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March 12, 2008

Tanzanian fish exports to Germany decline

One big concern to the recent Tanzania business and investment mission to Germany must have been the slump in fish export earnings from the world's third largest economy.

Apart from the Nile Perch, Tanzania's other major export to Germany is coffee, the top export last year, fetching $46.7million compared to $23.9 million in 2006.

The 55-member delegation led by Zanzibar President Abeid Karume must have tried to find out why foreign exchange earnings dropped by $46 million last year.

This information is important as it will enable exporters and the country as a whole to arrest an alarming trend, which saw export earnings drop from $61million to $15million from 2006 to 2007.

With the two countries having a long history of commercial ties since German colonialism, Tanzania finds it hard to lose business and trade opportunities in the lucrative European market.

Germany is the EU's fourth largest importer of fresh and frozen Nile Perch fillets from the EAC partner states after The Netherlands, Belgium and Austria.

The slump in Tanzania's fish export earnings from Germany stems from increased fish fillet exports from Vietnam, which has in recent years established itself as a formidable supplier to the European Union (EU) market.

Statistics from the Customs and Excise Duty Department of the Tanzania Revenue Authority (TRA) show that trade between the two countries dropped by $9.61 million last year. largely due to the drop in fish export earnings.

Last year, the two countries exchanged goods worth $240 million compared to $249.61 million the previous year, with the trade balance in favour of Germany.

Whereas its exports to Tanzania were $142.1 million in 2007, the imports value was $97.9 million compared to $138.7 million exports and $110.91 million imports in 2006 respectively.

Fish has for a long time been Tanzania's major food export to Germany and the EU market. In 2005, fish exports to the EU were valued at $156 million, about 36 per cent of the total value of exports to the EU.

A report released by the Vietnamese customs department in November says that competition for the EU market with East Africa has stiffened in recent years. Of course, Vietnam is winning the race.

The Lake Victoria Fish Processors Association also attributes Tanzania's losing out to Vietnam to pricing. One of its members told BusinessWeek that a kilogramme of fish from Tanzania costs about $1 more than that from Vietnam.

Tanzania Investment Centre executive director Emmanuel ole Naiko says that Germany is also among the Top 10 countries with huge investments in Tanzania. Between 1990 and 2007, there were 112 investment projects with German interests in the country valued at $205 million.

Tanzania is also the largest beneficiary of German aid in sub-Saharan Africa, with bilateral development assistance amounting to euro 1.8 billion euros (about Sh3.062 trillion) during the last four decades.

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