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FICCI President to lead 80-member high powered business delegation to Tanzania and Kenya coinciding with the visit of Indian Prime Minister
NEW DELHI, 6 July 2016: The momentum generated during the 3rd India-Africa Forum Summit in October 2015 is continuing. As the Prime Minister of India kick starts his visit to the four African nations, industry has indicated its resolve to support this historical partnership. Hence, to strengthen business linkages an 80-member strong Indian contingent from diverse business sectors will participate in the India-Tanzania Business Forum and India-Kenya Business Forum being organised by FICCI and its counterparts on July 10 and 11, 2016 at Dar-e-Salaam and Nairobi, respectively. Mr. Harshavardhan Neotia, President, FICCI, will be leading the business delegation which would comprise senior industry leaders such as Mr. K K Modi, President, Modi Enterprises; Mr. R V Kanoria, CMD, Kanoria Chemicals & Industries Ltd; Ms. Sangita Reddy, Joint Managing Director, Apollo Hospitals Group; Mr. Atul Jain, Joint Managing Director, Jain irrigation Systems Ltd; Mr. Brotin Banerjee, Tata Housing Development Company Limited; Mr. Jaidev Shroff, Global CEO, UPL Ltd; Mr. Yaduvendra Mathur, CMD, Exim Bank and many more. While showcasing the strength of Indian industry in sectors such as healthcare, low cost housing, power, construction, agriculture, transport, ICT, mining etc, the businessmen would seek partnership from its Tanzanian and Kenyan counterparts for a long term engagement with a focus on local capacity building. An exposition on Indian innovations focusing on various accessible, affordable and adaptable technologies which can make significant contribution in socio-economic development of these countries is also being organized, which will facilitate technology transfer and joint technological projects. Being one of the strongest industry delegations visiting these countries in the past few years, the industry members will also call on various ministers and senior government officials seeking partnership opportunities. During the visit, many MoUs are expected to be inked. This will definitely augur well for industry which is engaging deeply with the region.
FICCI MEDIA DIVISION
Business delegation coinciding with the visit of Shri Narendra Modi, Hon’ble Prime Minister of India
to
Tanzania & Kenya, 10th - 11th July 2016
S No Name Designation and Company
1. Mr Harshavardhan Neotia Chairman, Ambuja Neotia Group and President, FICCI and Leader of the Indian
Business Delegation
2. Mr K K Modi President, Modi Enterprises and Past President, FICCI
3. Mr R V Kanoria CMD, Kanoria Chemicals & Industries Ltd and Past President, FICCI
4. Mr Yaduvendra Mathur CMD, Exim Bank of India
5. Mr Jaidev Shroff Group CEO, UPL Ltd
6. Mr Ved Prakash Chairman & Managing Director, MMTC Ltd
7. Mr Brotin Banerjee MD & CEO , Tata Housing Development Company Ltd
8. Mr Nandakumar Jairam Chairman & Group Medical Director, Columbia Asia Hospitals Pvt Ltd
9. Mr Vikas Jalan Managing Director, Trans Metalite India Ltd
10. Mr Atul Jain Joint Managing Director, Jain Irrigation Systems Ltd
11. Ms Sangita Reddy Joint Managing Director, Apollo Hospitals Group
12. Mr P V Krishna Reddy MD & CEO, Megha Engineering and Infrastructures Ltd (MEIL)
13. Mr Ullas Kamath Joint Managing Director, Jyothy Laboratories Ltd
