92

34) Cheetcaat, RebbPr nod Pln.tfr t.s2 i.s 14.6S I.11- 8.2t ?.at 5 *6.

3ht) Pottery. Catus and Clay s.n 2.82 2.92 3.42 t.42 3.72 *.2 4.2

370 tron and Stel, onn-Perroa-o fet*l. - 1.62 _ R.22 - 3.42 -

390 Metal Product*e. Mshinwry andtrennpert uattpuent 7.32 In.12 12.7t Z1.4 13.52 9.32 1. 13.12

190 Other lndwerteta 1.It l .tt 4.2X 1.st 2.7n 0.02 2.22 0.S2

tOTAL VW9.n) I'm.02 te. 100.0o or'/, th t.t7'4 tee

Souroet tndoOtrtat Ceomma 1971 ant S%rvey of tndu.triat ProActton 19111, Ouream of St*tiatlcs.

11 ITi. to a -ewustivl newool r for the fod lnetwetrv (probably a wa.u enrt "vor).

It T%th IOclud. as ebanreal htph. prohObly erroneou. neuwr tfr 1SC )S0.

TABLiS A2.9 CASATtS NAU 4 091 1t8m Ns ALV0C1181 ISAntsI 183 tol me a

4q.5b. tilla ti Cewst left ftcvS)!1 II (T.3. C1ma.S 1W54 Dhm)5873 840 _9581 O

~~~~~*evt £.pl.p. ,qtam 1,,lu. E, . .. ,,m,

we sf P . eer . 1_c tl..O)t ss.6 24.1 s 26. I6 .20) -n, 4,400 1.In' , ,Cl hsm. e betr.

___ .*9 s.a 1S.2 34.? 4.3 3.049 5.a2o 40,9 56.WI 3. 9. O*olto _ m P we. qS5 .. va4 *.3.? 20.? 1. 2.456 3.0151 6.340 9*30 oS,44 0.8,'50 tPp. PtahliS83 a" PaOSebra4 23.1 IA1.4 14.J 03.3 932 3,32S 043 3.39 34.60 3328) 96,99 50.o .SW ,rn5e. _km n.i P5mt_tl 29.0 243.9 5g)4.43/ tos.2 wSS o.?a 10* 1,44J 39,10 3s.90 S31.053 23.3

StW Vry. Gln 390 Clap S.8 M0. 2.0 9.3 I .IS . 3.S9 aSl 3.343 1.010 *8,840 1,200 a3an tem .. fltel. o-ftu ftll - £7.3 40.3 1. 1.336 - 534.--. - 30.5 0101111 a t-l Ir s.. mummery n

r_t 14d_,n 3. 7 2U".4 56.14 14.1 a,32i 9.235 1.251 *."9 1a.23 . 40.o9 * . a"SM0 fibe Sei.es 6.% J5.4 4.9 S .s 0 21 I*.IU 24? "9 S 1.40. 31.400 15.840 9.1J

SWtA- zua.T- ,o*.S H1.4 5.12.4 20,41 "9.01 9.32p 931.91 11,3337 Z.3 U1' 3

%MM% tt1Ere5Ge Cm.. S1O NW Serp Of lig4ggiaS Pru4etIet *81AI1 rea. Of Statatitto.a t c.meat ".t. l5d. dwe5.p.d Sum a m r inotesr Urnob'.* 60S340, Ow".1t sp.eb. Table No. 2*.Ii Uea. . to ps0b8w * me a_1u etrer.IfH- tOtV Valu _r0.4 ink. er I-N C 1S, is cerlw ltacerrert.7 lbS. On. k- _ .eaIaIed Mattoon isle 3343w.v tot. on. km ebo .esaed msls 5.4 StC $10.

TABLE,A2.10 : LABOR PROOUCTIVITY. CAPITAL INTENSITY,

LABOR COSTS BY OWNERSHIP (1981)(TSh *000)

Non-Wage Value Added/

Sector Value-Added/Employee Labor Costs/Employee F"xed Capital/Employee Employee

Public Private Total Public Private Total Public PrIvate Total Public Private Total

Food 25.1 26.5 25.6 9.7 10.1 9.8 50,7 34.2 47.9 15.4 72.7 25.1

'averago 24.1 92.7 36.1 16.7 13.2 16.1 44.4 181.1 68.3 7.4 79.5 20.0

Tobwcco 30.3 - 30.3 8.9 - 8.9 34.5 - 34.5 21.4 - 21.4

Text les 17.2 38.2 21.7 9.7 9.2 9.6 14.2 65.6 25.3 7.5 29.0 12.1

Apparel 11.0 22.0 19.4 6.6 10.2 9.4 8.3 52.8 42.5 4.4 1.8 10.0

Leather 18.4 23.8 19.5 14.9 10.5 14.0 116.2 19.6 95.5 3.5 13.3 5.5

Itod 16.2 34.2 26.9 9.6 9.6 9.6 31.7 19.2 24.2 6.6 24.6 17.3

Pat 38.7 46.1 39.9 t5.8 10.1 14.9 70.8 103.9 75.9 22.9 36.0 25.0

Printing 65.0 39.2 49.2 16.3 15.3 15.7 41.0 32.9 36.0 48.7 23.9 33.5 _

Chemicals 41.6 57.. 52.3 23.9 14.6 17.5 111.0 40.8 62.7 17.7 42.6 34.8

Rubber 74.9 727. 222.8 13,4 14.5 13.6 neg. 51.6 neg. 61.5 7t3.21/ 209.2

Plastics 71.7 63.5 66.8 14.3 15.8 15.2 62.2 90.9 79.5 57.4 47.7 51.6

China, Glass 9.5 29.1 23.7 8.3 12.5 9.2 23.9 168.1 127.9 1.2 16.6 14.5

Clamnt 50.1 20.4 40.5 12.1 7.9 10.7 155.7 6.5 107.7 38.0 12.5 29.8

Iron, Steel 75.4 - 75.4 20.7 - 20.7 160.0 - 160.0 54.7 - 54.7

metal Products 79.7 51.9 62.5 20.9 17.6 18.9 15.8 83.5 57.5 58.8 34.3 43.6

Mm.-Electric Machinery 22.0 25.2 23.3 16.5 14.2 13.3 49.0 72.5 58.6 5.5 11.0 10.0

Electric Machinery 95.9 27.5 32.2 24.6 23.0 23.1 568.9 53.5 88.7 71.3 4.5 9.1

Transport Equipment 17.2 42.5 33.2 12.2 13.2 12.8 105.1 27.0 55.9 5.0 29.3 20.4

Other 25.4 45.6 31.1 13.6 16.7 14.5 138.6 49.8 113.6 11.8 28.9 16.6

Total 26.1 44.5 32.1 11.4 12.0 11.6 43.8 50.4 45.9 14.7 32.5 20.5

I/ Those value-addsd figures seem to be wrong, but the error Is contained In the primary sources.

Source: U lpublished date, Burea of Statistics.

TABLE A3.1 EXPORTS OF MANUFACTURES(US$ udllions)

1965 1970 1975 1980 1981 1982 1983 1984

Food Products 8.9 8.1 11.1 16.9 17.7 7.7 13.7 2.0

.-Beverages and Tobacco 1.4 6.3 11.9 15.5 21.1 21.4 14.5 9.7

Petroleum Products, Dyesand Paints, Processed Oilsand Other Chemicals 4.9 21.7 25.4 33.9 23.3 20.3 17.4 21.3

Textlle Yarn and Fabrics 0.9 3.7 12.2 30.9 13.6 13.4 11.1 12.9Sisal Fabrics 0.9 3.7 11.9 28.1 10.9 12.9 8.3 9.3

Other Processed Mineralsand Materials 0.6 1.3 0.7 6.1 3.1 5.1 5.1 3.7

Machinery and TransportEquipment - - 2.9 3.5 3.4 2.6 2.2

Miscellaneous Manufactures 0.5 0.5 0.7 17.2 4.8 3.1 3.5 4.2

T 0 T A L 18.1 45.3 73.9 151.5 98.0 87.3 76.2 65.3 - -

Source: Annual Trade Reports, sureau of Statistices.

Table A3.2 Import Substitution in Manufacturing 1961-1983

1961 1971 1973 1978 1981 1982 1983 1984+Total Manufacturlua

Mbaufactured Iqportsa/ (TSh million) 917 2,375 3,163 6,953 6,406 6,837 6,555* 8,136Domestic Production TTSb million) 564 2 013 3 025 7 070 9 395 11 038 11 365 11 662Total Supply (T8h million) 1,481 6,8 16,023 15.81 17,875 17,20 '9,79Domestic Production/Total Supply (X) 38.1 45.9 48.9 50.4 59.5 61.8 63.4 58.9

Consumer Goods

Manufactured Imports (TSh million) 410 424 685 1,765 1,310 1,708 1,898* N/ADomestic Production (TSh *lllion) 410 1 311 1 7S 3,544 4,675 6,17? 6,355 R/ATotal *upply (TSh million) 0 1,7 5,309 5,985 7,683 6,2S3 N/ADomestic Production/Total Supply (%) 50.0 75.6 72.2 66.8 78.1 78.3 77.0 N/A

Intermediate Goods

Manufactured Imports (Tgh million) 329 1,067 1,485 980* 830 1,106 1,205* I/ADomestic Production (TSh million) 114 544 980 3 243 3.S23 3,630 N/ATotal Supply (TSb illion) UT3 T,61 2,6 3,530 4,073 4i 1 f 1/ADomestic Production/Total Supply (S) 25.7 33.8 39.8 72.2 79.6 76.1 75.1 1/A

Capital Goodsi

Manifactured Imports (TSb milllon) 189 868 993 3,843 3,941 3.752 3,177* J/ADonrotic Production (TSh imllion) 37 157 271 812 1 149 1 226 1 263 I /ATotal Supply (TSh million) 1.025 1,6I. iI3.3 5w N/ADomestlc Productlon/Total Supply (1) 16.4 15.3 21.4 17.4 22.5 24.6 28.4 N/A

Miscellaneous Manufacturing

Manufactured Imports (TSh million) N/A N/A N/A 365 325 271 275 N/ADometic Production (TSb million) N/A N/A t/A 164 328 114 117 N/ATotal Supply (TSh milUon) N/A N/A 11/A 3 653 I 392 /ADomestic Production/Total Supply (2) N/A N/A l/A 31.0 50.2 29.6 29.9 N/A

pltd4 Goods 1!zplz/Total___uf_t_rir_u Sip_ly 16.6 25.6 21.6 33.2 32.2 27.9 24.8 N/A

a/ Includes transport equipomnt and excludes oll productsEstimate

+ Preliminary

Soureas Trade Statistics of TameariaMinistry of Industry, Budget Speeches 1984/85 ad 1985/86

eonomic Surveys 1981, 1962, 1983 and 1984Taasaia: Basic 9Economic Report No. 1616-TA, World ank, December 1977VEwld Eah Ustli_ tes

TABLE A3.3

ImPOrt Substitution Export Pfomotion, and Domestic Production in Tanzanian Industry(in current TSh milllon)

1961 1971 1973 1978 19b1 1982 1983 1984

Values In TSh Million

Gross Productlon for Domestic Market 437 1,555 2,627 6,548 8,582 10,227 10,519 10,664Production for Exports 121 458 398 522 813 811 846 998Manufactured Imports 917 2 375 3 163 6 953 6 406 6 837 6 555 8 136Total Manufactured Supply TMW-.T8U 14023T 13~5:0 17:875 3 T7iTW- I9' 798Ratios --

Production for Domestic Market/Total Manufactured Supply 29.6 35.4 42.5 46.7 54.3 57.2 58.7, 53.9Production for Exports/TotalManufactured Supply 8.2 10.5 6.4 3.7 5.2 4.5 4.7 5.0Manufactured Impports/TotalManufactured Supply 62.2 54.1 51.1 49.6 40.5 38.3 36.6 41.1Total 100.0 101

Sources: Trade Statistics of TanzaniaMinistry of Industry, Budget Speeches 1984/85 and 1985/86Economic Surveys 1981, 1982, 1983 and 1984Tanxania: Basic Economic Report No. 1616-TA, World Bank, December 1977World Bank Estioates

TABLE A4.1: FIXED ASSETS ATr END-1979 AND

AND NET ADDITIONS IN 1979-80 AND 1980-81 BY OWNERShIP AND INDUSTRY(TSh million)

Fixed Assets at Net Additions Net Additionis Total Net Fixed CapitalEnd-1979 1979-80 1980-81 Employed 1981

SectorPublic Private Total Public Private Total Public Private Total Public Private Total

Food 990.3 109.1 1,099.4 (27.2) 5.9 (21.3) (40.8) 11.8 (29.0) 922.3 126.8 1,049.1Beverage 79.3 60.4 139.7 (1.7) 22.7 21.0 33.5 12.9 46.4 111.1 96.0 207.1Tobacco 62.7 - 62.7 43.7 - 43.7 12.0 - 12.1 118.4 - 118.4

Textiles 554.7 343.5 898.2 (80.6) 69.0 (11.b) (103.4) 58.3 (45.1) 370.7 470.8 841.5

Apparel 10.9 88.6 99.5 (1.4) 75.5 74.1 (1.4) 5.6 4.2 8.1 169.7 177.8Leather 177.2 17.8 195.0 3.6 0.6 4.2 113.1 3.3 116.4 471.7 21.7 493.4Wood 78.0 54.2 132.2 (3.0) 5.5 2.5 (5.5) 2.2 (3.3) 69.5 61.9 131.4Paper 114.8 14.9 129.7 (9.0) 12.9 3.9 (5.8) (1.2) (7.0) 100.0 26.6 126.6

Printing 27.8 48.5 76.3 6.9 3.0 9.9 6.4 0.7 7.1 41.1 52.2 93.3Chemicals 221.1 145.1 366.2 5.7 29.4 35.1 (16.5) (4.0) (20.5) 210.3 170.5 380.8Rubber 52.1 13.0 65.1 (47.2) 3.7 (43.5) (47.3) (0.7) (48.0) (42.4) 1b.0 (26.4)Plastics 21.5 45.4 66.9 (1.2) (5.1) (6.3) (1.2) 1.8 0.6 19.1 42.1 61.2

China, Glass, Pottery 7.0 31.2 38.2 (0.4) 41.8 41.4 (0.3) 41.8 41.5 6.3 114.8 121.1Cement 173.6 5.1 178.7 69.8 0.3 70.1 48.9 U.4 49.3 292.3 5.8 298.1Iron, Steel 163.3 - 163.3 15.1 15.1 35.4 - 35.4 213.8 - 213.8

Metal Products 19.9 92.0 111.9 (1.4) 46.1 44.7 (0.3) 17.5 17.2 18.2 155.6 173.8

Noa-Electric Machinery 32.7 17.2 49.9 (0.6) 8.4 7.8 0.6 7.8 8.4 32.7 33.4 66.1Electric Machinery 33.0 33.6 66.6 2.4 7.8 10.2 6.7 12.7 19.4 42.1 54.1 96.2Transport Equipment 80.9 54.0 134.9 55.1 15.9 71.0 54.9 13.7 68.6 190.9 83.6 274.5Other 84.3 9.8 94.1 (0.5) 1.3 0.8 (0.2) 0.7 0.5 83.6 11.8 95.4

Total 2,985.1 1,183.4 4,168.5 28.1 344.7 372.8 88.8 186.7 j 275.5 3,278.4 1,714.8 4,993.2

Source: Unpublished data, Bureau of Statistics.

TABLE A4.2

Gross and Net Rote of Return on Capital in Medium and Large Scale Manufacturing(I6 constant prices)

1966 1970 1973 1976 1978 1980 1981 1982 1983 1984

Value Added 590 970 1,218 2,811 3,127 2,288 1,804 1,482 .1.351 1.17.1Surplusa/ 320.6 564.8 682.8 1,105 1,138 993 839 668 540 N/ACapital Stockb/ 926 1,910 2,942 4,398 4,915 6,055 6,559 6,071* NJA NIlACross Rate of Retuxnc/ 34.6 29.6 - 23.2 25.1 23.2 16.4 12.8 11.0 l/A N/ANet Rate of Returnor 24.6 19.5 13.2 15.1 13.1 6.3 2.7 1.0 N/A N/ARIO Ratio 1.71 1.97 2.42 1.57 1.57 2.65 3.64 4.10 VJA N/A

a/ Value Added minus Labor CostsEI Capltal Stock estimated on the basis of yearly depreciatlon figures (uiltiplied by 10)c/ Surplus/CapitaldI Surplus minus Depreclatlon divided by CapitalW Prellinary

TABLE A4.3

SECTORAL ALLOCATION OF BUDGETARY APPROPRIATIONS TO INDUSTRY 1/(TSh million)

1984/85 1985/86Treasury Other (own Treasury Other (ownl

Sector (Holding funds and funds andParastatal) Local Foreign borrowing) Total Local Foreign borrowing) Total

Textiles (TEXCO) 66.6 77.04 188.4 332.4 40.0 87.0 727.6 854.6

Brewery (TBL) 40.5 _ _ 320.3 360.8 32.0 - 364.0 396.0

Tobacco (TCC) __ __ 68.4 68.4 _ _ - 164.7 164.7

Leather (TLAI) 6.5 22.0 8.1 36.6 15.5 23.2 22.4 61.1

Paper (TKAI) 2/ 55.4 275.3 80.5 411.2 8.0 63*4 160.0 231.4

Chemicals (NCI) 22.7 37.3 21.4 81.4 15.0 26.6. 39.0 80.6

Cement and Glass 54.0 67.4 24.0 145.4 35.0 26.6 - 61.6(Saruji) _077010283

Metals & Equipment 2.0 20.0 24.4 46.4 26.0 770 180.2 283.2(NDC) 2, I__ _ _ _ _ _ _ _ _ _ _

Automotive (SMC) 4.0 8.4 61.6 74.0 6.0 58.1 77.0 141.1

Small-Scale Indus. 20*4 73.6 _ _ 94.0 19.9 56.4 - 76.3(SIDO)_ .

TOTALS 272.1 581.4 797.1 1,650.6 197.4 418.3 1,734.9 j2,350.6

I/ Excluding total allocations of TSh 314.5 mn. in 1984-85 and TSh 262.1 an. in 1985-86 to trading andconsulting parastatals in industry.

2, The Kufindi Pulp and Paper project is nominally part of NDC, but has been included under the papersector here.

Source: Budget appropriations, various.

TABLE A4.4

STATUiS Ot' INtSTIIAI. PAtAfSTATASi' INV*.'TNl-T PRICKAHS(ISh N. a. £ *), I-

TOtAL. PXA IKAN I11 ATA rAl. NETUIMS TO tOVEISSEN lT (MWt SvaT)

EST1T*It9ll I Sr: IttNit.*:a~tA AlWCsAltes 'O xrtiiAA sa*.irr VY ALLiuO&iltOS . .(SRCTum) PRoJEcT .U (o IF.: r BY _ I'InFb .:EI: ) 1 a.Emwrmtfl.ll

1984-tl5 196%-46 Cu'sr 1981-84 19N4-tlS 11985-86 19tl4-8S STATUS oF PROJECCT (6 SOtiWl2S us Vilr.) IflEID "IK-Ye TeXtIk4l "oil 14.0 3tn41.l' 790 0*Al.0 _26.t) '4.1 R7.7 Project tis 90 completed. *h0%ld be commissioned we_..

(Teat tee) _ . .

IWtorgore I%d1 oter 1ibl.4 110.0 911.9%a 9. 9) 1 It.. 7 7O.2 74.$ Project taM completed

teutiIv "ilI (World Bank loan*) (Other loans) _-

lionso Spinning *UII 9.It nil n.m. n.a. n.m. n.-. 16.01 In operation.

