The decision to prioritize coffee as Tanzania’s first export product under the African Continental Free Trade Area (AfCFTA) raises questions about whom Tanzania will sell its coffee to in the AfCFTA market. There are concerns about the effectiveness of this decision due to factors such as low coffee consumption rates in Africa and the presence of major coffee producers like Ethiopia and Uganda as indicated by Ezra Nnko.

While coffee is among the largest agricultural product in Tanzania and contributes significantly to the nation’s economy, coffee consumption in Africa is relatively low compared to other regions. Citizens in many African countries prefer cocoa and tea over coffee. Given that Ethiopia is the largest coffee producer globally and both Ethiopia and Uganda are major coffee producers in Africa, the author questions whether prioritizing coffee as the leading export product for the AfCFTA market is the most effective choice.

The author proposes attracting investment in coffee processing industries within Tanzania by leveraging the opportunities provided by AfCFTA’s Rule of Origin, which requires products to be manufactured within Africa. While he has put his arguments in a good way and offered a necessary solution, there are points to be clear about the fear that he has expressed. For example, attracting investment in coffee processing industries is necessary even if Tanzania would have been a leading coffee producer in the world.

Fear of Competition

The author’s argument clearly reveals a fear of competition within the African Continental Free Trade Area (AfCFTA), a trade agreement aiming to foster economic growth and enhance competitiveness among African Union member states by eliminating trade barriers. However, it is important to recognize that competition is an essential driver of economic progress in today’s globalized world. Data from Bank of Tanzania shows that cashew nuts and coffee are the most exported traditional goods in Tanzania.

The fluctuating values and quantities of coffee and cashew nut exports indicate the dynamic nature of these markets, presenting opportunities for member states to adapt and thrive within the AfCFTA framework. Instead of fearing competition, member states, Tanzania included, should embrace the potential of the AfCFTA to transform their positions in global value chains and stimulate overall economic growth across the continent.

Tanzania exploits the market that AfCFTA has provided

The basic economic meaning of a market is a system or arrangement where buyers and sellers interact to exchange goods, services, or resources. It is a mechanism that facilitates the voluntary exchange of products and services between individuals or businesses, based on supply and demand dynamics. The AfCFTA market offers the country an opportunity to benefit from an integrated African market of over 1.3 billion people. By considering the basic definition of market, AfCFTA does not offer buyers, but the market which has buyers and sellers who are over 1.3 billion people.

The choice of what to sell remains on member state. It has to be known that in free market, dominating the market is a relay race. A simple example is on technology industry, there was a time when Siemens, Phillips, Motorola, and Nokia dominated the cell phone market. Other brands have since dislodged the early entrants in the market, and they are not finals as other companies are getting into the market to exploit the unexploited opportunities. Similarly, the decision of Tanzania to make Coffee to be the main product to sell in AfCFTA should not fear the current market leaders.

What can Tanzania sell in AfCFTA?

Nnko, mentioned three products that are Tobacco, Coffee, and Cashew nuts which contribute more to Tanzania’s Gross National Product (GDP). For tobacco production, Tanzania is not the leading producer in Africa, Côte d’Ivoire is the world’s biggest producer and exporter of cashew nuts. Does this mean that Tanzania will have no product to sell in the AfCFTA’s market as she is not the leading producer of anything excluding Tanzanite? This nullifies the question of whom to sell coffee to.

Marketing

Marketing is the process of promoting and selling products or services to customers. It involves activities such as market research, advertising, branding, and sales strategies, with the goal of attracting and retaining customers while achieving business objectives. As a country Tanzania needs a marketing strategy to make any product sell.

In conclusion, the decision to prioritize coffee as Tanzania’s first export product under the African Continental Free Trade Area (AfCFTA) should not be viewed with fear or doubt. While concerns about low coffee consumption rates in Africa and competition from major coffee producers like Ethiopia and Uganda are valid, they do not negate the potential benefits that can be derived from participating in the AfCFTA market.

Rather than fearing competition, member states, including Tanzania, should embrace the opportunities presented by the AfCFTA to transform their positions in global value chains and stimulate overall economic growth across the continent. Marketing efforts are crucial in promoting and selling products or services to customers. Through these efforts, Tanzania can showcase the unique qualities of its coffee and build a strong presence within the market. It is important to note that the choice of what to sell ultimately rests with each member state, and the market provided by the AfCFTA offers opportunities for innovation, adaptation, and growth. While Tanzania may not be the leading producer in certain sectors, it does not mean that it has nothing to offer in the AfCFTA market. The country can explore and capitalize on its strengths to establish its position and contribute to the overall success of the AfCFTA.