Challenges, Prospects & Policy Options for Tanzania Assessing competitiveness of such a dynamic sector as Manufacturing can be a daunting task, not least because of the various issues that need to be taken into consideration in its definition, measurement and profiles. This study has attempted to define and measure the competitiveness of Tanzanian Manufacturing sector within a small set of indicators and informed by the context of the study based on its Terms of reference. Overall, we find that the level of Tanzania’s manufacturing competitiveness has been improving gradually since 2007 in two ways. First, based on the Global Competitiveness Index (GCI), Tanzania has been performing strongly in areas of macroeconomic environment and institutions. Second and more importantly, productivity within the industrial manufacturing sector has been improving, albeit at a small extent. However, in both of these aspects, our analysis identified areas where Tanzania has continued to perform poorly or factors holding Tanzania’s ability to leapfrog in competitiveness space. For instance, from the GCI, Tanzania scores low in innovation and sophistication factors, higher education and training. Furthermore, reflecting low export capacity, Tanzania is positioned among the bottom countries in our MECI estimation falling behind Rwanda and Kenya.