Tabora Spinning "ItilI 1I. nil n.m. n.M. n.m. n.e. 21.2 To be commisoonewd by end-I9S$.

Iororeoe Sisal Saa 12.4 1°1-. 5 n.m. nt.. n.m. n.M. nil balidintgs ready but Italian contrawtors meat benakvpt.work suspendedt *Inc 19Bl.

Textile Training -- S).l) n.m. n.e. nm. n.m 0.1 lb progress aftcr feasibility studios due to d1fftleu- t

Noeauarr Inotitute ty tn raising funds.

Sewing lbread 2S.O 29.0 n.m. n.m. n. n. .m. 2.S project atagnant for I years d_e to ath" og foreign

project enebnnge foer eqipment purhases. Im 1#90' e_Imporet started. Project half -p .

Ibruy Towel Project 2h.2 29.S n.e. n.m. n. n.m. nil Project nearly balf completed but irefAn because otloreign, erchanew shortage.

Rlib Fabric Project -- 71.0 n.m. n.m. n.o. n.m. nil *ew project. no work launC6ed due to #00etga exchange

shtortge .

tILTEX Lapmaston and 50.5 21.( 11.t1 4t.S 1.0 96.9 n.m0. ID mention. apparently sot launched.

lendern ait IonI

lIATEXE Rehab. 10.0 26.O n.m. n.m. n.m . n.m. n.=. (E-Iti loan)

TSCL P&hbtiltation 22.4 2.5 n.s. n.a. n.m. n.m. n. n.m. (Italian grant)

Shuttle Wgs. rtelect 2-.0 1.0 n.m. n.a. n.m. n.m. n.. . .m.

other 1.0 2. l et. t 1. 4.0 1..0 n.m. n.a.

TOTALS 132.2 5%4.6 2. 11S 1,54 I .t0 IS'.2 1t. 1 217.0

TABLE A4.4

STATUS llF tINWSTUitAI. PASASTATALS I fWSTVOIFT PUOtCRAS(T%h 1h.) poll 2 of S

TUTAt. . Ct. LJO#3I:tNT PARASTATAL. RFUIINS It CoUa T (1b SUiT)aIVJt.IISE BUINX.TARY AI.11ICATIlNS TrtAL SOWNT F'X. 110TINKFS

(SWCtIR) WO.ICT PROJECt my (rleu.tFCTf.O) E VXWIOf IRE19114-85 Il9tS-II CoSt. 1981-114 19N4-4S 19RS-Hbh 19H4-85 STATUS OF PROJbCT (AM1 SOUtCES oF or ViC£) 1/

iii o us Sal 411.9 I9.3 418.# 2 i. to ).F i4. 13.S I JItcaI .onetrurtlon started. bet still nalgitatiAu(k 2euan) Or&wt Er PMtiP tfo-.elin funds for now "elpmeot.

Arua SGrew ry S5S. ".1I 111.) 1i7.t. n 1.sn 54. t16.9 Au pr.e.vios projcrt.lb bAbt illtat

"mass ortiry 2111.9 135.1 1,75h.0 to .h 0.0 40.0 ntl Now pro)e., ttill on paper becaue forel,gn fnd-s a"tarranged.

loehi NXeting Pleet 4.1 __ n.e n.e. n.m. n.m. 40.- I lork In hend.R&bobl It gott lo

Ibrbrev geRab. 7.4 94. a n.m. n.m. n.m. n. ntl StJ.1l prepariaN droutago and toaders.

atebores II.7 21.8 641.t 117. t 49.9 S9.1 -

TUALS Jtl- a 1%. it 1, 1St.( tt h7. h A4. 9 231.2 190.5

tCC Vortious Rl-babh. and 41.4 164.7 n.m. n.m. n.o. n.m. n.e. n.e.(Tobacco) Civil Works only

TIA I terooroe effilnt 7.t 30.4) n.mt. n.t. P.M. A.M. n.m. n.&. Most cnnstructlon wrk now-aring ruep8ton. (tortd(Leatbher) Treatment Plant Bank loan)

Ibratura leather 5.6 7.6). n.m. n.r. n.m. n.-. n.&. Civil work. halt completed.lord

Tamatn.l Indetrial tS..o h.tl n.m. n.m1.. P.Q. n.M. n.o. hsahtnetr partly Inwtalled. tealtg not started. inogoots Company training no for. (Italian lon})

Iteraoro Canvas "Il8l -- MI. n.m. n.m. n.m. n.u. n.o. Project In operation. (EEC graet)

ather 9.0 -- n.m. n.m. n.t. n.m. n.e.

TOTALS 16.6 6b.3 n.tm. n.m. n.e. n.m0. n...

TABLE A4.4STAtUS OF INNItSTRIAI. PARASTATAJS' VINYV'SThIIT PlN=A AS

(TSh PSi.) I of

TOTAL 4t:. 1NtlOtllr __ PAIASTATA. swn*TS To GoUVtUSUT (AMOI 8GlltT)IU FttiS1. E3WXTANtY AtMCATIMS nOTAI. Sli.Nr tXitUnt.

(SECT"S) WFJCT - tt) Ul(T ay (rl.lIF .TEI! t EXPEI l t:t*1984-85 19865-86 CtST I9N1-84 114-SS% t9N15-#h 19#4-68 STATUS OF PBlJZCT (AD SOUtCES (W FINA1C) I/

hAI tissue Paper rroj,rt 19.4? 73.O) 0..1. n.. n.a. a.m. n.0. n.a.(Paper) _ _ _ _

Gaes Workahop 6.5 .8 n... n.m. n.m. flC 0.*. n.n.

Type Setttng 2. u 32.2 n.M. .m. tI.M. ".n. n.a. n.a.

frIntpa Kebab. h.t1 .t n.-. n.M. n.o. no- n.&. n.--_

Meht' I Print libab. S. _ 50 a.m. n.n. n.-. n_M. n.n. n-.-a .

l 2indt Paper IllI 326.9 63.4 *,5t).t n.m. 2Nt.0 tS.1 n.e. Strting operation. In 19615-S. (wrld sa'k. tztothe r ds>norc )

Q.ber 21.6 46.0 n.m. n.m. n.o. n.e. n.a. n.n.

TOTALS 411.2 211.4 1. Vn). t) n.*. 2596.0 I5S.I n.e.

NCI Slphuric Acid Plant 5.0 5.0 lIS.n 0.0 5.0 46.0 n.a. Site prerperation anly-tnsr,rtmio not yet starced.(4iumlcebu) Foreign financing not arranged.

feticld*oIimo.cti- 17.7 la.O) 2S6.7 19S.0 $I.0 30.0 n.a. Contracts conpleted; ewlp.at tebricatlon stertixg.class Plant Civil conetruction to boud. (loon tfro ttely)

&WIaOannda uIntre- 14.0 0.a n.1. n_.. #$.Q. n.m. n.m. n.a. Presumed opetotieal. (Sodltb end 1 nlsUiwuout tzFId4 Plant grent)

Pharmaceutical Plant 3.5 2.7 n.m. n.o. n.m. n.m. n.m. n.e. Preesmed opetotenal. (gront tee Finlad)

Caustic Soda 1.0 3.3) n.m. n.m. n.m. U.n. n.e. n.m.

Eltbera 20.2 35. I W.2 25.5 53-.7 98.? n.m. n.-.

TOTALS 61.4 6.6 1,3159.9 220.5 814.7 174.7

Sarujg Aru"e Tiles end 1V1. 25.0 1 9. a 6.0 10.1 1303.6 O.. Ttle faetory still et ds5gm etae. rick factory(amngt 1 Arelu Brteik (11) p-rebeed used equipmnt bet cvil works mnt yet

Class) | started. (balgiatta Keen)

TABLE A4.4STAWtS OF INIANTIWI8Al. PAUASTATALS- t VEV%ENT PFMX(AMS

TttTAI. _ au,':tl*,N PARAs;rATAt. *EInwIas TO wUwROIT (*t14 S1INIGMtEITK.FK I .SF. MU.#TA4RY AUlJ)AATION t AIITlA. SKAI f*XliliTil.lw t.S _.

(%SgCTtt) "II.IECT RtRI:tILT BY (rKitll.l' r) iA"..t1 I nfrr.________________ 19844-i P h1915-#6 ClisT 19841-84 PI844-% I985-Nt. 1914-MS STATuts (or FRoircT (AhDisoMmces at Fa rlE)

Saruj I Natu, t:Clst. Works -- A).- .._. n.n. t. n.. n..n.t rlry a.b.dw;led for 1, stil8 etl .ndg e.moatrwrtlon.(Crtnt 6 Ftoreitn financtng of eqieml t still to be finalised.

M:ass)--- - . ----

CDnttIn"d "ftfj (nftt r A n_ 1.3.0 41.tu I1.In 41n.1 t 2. l2a (Frencnb loan)

sa.. ga Sl........ t *.l ess .a... h n. n __ n.me. n.m. n.a. n.-. n.m. n.-. Presumed operatlonal. (elgtiaan Ivoni)

NtrooKr. CA ra.iCS 2Z.l __ n.m. n.o. n.n. n.m. n.tm. n.m. Pretmed opetstional. ((trcthoalovakstm loan)

Oheret 2t4. 1 36.6 n.a. . "..n. n.m. n.m. n.m. Pe*sed operatinal.

TI)TALS 14S. 6 bl.6 n.m. 2#41. h n.m. n.o.

SW Captive Foundry. 2t.5 IV2.$ n.m. it... n.o. nU.. n.a. Still at tite preparation, detailed desitn stage.(3btal. 16 Nachin. Tool Final pralect docmerat not ready. trainlng not began. I.-Equtp mnt) complex No paywnrt _ade for aquipomt. (9migarlas loan)

Nasthn Farm - 141.4 516.n1 2)1.0 t.5 10.0 n.a. Oly alte prepared wo for. ltaited design not ready.Impl.e nt* Machinery not procured. (bIlgarian tno")

Iren and Steel Study 1.9 11.1 n.m. n.m. n.m. n.m. n.a. StartinXg eonatrtIrtiion of bomtalrt. WViI pro.pew* for_ Iron ore deposits. Held back dim to lack ot ftnda.

(local)

ting'uIA Comptex - A.t) n.m.m. n.e. a.a. work stopped bhenuo no finde allocated in late

OIatrs rI.0 n n.m. o ... n.m. n.m. n.e .

TOTALS 46.4 2n 1. 2 Slh.t 2tl.Z 1 t. t S 101.0 n.e .

SIC iandrover h.condi- i1.3 12.11 n.n- n.o. n.m. n.1. n.m. Plant to bh completed 1984-S. Intdoed ma fleet(Aiame- tioning Plant stdge of Londsover amenbly opetgiton when tfnda aretive) avallable. (tInited Kingdom loam)

TABLE A4.4stAnhs OF INtSTrRit. PARAV%rTAYAS ' litWSTtlsET iaatANS

(rsh tl t.a * ot S

TtTAI. C_t: 1XtItwflT PARASTArA5I RMIRTUS 1T CO MAEReshtT (ANI. *UIX;F.T)FJVtEACRi%l UEII TANtY AU41.IICATIlMS TrAl. SVtNI F 'riENtaI n0ftlS Fs

(StCTUa) FRitt ICT I'ltU.Cr aY (01iUnCKtE1U) I XlN I )I rt1#t,__ __4-_a- I9SA-#b _t,ST 19N 1-#4 l9t4-RS _ t,-K _#.-f-N5 SIAT S Dc PRtJE-rtT (AND Utxt'Sc Ur VINAS) tl_

Sti; Vlatm Tractmona Itt.) Itl I.t .C M. n 14 t .4 4p S1tp t te assembly apecraton aI*&vt4 fot time- .tisg.j(ut _- Trators betint asubted sit Sv-nla truwk *sswObil

titv) plant. Seitpate plant to be set up rIen funds areCoat imwd ew.si #hio . (Ftnnti.h groat)

Irthtrs Is4.' I. __ n.. -__ ___

Tl)TALS 14.0 141.1 . itRU. 0 tl R. 4 A.R 6_

Subo Various Projecto 94.0 76.1 n.. ".M. a.. n.. nsg Various teet of coeptetion. IV-rlove forelign(SmO 1- sgrants)

lcalesry

Other _ __ 4653.1 21 Ill.( 83.8 182.2 __

rots. l. .6. b 2. u. f6 12,Rt." o 24t.t) 795.6 1.179.7 _i

It tUtue, of pTo)ert is tak,tn from parsestata returnsr antd re-ter to earty- or .id-1985* Wille sources of toretItt floance *re token tr_m th twdliut doremesta. The hbtuet only mentions toritgn fInance tied ts the proleet; forttgn esehange loana roeted ti,rotgh local financial Ias ttutions are not1iettifled separately. 6bhre no foretign suntrce Is r-t tionnd, the projett its nttrely lc-aliy financed, or has not yet found o forelgn sponsor or Ingettingt foreligt eXchangtie through a linanriAl Inst itttt.wn.

2/ lnCI, A coffte curing miit tnr a total tnvutt-nt of lt.%5 mi. atut Inspeci ted other tnvestment. ot 144.8 cn.

Symols: n.m. - Not wnttoned.n.a. - Wt available* but pt ne-t In i onttoned.

- 120 -

kpgl s 2D.9 u1111 (IM)ortiw *o3lt 0 U19 1a240 (19 WO) Table AS. 1

.ou bal t. htm (2

inea -T RI) Acral hjtb194 19%0 I-*1 1982 193 1984 1i5' 1ty lr

Emasdtumtic prata 4,494 0.6 -1.3 0.9 -0.4 2.5 2.5 30 8 4.0 4.0 4.0 4.04I&1dtm 2,417 2.8 ,2.3 2.6 1.1 2.6 3.5 4.5 4.4 4.2 6.0 LSbIAmy 462 -10.8 -13.8 -7.2 4.5 -11.5 -I10 2.0 'L0 10.0 .0 8.o 8oServim 1,615 3.3 .4 3.0 4 4.3 3.5 1.4 7 3.0 3.4 3.6 3.8

o2vumAimMjl 4,678 6.8 -. 0 0.7 1.6 6.1 7.2 9.6 3.7 3.. 2.3 3.3 2.4(amm latmat 718 -13.6 4.3 0.8 -17.2 4.8 9.0 -2.2 4.1 -2.9 4.0 4.0 4.0bprtsw g aus 473 0.6 18.7 -18.S -14.1 9.0 -19 4.3 12.3 12.1 11.7 3.5 9.4

psrt of WS 922 0.4 -7.9 -3.9 -21.8 S.9 1.2 20.0 2.6 0.9 0.8 0.1 01

G wtit sv*c 267 -29.0 34.3 9.9 -14.8 -9.6 -18.4 -40.0 -12.7 19.1 39.7 2Z.4 19.9

.mas,

_ ddla (1978 a 100) 130.9 154.7 185.4 183.2 10.0 191.7 249.2 299.0 343.6 395.0 42. 483.68 tot. (T.ii ps 13$) 8.2 8.3 9.3 11.1 15.3 17.5 35.0

S8r d CM' at is*at prim ) A hAuul E1 m'at X!M) (g t )

l11) 103 194 1965 1906 191 I-045 196-%!/

(Sm 1nust1c fto.bu~ ~/ 100.0 10 1000 1OD.0 100.0 100.0 0.9 4.0~Ios1wre 41.6 43.7 43.2 43.7 44.5 45.0 2.4 4.2

14.8 6.0 5.1 4.2 4.2 5.1 -11.3 8L5SwvIw 33.2 44.9 45.1 45.7 45.7 43.6 2.2 3.3

Cnmqt1, 90.5 82.2 84.0 87.4 93.8O 8.6 1.8 3.0Qa-I 1weest 22.4 19.3 17.3 17.3 16.4 15.6 -63 1.0bwo of QPs 12.7 13.6 11.9 11.9 9.9 14.1 -5.6 10.9

at WIES 25.7 15.1 15.4 16.7 20.1 17.3 -4.8 0.8

(kosat1c m 9.4 17.0 15.2 12.1 2.2 8.2 -1.5 20.0

19081 196/8 1886-

OaEOt e 18.4 1. 18.00an% opfaze 2D0. 22.2 20.7

Uph (+) or defelt(-) -1.6 -. 5 -2.7(wp1a1 o.q tum 102 6.9 5.9

~Ft1e piwmidig 5.1 4.0 2.2

19753-2 198625 191

orP F;-s we (S) 2.8 2.1 4.0at prn Cpl±a ptfh rate (S) -0.5 -1.2 0.7

inR 8.4 10.3 3.4maglma wl rag 0.4 -0.2 0.1

bv= eltldty -0.8 -0.7 0.2

YJRM9 aly. (I VW ow1ta is St offica M&ws raoe.

Ametptim; amuwta as, apewus at 6t auto

108 (Am (E1,f)1.21

- 121 -

_pA1tc a .9 t im9 (196.)Ulla (194) Table A. 2

kd1maotw amut i) 8A_ _ _ _

~ _a 1944 g 91i * I m !O i__ ,5 11 'l 190 i"I

_ eo ~~~~36V| -1.8 15.7 -12.1 -14.1 -M7* -W 5.3 I2L$ 14.2 0.3 2.0 11.9Ikr prix pmfta 268 -6S 33.5 -16.3 -1607 -14.6 -4.2 7.8 11.8 15.6 6.2 6.2 13.2

oda 100.9 9.9 -36.7 9.6 7.6 3.3 3.9 1.0 7.1 10.7 31.7 -. 8.W

Ibrdm_1 lqxKta 839.3 -2.3 -63 1.5 -21.8 1.0 1L9 20.4 2.5 0.3 0.7 -0.7 -0.3ba~atau 72.7 363 -7.9 31.9 -2LO 4.3 0.1 -36.0 1.3 -3 0.0 0.0 0.0rau 227.4 27.1 -15.9 -28 3.5 1.0 i 4.9 S552 6.6 3.9 4.3 4.5 3.8

1ndabwy & q4.zt 251.3 -25.5 10.4 -12.5 -35*3 49 10.1 14.7 1.6 -7 -0.5 -0.5 -2.9Odur, 287.9 -7.7 -17.2 12.6 -19.5 6.9 2S.6 23.6 1.6 -0.4 0.0 -1.8 -0.6

own peace hum 93.6 100.0 96.3 809 86.3 93.6 1.7 101.6 95.3 103.1 111.1 1220 9paEt Plri miif 91.2 10.0 109 95.7 924 91.2 89.7 k0 86.9 90.4 94.0 97.6 101.4

h at trf ainlhim 1(O.6 100,0 95.5 84.51 93.4 102.6 922 121.0 109.7 114.0 11L2125.0 123.2

on of at a3dw (O) bqA uwa Tbmse (Z)_ (at amt r* at19580N 1985 1991,y 1976-0 19W 198"Il

1t 1000 10. 100.0 100.0 -1.8 -7.1 11.8A4Wor I=q rrotS 66.3 55.6 61.7 71.4 -5.8 -4.2 10.1odus 33.7 44.4 3L3 2.6 6.7 -2.3 16.7

1 t 100M0 100.0 100. 100.0 -1.8 -4.8 0.5roadscalas ~~17.7 11.7 LI 4.2 -&2 -I1 O.l

PN eOU 6.0 22.9 14.0 21.9 0.8 -1.3 4.5y1dd1y & sad 31.1 34.5 30.9 27.7 2.2 -11.0 -0.6OtIwis 43.2 30.9 47.0 463 -5.8 -7 -0.4

gm&of T"u1 i8th wre of Tuis th lam oTaws gmiunhur1e1 *Wtr1 (2 ___________, 01 fm 1975 19 1984 1975 110 1!B 1975 190 1984

3qar-a 47.4 57.6 60.7 48.9 35.8 32.2 3.6 8.7 6.3bia 58.0SLO 67.3 63.2 34.8 26.5 3L 6.2 10.7 2.4

S t D e for All T1_aua O(blnl ad Za u1).

1G18ku(7,3s~ai,)I ,

- 122 -

STATISTICAL APPENDIX

PART II

BASED ON MISSION INDUSTRIAL EFFICIENCY SURVEY

- 123 -

PART II: TABLES BASED ON THE MISSION INDUSTRIAL EFFICIENCYSURVEY (MIES)

T-8s Table 8a: Industrial Sector Efficiency Assessment - Wlth Names(Sub-sectoral classificition of 48-Firms)

T-6 Table 6: Efficiency of Product Lines at Actual Capacity

T-7 Table 7: Efficiency of Product Lines at Attainable Capacity

T-9 Table 9: Domestic Market Activities in Export Firms(Reprint for the Margins)