14. Mr Mahendra Kumar Agarwal Managing Director, Meghalaya Cement Ltd
15. Mr Bomi Bhote Chief Executive Officer, Ruby Hall Clinic
16. Mr B Soundararajan Managing Director, Suguna Holdings Pvt Ltd
17. Mr Umesh Balani Managing Director, Rotomag Group
Business delegation coinciding with the visit of Shri Narendra Modi, Hon’ble Prime Minister of India
to
Tanzania & Kenya, 10th - 11th July 2016
S No Name Designation and Company
18. Mr DSN Murthy MD & CEO, Dhanush InfoTech Pvt Ltd
19. Dr Anil Singh Chairman, Bhagwant University
20. Mr Amit Kumar Saraogi CEO & Chairman, Anmol Feeds Pvt Ltd
21. Mr Navin Agrawal Partner, KPMG Advisory Services Pvt Ltd
22. Mr Rishabh Sethi Executive Director, SPML Infra Ltd
23. Dr Sreeni Tripuraneni Chairman & CEO, 4G Identity Solutions Pvt Ltd
24. Mr Bahubali Kothari Executive Director, Om Metals Infraprojects Ltd
25. Dr H. Vinod Bhat Vice-Chancellor , Manipal University
26. Mr Sagar Kaushik Chief Operating Officer- Global Business, UPL Ltd
27. Mr Rajkumar Patil CEO, Kirloskar Kenya Ltd
28. Mr B Srinivasa Reddy Director- BD & Projects, Megha Engineering and Infrastructure Ltd (MEIL)
29. Mr Aditya Sanghi Director, Sanghi Industries Ltd
30. Dr Sumit Prasad Director, Columbia Africa Healthcare Ltd
31. Mr Arun K Agarwal Director, Cosmos International Ltd
32. Ms Shilpa Agarwal Director, Cosmos Advanced Diagnostics LLP
33. Mr Kamal Poddar Director, Choice Capital Advisors Pvt Ltd
34. Mr Umang Chaturvedi Group President – Corporate Affairs, Fortis Healthcare Ltd
Business delegation coinciding with the visit of Shri Narendra Modi, Hon’ble Prime Minister of India
to
Tanzania & Kenya, 10th - 11th July 2016
S No Name Designation and Company
35. Dr B Rajshekar Dean, School of Allied Health, Manipal University
36. Mr Rahul Sikka VP & Head –Africa, Power Transmission and Distribution, Larsen & Toubro Ltd
37. Mr Rajiv Kumar Senior President, International Tractors Ltd (Sonalika Group)
38. Dr Hari K Prasad President- Hospitals Division, Apollo Hospitals Enterprise Ltd
39. Mr Ankur Jain President- Exports, Jain Irrigation Systems Ltd
40. Mr Kandasamy M Sr Vice President, KEC International Ltd
41. Dr Harinder Singh Sidhu Vice President - Corporate Development, Apollo Hospitals Enterprise Ltd
42. Mr Pramod H Chaudhari Vice President, Jain Irrigation Systems Ltd
43. Mr Rajneesh Khullar Vice President-Global, Sales & Marketing, Vihaan Networks Ltd
44. Mr Vijay Uplenchwar Vice President-International Business, Megha Engineering Infrastructure Ltd
(MEIL)
45. Mr Radhey Mohan Vice President, Apollo Hospitals Enterprise Ltd
46. Mr Sumit Sapru Head- New Business initiatives , Tata Housing Development Company Ltd
47. Mr Ashok Thakur Head – International Operations (Africa), Mahindra & Mahindra Ltd
48. Mr Ashutosh Jagga Head (BD & Strategy), Technofab Engineering Ltd
49. Mr Rajni Kant Agrawal Head of Operations-East Africa and Asia, WAPCOS
50. Mr Sushanta Kumar Choudhury Senior President, Doyen Overseas Private Ltd
51. Mr Anil K Maini President & CEO, Africare Ltd (Medanta)
Business delegation coinciding with the visit of Shri Narendra Modi, Hon’ble Prime Minister of India
to
Tanzania & Kenya, 10th - 11th July 2016
S No Name Designation and Company
52. Mr Mahesh Punia Managing Director, Live Bean East Africa Ltd
53. Ms Chandrima Sinha Vice President, Invest India
54. Mr SA Ramachandra Country Head-Kenya, KEC International Ltd
