/ 13 July 2007

Tourists versus traders in the Tanzanian economy

On display among the bold African patterns and chunky jewellery, a carved giraffe flashes a price tag of 20 000 Tanzanian shillings (about R100).

Handicraft trader Rose Mfinga says she will have to bargain hard to get half that price. ”People refuse to pay. I [inflate] my prices. That is what we are used to doing,” she says at a recent craft sale in a public green space in Dar es Salaam, Tanzania’s commercial hub.

Mfinga is a member of an emerging artisan collective in Tanzania whose market is overseas tourists who like to haggle over the cost of handcrafted souvenirs. Only a year old, the Tanzania Handicraft Association (Tancraft) has registered 200 micro and small businesses operated by one person or a handful of people each.

Tancraft’s next task is to survey how many traders are still outside of the organisation. They believe they will discover hundreds, maybe thousands, more.

Tanzania lures up to 700 000 tourists yearly to climb Mount Kilimanjaro, Africa’s highest peak, or witness wild animals roaming in its flagship Serengeti National Park.

Tourism accounts for about 40% of the country’s foreign-exchange earnings and raked in roughly $750-million in 2004, according a tourism sector report commissioned by the government.

The industry supports tens of thousands of people in a country where 36% of the population of 38-million live below the poverty line and one in 10 people is unemployed. Charter airlines, hotels and lodges, tour operators and restaurants are the biggest winners of tourist money.

Informal trade

Like other African countries, Tanzanians trade mostly informally, an activity that is difficult to capture in official statistics and which includes selling African wares to tourists. According to research, about 61% of Africans living in cities are employed informally.

In Tanzania, like other places that attract tourists, bargain shopping is a firmly entrenched ritual. Guidebooks often advise that a general rule of thumb is to pay only a fraction of the opening bid for a good or service.

One popular Tanzania travel guide warns foreigners that prices for items at the central trade markets could start as high as 10 times their actual worth. But tourists frequently test just how low traders will go.

In some cases, traders will take a loss just to move some of their merchandise or appease a particularly pushy bargain hunter, says Elibariki Mmari, vice-chairperson of Tancraft. As a result, Tancraft’s members complain that it is hard for them to make a decent living.

”Eventually it becomes unprofitable and their business will collapse,” says Mmari. He would like to see a greater commercial spin-off for local merchants that specialise in everything from basketry to pottery, textiles and paintings.

”People think if they do not get a discount, then they should not buy something. And sellers then sometimes charge too much. It is confusing,” says Mmari. ”We try to encourage our members to set a standard price. People should be able to find the same price for the exact same product.”

Tancraft has other objectives focused on the supply side of business. It holds seminars on good workmanship and helps secure financing so small-time businesses can expand and export.


A hawker pops from behind a mannequin strapped in Masai attire at Tancraft’s first trade fair in Dar es Salaam this month. ”Karibu sana,” he says, which is a popular Kiswahili greeting that translates to ”you are very welcome”.

There is fierce competition between dozens of merchants and each one tries harder than the next to woo customers. In the throng, Avril Kassell opens her cloth backpack to reveal a pair of leather and bead sandals — a steal at just 9 000 Tanzanian shillings (about R50).

She says at the top of her must-do list in every country she visits is to poke around the local markets and land a few good deals. ”These guys are not moving much of their goods,” says Kassell, a London, Britain, native. ”I think trying is part of the fun. When you get something cheaper, it feels better.”

Bethany Oshel, a Christian missionary from Marion, Illinois, in the United States, researches the fair market value of an item and will bargain to get that price. ”We were actually hoping that we could come here and not have to bargain,” she says. ”I want to make sure [sellers] are getting a good price and are able to eat. But I do not want to get ripped off either.”

Mmari acknowledges it will be a sea change to convince all sellers to charge a blanket rate for the same goods. He hopes Tancraft can help to at least narrow the gap. ”This 20 000 [Tanzanian shillings], almost double of what something is worth, is what we want to eliminate,” he says, referring to the wooden giraffe. — IPS