Merchandise export diversification strategy for Tanzania: promoting inclusive growth, economic complexity and structural change

Publikation: Bog/antologi/afhandling/rapportRapportForskningfagfællebedømt

This paper identifies industries in Tanzania that are critical for (i) upgrading and diversifying the economy, (ii) increasing export revenue and (iii) absorbing labour. First, a Product Space analysis identifies industrial niches, which Tanzania should promote to increase economic complexity and stimulate structural transformation. The identification of industries is based on a supply-side network method following the literature on economic complexity. Second, we combine the complexity analysis with a gravity model, identifying industries with high, demand-driven export potential. In combination, the supply-and-demand framework finds industries that are complex, feasible to target given Tanzania's existing know-how and profitable to export given product-specific trade resistance and geographically dispersed demand. Third, we construct an employment absorption index to identify industries with a high labour intensity. Our findings suggest a high export potential and scope for learning spillovers in complex sectors, such as machinery and chemicals. In contrast, less complex sectors, such as agro-processing, metal and wood, are correlated with higher employment creation.
UdgivelsesstedThe World Economy
StatusUdgivet - 12 feb. 2022

ID: 312643016