55. Mr Vikas Agarwal Country Head, Star Agri Warehousing & Collateral Management Ltd
56. Mr Sumit Dhall Regional Head- Tanzania, Shapoorji Pallonji & Company Pvt Ltd
57. Mr Abhishek Gupta Regional Head, Indus Coffee Pvt Ltd
58. Mr Rohit Agarwal Commercial Head- Kenya, KEC International Ltd
59. Mr Pankaj Joshi Chief Manager Commercial, KEC International Ltd
60. Mr Dipak Kujur Resident Representative, East Africa, Exim Bank of India
61. Dr Jignesh Sanghavi Sr General Manager, Apollo Hospitals Enterprise Ltd
62. Mr Ankit Khanna General Manager- Channel Sales, Vihaan Networks Ltd
63. Mr Naveen Chadha General Manager, SPML Infra Ltd
64. Mr Mohamed Tajdin General Manager BD (Kenya), Shapoorji Pallonji & Company Pvt Ltd
65. Mr Tejasvi Rao Deputy general Manager, Apollo Hospitals Enterprise Ltd
66. Ms Kusum Narain Senior Manager, Modi Enterprises
67. Ms Meghana Joglekar Deputy General Manager , Exim Bank of India
Business delegation coinciding with the visit of Shri Narendra Modi, Hon’ble Prime Minister of India
to
Tanzania & Kenya, 10th - 11th July 2016
Innovators
68. Mr Sunil Kumar CEO, Agventures Corporation
69. Mr Jaydeep Mandal Founder, Aakar Innovations Pvt Ltd
70. Mr Ajay Muttreja Advisor, Aakar Innovations Pvt Ltd
71. Mr Vaibhav Tidke CEO, Science for Society Techno-Services Pvt Ltd.
72. Dr Tushar Gaware Head-Food Pro-Tech, Science for Society Techno-Services Pvt Ltd
73. Mr Sudesh Menon CEO, Waterlife India
74. Mr Biksham Gujja Founder & Managing Director, AgSri Agricultural Services Private Ltd
75. Mr Anand Singh Rawat Assistant Manager- Commercial, Jyothy Laboratories Ltd
76. Mr Goteti Venkata Subrahmanyam Managing Director, Panacea Medical Technologies Pvt Ltd
77. Mr Abhishek Sinha CEO & Co-Founder, Eko India Financial Services Pvt Ltd
78. Mr Sushanta Kumar Pal Director Bitchem Asphalt Technologies Ltd
79. Mr Amit Bhatnagar Managing Director, Accuster Technologies Pvt Ltd
80. Mr Jain Amit Suresh Managing director, TechnoPurple IT Solutions Pvt Ltd
81. Mr Kunal Prasad Co-Founder & COO, Cropin Technology Solutions Pvt Ltd
82. Mr Abhay Kumar Shendye Founder & CEO, Swasti Agro & Bio Products Pvt Ltd
83. Mr Pramod Kumar Verma Managing Director, Vantage Integrated Security Solutions Pvt Ltd
84. Mr Shashank Kumar President, Farms & Farmers Foundation
Business delegation coinciding with the visit of Shri Narendra Modi, Hon’ble Prime Minister of India
to
Tanzania & Kenya, 10th - 11th July 2016
85. Mr Rajeev Kher Founder-CEO, 3S (Sara Plast Pvt Ltd)
86. Mr Krishna Ravi Managing Director, Reckon Green Innovation Pvt Ltd
87. Mr Mohammed Zainulabuddin Director, Forus Health Pvt Ltd
FICCI Officials
88. Ms Sheila Sudhakaran Assistant Secretary General, FICCI
89. Mr Susnato Sen Senior Director, FICCI
90. Mr Pankaj Singh Additional Director, FICCI
91. Mr Rubaab Sood Additional Director, FICCI
92. Mr Alok Priya Azad Joint Director, FICCI
93. Mr Kailash Hariharan Iyer Joint Director, FICCI
94. Mr Nikhil Chachra Joint Director, FICCI
95. Mr Sanjeev Kumar Senior Assistant Director, FICCI
Country Note: Tanzania
Profile
• In spite of being one of the world's poorest economies
in terms of per capita income, Tanzania has achieved
high growth rates based on its vast natural resource
wealth and tourism. GDP growth from 2009 to 2015
was an impressive 6-7% per year. Dar es Salaam used
fiscal stimulus measures and easier monetary policies
to lessen the impact of the global recession.
