Profitability of SIDO supported small scale furniture industries against imported furniture in Dar es Salaam and Arusha Regions, Tanzania

Abstract

The study assesses the profitability of Small Industries Development Organisation (SIDO) supported small- scale furniture industry against imported furniture in Dar es Salaam and Arusha cities in Tanzania. A total of 127 respondents were interviewed using questionnaire, focus group discussion and documentary review was also employed to collect data. Descriptive statistics and profitability analysis were used in the analysis of the data. Findings revealed that location wise, there is no significant difference in all socio-economic characteristics. The study revealed that there was significant difference in profit generated between SIDO supported small scale furniture industries and imported furniture firms (t = 3.23 at p < 0.05), imported furniture were more profitable compared to locally made furniture. However the study established that SIDO supported small scale furniture industries generate adequate profit to sustain their operations. Furniture business was more profitable in Dar es Salaam, but local furniture industries, generate slightly higher profit in Arusha. Policy actions therefore should be directed towards enabling SIDO supported small-scale furniture manufacturers to adopt modern production practices and improve their performance so that they can make adequate profits.