Contribution of the manufacturing sector on economic development in Mbeya City Council - Tanzania

Abstract

The study investigates the contribution of manufacturing sector on economic development in Tanzania with a major focus in Mbeya City. Through cross sectional survey design the small and large scale manufacturing firms were researched in Mbeya City Council. Small and large scale sunflower oil processing, fruit juices and soap firms were surveyed. Through systematic and simple random sampling techniques, 210 respondents were obtained out of whom 200 were processors and 10 officials from Ministries and public parastatals such as SIDO respectively involved in supply chain value of manufacturing sector. Through structured questionnaires and observation, collected and screened data were analysed quantitatively by employing structural equation modelling. It was then revealed that manufacturing industry contributes positively to market efficiency necessary for development of the economy. Moreover growth in manufacturing sector was revealed to have a positive contribution to commercialization of primary core economic activities and value addition over finished products sufficient for development in economy. Despite its positive contributions on economic development, the growth of the manufacturing sector was revealed to be insignificant. Thus the study recommends that manufacturing sector development should be promoted by all stakeholders through creating better environment for investment over processing industries, technology and sustainable energy supply, training, subsidies, and credits support at low interest rate.