• Tanzania has largely completed its transition to a
market economy, though it depends on agriculture,
which accounts for more than one-quarter of GDP,
provides 85% of exports, and employs about 80% of
the work force; agriculture accounts for 7% of
government expenditures.
• Mineral production (gold, diamonds, and tanzanite)
has grown significantly in the last decade. It
represents Tanzania's biggest source of economic
growth, and foreign exchange through exports.
• Tanzania, with the combination of its strategic
location, stable political climate, positive
macroeconomic outlook, and its membership in EAC is an attractive destination for investors.
• Tanzania is the only country in East Africa which is a member of the Southern Africa
Development Community (SADC). It is also a member of African Union (AU), the United Nations
(UN) and East Africa Community (EAC). Dodoma is the official capital and seat of Tanzania’s
Union Parliament
Political scenario
Tanzania is one of the most peaceful and politically stable countries in Africa. Since its independence
in 1961, the country has never experienced a civil war or any major internal strife. Tanzanians
continue to live in peace and with a sense of a common national identity. Since the resignation of
Julius Nyerere, the country’s first president, all succeeding presidents have been elected into office
in fair and free elections. This political stability provides protection to investors.
On October 25, 2015, Tanzania held its 5th general elections since it transitioned to a multiparty
democracy in 1992. Dr. John Pombe Magufuli, the ruling Chama Cha Mapinduzi (CCM)’s candidate
emerged winner with 58.46% of the vote, while Mr. Edward Lowassa, a former CCM stalwart, behind
whom a formidable opposition coalition united, got 39.97%.
• Government type: Multiparty democracy
• Provinces: 30 regions
• Independence: Tanganyika 9 December 1961 from England administered UN trusteeship;
Zanzibar 19 December 1963 from England; Tanganyika united with Zanzibar on 26 April 1964 to
form the United Republic of Tanganyika and Zanzibar; renamed United Republic of Tanzania on
29 October 1964
• Legal system: English common law; judicial review of legislative acts limited to matters of
interpretation
Key facts and economic indicators
Capital: Dodoma (Note - officially changed
in 1996; serves as the meeting place for the
National Assembly; the executive branch offices
and diplomatic representation remain in Dar es
Salaam, the largest city and commercial capital)
Languages: Swahili, English
Population (2015): 51.8 million
Currency: Tanzanian Shilling (TZS)
GDP (2015) : $ 46.19 billion
Inflation Rate (2015): 6.6 %
GDP (Real Growth rate, 2015 est.): 6.9
%
Investment (Gross fixed, 2015 est.) :
29.3 % of GDP
Total Exports (2015): $ 5.36 billion
Total Imports (2015): $ 10.49 billion
Business scenario
Tanzania has been among the fastest growing economies in the world in the past decade with an
annual average growth of 7.2%. Inspite of the global recession, growth performance in the country
remained at a respectable level of 6.7% in 2014-15. The key drivers of growth include private
consumption, exports, tourism revenues, and foreign investment. From the supply side, the main
drivers of growth recently has been several fast growing sectors, such as construction, transport and
financial services.
Inflation has gradually declined over the past 30 months due to tight monetary policy and falling
international energy and food prices. While inflation has slightly increased recently, largely driven by
increase in domestic food prices and possible lagged effects of sharp depreciation of the local
currency during the first half of 2015, the level remains relatively low at 5.6% in February 2016. The
country’s relatively well-educated labor force, coupled with political stability and the Government’s
sound macroeconomic management of the economy, add to Tanzania’s attractiveness.
Although revenue performance in 2015/16 has been better than in the past few years, shortfall has
been experienced in the first quarter of the FY driven largely by weak implementation of the new
2015 VAT Act. The new government is committed to 4.2% of GDP fiscal deficit target for 2015/16.
The government faces additional expenditure needs, equivalent to 0.7% of GDP, coming from
expenditures carried over from last FY, payment of government arrears to TANESCO, and additional
fiscal space needed for provision of free basic education and expansion of higher education
students’ loans program (new presidential initiatives).