T-10 Table 10: Tanzania Expert Activities

T-13 Table 13: Allocation of Foreign Exchange Through the Bankof Tanzania

T-14 Table 14: Bank of Tanzania's Allocation of Foreign Exchangeto 48 Manufacturing Firms

T-15 Table 15: Subsectoral Efficiency of Industry: 1984 ,

T-16 Table 16: Summary of Weighted Total Actual DRC at Shadow Prices

T-17 Table 17: Summary of Weighted Total Actual DRC at Shadow Pricesat Subsectoral Level

T-18 Table 18: Summary of Weighted Total Attainable DRC at ShadowPrices

T-19 Table 19: Summary of Weighted Total Attainable DRC at ShadowPrices at Subsectoral Level

T-25 Table 25: Share of Value Added in Total ManufacturlngProduction (1965 and 1984)

T-26 Table 26: Structural Transformation and the Productivityof Investments by Subsectors 1965 and 1984

T-28 Table 28: Structural Transformation and the Productivityof Investments by Subsectors 1984

T-29 Table 29: Protection and Efficiency in Industry 1966 and 1984

T-31 Table 31: Cofinement Scheme and Price Control

T-32 Table 32: Effective Protection and Economic Efficiency

Tab le 8a IaUzuta INUThuN. SECTOR EFtFKIENY ASSESS1EN Pap I

1 1~~~~ ~ ~~~~~~~~ I a 2 1 3 : : 4 5 1 6 ; * : 1 10 2 if 12 13 : 4

I ---------- : 1~~~~~~~~~~~~~~ PrK : n.t k ItUt WIN:. I atQl I Att4bit k ttOuals IAtt.a. e iWt.t 1i :naKtal :ctuat :. Attable % ktuat Oros 14tt.blt GranI row Produtt,t Pvrmut :1*flective tShwt-Raa:Lom9-RwaL&ctv:apact?I itylI IShut-Rue ULoi-la I2 eo Rate odI*..f !fceomoic. EC, no c Ecuassc S Ecescw

1 --------- ~~~~~~~~~~~ ~~Pr.dct Linu:. 4Fires 'hlate of mc MC OmC Wtm zat ?Ut.lizatl mRC :mC Profit ORtUm lSRate o:1 ateo o Surplus I SerpiuiI (P1913)IFIM -PreductiG%Pr4tKcties k Rtwra: Return :

I .Fuod I-U I broad : iooz: lot: 0.19 0.42 50., 7525 0.34 1 0.42 1 35tU 312: l,. 33?: 34609" 59,417

- -- - -- ---- - - - --- -- - - -------- ---- --- - -- -- - --- -- --- -- - -…--- --- - --- -- - -- --- - ----- --- -- - -- - -- - -- - - ---- - ------ --- -- -:--- ----

2 .Fd2-3 2 bread 1 0022 -2421 0.32 0.60 9OU Sol: 0.32 1 0.40 1 IO 3421 lOU: 4IU: 2.40 2.609

- - ------ -- - - - --- ---- - - ----- -- ------------- ---- --- -------- -----

5 3Fruit aicus 1 411 sun:. o.w: 1.441 M02 62., 0.401 3.531 33n 2n2: -721 -1: 3631 130 13AN ei-0 : tvst Jtau 1 ,. 5452 I.00 3.341 ml2 501. 0.45 1.22: 31: 292 -351 -4,2:) 275:1

I~~~~~~ 5 SPSISSBISVrops 7121. 2932 0.60: 1.1I90 1. 1625 502: 0.24 S. 0.M 1 =521 272 -III: 2722 W.75 ! 12.452 IS6 T0sato Product% 1 m: 6192: 1.03 3.35 : 3321 6521 0.43 1 .60 oil3: 3521 -37n2 -III?1 (61 645

*.,VOW o- 7 Cooking sh I 432: rAd I : : z.o: 1522 4011 aa5 : .44 In:51 U, -24: -2l21, (5,26441 (31"0OUt 9Sawaise I 521 32521 0.555: 4.39 1 1511 402 0.311 1.20 1 M,1 or. -172. -4,. M53: 13.444

-- …-------------------------------------- -------- ----- … - ---- 2------ , i- -------------- --- …-----:----------

1 M-totaI for Feed Prooutts Total : 122 O.3? .1 1.95 1 17 4321 0.27 o.sa 242: 172: -521 41: 36.w5 1 3363

I ~ ~ ~ ~ ~ ~ ~ I Public lot:2 0.911 0.42 : 021 M:2 0.34 : 0.42 1 351: sit: 3411 33: 36,609 59.6171 P1 Private 3932 1 .00 14.24 1 142: 422: 0.45 :t.3 : : 12n: -1921 -721 43 1 29.144

…--2 -- ------- …-------------.---------S…-…--- - …------- ------- :-- ------ -- ----- ----.-----1------:…----S ------- ------

2 l1l-bot1 fgt Sued PrOducS I Total 411U 0.24 0.79 M.,7 sill 0.5 to 0.4" M 3 3021 721 2621 4t,243 MM593 wiuttUt*Fud 4- I -- 11 11 1i111

5 Public : an: 0.29 10.62 : 502 7525 0.14 : 0.42 1 M: 3121. 1421 332: 36.409 1 9.4371I Prvt, 4 19911 0.52 11.53 I 222: 3421 0.2? O .71 3121 2M: -91321. 4.354 16.314

.Ilht wetadsaalluucco 1- wtu DO 1 .2I 1 Z. 1 u &X, 46 1 1 3 1 1tn' -in - 5 (6"1 t t 1

I 7.0uvera ss ad labKw 3I 11 Ike 1r 3k4021 3021 0.201 2.90 I 3m21 402 0.45 1 0.31 M6: M3.- -1721 -3021 (26,4632 9,1651

I 4juqatp for Tbmacc - 0Cqwtn(o ete)62 3211 .3 0. 0.35 M 3021 402 0.20 0.29 M-42 3221 521: l02: 333,386 41013.02

=0 lObKCD I t CImetl ic eb 122 3611 0.13 2 0.4 1 502 602 0.11 0.71 I ?4; 32211 311t. 4221 39,131 2 .20s.mI P privates '1 0.22 522 0.202; 0.01 502t M0., 0.261 049 6921: 2442 3421 1221 38115 2

2 - 1No apo

Table 8a TRIIRttl IIMIRIAL SECTtR EFFICICIE? A1SE9iEIIR Pop 2

4 ----- 2--------1 ,~~~~~~-- -- ----- 1 ----- ------ ---- i-- -- ---- ---

| : : I : 2 : 3 : * : 5 : 6 I 7 : * : * to 1 I 2 : t2 13

IA. E2N3 38809 (Could --- -~~ ~~~~~ ~~~~~~~~~~~~~~~~~~~ -- ,----- -- --- I----------------------------… 2----:^.~~~~~~~~~~~~~~~~~~~~~~~~~~~ t i I I {tt}

: : Pr,ott : Oet : ktal lActal : kt; l I AttobIe: Attnble: Rttnble ! OWtnl FioocialltActual I Attable : Actul Gross lAttable Gross!

: 121 tetil Pertcnt Effective Short-RntLonq-RuntCapacity Capacity .Sbhrt-Run Mong-Run I Rate of Rate of MEcnoic: kEoatic Ecoeic : Ectoc :

: ----- :Prodeut Line :ef Firo-s Rate of: ORtC : RC Milizat Utilizat 2 R : ORC Profit I Return Rate of Rate of Surplus : Surltus

(FIRI) I : roductil:Protectie: :t2 ra Return

…----:---------- -2--- - : : - -------- ------------ ---- -- - :-- - ------ :- --- -: - :

I . ettleS 1-U 2 : 4 Woen lankets I 9921 2678 17 26 452: 702.: t.05 1.77 9t: 132: -4l -262: 113, 0051 41,424)1

: 15 in-Wove Blankets I 112: 455t: 2.02 1 3.40: 6a 75S: 1.69 : 2.84 m91 2MI, -432: -40f: (2.0201: lt.6U3:

9.Toxtiles 2-S I 26 Cotton Yna IDeo. attet) : 4t1 -202S 0.9S I 1.77: 621 642 0.91 O. 1.77: -92: -It: -ISt: -1tS: s : ::

1 17 Cottn Tar Eprts) 32: Int: lnf luf 2 64 61 Int: uf; -9: -18t: -4211 -4t%1 (5,129)S 15.129)2

: : 19 #oene Cotton Fabrics : 932: 1402: 0.62 1.20 : 64t 64N1: 0.62: 1.20 I72 2s5: -62: 7,: "993: 79.9S3

S ---: -- -- …-- : - - : ---------- t-:………:… …--- ----::----:-

I 10.1"tilus 3-U : 19 Liana 3121 2289: 3.27 1 5.S0: 321: 351U 2.60 4.9: -2m: -23: -301l -m2 (16,362): 215,539;:

I I 20 Kanal/Kite 2 3121 2452IS 1.97 S: 3.55 32It 352: 1.73 : 3.08 -it: -16: -261 -25t: (1i.0331: t10,423)1

: 21 Sfi : 212: 2092: 3.: 6.635 31U 35t2 3.131 5.57: -3322 -m2 -3021 -301: 812 (11,195)1

: : ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ - --- - -- ----- -- --- : :-- :--- ----- ----- I---- - . :.:.:.:.I 12.restlle 4- : 22 Canva : tOt: 149621 0.93: 4.S0 : 5512 70t: 0.70:I 3.48:2 632? 642 -14?: -122: 1,2061 7,ttb:

: 12.t7ttiln S-t 2 23 ot" M 7MI. 0.61 2 2.09 4n7 6Ot2 0.52 t 0.89 2321 2911 -31: 421 1,834 2,99

: 2 24 l:-Win -i Dehrn0 t21: t211 73: 0.56 I 2.00 1 n47 6022 0.47 : 0.61: 23s: 2621 0il 92: 5,842 1 3,935

: : 25 t-ai t (ExWprts : n: t12: 0.72 1.29 2 4n7 4022 0.55 s: 0.9 2 2M21 2621 -n7 021t 514 1 ,059

: 1 26 Java Kitenga laretl 1 202 6411 0.5D 2 .05S 47: 602M 0.50 : 0.35 212: 19n: -221 62: 3,341: 5.277 *

: : 27 Java KtteWa (Etrts) 2 422 lU2 0.76 fi .36 4n: t6021 0.59 1.04 m: 292: -922 -12: 526 29 I

I : 28 Brey Cl2Othtlandaes I 6222 -421 0.3t 1 0.59 n47 602 0.283 0.4s: 29I 312: m21 4 53,66 30,742

: 13.T"tiles 6-U : 29 Sisal fDp 1 202 :n 1 Inf t Inf I 51t2 602t Inf I2 nf: 2,4 -32: -3322 -34t: (40,219)1 (n,s77):

: : : : : : : : : : :- : : : : , :~~~~~ -I I

: 14.Tutiles t-R 1 30 Wovn Cotton Farits : 52: Inf: nf: In)2 tn: 40?: Inf I Inf 2 3: -m: -110l: -18t: (3.6161 s7,430)1

: : 32 Knitted Polester Fabrics I t95, 16 2 In) I tni 2021 40122 nf2 InI ) 672: M., -5522 -_692 (20,000)1 433,56911

: - -- -… : -: : -- : - - -- - : :-

: s.t&tiles 3- : 32 Knitted Fabrics Dno.1lartet) 2 302: 6222 0.67 2.483 4322 7012 0.49 1.51 I n: 62t: -22t: -92: 492 13.493:

: 33 Knitted Fabrics (Exports) 14t21 267322 2.54 9.41 432 70M. 1.17 2 4.33 6222: 6t12 -in: -262: (2.725)2 (650:

34 Wae Fabrics 20M: 372: 0.46 2 .69 4621 l02: 0.371 1.14 2 641: 6221 -9n1 -tt: ,0712 15.003

35 scots to". hamret) : 32: -14?: 0.39 2.42 2 9: 90: 0.38 1 2.41 2 1 -422 -62: -21: 17,381: 24.8252

: 2 336 ftoants Extperts) : 41: -7n: 0.41 2 1.51 tO0: 90M1 0.41 1 1.52 622 -421 -n: -n: 2,205S 2,2105

1nsnn=snninnscr:s=fleru=n==n=X =ns=r=cnc=tr=.1==w*rt rw=n2s r== Iwt===: :==t csrh r:rr ==n==sa=n2r= =c:. :r::.2= t, rslsn=1 #0_ mn r-==S-t ==rss=r=:s u

Sob-totat fur Textiles : Total 2 : 26322 0.97 2.012 6121n 0.78 2.74 332: 2622 -1t5: -132: 52,39t: 106,937 1

: : P,lIc : 2 20022l0.8: o.s t.90 m53: 59s: 0.78: 1.59 2321 2: -1421 -12t: 46,243 2 93,2ts

Private I will O."6: 3.S1 43n1 62,2 0.77: 2.971 491t 492: -I1Pt -Itt: 6,143 : 3 13m

2 Brand Sob-Total for :Tot 39222 0.5 I 1.3S : 3612 552: 0.45: 1.07 m 5n: m9: -n: -221 472,096 m79,6: --- I ---- : : : 2 : : : : : : : : : : :

I co Rm aIS: Public : 3922t 0.561 1.27 4722 4022 0.441 0." 6022 1t02 -422 0et: 423,611 69,035 1

t 2 Private O : CR2 0.5" 2.33: 302: 522 0.51 2 t.6 I 4122 3422 -1422 -2t1: 44,25 90,616

So planatary Mtes an PM f

Table 8a TAZAM3*: . IIUTRIL SECTOR EFFICIlCI AISSESSIENT Pmeo 3

: : : 1I : 2 1: 3 : *4 : 5 1 2 6 1 7 : 8 9 1t0 1 11 12 1 13 : 14:.IEiEDIA1tE G :-----------:------------- --------- :----------:-------:------ --------------------- :-- :---------: ------ I ------- : : Prod,act Net : ktual :ktual : Actual Attble: Atteble: Attnoble Opprtnl lFanmcal:ktuael At: ta le kttal Gross latinble Gross:

IV le siut and Leather : Percent NEfective :Short-RniLong-RubtMapacity apacity 'Short-Run oLeng-Run: Rate of Rate of Econowic. Ecooic Econmc Ecoomic __--._-------.-------- Produtt line '04 Fires s: Rtte nf . PC : RC ltttlitat MUtiltzat _iiC I OC : Profit I etur. IRte of b Rate 94 Surplus Surplus

: tFIRFt? : -lProducttonlProtection: I : : :tr : Ettrn Rturn :-____ _ -------- __-_ -------- --------- __ -------- _.------------ ------- :---------- ---- ------ ----- ----- ------ ---- ------ I- - --- ------ --- ----------- :

: If.Leather l-tt : 37 Shoes 9221 nf: Inf: In : 2X1 252 In: tnf 421: -1121 -22: -43X: 120.37611 (60,.08)1

I l7.Leatber 2-V : 38 Ridn (9en. 'iartet1 521: lf 3nf: laf 4121 4871 Inf 1 tnf 4n: z211 -2221 -221: MAW18701 4124t6tl: 39 RIdes (txportst 352: 1nf: 3nf: Inf 411: 481: nf:1 Int 2*4 721 !221 -t821: -1821: t4,98M1 (4.81t71: 40 Soat Skins : 112: 1nf: I : I 1[a 2z2: 4B2: Inf: Inf: 392: R -25t -322: '3,4711: (5,4851:

: : 41 Sheep Skint : 27.: 1nf Inf: Inf 52: 3021 I4f: nf: I9n: -I2: -412: -14521 fl44931 (6,82fl:

1 38.4eather 3-ti : 42 Rides (Doe.larket) 5311 l3f fi nf 7n: 821: 85.04: 232.02: 502s 542: -271 -2621 (104571: (B.S831:: 43 tbdes (Etportsl 1 2521 Inf lnf 1 nf: 68112 82o1: I0f tnf 50 5421: -3921 -4021 (10.6931: 111,3171:

: : U4 &eet Skin I Doet. IrDetl 421 1nf Inf: la4 .4 t 282X f021 13.21 1o33.9brk 472: 49n: -272: -2621 I873:: 17951: _(: : 45 6eat Ski. (Esportrl 1 3221 tn4f 1 f: tinf 282t f021 3Inf tnf 47:1 49t2 -351: -431: '4,52B1: 16.39011* 46 SDeep Skl (DDo. ret) : 621: tn I .nf laf 2721 60t1 1 I 1f Inf 4n7: 491 -312 -352: (1.6471: t2,09431 t

47 Sheep Sgin lEpowrtsu : 2:1 lnf ltnt la.: 27X1 6021 1tnf tnf: 472: 41n: -3911 -522: (768): 41.202: 1:- : : : : … :…:….…:….…::-:I:-:-:…:

: 19.eettter 4-R 48: .k. Shoes : 2521 55X: I.92 4.97: 202: 4021: 1.10 2.27 152: 1321 -412: -342: 365)1 1391:: 49 Ladies Shoes : 752: 452r: 1.96 5.04 2021: 40: 1.12 2.31 721 -42: -412 -3521 1195: t66):

3 Sob-Tatot for Tarits Total Inf1 1 nf:.1 In f 102: 3121 Inf Inf ml 1321 -2521 -m3: 171.3841: (121,181: --------------------- -- :. ---- : :: : : :

a: e t hertk Public : l3f Inf: a1. 9n: 312: Inf 1 3I4 12 32: -2521 -332: 171.1241: (12132321:: ----------- I Private : 4711: 1.95 5.02 2021 40%1 It2: 2.30 12: 12: -4121 -3421 (26031 M8I5I------- --------- ----- - ----------------------- ----, ------ ----- ------------ - --- …------…----- .--- - - -…-- ----- --- …_ . --- --

: Sub-total for lnerein and Total I : It: Inf 1: If. 402: 572:1 3In Int 4n7 27: -261: -2B2: 151,0061: U60,409):: Leatherm tithbutLe tbrth l-er ----- :: : fmePublic :0 : 1rf 1 In f If 442: 5921: lIt: n1 : 482: 272: -2:61 -282: 150.74)1: (60.324t:

: Private : 4711: 1.95 5.02 202: 4021 1.12 2.30 92: 12: -411: -3421 t260O3: t851::SS5=SSSCW::S G: ::n: :tsa=sssn.oe:t:::::::t : :r :::::x s S::G::::S::: Sttttfl2t2t,22r8:tS:r2er =X ::::::t Stt.rcttt$GOtcr,st. c:t ,:ntft::G::::GG::Slt:G:::GOS...... .

Se nplanstory notes oe pap 8

Table 8a tlAIZl1A: 1IWTRIAL SECTOR EFFtCIElY A1S6Elt P"ae 4

--l ------ - -- … --- - ------ … - -- …---------- - ---- - - - --------------:-I : t2 : : : 4 : 6 : 7 :I : to : It: 12 : 13 : If

IMUMEDIAR~~~~~~… sm 4o. - --- I-- -- --- …-------------------- -- -…---------tE. tINIUtAl UAIIS Cxant.) :- - ~ ~~~ *~'~ ~ ~~~.~ ,…I ~~ I~ ~~~ t-~~~~-~~ ~~~~~~~~ ~~~ ~~~-~~~~~~~ -~: --et: 1e :t I :tua 4cttl :ctual : Attable A 4ttttble : Att6la (tpr uWtl I.FicitalkAtal l MttUiMe : Attual Orms :Attnile ror,:

