Manufactured goods have for the first time in history surpassed cloves as Zanzibar’s top goods exports earner, which indicates advancing progresses in industrialization drive, aimed at diversifying the isle’s economy.

The recent provisional data by the Bank of Tanzania (BoT) and Tanzania Revenue Authority (TRA) show that earnings from manufactured goods amounted to US$21.8 million during the year ending November, 2024, an increase of nearly 91 percent from US$11.4 million recorded during the year ended in November 2023.

For many years, Zanzibar has been depending on cloves as top goods exports earner, as during the year ending November 2023, the value of its exports earnings amounted to US$17.9 million, which also increased to US$18.9 million by November 2024.

However, services (tourism) remains the Zanzibar’s leading exports earning sector, accounting to 80 percent of total exports and 25 percent of GDP, as it injected a total of US$1 billion during the year ending November last year, driven by an increase of number of tourists.

According to the central bank report, the strong increase of earnings from exported manufactured goods also boosted the isles’ total earnings from exports of goods to US$58 million from US$48 million respectively.

Small and Medium Enterprises (SMEs) continue to dominate the Zanzibar’s manufacturing sector, particularly in food processing, textiles, and handicrafts.

The Zanzibar’s industrialization drive started way back in 2015, when the government led by President Dr Ali Mohammed Shein, was implementing five-year strategy aimed at involving different sectors to ensure industrial production increased to counter over-importation and boost exports earnings.

Official data show that between January and June 2024, manufacturing was the leading sector for attracting investment projects, with 196 projects worth US$1.42 billion.

The Zanzibar’s major manufactured goods exports include textile and garments, cosmetics, fragrances, food products, beverages, machinery, transport equipment and natural food additives.

The archipelago island is currently developing its manufacturing sector with incentives for industrial projects, free economic zones, and a public-private partnership (PPP) act.

To cement the growth of manufacturing sector, In August 2024, President Dr. Hussein Mwinyi laid the foundation stone for a new industrial park in Dunga Zuze village. 

The park will be home to a variety of businesses, including those that produce goods, transportation equipment, textiles, garments, and food processing.

The industrialization drive positions Zanzibar to transition from a tourism-reliant economy to a diversified one, creating jobs and enhancing economic resilience.

However, the costs of manufacturing remain the major challenge in Zanzibar.

According to the research report on the manufacturing sector in Zanzibar by Jamal Msami and Emmanuel Maliti of Repoa published in 2023, the unit cost of manufacturing in Zanzibar are relatively higher, than the same costs from benchmarking countries. 

According to the report, the unit cost of raw materials being used to produce non-woven bags in Zanzibar is US$ 1.25 against US$ 0.16 in India.

The report also shows that the manufacturer of wheat flour in Zanzibar incurs US$ 432 to produce 1 metric ton (MT) of wheat flour. It is US$ 218 in Russia and US$ 338 in United States of America (USA).

“The higher unit costs in Zanzibar are attributed to the same business environment constraints that contribute to capacity under utilisation,” said the report.

The study surveyed six large scale manufacturing industries in Zanzibar and benchmarked the situation in Zanzibar against the situation in comparable countries and regional averaged. 

The central bank report shows that the third largest valued exported goods were souvenirs and spices, which injected a total of US$10.3 million during the year ending November, followed by seaweeds, although its value shrunk by 43 percent to US$4.7 million from US$8.4 million due to decline of both unit price and volume.