Agriculture is the mainstay of the economy contributing over a quarter in the GDP formation and
employing a majority of the workforce. Tanzania’s industrial sector is also one of the fastest growing
in Africa. The external sector of the economy improved following a declining current account deficit
that stood at 8.1% of GDP in 2015. Export growth driven by regional trade in manufactured goods
and reduced imports bill from cheaper imported oil contributed to this decline.
Tanzania has made efforts to encourage foreign investment. Government steps to improve the
business climate include redrawing tax codes, floating the exchange rate, licensing foreign banks,
and creating an investment promotion centre to cut red tape.
Significant improvements have been made in the country’s infrastructure. Today Tanzania is the 4th
largest domestic air transportation market in Sub-Saharan Africa and Dar es Salaam airport is one of
the top 15 in the sub-continent. Quality of roads in the countries is considered well above the
benchmark. Moreover, Dar es Salaam is one of the most important ports in East Africa. Progress in
other sectors like power, ICT and so on cannot be ignored either. The long term marginal cost of
power generation in Tanzania is estimated to be one of the lowest in East Africa.
Tanzania has witnessed a steady and consistent flow of inward FDI during the last decade. Tanzania’s
most significant investors have been of European origin, namely Denmark, Norway and Germany.
However, India remains an important non-western economic partner. The vibrant commercial
relationship between India and Tanzania is also reflected in the 40,000 strong Indian community
present in the country.
The Indian investment portfolio is quite diversified. Major Indian companies and brands operating in
Tanzania include Bank of Baroda, Bank of India, Tata International Limited, NMDC, insurance
companies (LIC, NIC, United India etc.), Reliance Industries Ltd, Kamal Group of Industries, Bharti
Airtel, Escorts, Ashok Leyland, Eicher, Bajaj, TVS, Kirloskar and Godrej. About 36% of medicines and
pharma products imported by Tanzania are sourced from India. All major Indian pharma companies
have their distributors and representatives here.
Key industries: Agricultural processing (sugar, beer, cigarettes, sisal twine); mining (diamonds, gold,
and iron), salt, soda ash; cement, oil refining, shoes, apparel, wood products, fertilizer
Exports: $5.36 billion (2015)
Key exports commodities: Gold, coffee, cashew nuts, manufactures, cotton
Key export destinations: India 21%, China 9.9%, Japan 5.3%, Germany 4.7%
Imports: $10.49 billion (2015)
Key import commodities: Consumer Goods, Machinery And Transportation Equipment, Industrial
Raw Materials, Crude Oil
Key import partners: China 27.6%, India 24.5%, Kenya 6.6%, South Africa 5.6%, UAE 4.8%
Initiatives to foster investment & trade
• As part of the country’s national economic empowerment policy, the National Economic
Empowerment and Job Creation Programme, also known as the “Uwezeshaji” Credit Guarantee
Scheme, was launched by the National Economic Empowerment Council. Under this scheme, the
Bank of Tanzania has licensed 13 financial institutions to extend credit to eligible applicants.
• Tanzania has put in place investment incentives which provide a soft landing platform to all
investors during the initial stage of the projects implementation. These incentives are both fiscal
and non-fiscal and are provided under four major schemes/legislations, Tanzania Investment
Act, 1997, Export Processing Zones Act, 2002, SEZ Act, 2005 & Mining Act, 1998.
• In an attempt to boost competitiveness, especially among micro, small and medium enterprises
(MSMEs), Tanzania collaborated with the World Bank in 2007 and started implementing the
Private Sector Competitiveness Project (PSCP).
• Tax incentives such as enhanced capital deductions and structured allowance are provided
according to lead and priority sectors, which comprise agriculture, agro-based industries, mining,
tourism, petroleum and gas, and economic infrastructure.
• Tanzania is an active member of MIGA (Multilateral Investment Guarantees Agency). Likewise
Tanzania is also a member of The International Centre for Settlement of Investment Disputes
(ICSID) so investors have unrestricted rights to International arbitration in case of dispute with
government.
Tax structure overview
• The corporate income tax rate is reduced to 25% for three years for companies that are newly
listed on the Dar es Salaam Stock Exchange and that issue at least 30% of their share capital to the
public. Companies reporting tax losses for three consecutive years must pay alternative minimum
tax at a rate of 0.3% on annual turnover.