V Y Plastics ad Pharsaticals: : Percent 'Eff ctive lSirt-Renltew-bn:Capcity :C.aity ISMort-hP MLmon-Rftu atte of IPt e of 11cotsicl Ecoaicc l Ecotntic :Euomc ----- …----------- -- -- I Product Line :of Ftr's I Rate d : mRC : c :utzilzat Mtilizat DC : RC : Profit RetuIrt Ite of Rate of : Swpls Surplus

: tti}(FlM) :Prodoctim.:Protecttot: : : : : : : : Retorr I etnrs : :

I 20.Plastics ad Paruaw titals 1t{t 50 Tablets i 7u: Inf: Inf Iof : 302: 4021 3.94 9.08: -22: -10: -23?: -222: (7, l: 46,4141:: 51 ltfetsiuss 222: tnf tnf I ID4f t2: 602: 17.61: 39.82: 01 -82: -241 -232: (2,0521: (1,9641:: : : :. : : : : : : : ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~~~~~~~~~~~~~~~ : : - -- --- --------- ~~~~--- - ------ V----;----1 … I…----- …

I 21.P`astics and Pbwaacnticals 2-t 52 Polypropylene Satks : 10021 Inf lrtf I 1 1 552M 7521 IWf [olf 1 -19n1 -3421: -891 -II0: t31.7001 (40,559)1

: : : : . : : : : : :

: 22.PIastics ad Pftwa ticals -tI 53 UC Pipes : 302: 1tf It1f I: tf 4 21: 27: 26.27 46.82 I:72: e2: -32: -3821 (5,3071o (7,15011:54 NPE Pipes 22U 209621: 4.60 1 11.61 1 621 502: t1.13 2.28: 3021 2121 -2621 -t19: (2,2331: (4711:

: 55 Polvtbuele Fdi : -- 22M: 997: 2.18: 5.50 1 IOU *: o.n: 1.29 2: 242: -2321 -21: (t,96811 2,724156 6.11.1Pipe : 1121a: 10 I Rf 1tf1 102: 40N1 2.99 1 5.39 1 27: 62: -91 -102: ft,48411 41.742):

----- --- - ------ ……------------1-----1----1----1---- … ------.--.---- 1----------- --- ….--- -1 --- - -- -I 23.Plastics ad Faarmactuttats 4-9 : 57 Tabletes 1 541: lnf 1f 1 Isf m221 su.2 1.66" 7.67 521 -621 -162: -t141 (2.8121: It Otl:

: 58 Capsules M.3n 532: 0.85: 4.481 4721 O62 0.62: 3.10: 201: 212: -102: -92: 2901 1.06 I- - -- ---------- …--------- --- …- --_- --_- I- __ ------ I----- _ … ---------- -_- - - - -._ - -- -___ _ _ __

: 24.Plastits aid Pbar.aKmtilcals 5- 39 Plastic Crates : 502: 10411 0.21 2.25 1 2521 S02 0.I 1 1.10 3Su: -521 -1221 -221 2,625: 6 II t: : 60 Pails & Uads (4l ad 20 Lts) 1 1621U 174 0.50 5.34 1 2211 5021 0.28: 1.85 181: -122: -i, -102: 218: 976:

61 Canisters (5 aid I LtsI : 342: 272 0.421 4.50: 6n: 75U 0.39: 3.92 362: -521 -20M, -2011 651: 800:- ---- --- ----- ---- - ---- -------------- -- - -------.------ * -- - ---- -- ----- ----- I----- ----- ---- -------- ----------- --- I----- I …- ----- _

I 25.Plastics ad PtwarKaicticals 6H 62 BaIl Point Pens : 2002: IDI I nf: If 1 311: 6021 Inf Df : 322: 821 -162: -152: (9531: (1815):1 ~~~~~~~~~~~~~~~~~~~~~~~~~~I* , i S1 I

- - - ----- ------------- -…----- - --- … -- , --- ----- -----…----- ------ I- -1--…--- ------ ----- ---- …--.---- ---- ----- -------

: 26.4 tics and Pliarmeaticals 7-R: 63 IIsoD Fts t : 1002: (653: 2.14 : 7.09 n: 9 35U1 0.61 : 1.33 : 482: 392 -221 : -82: (2,0961: 4,907

------ ------------------ ----- - -------- - -- ------------ ---------1 ----------- --- ,- ---------- I---------…I 27.Pattics ad P ar seuticats 9-3 64 laiection 7421 R laf: lef : lf1 1321: M52: Ief Inf -232: -m2 -2621 -372 110,423)1 (23,48311

: 63 Stlo Iddi 21221 s I n: I tf: t IU 431 *2 f If 1f M-2321 -2 -2n: -3621 13147)1 U62B81:. -- ---- …- …-…- --------- --------------- --------------------------- -------…--

s _ $ s £ g= *== t1=¢ 1*nn=lt:21in=D X:I=: tr =0==flnw1nnnzt21fl=S=fl#tt==t fl =t=ttt=il==t=flitflfi=l=# :=cni==f =n fl = i

I S - -Total hr Plastit total 1JF I Ief : Inf tSS: 422 1s1: lef 1 122: -4 -252: -2U62 (67,4841: (73,3611:

ad aruactitcls : Publitc : Ief: lf Inf: 152 1it2: 4ef Ief: 821 -32: -2n7 -m2 (4,359)1 (55,53691__________. Private O M.3721 21.S2: I04.9I1 1421 4221: 3.25 9.n1 222: -62: -m: -242: 413.125)1 (17,791

See esplenatrt mote on page a

Table 8a ThIIIOW t IBIIAL SECII tFFICSIIW fWSSESt Pa# S

…r--------:… ~ ~ ~ ----- ---I I I t : 2 1 3 : 4 : 5 : 6 : I 8 ' : to : I1 : a12 13 1 14 :to. IEilTa NM Itant.l I :--- ------- --- :-- --- ---- ---- --------- - - - - - - -- ~- -- --- --- -: : PreAKt hIt : ktus :ktutal S ktual : Attab)t . MOt I k*ttebh: I DItn) 11Paxl O tte)I lAtbbl I kctuul ron lttuale Gross:

VI Clacals ad Fertilier :: Pwrct .Effectiw 5owrtt-teL.-m:oCapacity ICeitV ISrt-he 139-fth Rate of I bbt of lEcueuic? Ectmiac Ecoeic Ecomac :S --------------------- : Product Lint :o FiFo's: t t el I C I IRC WUtilitt :tilizat. DEC : DRC : Profit ltetwo IRateof d Rato , : Srpolu Srlus I: (FIRM . ctiostProtetteuit:, , : MoR e I te% t :

: 28.Cbneicals I Fwrtilizer t- 66 htwtgqet P r 1 1*21. laf: I l af I 3621 702: 3.45 20.53 3621 222? -182: -In: 7tl 813)1 t6,4161:

*…----------------------------- - ------------ -…--…-------1------------- - --------------- ?-- - - --- - -1---------I 2t.heicals I Fertilizer 2-tS 67 AU A/CSR Cuutars I 36?: hf Inf l at:f 2I 2: 65: 16.6?: 83.33 352: OS --in: t6 42,1235) (tt69 1:: : U PVt CabIes 5121 842: t. s I 7.71: 292t 6521 0.s9 2.74 4t21 32: -142: -II2: (533): 2,t39

: 1 69 Pmwer CAbI 1 2: Ref 1 nf: f InVfA 1 9 I M: S: l 1 1I -IN: -7n: -36.1 -752: (2,461; 46,75)1 1 70 Etulled Cper ltire : 721 n f I laf: Inf: SI21 752t 1tf: Inf 2M: -22: -21S1 -232:1 16761 (P941:

: 30.C0eitels I Fertilier 3-0 It hJl tis Sulebate 31 1s lof 1at: hIn 1 52: O5t: tif: laf4 I2% m1 -32 -3421 116t069)1t 114,m) I 72 T.S.P lran?les M 2: laf laf: lat: 46t1 70t: t1f I Int: 24M 502: -542: -62 23901? (32,043)?: tD

73t = U 20:18 Ref: I nf lof: laf: M:2: 2 Rnf: I 1 Oi -421: -072S -10721 t30,030)1 O : 38,531 : : 74 Wt 2525:5 : 12S: Ref: lEd t1f1 792, 852?: Rf lot I -921 -242: -S2u -532: (10t6O tit,3241t

: -- - 1------- -- ------ … ------- 1------: -- 1-------: :… :- :o : :--- :… : - : -:: : :: I.Mheicals I fertilittr 4-4 : 75 Lndr .SO " M: 546721 3.5*1 1l.07: 2321 502: 0.54: I.U: 422: 72 -t91 -92: 12.613)? 3.525:

1 76 Toilet Soap M 20S: 34452? 2.16 I 7.34 2321 502: 0.486 1.51 43S: m: -In: -72: (361: li n.: :1 mnets : 32: 4942? 0.866: 2.941 I2t 2021 0.03: 0.09 27: M2: -1321 2011t 201 5,479?

------------- :----- -1 -- -------------- -----… … -- --- ----------1-----1---------- I- -------1 -------…1 32.Ctboicals I hwtilittr S-U 3 76 Le ry Sogp : 7N: 569 2.63 8.2) 1 4021 502: 1.34 3.75: 4421: 92t -la: -1421: 42,#16) (1,13n)1I i 79 Toilet gmMp : 241 "0M32 3.521 10. 19 m2: 02 0.471 1.27 m3 7n:1 -1n72 -42: (980: 1721

: : ----- : :------1----------I------: --- … -- : --- … -- - - .

I Sb-total for bitcls ad : tbbl f :f lIef M1. 7 492? ld : 1sf 1 29M s3n: -261: -2U: 11o0,7 : 1101,521)11 _- - - - - -- - - - - _ __ _ _ _ _ - : 1 : : : 1111111

Fortilier : Public lt Rf ; 1 4MI 7321 taf:.4 lRf 1 m 221 in: -m2 -302: 4100,729): (1)2,24): - - : Private : 504321 2.66 16.9t I M2 44 0.52 : l.52? 422 out -17t2 -n:2 1624)1t t725

SW ptadtt aete ea "p 6

Table ga iUWII: gl=1W.IL 5EtC EFftV 4A9S W ENTp4te 6

g ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~-- -- --- --- t----: :-:t:-- hS.2UIt_tS llED: _ lUeO : ::t : 2 1 3 : 4 : 5 : 6:7 : 9:9 : tO :11: 12 : t3 S 14

t ______________ -:*::- -- - -- - :- |- --: ----- : … -:--------:-- -- -: -- -: -:----:- :--- ------- - :

I VI RW, saut ,bod I I h t l 1. t :I ktual :! ail : ktat I attot:. I Att.ble 1 Attatle 42rtal tfteatidA:tu: I S At Atual s: t to bte fI ----- 1 : : Rarceet :Effuctin :StIrt lkRa:L.q-RuCaa9: ti :Cepcity :9 e Iog-ntct Ratte of b te of Icouwc: Ecotcwt Erg sic . EcoM c :

t .d r P CW u sat : Proutt Line :tfFires t : IRae : Ollt l"Utiltzat lUtilizat : weK :O Profit :Ratut titate : Rf etof Suplus t S"tt us: --- ------ --- : WPrOKU1thutProtttiou: : :t: : : : : :wotwa: mt

: (Fll : : : : : : : : : : : : : ::

S 3L.h"2lnsspapurCu t It- G o twun M tI' .s: en:9 t.Me: 54: i: 0.61: 1.11 S2: 32: -In,. -321 9,377: 24.,e3: el St t : n9: 42 .s: 1.06: m: za: 0.441 0.7B: 112: 2621 -2: 9n1 2,6Sl: s,Ims1 2 blated Rubber Prtcts f It2: 652: 0.37 1 0.69 1 6 52: 952: 0.37 0.69s 252: 39 152: ISU 8,114 : 6,14:

:-------------… -- ---- … ---------- -:--------------------1-------1-:-: : : : : I :s 34.hbubluss,6ptn r,PCoet 2-U 33 Cu Stgd : 157 IS9,' 2.34 : 6.42 44W 702: 1.30 2.83 S121 601: -3521: -2.22 (6.92?) (2.631

1 94 Packitq Ratral : 2e3: 379: 0.53 1.20 261: 602: 0.24: 0.30: e: e2n: -n: 44141 .7i96 27.743Ms : 65 ltip j las : 342U 11012: 2.75: 6.20 1 i: 7021: O.87: 1.64 tul. m2 -in: -2021 6.0011t1 I,se

- ----------------

s 35. aw,s ,PWo ,CMt 3-0 I Ss RC Deets t 1e21 2332: 1.05 1t.92 4012 702: 0.61 1.09 3U: 341: -16: -32: ftt7n1 2.473 I

:36.Rabbr,SaseaPa ut 4-33 : 87 Portlt Cuuet (cat rket)t i t12t s 0.691 3.4 . 292t S0t: 0.42: 1t.82 SS: -St: -222 1tt: 11,591 69,402 1 o:U P:8 rlwid Cot (tap. R aa: n1 5321 0.6: 3.49 1 Mt 2 02 0.35 : t.74 3V: -9: -122: -n:2 I'39: 7741 I

:_________ :-. …- : -: I---------

S. bbor,S"as,,Papr,c dt 5U 9 Pvrtlat Came (Dua.Narket) 9Il2 2165: 2.24 5.07: 25t2 5521 0.60 1."66 -521 -221: -19I -le0: (31.0181! 16.7071:Portland twat tEzp. _tt:; n:, 22s2s 2.2 *I 22 07k 551s S 0.6t9 1.55: -S1: -In: -m: -t: (3.0tS: 2.53:

----- - t - :---- --…:----- - ----- ---: -:- :- ----: ::----:::311.2 r,Blass,P4qw,Cuut 6-t I 91 6lassare -. 2 : 44: 2.10 : 3.510t 30: 701: 0.87 1.36 122: in2. -fuess -4 426.220): .362:

1:1 92 Silicia. Silicate d id 1 7 n72 3272: 1.71 a 2.92 1 30u 70o: 0.72 1.13 U,: U: -2:01 -221 t72: t.1 :I I 93 Sil8c13 Silicate (Uiquid) M t2 3021: 2.00 3.421 452: 752: 2.t0 1.901 122I 221 -89: -62: (3.794)1 (373)1

S he-ltal hr R , Uur, SIui btotd : 12822: 1.54: 2.93: 31t: t32: 0.62: 1 .45:1 92: -2S: -1621 -02S 122.17511 173.1763:I -------- ------ S ---- : : : : : : : : : : : : : :

I Rawadt Pawr, cht S tblic 1: 14521 t.001 2.651 322: sn: 0.56: 1.471 921 -4: -1421 -n: 412: 142,967SI --- o--- : Piate : 424 2.06 : 3.52 312: 7021 0.67: 1.36 1 tit. 322, -4U: -202: (29,97)2 10616 t

SW uplaery sut" a VW S

Table 8a T5292It* IlSSTRIL SECT1 Eff CtWE RESh6hht Par 7

I - - - -- - --------- --- ---- ---

sL .M 14iye GM h ent.? : : 2 3 4 : 5 : 6 : 7 I 1 : S : to : I1t 12 : 13 1 14

I . rt .Ir, Stel and Opta ProdKct I at : ktaal lktul: Atual : Attble : Attable Attible Wprtl fmcidl:ctual I Ottsb : ctual Arm 1Att*le Gra:I --------- wI : Prcept lEfSectti, l5hort-Uual.L-RmulCapatity MaWcity 'Shurt-n TLom;-Ru ltt of I Rtte d lEcomticl Ewdc I Ecoic EicmA :itI Protducts I Product Line 'of Fires I Rate of I RC : RC tzilizat ltitilizAt RC : RC Profit Retw. IRate of Rate of : Surpin : Surplus

I ------ MProectio.lProtectio: : : : IR rn Retern : :2 (FfIRlt) : : : : : : : : : : : : : : :

t- _ - : -- -- : : : : : : : : : : : : : : :~~~~~~~~~~~~~~~~~~~~~~~~~~~ I- ..

: 39.1ta Produts I-U 4 udaia Products Et2tl 1: 3: tI tdf I Id: 231 60 0.33: 1.29 1In! at' -421 -11 (,345': 1,901 : 95 Alaiiom Products the.) : 7 n: 3932t 0.31 I 1.76 232: 6Ott 0.06 0.34 7n: R: -22: 72: 2,719 . 1094I 6 Stal.Corroqted Iron Slets I M2: Inl: lf Itt l: it.: bit: 9021 : : 27:1 t421: -n7 -01: 4,517): (110,8511:I :91 St dl Oillts I l 9 t1. 1 14 at:4 37ll t4t0 Int:I t1f 1 341: 1ml -20t: -2S1t t40,0t3)1 173,295):

I____ __ . … ._..-1--__-------_---… - . --.- ------- :---- : 4OJhtel Products 2{ : lt Sstnl Cstatoers : 7921 1.4Mt I MI 1.4 m tO60 122.13 1 337.44 I 15t2 -24t: -3 -302: 124,259)1 Q2,177:1 : IS Irtwn .rts nz22C: Ckla Itf: 1[o: 32: 602: 1n.: lf: 2421: 21: -162: -M. t5,0041: (7,4SI:

- __ - - - -- - - . . - - - - --- - ----- ---- ----- - -- -:

I 4It.tal Prodcts 3-0 100 Fabricated Steel 9221: tm: 0.50: 1.07 75ti: 9021 0.47 1.00 : 311: 2tt: -21: 01: 9,769 "214I I 101 Irom Cating : 5T: lt:. I I nS: 502: 7521 2.4: ltf 1 -192: -14.021 -11421 -11921 t3,447)1 13,59221I 1 102 Srvites 1 1321 -211: 0.37 0.55 tot0- 1002 0.37 0.55: U: 621 4n72 472: 5,156: 5,b6 1

l___~~~~~~~~~~~~---- ------ - -_I ---- _-___ _ --- __--------- _---- ----- - ---- - -- :- - -- - - - -

: 42.111tat Prutts 4-4 1 203 Steel Products : tO2t: 60921 3.42 6.91 352l 702: 1.05: 268 ZU2 62 -2521 -2921R it,705)1 (1141:

~~ -- 1 … 1--**-- 1 1--------1-------~~~~ ~~~~~----------- ---- --.--------.-------..--...----- ,------ : 43.btat pruhsts5-1 :104 IJUsus mi: -12: 0.34 I O.6" tOO1 : lODt: 0.34 0.66 1: 22: t111: 1921m 12 S1,22 S1,2m

105 Plo : 2021: 391 0.39: 0.73: 2111 6521 0.182 0.29 : 2121 2521 232: 11321 12,001 52,12261 l06 flat Shar O 921 4n7 1.34: 2.62 1002: 2002: 1.34: 2.6: -i32: -2521 -2221 -222: 473): 739)1 1

________ ------------------ . 1~~~~~~~~~----- ---- ------ …----- …………---------- ---- 1----- 1 ----- -- - -- * ------- ---- -

1 44.Ntl oducts 6-: 107 tbil fire : 592 23322: 3.231 8.50 11M 4021: 0.46 0.93 271: 3: -nil 22: t1,360): 13.63: 1/8 Nails 3421 2613t: 2.23: 5.87 I IItU 4021 0.70: 1.23 1 502: 91: -211: -n: (632)1 1,062:

