The Impact Of Trade Liberalization On Small And Medium Enterprises In Tanzania: A Case Study Of Urban District, Unguja

ABSTRACT

This study examined the impact of trade liberalization in small and medium enterprises in Tanzania. The study addressed four objectives, which were, to examine the underperformance of SMEs in Tanzania, to assess the impacts of price control in Tanzania, to assess the impacts of the fluctuation of external tariffs on the development of SMEs in Tanzania; and to propose measures to improve the performance of SMEs in Tanzania. The data were collected through direct observation as well as through questionnaire to small and medium enterprises. A case study design was utilized in this study. Both qualitative and quantitative approaches were employed in this study. The study involved a total of 50 respondents, made up of 30 small enterprises and 20 medium enterprises. The study found that trade liberalization has various impacts on SMEs which led to underperformance of many small enterprises, falling of markets to some goods, and improve competition. But, also these SMEs faced various problems and challenges. These are like low capital for investment, low market, low education, dual taxes and poor government support. Others are like fluctuation of prices, natural calamity and emergence of political instability. The study revealed that the majority of small and medium enterprises are still poor despite the facts that they engage on SMEs as one of the sources of income. It was found that, many SMEs were facing challenges which result in poor performance. The study recommends that, provision of financial support, reducing dual taxes, establishing educational centres, improving infrastructure, and ensuring availability of market would increase the performance of SMEs which was affected by trade liberalization.