• A general withholding tax rate of 10% is charged for dividends paid by unlisted companies to
residents and nonresidents. Companies listed on the Dar es Salaam Stock Exchange pay
withholding tax of 5% for dividends.
Bilateral agreements and LoCs
• MOU between the East Africa Statistical Training Center (EASTC) in Tanzania and the National
Statistical System Training Academy in India on establishing a collaborative program in official
statistics.
• MOU between EASTC and Indian Council of Agricultural Research (ICAR) - Indian Agricultural
Statistics Research Institute.
• MOU on Cooperation in the field of Tourism.
• Agreement between WAPCOS (PSU under M/o Water) and Government of Tanzania for
preparation of DPR for Lake Victoria pipeline project
• Important bilateral treaties:
o Trade Agreement (2000)
o Agreement on Avoidance of Double Taxation and Prevention of Fiscal Evasion (2009)
o Air Services Agreement (2006)
o MoU for Cooperation in the field of Agriculture and Allied Sectors (2002)
o Agreement in the field of Health and Medicine ((2002)
o MoU on exchange program on co-operation in the field of education (2003)
o Agreement on waiving Tanzania’s outstanding loan (2004)
o Agreement on co-operation in the field of IT and Services (2004)
o Joint Trade Committee (2007)
• India’s aid to Tanzania include :
o Exim Bank LOC of US$ 268.35 million for extension of Lake Victoria pipeline project to
Tabora, Igunga and Nzega (June 2015)
o US$40 million Line of Credit (LoC) for financing the country’s agriculture sector including the
export of tractors, pumps and equipment from India to Tanzania.( 2009)
o A grant of US$ 10 million for projects in social and educational sectors (2011)
• Small Industry Development Organisation [SIDO] of Tanzania was established by National Small
Industries Corporation Ltd [NSIC] of India in November 2007.
• An India-Tanzania Centre of Excellence in Information and Communication Technology was set
up by C-DAC at Dar-es-Salaam Institute of Technology with one Param High Speed Super
Computer and 10 remote regional centres.
• Prime Minister announced another LoC of US$ 178.125 million in 2011 for development of water
supply projects in Dares-Salaam and coastal regions.
• Tanzania is a major beneficiary of Indian scholarships and other educational assistance, including
self-financing students in India’s institutes of higher learning. 24 scholarships have been offered
for academic year 2014-15 by ICCR under the Commonwealth Scholarship/Fellowship Plan and
General Cultural Scholarship Scheme. About 2000 Tanzanian students are estimated to be in
India, the majority on self-financing basis.
Tax Rates (%)
Corporate tax 30
Capital Gains tax 30
Withholding tax (Dividends) 5/10
Branch tax 30
Bilateral trade (2015-16)
Total trade: US$ 2,579.43million
Exports: US$ 1,654.64million
Imports: US$ 924.79 million
Indian cos. doing business in Tanzania
Apollo Hospitals Enterprises Limited, Ashok Leyland [trucks and other vehicles], Bajaj [three
wheelers], Bank of Baroda, Bank of India, Bharti Airtel, Eicher [buses and trucks], Escorts [tractors],
GAIL, Godrej safes, Jain Irrigation Systems Ltd, Kalpataru Power Transmission Limited, Kamal Group
of Industries, Kirloskar engines, Larsen & Toubro Ltd, LIC, Lucky Exports, Megha Engineering Ltd,
Microqual Techno Ltd, National Mineral Development Corporation [NMDC], NIC, ONGC Videsh
Limited, Reliance Industries Ltd, RITES, Simbhaoli Sugars Ltd, Super Power Soap Industries, Syngen
Fuels and Agri Products (T) Ltd, Tanzindia Assurance Company Ltd, Tata [trucks, buses and SUVs],
Tata International Limited, Tata Petrodyne, TCIL, The Central Mine Planning and Design Institute Ltd.