I 109 8arwbd Vire f 62: 7902: 2.39: 6.24 1 2I: 4021 1.68 2.04 I 9: 52: -21t: -452 1130): (679)1:: : : : : : : : t : : : : : . : :~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ --- ,.

- -1 …------…- ----------- I ---- --------- ----- ----- :------------- ---- --------- ------ ----------- ------- ----- ------ -…---

: 4M.OiW Products 7 - t10 Razor Blades : 32: 17621 0.33 1.33 6M2 702: 0.32: 1.297 592: 292: -52: -521 9,276 9,706b: Ill! Cha: l Stictk s2t 5751: I.02: 4.03: 2421 bO0: 0.37 1.41: 452M 2M. -192: -72: 462: 564:: - - - - - - - - - --…------- ------ ------------ --- :-- :---- : - - - -:----- - -:----- - - …- -- --

I Sub-Total for Ire., Steel and Total : : 6732: 11.12 32.16 351: 612: 1."5: 5.29 2t: 1221 -n2: 42: t05,2821: I64,214):: ----------------------- : ---- : : : : : : : : : : : S

: atal Proucts Public f1 InI 1 l41: 4U21: m7, 2.91 7.74 20m1 t1l2 -9: -2: U12,4301: (78,511):: --------- : Private : : 35321 0.541 1.85: I721 4321 0.46t1 1.22 441: 36t2 -1tt2 -52: 7,143: 14,3361

I Sra4 M-Ttl Fr : Total : : 16ts21 4.17 11.83: 2n2 541: 2.47 t 3.77 I2911 a21 -1521 -112: (390,9991: t1b,6M32)I --------- 1 ------ 1 1 1 I 1 1 1 1 It : : : : ::

UIIINM E 1O1 fIDS p: tt I 2121 5.47 1 16.53 : 321: 621 1.78 1 4.79: 1 in2 621 -152: -3t: (336,2411: t204,631U:: : Private : : 862: 2.69: 4.74 Z22: 512: 0.87 : 1.85 2921 311: -2422 -la: (42,7t)1: It,99

lao__ usplmatu= eut: s=ses uss pap!_aas a

Table 8a TIIZIA: IUISTRI IECtASR EFF3CIEIt ASSESit P I

C. CIPTALm aDS : : I : 2 2 3 : * : : t : 7 : S : 9 : Io : i t 12 : 13 : 14 2: ---- : : -- : - : : : : : : : : : : : : :~~~~~~~~~~- -- --- -----

: 11 dairy ad trasrt I : Prodct N t btual Actul : Aktul AttIble: 4ttble : Attable Owrtni Fiancial:tuul : Attabi : ktul Gross 2ttbte Gras:------ -- Pr--t Lia : PercasHt2ff ItiVt tSbrt-R=Loq-Ruw:Capcity 2Caepcity MShort-Ruo ILong-Rfa: Rate o f Rat of fcooomic: Ecorwc Ec:mcaic Ecomoc I

I Equipment : of Fira : Rate f : IIRC I DRC 2utlizat UtMiizat 2 t : OK : Profit : Return :ate of: Rate of Surpl"s : Surptus :t ------- :Pr.utflattrOectKuf: : :Retr2 RRtnU :: (FtR : : ::::

- ---__-____-_____-__-_-_____-__-____-___ -_-____ -_--_ _----_-- _------_- ---- 2------ -2- - -- h-- … … *---------- …- ----- -- ---

I 4.U-abiuuwr * Traprt Eqnp. 1- 112 trct P 2 lull 13 W l2 f 1. 2 f 302S 302M 1nf nf: 332: 312: -20m: -21t2 (37612 t9531:I 113 Tract P o2n : J2: taf t I nf 2 let 2 o0" 302: 5.95 20.35 2 332: 331: -202: -Ml. (3,13032 (2,75311

1 t14 trick P 112 2 2422 lf. I2nf: 1tf 302: 30M2 0.S6 3.29 33t: 3312 -312S -141: (1049): 62:* 115 lln 53* 2: 3422 141: tf laf: [1f 12022 3022 9.32: 3t.8: 2 31t: 2M1. -20M: -I922 (383l2 t031

- ---- __ _ _ _ _ - _ ------- I ----------- ------- --- - … I : - : - :I 47.hm uiwy I Traport Eq. 2- 116 Rad&itorsifil Cooler tftp) I l3t2 2922 0.722 1.51 2 0t2 M0. 0.70 12 .51. 4722 94t2 -1312 -1922 342 2 342: 2137 R:idatorsl0i Coler (eu) 2 m3 2s5t1 0.45 2 0.97 2 702 70Mt 0.452 0.97: 472 962: 22: 22 9.004 : ,004:

I 4MlcMiaery a traort 3*p. 3-U 118 Car btaries : 3002 lf 2 3sf 2 14f 2 515U 402t : sf 2 Ilf: -342: -In: -252: -3n72: 10,055): 120,fl7h:: (Private i:973) I

:~~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~ : -~ : : : : : : : ::- ::…-- - - --- … 2------- - - - -- -- - ---- - --- - I- - - - --- - - ---- ---- …-- -2-------

I Brad M-Total for hcbiary : Total 2 46422 2.113 7.56 1717: 3n7 4.72: 13.00: 302M 2212 -192I -232: (7.6533: 416,379)

I: nd Trasrt Efqipmt : Pub i c : : . 2 3 lsf InJ: lot: 302t 3.032 10.36 :322 302 -In:2 -lx: (5,943): 44,44712-I ---- ----- : Private 2 2 3632: 1.18 3.3: 29M: 422: 6.313 15.452 2422 n: -19n: -2921 31,710): tl2 n wI ad CPIt"L _O:m

: 2 1tt1 : : 525%: 0.9": 2.45 2 30%: 53U 0.63 1.6 I 4311: 421: -32t: -92: 34,2542 576.1340I Wm MAL i -1

I f ------ P Pblic 2 5242: 0.9t: 2.35: 351 562: 0.6t8 1.66 422: 43%: -112: -B2; 84,4262 49.9-57:I 48 Virus 1t3 ProdKct Lions : Private 53222 I.0 r- 3.122 2622 51U2 0.72 2 1.87 2 352: 322: -18t: -142: (172): I6,B33

2----- …-------------~~~~~~ ----- ---- ---- ---- ----------- ------------------ -2 -- 2-------- -2- ---- -- 2 -----I Brad tat : Total 50222 1.40 3.72 m2 532: 0.97 2 2.39 232. 13t: -3522 -3222 l26b.49932 29,937:I uithbt Broryaud tbc2Ko :2 ----- I - 2 2 222 2 Public 2 492: 1.54 3.93 3322 S522 1.07:1 2.63 I 1I 92 t -m:1- (261,3272: (56,246)2

2 Private 2 2 53222 1.00 3.122 26U 5122 0.72 : 1.97 35t2 3222 -3322 -3422 (3722: 86,1833:-------- ------- ------- 2- :--------- -- ----- : 2 : -- : :

btes All date for t9S. 5aw prices ouJ in sil ecomic calcmlattms.Shado exchae rate for 3m %sa ntiusted to be US I I * Ih 40 Ava3e official ectsg rate eas tTb 15.291.esolate valm in cols.13 ad 14 are is theund Tshillios. Negative values are ts brackebt.*laf stnds fhr tsfiote.oprwatiua Rate of Profit * Dosic Value a aims Lar Cst divided by Rnes.

bru Ecmic SUrplus Value Added es Labor Cot, at lNerid Prices.*2ttaidable Variabies Valu of the Variable if a firm Imld hv achie@d highw capaity

utilizatim, asssis Po foreign atcap custraint.

- 132 -

1- I s I £'i

51lSl"~~ fti

j... . 2 jI .._. 'i

pap 1

THlE 7 2 EFFMICIEE OF MuCt LtIME IT t4 II tWEITY

: : t : 2 : 3/(b) t :tl t 4 : 5 S : 7 : I*t : :

I Efittiq of to U tI:t M:: I id P11SC SO ftilt SKt2r Ttd IMt- OK ( I :tAt t OK ? I t Wm" a tt MOS11 OK I :.wr ttC I "UB- IC <.5 It=- at > 1.5:I I S : MllJlTtI_ PlttCES I : 2--* : - -t---:-- -t-- ---- :-- : -- ------- :-.--.--..-. :--_---1-

I: Pi ot is(toot) 24t ms : 21 (Ml : tu ( tn211w 1: 9 I2 : 32 (e1mI la pulic Wtr tkl I I

I S---t 4Prvt kt 1Ttl IE----S :--u :-- U-UI --- LS----:~ IU----tit:uu------(1.5:u- -S31 >

I hawt UN$ IZ t 0 fte} S 27 t8 : 7 (t1 t * (M : 6 0 : 2S (M) is IS: 1' HOW 1S in 2.+vtX wtor Its) I S -:- --- :- ---- ------ :- -- -- -- -: - - - : --

I Total PoitttUs I (a) It s(ion) 61 (521) t 29 (242 1 29 (251: 22 (19): 67 (1t 4 4351)1 48 (411)

S S : : : : : :-- : -: _~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~---.----_________________

la) Pwcmntq tw of pb)ic sad private prodKct lien is total 1k acb rw we is brackets.(b) Etelds m,ti vadw activitie (ilii(ite NCsl, *irb ar sho seperately to ielm 4.

Table 9: TOOMUI A: Mm IC sT 88l tl5 IN188 Ftl

6bmts ia '08 Tab, 398*

2 2 3 222~ ~~~~~~ ~~~~~ 3 42 II I 7 I 9 2 0 2 It : 22 232

2 Igst Wooteilfire I Ouo.tc aridtPAetstile"s 2 2 2~~~~~~~~~ is fopWt Oriteet6 fires &tu.l I ktsal I kctsa Malsuiial24watia.al2 ts k ttratealmtralaa2aeeam. LAwta ot CI ptal

2lapst ad

Iemrt-by23. -by : Capaity leate of : tot#( Rate. of Vate. of I VsIub of 2value 000 Cast 2 C tapis2 mc~~~~~~~~~~~~~~~~~~~a : n ZWtiliutlmi,btwn Prolpt 2 Pter, ef final Good: tows 2 Iapers2

I------ - ------- - --- - - -------- … --- :------- ----------- ,-

2 2 Ceti two (110. DAletI 2 .91 I s.n7 44122 -ill: -1483 -1522 50,288 32,741 4,42 1 SIM81 5,514 2 5.0582

2 * ~~~~~~~I 2 2Dow. Cott". Fabris 2 0.62 2 2.20 2 M42 4221 -i07n, -20633 668.524 MAN740 2 0.728 2 o,r 23,M 205,9

3 Uttlled Faaksn tOWMArku OX.4 2.411 I 4222 5sn2 -4422 -2222 65,967 2 52,034 2 4,934 1 0,086 27,053 O 4sm8

2 2. 4 fua Fabric 2 .46 2 .69 2 4622 5u: -sat: -922 48,960 34.248 2 24.828 6.749 2 9,24 : 4.09

2 2 5 S~~~~~~~$aints INS.. Natet) 2 .38 2 .43 02 -2 -5333 -622 1*6.232 2 88,325 2 3,008 20,627 2 ,733 Zt2,233

2… -- 2-------------------------2-------2--------2--------2 …~~~-2 …----2 -…- ------ I --------- --- I- ----- - 2 …--- -- ---

I 6 19e41ax (Ow.11aret) 0.56 2 .80 *7n2 1512 -72.2 012 26,853 2 13,689 1 13.144 - 7,323 5,887 2 1,743 2 3. 2~~~~~~~ 7hso" 2 0.622 2.88 472 ii : -M -322 0.768: 6,088 4,6W I 2.81462 2,2572 4,046

2 1~~~~~~~~~ 8avsat2tem MRg.3artel) I o.u: t.os 4722 ni -7M2 -222 20,478 10,433: 8,046 0,784 3,101 6,546

* 2 ~~~~~~~~9 or" Clothlflhdeps Q .33 2 .59 4722 I8n, -262? 27, 235,78 2 4,647 87,113 2 28,452 : 22,562 33,345

…------I----------2 -------…2 4 210 Pipe Tobbovo 0.202 8.602 502 2M92 -4621 342? 8M2 602 M22 a5 89 2362

2 222~~~~~~~~1 CiWrettos tie.. hbrket) 0.222 0.35 02 312 22 382:i: In 73.485 327,662 377,78M 43,250 2 8,02 2104,90

- ---- … 2-----------------------2----- -2---- - -- …------ -- - ----- ----2--- -- … -- -.

'5. 122 Itadisuta.A8i Cololr IDel 2 0.45 2 0.9 M?02 792 -i072- 22 26,208 tt,m1 1 5.616 6,6133 7,363 lb2.55

2 2-------2----------2--------2- 2 ~~~-2-…--- ---2 22~~~~~~~~~3 Pvtlaed Cawet 41100.0wark 2 0.69 3 3.48 2 m92 -1222 -3322 -12n: 39,248 2 MM59 I J60,0 2 4,460 2 167,3312 272,937

6 . I I I I I

2-- -- 2------------------------2 … 2 …2 …2-- ---- I---------- ----- …--- ---- 2---!--------- ----

7. 1~~~~24 Patluef cometoo.owmte 2 2.242 5 .07 M 52 -in.2 -8422 -in2. 337,420 2 MM3.5 25.030 21 56,048 70,85 2 254,083

…----2- … :---------t----:----------: …~~~~~~~~~~--2 …-- --- -

8 . * 5 Shea Di.2 . 2 24 2 M22 62: -M'2 -2522 5,772 7,35: 32,264): I,3=8 3,396: 3,733 2 2~~~~~~~~~ 16AUe t1wo. twitI 2 tel 21 2sf 2 #22 91 -592? -2222 37.347 2 43.890 (51,43)2 6,122 1 6,044 1 7,490

2 27 Sk,ep S&2.i 2 2.3~ta I .2 32 -2 -28,2 -4222 2,0282 2,229: (t.21 D? 2382 am5 8312

- -- 2----- ---2 …--…- ......2…---- - - ----- - -

3 9. 3t batdSkiu Ike. bybetl 2 o 2 I4 22f 282 4312 -192 -2722 3,32 3,686I 238212 7732… ,33122.610I2 32t bee skis86. NatetI I 2.f I 2.4 M,72 4322 -2202 -3222 4,437 1 5,252 I thi24)2 1,933 2 I,80 : I,52

1 2~~~~~~~~~ 20 USda. (1110.Parm?t I 1.4 2 2.2 6722 922 -3922 -272 37498 3 8,802 2 112m,24f 9,21 2 133,712 t 24,2332

----- --------- --------- - - ---- …-- - 2- ------------- -

110. 21 228e.rwearro Ira. beets 2 2, 2 le 6122 2422 -50V -722 78,613 873,86 2 286,273) 23,34 - 62,6472 929,607

3 2~~~~~~~~~ 22 Alt.olve pi bts Mm2e.) I 0.32 I 2.76 ml32 n22 -26: -22 96,13 92,303 2 39.3 I 2,226 2 5,719 2 7,837

I 2 ~~~~~~~~23 n )steel 82ts ta I.4 2.4: 372 32 -9622 -202 77,76 1 24,2?6 2 446,4ul: 3,652 I 7,768 2 8,37

Wm sonIh uerbea rate seeis I caslcstaotles aD S I Tbk 48.up-&wpt Seletiasti rtow to tbeg acti,itles to espatiqg fires 05)3, i.e. It i.ta48a to 95w aludedlctle. Of tOe efticleaty of4 see (I.a-ee te civities) of tOe fowei" earbaip gaseated by ewsgt.

Table 10: ;wzuna am, attm~1'3 NM19 lU

6bt1t to *0W0 Tsl., 2906

--.--- ~~~~~---…------ --------

2 EaR t kimtotd Firme Expo,rt Prod.ct Line ktsal ktusl 2 ltml :Total IPartisl :11praictao.a2Partia22*ctual :Itralo.1.wwapamuw,tml ;o "-~

hSbort-IiuL~~-*u CSOatitY IFiQacli4l Financial Rate of IRate of IRate of: Vaiw of Voice of vai Al"e4s lLabor CostlCaital Cpital I * Div~~~~~~~~~~O : R D IC :titilzatioaMsite of Rate of Profit :Profit lRetwn :of Fina2 al God: mpts ICost 1 lwts

- -- --- -- - ---- --- - --- - - ----- -- ------- - -------*--- - - -

I Cotten Yarn IfopWts) 1 . 1*1 6421 -32 221 -9 29: -42M.93 2292,252 394 3,676 3.312

----- --- ----------- ------------ ------- ---… -…- ---- ----- --- --- ----

' 2. 1 ~~~~~~~~~2 swats utpurts) o.*1 1.521 9021 -4: -in:, a. -ont: -721 24,229 1 ,o,si 3,555 1,4 ,9ts19 4.536* 2 ~~~~~~~~~~~3 Kititted Fabrics (Empots) 2.54 1 9.41 432.1 622: -54221 622 -1521: -l92V 24,69B 22,929 : ,70 4,495 :2,154 129.536

- ---- --- ------- --- - ---- I---- -- ----- ----- -- … 2------:-----------------3 1 ~~~~~~~~~ eta-Was (tsmtst 0.72 tam2: 472 262l -62111 2Ml -lIet. -721 *,rnm 2.416 1 ,00? I,aM t ,925 : 2,017

S Javae Kitmoa (Excpots) : 0.76 : .36 4721 1921 -6921 2121 -22021 -921 5,944 1 3,666 2,279 2 1,63 1,3221 3,010

2 4* 1~~~~~~~~~ 6 Ciqaettes (Ewspot2 I 0.13 1 0.40 Sol: 32221 122 942 24I. sit, 19,920 4466 45,22M ,9 12.140 124.106

- --------- -- -- ------- ---------- ---------- -------

1 1~~~~~~~~~~~ 7 ladiatars/iCi Cooler IE:ports): 0.12 1 .52 I 702 962 -12921 4n21 -24321 -1s2: 2.5193 1 ,434 I 2,259 my91 1 3 2,071 4.

… 2----- …------------------~~~~~~~~-------… … … …-- -------- I---- …-- ……I--- -------- ---- I---- -------- -

6. 2 P wtia. e .st (E# Rosma) 1 0.69 1 3.49 MI292 -I21 -302 521 -7621 -2221 39,090 33.2521 5.9*0 4,100 I16,54?1 26,1195

I I S I

2 7. t 9 Portland Cemet (Esp. baedal 2.24 1 5.0? 2521 -221: -7M21 -512 -22221: -:92: 35.369 1 32.893 2,476 : 5,543 ? .066 25,2292

2 8. 2~~~~~~~~~:10 Rides (Imports) 14 11.4 4122 1221 -5221 4721 -2842 -29x1 27,22 29,727 I ime: 4,09 112,22 II2.660

… …-----, ----- ------ --- ----------------- -------S- ----------- --------------- -------------------- …--- - ------ ----- 2--- ---------- - ------------

I222 Ridbs (EmpWts? 1 2f I 24 6n11 5421: -23221 5211 -2822? -3922 22.695 1 28.962 1 4,26611) 4,425 ? .139 1 2.972

9. 222 so"m Skin (Impots) to#n lot4 2721 M9 -214721 4721 -45622 -392 1,109 1 t,569 (45921 30 M 539 1,049

