Manufacturing output increased by an average of 1.1% during the decade 1980–90, and by 1.7% between 1988 and 1998, when it accounted for 6.8% of GDP. Industry in general accounted for 17% of GDP in 2000. Along with the results of parastatal inefficiencies; fuel and import costs, lack of foreign exchange, power shortages, lack of spare parts, and unreliable local services have tested the manufacturing sector severely. By 2001, 333 of 395 state-owned companies had been privatized, including tobacco and cashew farms, mines, the brewery, and a cigarette factory.
Tanzanian industry is centered on the processing of local agricultural goods. Some products are exported to neighboring countries: textiles and clothes, shoes, tires, batteries, transformers and switchgear, electric stoves, bottles, cement, and paper. Other industries include oil refining, fertilizers, rolling and casting mills, metal working, beer and soft drinks, vehicle assembly, bicycles, canning, industrial machine goods, glass and ceramics, agricultural implements, electrical goods, wood products, bricks and tiles, oxygen and carbon dioxide, and pharmaceutical products. In the early 2000s, the industrial sector was relatively weak, but made small gains in the production of cement, soft drinks, corrugated iron sheeting, food processing, chemicals, leather products, and textiles. The construction industry was growing at a slow pace at that time, at less than 5% per year.
Oil and natural gas exploration are encouraged, and natural gas reserves were estimated at 2 trillion cubic feet (Tcf) in 2000. Tanzania has one oil refinery at Dar es Salaam with a production capacity of 15,000 barrels per day.