* ~~~~~~~~~~~~123 ouat Skin (Exportsi 1 2f In2. M 9: 492 -t2272 4721 -37521 -352 6,262 1 0,4921 12,32911: 2q299 1 3,.6 1 7,42?

2 2 1 1 1 1 1 : I 2 2 2 1 I I 1

… 2------~~~~~~~-------…--- --- - --- I----- I------------ ---- i-- -------- ---

l0. 124 Avasimium Products llEpots) 24IM 2.4 23: OX: -4M2 2in: -922 -422 44,7?17 45.463 1 746)2 599 2,31? 39,323 I

Irnrci? Actual RES119 eit

otes: aDM= eachauqe rate mmm in calculations; US * I a TS6 40.1111-13Vo't Activities refe to thos actiVities inl esOrtiag fires only, i.e. it latends to 92me aisilication of the efficieny of Ms (is ams-esportinq activities? of the foreign euchanq "worted by eparts.

lstal FuasKiel Rats of etutm bclede lihe direct reterme from the activltp-s sports (Part&ialRate of R,tnra2 Andthe indirect retus Iris atilitiq the retained portion of the, 4weip mschuqge qenegted atheou m-epetie, activities shich are (profitably) sold dmemticelly.

i---- | Ti--------------------- - ---- - ---

~~~~~~~~I I I { ;|§r ir

K p~~~~~~~~~

g 1- 2 1* * 12 1n --" *-0f

--- 8' '-----lI I I m --

i.i .. .. . .I..... ..... .

T~~~~~~E

iF~~I a 12N1a j §1 1 ' ^

-~~~~~~~~ -f -

hpq2

Table 14: On OF TNUZIA1S .LUCTIUUI U FUU r EKIt TO 4U IWCMIWI SPIVat, .o

*~~ ~ ~~~~~~~~~~ a a

I Eff iciaet : toeff{icit I £1ttonlv lof icint: I5 ~ ~ ~ 4 I lqnati} Vau Aded I ToX tal

Efficimc : S rt- ORtK ( 1 Shat-t IIRC > 1: DIC a lifiuite :

I _r of ktivities? 41 Mi 1 33 (29) 144 (7?) 118 (100?) : ------ *:-----:----------______--------______------- _I

Gross Output in 1994 1 2.9 4? : 2.8 (26?) $55.2 (27)1 :200.9 (100?): (t .rld prices) :

: :

:----- --- ::- :

D T ULLATION II in tn82 1 $14.8 12M) 1 $17.3 27? $31.2 (49? 1 $6.3 (1O0)

I OT.LUXATtUUN Ii ian : $22.9 34) $2.4 (1ta : 833.0 (49)1 $68.4 (100? 1I

: UIT MlCATIU I : tto i4 $19.6 (2) I 1221.4 (2M?) $41.7 (50?) : 82.7 (100t)

I o i99 tS 8391.3 (24?) $ 20.0 (24I) t $42.7 (5m) t 812.0 (100?l: 1

:ITOTAL BP" DlllUTttiil:t 1982 - £ I $7.6 (261) 1 $72.1 (2413 : 1149.6 (501l 1 $2%.4 (100?)

Ida - Shar of ras total is bractets.Ourn issima Intrial Efficiescy horve, 43 firos, 11 ctivitits.

Table 15: UR UIIK5 USYlO

- :~ ~ ~~ : 2 : 3 : 4 i s I 7 I U I v I) to it I 12 I 13 I tI

liduitrial Sebseturs I late I ctuall Atuall I Atul I Attaisble AOttainbte MttiaIble U.11erational: oSsm I Rt : ctual :Attainabe WI.autial :ktual wse:* l~~~~~~~~~~~~of Effective I gbwt-u Molon-R Capacity :CAPKcity :uh.t-Owe L.g-Ros I Rte of W aciliaaafEeuc :kEcmic uI P ,t :EuecI* I ~~~~~~~~~~~~~retectiu I OK OKus Utilizat : tilitat I anC P C :Profit Odomut Retwrn I Noter Return :Pratettion: Septes

--------------..-- ----------- ------- …-

:: Fat Products : n a .u: 0.931302: 562: 0.22 I o.s: mn :24t: Mn 21: 191 t: t V19,t,4

I-- - --------- - ----- -- - - ---- -- - ----- ---- ------ - - -----------

*11 5 4 .3 5.9 50 I 5 137 4 an 421 M I - 5 53 M.3

---- ~ ~ ~ ~~~~~ S --- ~~~~~~~~- -- -- - -

119 icaneles aid Fertilier : lfiaite lefirnite :itrnsitne : 12 34 Imf.2te I lfinae 4iz1 342 2 m I -2162 -322 I 302 1423,0681--- ------ ---------I--- --- - --- -- - -

IWI PbblaStlc ,rndbod uuceutical : 1762 1.062 0.241 $12 1 452 0.42 1 1.406 2ez St -52 -72 1 -192 13 : IM,601; :-------- - …

:Vt Ino Steell dFriie el niret l refKtsnite ll6fr2it 1 32 60521 1.211 I 3.73 1 0 I 592 n 9 -2o2 i -IS in5 1 (1432,5tPI------------ I- ------ - I----- - S-01- - - --- I- - - - I- ----- :

1911 Racbbery sassbd Tano tEqPaprn,et 1 3092 2.62:1 3.241 2 652M Mt07 13.10? 13 M n2 -2491 -122 1 272t 21932,69: … --- :----------- ----- :-------:-------I--------------------------

I "TAL ~ ~ ~ ~~~1472 O. 2.01: 7. 2: 132 1 332. : .79 13.1: 34 2021 t2 : -152 1 -tit 1 4 13,2371

Retest ta) Shadoe,chap erate for 19leanestibated tobe I US 1;a 0 ot .s b) Iefirntt. valons reslt (roo the subweturs operating at rneattve value adde at uwld prices.

Coleus:11) E4fective ltat* of PrOtectiui: Value adde st d0omstic prices divided by value adde at wuld prites, tMes Me.(21 kctual Short-Rm INC: Labor cost divided by value dded at earld price, at awtual capacity otilizatiter.I3) Actua Lop-tos MC Autua capital cost plus labwr cost, divided by value added at vwrld prtces, at actual capacity fetilizatiorn.16) As 1. (2), at attaIrNAbe capacity etilizatico.17) As in (3), at attaioable capaity eitilizatiorn.(9) Value addd at domestic prices miami lawo cost, divided by sales revurn at dometic prices.19) Pre-tax f irnacial retort me capital.100 deter-tax firneecal retworn m capital.111) kONesiC rettrn me caPital at actual Caaity utilIzatioR.(121 Ecaoaoi return me capital at attaleable capaity otilizatim.(13) Ret financial retorn mimes mcuoeC retort eo capitol (tel 10 . Co] 11).1141 Valwe adde at mwnd prices esims lab cunt, is -W0 Tb.

fla 24,1984 Pap!

Table 16: T*#ZAUA 13057111 SECY WVINEt Efficioecy 1alyais of the ladiatrial Sector

Table s SO11?W OF ISJII MAL FDO* P CT 31OM Al SI'MO PRICES

--- - ------------- i------------- I----------------:------

I I I 2 i 3 1 4 8 s i 1 7 : B 9 120 I It 1 2 1 33 14 :15 i&t1IIffIcleecyIurnwy ------- …---- - ---- I--------IfOw IWUtiatla Sctor I Whqhtud 1 Ome- : lopot laport. CtaptalIeortlktul Wone. 01fT'uzfo. IWVa g oe. Vat"e 11let.OUTPWI Ik.;0PUIT list. Value tlabor Cost !Capital Cost3hfrt-RaXlonq-Rum.

Activities IEepIaseentlEmploiorotl, Cooteot I Contest .Cap.9till Value I Value Added I Valuet Value 1Adde 1 11OE 1NI 1 I I~~~~~~~ ~ ~ ~ ~ ~~~Factort 1 I 1 : :I 11

------ -------------- ---- - --… -- ------:------ -…----- - ----a---…

Ileta for tIe 1,354 2002 107,475 1 1.53 3 297,149 702 374,546 682:. 252t13,CIS,60? Z: *S5,i96 I 452,891 : 479,579 1422.M9 PAss,7 M 356,455 1 108,345 O.99" 2.911:Ildostrial Sector 1I1SI1111

* ulic I 501 M12 46,622 1 1.63 1 3164,454 7221' 334,144 6821 251SC,A133,1 2055 2717132,1 2,4 a 2,3 1 5,331 09 127Private 18,354 732 60,353 1 1.54 $1 32,493 492:1 30,380 6921 2421 3521,719 I 327,302 1 242,338 $M22,422 1 3193,135 3 329,242 1 331,919 41356,412 : 1.09 3.09 I

:Total 4w Activities I 674 3421 40,134 1.41 1 49,122 421 329,960 7021 392 $36,353 $1 39,188 61 3 ,165 1 378,900 S 113,546 1435,354 $ 23,459 1 342,671 1 0.36 11.011

PuAlic I 39 1321 88,316 1 1.34 M 2,997 4621 314,424 7323 4322 U31,4481 391,106 1 84,354 I 392,06 335,554 1 33,533 I 311,171 1 31,334 0.31 aO.pprivate Ml59 371 21,900 1.65 1 23,135 421t 3(5,534 612 31139,9 9,6 94801363313692 2,2 1,3 22,6335 1 0.41 1 1.18

Itotal for Ativities 1 52 352 33,144 1 1.49 1 31,912 7721 314,619 7521. 2621. 236,127 1 3156,809 I 3129,319 1 125,633 1 116,03031 3",595 1319,945 W 2,323 1 2.08 1 4.41t .Wi8th SWI)l 1I ::I1I

iPublic 1 33 521 7,6191 1.61 1 31,482 W0I1 34,436 782 301 49,642 I 327,640 I 322001 t 321,520 1 31,155 1 32,364 1 4,903 1 5,704 1 2.07 14.49 1private. 1 619 9521 25,326 1.49 1 77,430 8021 312,252 7421- 2621. 23,6 $ 129,149 I 3107,3161 $104,113 1136,9812 1 37,231 1 15,042 1 314,620 2.06 1 4.33

1 -------------- ---------- ---------------------- -------; …---- ------I-----… 1~

.Totel fow ktivities t ,t73 4421. 67,293e 1.57 1 243,026 8021 44,595 472: 20? 365,334 1 3376,608 1 3273,726 $ 300,679 $ 309,2491 131,56911 M3299 1 366,173 1 tf I [of1

IPublic I 412 352' 23,236 18. 70 $1323,668 M02 319,742 6521 832 3321,507 I1 3195,309 $1 26,19 1 365,070 $ 173,061: 37,991)1 313,465 1330,597 1 ml I*1 IPrfivate I 764 6521 39,052 I 1.50 1 109,35 8021 324,343 702 2321 $323,327 1 11,300 S 147,527 $ 135,609 1 136,1988 I 1573)1 319,531 1 35,577 1 If I 10 I

…-------- … -------- … - - ----- - ---- ----: -------- ---, -I------…

lintel for kctlvitinu 1 31 1721 18,490 1 1.04 I 20,467 4121 314,335 7621 5921 3199,3311 39,553 1 103,778 1 399,67 1 350,058 1 34,60 1313,633 1 319,502 1 0.28 1 0.68

Public 1 59 1921 7,79 " 1.31 $ 10,159 3721 31,09 742 511. *107,850 1 351,349 1 35,603 J45,Zt3 0 27,768 8 327,452 t 5,907 $1 0,900 t1 0.22 : 0.41IPrivate t 256 sit: 10,691 1.00 $130,308 4421 46,740 73 MI 77 1 32,1821 344,006 1 4,175 1 43,454 1 322,297 1 328,157 1 7,72 rA 33,602 1 0.37 1 0.177

ITotal for Activities I 409 222 29,570 1 1.031 330,45 4421' 313,29 7421 5921 3247,976 1 123,697 $ 124,239 1 3125,602 1 369,176 1 56,426 1 318,136 M 2,830 0.32 10.761

LAW ( 1.5~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Ipublic 77 1923 15,952 I 1.30 I 319,325 4521 31t,61W 732 531143,415 S 71,M1 S 78,823 3 376,613 1 42,954 1 333,659 1 39,1 1 $4,594 1 0.29 OX.7 IPrivate 1 332 9121 12,417 O .94 1 311,134 4221 37,644 752 772 3t04,36t 351,900 $ 52,44t1 3 38,909 1 26,222 1 32,747 1 33,325 1 10,234 ! 0.37 10.32

._ g.--i-s -. --------- T-----1K I - *di2 f kfi 1 fl

Ii: '£'"LI XX B| t-T-1

- - - - - - - - -- - - - - -- .*- - - -

~~ Ib b I

.0. I.. w *

__~~~ _i ____ _

_l,£__O - -^_ '-, $- ---- - -- -- -I-

. V I V * * IZffl~~ ~~ 'I2 . si I' if!{{

tml a!.R.R~~~I & I e 11 f r Ee2r1

bb ~~P

{9 91 t011 3 I" a lG § 3 ffi- o it - t

-141-

^~~~~~~~~~~~~~~- - - - - . .- -- - . .- - - . .. - - - - . .. .. - - - .. _- .....___*._______,

!sg.1.;..w-1.t....1t.t.1 ..i1 r

15 .w|^ X Xal8 X

re, .... __..

0~~~~~~~~~ 9 aes3Ri aXh

.. ~~~~~~~~~~~~~~~ - -- - -..... - - -..... - - -........... .. - - - - -.... ..

- - . _ - - - -- - - . '. - - - ._.___-__

Table 17: 712231$ 11231141 SECTO REVIEW: t 44 ideny btaly.is of the Industrial Sector at UosKutioral Lasni

Table t 11. 9 3561EV isis FOR OCTAL OR Al n M M cP

112 1 3 2 4 2 5 3 6 1 I I 8 1 9 .1 to It2 1 21i 13 1 U ias : 26t3 EfficIency taarv I ---- ----- ----- ----- 1----

I for thi Indutarial sector 1ftr- I ualtrted tEsployseat: owr- 1 1smet 2ut: Capta leort:Acteal lb.. OUTFI1TID. I311730. Value llt.91JP'lT 1 IFA.1'I1TW list. ValueXlabor Cost CIWtal Cost3hort4uuU.os,-Itg2I shp :Acti.ui. : :Eaptsynot.l Ceetet I Content lCap.IItil! Value 1Value 1Added I Valuse Value 3Added I U 0

1 1 1 * :~~~~~~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~ ~~fKtor3 I :. 1 I:: ---- --- --- ------------- ---- ---1…-------…----1 …--…------- 1 ------------------------ 2---- - ----- 1-

'VI Umnicals and Fertilizwr I Total : o fit: 4,927 : 4.32 1$43,904 Mh: *4,346 431: 3221t $119,947 33 $6,283 1. W5,62 $48,931 $49,422 I (452132 $3,043 1 $6,93 1 tsf I [of t ~~~~~I I 2

1 ~~~~~~~~~~IPeblic I 24 523 3,81 1 .49 :$12,068 86t2 $2,024 701 512t $24,82 $17,042 $, 764 1$11,694 : 12,867 (1 6,173): *3,134 1 $2,913 I 1sf 1sf I lp~~~~~tfrlatel 86 621 3,209 5.231 $32,837 90211 *2.322 582 221 $9, 120 3 09,2431 $43,877 I 37,217 1 36,555 1 66 3 $2,90 *4,0261 2.811 8.9424

Wvit NM"r, elam, bed I Total I 73 421 22,192 : .70 1 $42,171 692- $11,152 80121 331t1 $131,87 1 8,359 $49,5353 $49,912 3$62,307 I u8,6e 1 13,922 $13,917 t 1.62 2 3.24

I ad P&W, Comt I S I ,S S,

:Poblic 21 21 421 4,947 2 1.41 2 $15,287 472.1 $4,471 7121 332. $45,55 $32,709If $12,04 1 $76,33 I $2,83 : $3,576 $3,570 1 $6574 1 .00 2.1 I ,

I Ifrivatat 52 421 17,244 1 1.74 1 $26,891 702 $4,481 8BU1 3111 $86,321 1$49,649 I$36,673 1 $43,524 t *8,497 t 45,029 1 $30,35 $7,3431 2.06 I3.52 I

I lbtal pi ts t ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ * ,t

2 3~~~~~~~~~~t ic3 36 n 611 1.4 '" M 2 1nou 26% 27,5 .304 *2,0 3 ,99 M 14 019) 1307 $71 isI f

t I I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

-------- - -------- - ----- ---3-------1-----2------------ -------- 3------------1 …

I91 grmn ateme I Total 21 235 M 7107,4752 I-s.o 2$5,105 9M2 $6,402 7922 3251$1,08,6127 $70,760 I $3,922 $49,1017 $582,34 2 $743 I $4,3435 I $18,043 O .70 11.28t

2 I~~~~~~~~~Public I 36 72l 46,39 I 1.46 1 $14,0,9 892' $34,872 3 $22l $78,960 t $55,042 I $20,3,99 $44,949 2 $4,65,4 OV,3$28 $3,031 1 0043,21 laf 2.1s I3 I~~~~~~~~~~.Privatel 100 7Ml 1,51 1 1.50 1 $1,90 Ml2 $1,52 6623 132 $29,732 $15,712 $142,0 14 $14,253 I$93,192 $2959 1 $21,268 $2,4331 1.09 S.7" I

Table 18: TISZEA ttt0Ri. IICTOKt 49911 E#fitievy matyv,is of the tedetrial lecter

TAle I O303? 99 59I1f YOME FOR ATTAISAE PC AT MOM9 POCEO

I I 1 1 2 :~~ ~ ~ ~ ~~~ ~~~ ~~~3 1 : s lo 1. i : 9 : 9 1 1 it f 1 2 1 13 1 14 Is :

tim badetrial hKtwr I 001961u0 1 - Input iqint: capital lopervattaiaael:es. 0WTP 0TOsS INII 000. Velve hlotOMPU lt.tIW1M '-lt. Viee kaLrOm at Itapitat C.,t1t-om:Line-deI ktivitlen 'EmoIeysetIap1ormeatt Coateet I Content 1Cap.Ultill valver Volv# Added Value Vat"e I Added I I NC IC

…-1-----…-1----…~------- ------------ - ----------1-----------------itftul for the I1 ,05o IMo: 107,475 : 1.5 : $Ws,0n n: o74,30 6n: 492:o:,0oIS,617 : o63,76 $M0.2991 310100,789 o901,906 I 0,9900 1 M7,73 1 06,35 0.711 1.02 I

tiewrid bctor I I I t A . I . .

Public I lOt 272 44,622 1 .&3 0373,89 74: 034,26 I" 6fin 461: 049,941 0204,415 1$210,353 W 535516 0490,1221 onj" I 020,7M ,iWA 0.43 : 1.auIPrivate : 1,314 7321 60,0531 1.56 IM29,274 69: 040,39 692V 522l 01,719 027?, 382 : 242,338 1 065,192 10411,682 1 013,510 I 041,925 1 4,412 97 1 0.9I .0,:

Iltatl few ktivitine I 69 421; 32,621 1 1.33 10110,93 Sit.- 027,419 Ott1 s711 357,211 1 189,306 $ 161,904 1 310.163 0218,140 M9,02 I 023378 039sP ? 0.51% I0.69

Pulic I 77 lttlI 10,243 : .39 : 02,39 462: 011,22 7M: 421 0132,339 1 49,425 1 042.914 1 029,921 1 64,331 o4s,so I 08,2 ofts, : o.au : 0.52Privaute 1 92 MI2 22,579 : 19 os,osm s32: 04,19 in: sit: 0224,972 1 1119,91 1 0105,991 : 200,240 0153,90 1 044,432 $1 .0179 024,223 0.32 :0.89:

:Total for ktivities I too aot: 21,240 1 2.18 1 04,79 M31 01,343 "4I1 54U: 094,974 $44.33 1 $41,011 1 47,721 1 $57,229 0101,492 04$,493 013127 1 0.41 I 1.39 I

Pattc 1 20 IIIt 9,212 : 1.44 : S12,992 43?: 03,144 4922 6411 044.59 1 o2,99 SZ0,70? 1 027,33 : 02,4481 S6j09 I 4241 0,3! : .62 1.203Private t tOt 99: 3,029 1 1.15 1 02,0,14 MIn 02,199 4221 0.- 043,279 : 023,97 1 24,304 1 00,334 1 34.760 I 03,42 1 $?,I37 1 03,571 1 0.59 11.3

------- …------- - - ----- -- --------1 --------- ---- - ----- I----- - -- 1---------1-----'--------

ivIth 0.7 ( 9gm4 ( I I"9 IIlI 21,294 1.40 1 132,620 772 $1 0,494. MI2 532. 1 OtS,520 1 07,749 I 049,71t 1 0191,497 $1 17,M3 019,714 t 016,13 023,50 0.89 1 1.53

I Public : 4 35I 4,011 1 1.43 : oa1,t 9321 03,525 63: 21- 060,043 1 34,114 1 24,329 083,149 ST07.92 103,440 1 3,03 1 5,400 0.90?1 2.34 t Private I 130 6Olt 17,204 1 2.39 1 66,452 72I $6,9s, B4:: 67n1 091,477 s 5i.5 1044,422 1 0107.0 1 091,913 1 14,015 : 013,491 89,110 0.10 I 1.34

…-….-------------- - :-- --- …-…- ----------- --- --- I------------1-.---------t-------:I I I t1stat for ktActties I I 1stlt flUE ( I 1 ,048 s721 4,351 12.64 I 020.610 6421 043,24 7121 14?: 0606,64 1 32,93 029,4"4 1 56,38 1447,1511 0122,231 1 0446,313 $601,258 0.38 10.E

PuMI it I 165 tat1 22,444 I 1.41 1 01.,3 6421 017,893 7121 5141 $23,"Jo I 01210,027 St 1020910 122,330 11024,729 0156,101i I tsaso: 1 5,60 I S, : 0.20 t 0.11 IPrivate I UT3 8421 42,999 1 1.68 1 0174,072 422 03 25,31 711.1 5411 S ,038291 0194,112 I 0174.716 1 034912 $M29,422 1 64,133 1 038,7 I 03n,906 0.44 1 1.01 t

fteta Pu Acttivities 2 106 1 17,147 I 1.4 I 0201,197 3tt1 0t2,461 6422 3M210214,023 1020,331: 095,27 I 025,349 I 0247,407 1 94,661: S1,W9 I 010,902 1 2.8 :544I

Public I i7n 1 11,2 1.49 1 0165,967 9411 06,924 U4zi 3622 $142,069 1 $67,093 1 04,9741 0199t,5171 021",04 I 2,37 I 0?,99 t 03,92 I 3.08 1 LOtIprivate 1 333 1 1,366 1.24 1 035,33 682 03,517 702 44311 071,959 1 041,73 1 030,221 10473191491 0,7 1 04,0M : 4,4471 1.30 I 2.9 I

Table 18: TANZANIA INDUSTRIAL SECTOR REVIEW: (cont)

1 2 2 22 23 1 4 : 5 161 7 2 1 2 9 150 222~~~~~~~~~~~~~~~~~~~~I 122 2213 I 14 11 22t 6 *

:fw 1ofstrtat factor altedtg I ow- I 2e9t wt 2a vi t api lqurttfitawtowin 1001231IN& 1W 1Dwe. Vains 21103.390 I 1a2.31 Ilst. Vanu fLAw Cat 23q13a2 0ss3wrt4hw1.swp-Dm:k Atlvltlu If2~.2glust .. Coiptt ?Cq.ft22 vain I Vains I Wols 2 Wals I Wales Wi I OK PC w

2 2 1 ~~~~~~~~~~~I Factort I I I I I 1

hTtat ir Activities I I lullS VW ) I 1 306 43tt 42,119 12.52 S372467 322 IM301,6 663 4121 S140,031W I22, :l $126,225 I 0431,32 2 45,657 4123,332)t 12,31 4,S@: h I ha

* 2i Mjlg M. 2 * I I S1 I *. I t I I t I t I* 4 tSI

* sh2c 2 335 4231 24,256 I t.74 1 1261,263 on: it.,M ml su9 217.W192 2 1257.116 099.6031 *31ie.6 I 132.397 I 4120,72222 913j"7 : In.I lot$ toh I*prIva te 472 1322 27,96 2 1.34 I 1207,20 63n2 15,027 67n2 4423 1112,M9 I M6,270 I *67,622 I #126.640 I 1229.260 I 3122,62052 *12.21 I 122.56 I hiI h

21st.) for ctlvltlss I 441 24l 23, 19 2 ."9 I 174,523 1422 113,33 7! 62l2 1263,14 t $133.243 . 1133,21 I 122.4645 01 40.613 t 2 17.9 *t6,656t .12,4 1 0.24 1 0.1 I

i pfti I it 26a: 9,022 I 2.37 23 60,724 423: 06,312 743 72! *ugs,= I MW S9,693 11.5 2j" $13.M9 142,319 I 17,036 2 *,4s. 1 .12 0.43 privats I M7 3432 14,646 t 2.t1 2 653.?" W43 1,615 M 701 54 , 113,52 1 7,543 1 174,539 I 1136,224 2 89,6221 436U,M9 1.0 MA *14,4P9 6.312 9.71

27.1.1 for fttivitias 2 670 36t2 14,04t 1 2.33 I *215,373 1321 $13,979 M32 6022 14,6,311 I237,250 t $211,561 2 0413,301 2 130445? I 1169,345 2 =5,1051 6 43,947 2 0.35 I 6.15*2s1tbl uUC(I. 1. I I I I I 2 2 I I I I 2 I I

2 ~ ~ ~ ~ ~~1 2 1 :212*2 I Pullt 2 37 2322 26,536 2 2.361 2 34,407 52 0112,040 733 69321 *111,452 I 177,062 2 s17,992 2 u?w sw765 6,63 I w6.9 s6 10.91s $1121,061 I 0.22 I 0.53 I '

2Private I 162 M:1 37,524 f ."1 I $140,392 602 120,93 M2: 5622 $297,759 1260.239 2 137,569 M 26,197 IM8 1252: I160,379 2 Wj"59 I Me%~ 2 .46 O .94 1 ------------- 2 ---- . ------ - ------ ---- ---- -.----- :----------s-----:--:-----2-.-.---2

21.1.1 4w ktluitla, 2 360 1632 24,M7 2 2.79 2 $172,270 6322 $123.2 6422 4332 1296,05 1 122,02 83262 I $177,91 I 120,969 2 IS23AM)l 012,115 I 12,53 1.4 1sf I

llater.W ile I 2 1. 2 I I I 2 2 1. 2 I 2 I 2

2 Plk2e 2 262 5422 22,37 2 2.02 2 199,396 77: 17,349 163 4422 $125,222 S 10,495 : 4,63 2 #126,210 I 1129,460 2 1123,29)2 11,36 2 4122,1 2 ls# I tl1 PIvate 2 256 46t2 22,596 2 1.S3 2 817234 93l 112,472 6631 4232 130.932 2 14,532 I 137,460 1 16,8671 177,362 I 2125,69422 1?,20?: 327,436 2 1.f hi I

19.6.2 #W Actlvltle 2 1,55 64: 92,502 2 2.54 1 43,607 703, 1M,726 693 502 126223 I 1452.709 1 370,663 I 132.73 M 1694,33 1 #22739 2 $13.133 = 1,24 2 0.45 I 2.36 Itais lflee 2 I 1 I I I

t~~~~~~~~~~~~~~~~~~~~~~~~~~~~ I2 I 1 2 1 I 2 II hm~~il 2 433 223 32,247 1 2.41 1 62=,40 Mt3 1269 6322 46211 1362,34 I 122,920 2 011592 2 129,40 1 16,71 1 13,6W 1 623415 1 139,27 1 0.4 2 2.97

PrIvet.p 1 222 1522l 43,51 1 .72 1 2221A,402 4222i 123,90 6722 40121 440,35? t 12,31,49 2 126,95 t 140,3251 2 103342 2 4609,20 I 134971 $ 4146,7 I L.3 2 2.01t

I teIutm tI % 3M V? 2 2 2 3 2 2 m 2n t w $ww 11 . 26 1 3I O 1 221 M 1 MM1 wi L 2 2 V

2 PIvate I 1,23 Mt1. 39,32 1 1.6341 126,V44 663I 35,112 G131 ml 633,w71 2 wj 12629 173,65 $ 144,917 2 039,4n t unIo942 11257$1960 1,3 2 0.76 2 1.35$1

-145 -I w ~~~~~~~- - - - - - - - - - -..............................

s1Xx 1 5 ts I B ts I " ts I X ZflLo I t! IT~~~~~~~~~~~~~~~I - - - -- - - - - -R. - - - - -*B

.... ~~~~~~~~~~~~~~~~ _ k a is _______¢ | | 3 | @' l' = | "' =; | 5' : s : t' g | $ g~~~ St

_~~~~~~~~~~~~~~ -- - -- - - - - - - - - - - - - -

|a|! | ~ t | t lt 2 * it |t i'|d {

*^ _ ** * ^. ^ = _ Z * ** b* * * ~ w w @ ww- ^

# ~~~~~~~~~~~~~~~~~- - - -- - - - - - - - - - -

_ ~ ~ - - - - - - - - --------------- _

I-| 1l v-#g Ih i 'fi'''- i1 -''-

Table 1-9: TUUUIA 2U1 t' 5021 OM 9123 a E#ffciQInCT balpuis Of01 theodostria o at Sec.'att0 watrl Lees

table s SUSU OF lEtPND tTOT M. PP 028692 UR Al 99v19 PRICES

I 1 1 2 1 2 1 3 1 4 1 5 1 6 I 7I8 9 to1 1 2 121 13: 4 13 1S 14

Ifor the lsdeetrial Sectter ?&Or- 1b4hted iEmplo79e,,t: th- t Ipu input I Capital loport IAtteaialh2m. m1pullke. IlJIhIon. vanu lln.jAomIPII Iet.1w 1I :. valoelaho Cost IC taptl toetltort-Raolumq-ft.ship kAtivitiues lEmloyeeet Coeteet I Ceoteet 1Cap.utiI; Valetm V.Ii Mdea : alue Vaet" NOW8e 1 I DOC

I 1 1 1 i~~~~~~~~ ~ ~ ~~Factor1: :

191 Cosiecals aWfertilizerw Total 1 io 611 4,927 4.32 1 573,442 631 54,346 6321 5411 $119,947 1 54,295 : 5,621 590,900 81518,05 *2,M5 1 53,320 1 56,93 Jai2 3.73 I

I Ipuhilt 24 5211 1.911 .1 I.": $i6,m 9321 52,024 7M.- M.-1 54,927 ft53,042 " 5,794 1119,311t I 19,97 I *t,25612 51,240 1 52,913 I lot tof * I~~~~~~~~~Privatel 94 "I1 3, 109 5.121 557,145 932: 52,322 592: 4921 593,128 1 59,243 1 *43,97? S 72,47B : 6u,49 : 4,009 : 2,079 1 4,02.6 1 0.52 1.52 1

1977 aftes, UNew, bed To1tal 1 73 421 22,292 2 1.70 1154,994 4921 $11,152 902l k 65 1 531,131n 58,359 1 49,515 $1 *6,692 1 5124,645 W 2,046 * 16,921 1 513,917 I 0.77 1 1.49 I --- -- I-----1. I

1Pilic 1 21 421 4,947 1.6t M 2,960 fig: $4,471 7122 5711 545JU I 532,289 I1 512,94 I 47,311 53993 I 57,226 #1 5,046 1 56,574 1 0.56 11.47 ,Privatet 52 411 17,244 12.74 1 55,933 702 5,481 on: M:U $9,321 2 54,649 I *36,671 1 59,533 0 64,7131 $14,620 1 12,974 1 7,343 0.67 I 1.361

…--- ------- 1.------------1-----1--.--------

1911trikm, ntod and t Total t It5 721 7,152 : t.49 1502,9914 9121, *6,42 7M1 4021 *109,602 $ 70,740 1 37,922 $119,463 1 113,086 1 5,377 : 5,941 1859054 1.11 :2.41 0

tPilic 36 721 6,191 .46 1 55,421 921: 54,97 21: 722 579,930 1 55,042I 52,909 I 56,931 :560,74 it*, 135 1 3,431 : 5.7221 3.02 9.06 1 I~~~~~~~~~Privet# 1to 7n1 1,541 12.50 1 43,543 99; $1,529 662: 41t21 529,73 115,719 $1 4,014 1 549,532 1 544,290 : 4,242 1 2,536 1 2,333 1 0.6.0 1 3.

I It1 1 1i1wy 1a1A Tr, 1so,:t1III

I total 1 431M 23129,264 1 1.29 1 526,342 9111 525,906 521 3321 $214,040 2 5124,106 I 589,934 S 29,9721 5293,0421 52,931 1 51,037 I 524,34 1 4.79 2 13.2 I

lPoblic 1230 492* 5,2M t 1.49 1 2t,634 9021 54,726 54n2 30t1 5137,M6 1 59735 1 49,929 1 243,972 1 24,625 t *1,356 V1$,112 1 59,94 1 3.031 120.36 1I Privatel 293 1421 14,079 1 1.15 1 47,706 952 511,092 77t 492 1 576,757 1 53,7M 1 4,005 1 *51,999 1 55,425 1 51,574 1 5,925 : 4,402 1 .31 1 1545 I

I W IUSU.L I Total 11,854 1002 107,475 12.56 1 567,077 7321 574,546 6821 49s15o1,01,49 2 .796 1$45,991 101,000,701 1 I 9"801,99 2 ,900 1 570,7051 51016,945 I 0.71 I1.92 1I~~~~~~~~~~~~~~~~~~~~ I 1- 1

trio firmlloo odectUeouI I I 1 I Not~~~~~1i*c I 502 272 46,622 2 .63 2 5373,91 7621 534,146 4921 44211 51495,9 1 526,415 $ 210,=5 1 535,56 S 490j13 1 4539 I 52A,7 1 550,433 1 0.62 13.75 II ~ ~ ~ ~ ~~lruthi ll#,354 7321 40,953 1 1.56 t *29,276 492 540,3 692 521 5521,71?9 1 579392 1 5242,33111 0144,292 2 412,692 1 55,510 1542,92 V 5,412 1 0. 79 12.3

Table 25: TAIUWA i O VAS A N TOtI. fURlhINU PUWIU1

: : 1) : 21 : {? (41:

: t t95 : 19 t4 1 IM I

Indastrial Cateqories I Duetic : amstic: twbd lIntalleu:I Priced Priced : Priced ICapcity IValu Added IVale ddedI Valu Ahded I Share 1

: Couer oods I 52 1 462 8 652 : 342 1

: Interediateloods : 402 : 432 : 122 1 512--------- :------------ - -- - ---- - I - -:

t Capital Goods 1 32 : 112 I 4n I 15

I tal: : 1000 : 100t :100? Itl lt

Sources:Column (11 Srvey of InXdutrin, 1965.Colmns (2) to (41 based an NIES 1984.

t --- T--- - T - - -D

*2~~ ~ ___..I

2 XX;| | I;| in1 10

i , - - g '0*-f--'

~~~ X~ XIA X|^Ni!

- Btl - ~ ~ -

f .-. i 0.

e13 I .

* t' IXll I I Y ̂ T-!: 01 I

,, . -- -- -:- e .-| .._| .52 1| I f t E

a IIIIII '* 1~ -,a ,,jW,d _ l. !. ._*. s IDdi

.- I I * a 1 3', t

~~~.-~~ ~ 671 -

Table 29: TANZAUIN MInOC AN [FftCIW IN 10UST

1966 ad 198I

: Susecters t Effectinv Val uuedle Effective Vale Id:Rate of Share I Rate of Share

P: : tio I PretectiI t

:I tebic : 0.40: sin 0.53:2 er t 187? 0.661 I300 0.21: 3 Cmud Frcit ad Veetahles 1 184 0.30 31 0.1I t4 SftIrinks -232 0.401 52 O.S 5 Textiles 26Y? 0.35 1 20 0.27 °6 tyrtsud Tubes 2702 0.35: m 0.20:

: SWop 1512 0.34: S25 0.021I 1 Taninq and Leather I t30 0.38 Inf -0.12:: footuear : 1232 0.40: lnf -0.1IS

1 It lt.l Produts 1I5 0.34 Intf -9.07I 11 Glass Products I5 tt 0.62 U624 0.11

12 Pqwer ad Pw Products : 26 0.42: bo2n o.11:: 13 Ceunt : 122 0.61: lO1t 0.11:I 14 Sisal aid Jute gags I11 O."I lf -0.42 -

15 Phareaceutical Procts 01t 0.28: M21 0.01

Aerwe for the Saple 1342 0.42: 52a 0.10:

Avera for the Secter U Us 4702 0.15:: : : :~~~~~~~~~~~~~~~~~~~~~----

Table 31 :TANZANIA INDSTRIAL SECTIR REVIEW

Canlinaent Schm and Price Control

* ___ ____-----------------

:

Price Controle…--------------- --- Total :

!Confinment Scheget Nb : Yes :

: No : 26 :U

Yes 3: It: :53

total 42: 76 118:

---- - ------- - -:- --------- …

- 152 -

TABLE 32

TANZANIA - EFFECTIVE PROTECTION AND ECONOMIC EFFICIENCY

AverageAverage Average Net FinancialEffective Economic Rate of

Effective Protection Protection Return ReturnRate(Range) Rate on Capital (Pre-tax)

-25% . EPR 4 50% 2% 11% 0%

50% 4 EPR e 100% 67% -3% 5%

100% < EPR * 200% 146% -9% 18%

200% < EPR 4 1,000% 445% -18% 37%

1,000% 4 EPR s 6,000% 2,810% -22% 61%

EPR = 00 00 3%

All Activities 470% -20% 19%

Source: MIES