Ranchi, TVS [three wheelers], United India, VA TECH WABAG, Vigyan Educational Foundation,
WAPCOS
Social context
Approximately 28.2% of the population lived below the poverty line in 2012; a reduction from 34% in
2007. During the 2007/2012 period, there were improvements in living conditions, access to basic
education, health and nutrition and, labor force participation in non-agriculture employment.
Nevertheless, these benefits were not distributed equitably. Inequality has increased between urban
and rural population and approximately 12 million Tanzanians are still living in poverty.
Potential sectors for trade and investments
Banking and financial services
• The banking and insurance sector has registered significant growth since the liberalization during
1990s. There are over 34 commercial banks, 18 insurance companies, 1 reinsurance company
and 37 insurance brokers in Tanzania.
• Foreign banks are becoming increasingly active in the economy. Of the total 41 banking
institutions in the country, 19 are foreign-owned.
Metals and Mining
• The sector is expected to expand immensely accounting for almost 10% of the GDP by 2025.
Tanzania has a great mining potential particularly for gold, base metals, diamonds, ferrous
minerals and a wide variety of gemstones. In 2009, Tanzania was the world’s only producer of
tanzanite.
• Over 800,000 sq. km of varied geological terrains with potential mineral resources are available
This sector presents plenty of investment opportunities, such as:
• Establishment of gold refinery activities
• Establishment of value added activities:
• Gemstone cutting & polishing (lapidary);
• Rock and mineral carvings;
• Jewellery manufacturing utilizing gold and gemstones; Industrial minerals beneficiation for local
consumption & export – e.g. lime production, soda ash, kaolin, gypsum, coal, iron ore,
dimension stones etc.
• Base metals including platinum group metal (PGMs)
• Supply equipment & materials e.g. explosives, grinding media, mill liners etc. under JVs with
Tanzanian entrepreneurs
• Drilling
Wholesale and retail trade
• Tanzania is projected to have the 7th largest consumer spends by 2020 at approx. US$29 billion.
• While in the mid-income segment it is a highly evolved market that will attract investors looking
for a regional presence, in the high income segment, Tanzania is an underdeveloped market with
low penetration but a high growth rate.
• Direct, duty free access to 133 million consumers through its membership of the EAC represents
a lucrative consumer market.
Real estate and construction
• It is projected that half of Tanzania’s 45 million population will have moved to urban centres in
the next 20 years, more has to be done in terms of offering more housing loans and constructing
homes to meet the ever-growing housing needs.
• Some specific opportunities in this sector include:
o Development and management of housing estates
o Erection and management of residential apartments
o Development and management of office buildings
o Building and management of conference and banquet facilities
o Creation and management of shopping malls
o Setting up and managing movie theatres and entertainment facilities
o Development and management of hotels
o Establishment and manage
Agriculture and agro-processing
• Opportunities also exist in production of cash crops like coffee, cotton, tea, tobacco and cashew
nuts and other important food crops like maize, rice, pulses and wheat. Tanzanian sugar market
growth is estimated at 6% p.a. The current sugar supply gap is approximately 300,000 tons,
expected to increase sharply as current estates are limited in their expansion thus creating
opportunities in sugarcane production and processing.
• Potential irrigable farmland in Tanzania is approximately 29 million hectares, out of which only
280,000 hectares are under irrigation farming. This provides for high agricultural investment
opportunities.
• Specific investment opportunities are: importing modern-and-efficient farming equipment, for
instance tractors and power tillers; providing training of modern farming, for example, how to
use appropriate irrigation technology, etc.
• Revision of land laws to allow long term leases of up to 99 years for foreign companies.
Tourism
• The tourist industry currently supports 27,000 jobs and generates 25% of Tanzania’s foreign
exchange.
• The development of Tanzania as a multi-centre tourism destination offers considerable potential
growth prospect and provides ideal opportunities for investment. New accommodation,
entertainment facilities, camping, lodges and guesthouses of international standards are needed
in Tanzania.
• Joint venture opportunities are available in Kilwa, Zanzibar, Mafia, Dar es Salaam, Mwanza,
Arusha, Iringa, Kilimanjaro, Selous, Katavi, Saadani, Serengeti, Babati and Bukoba.
• Locations ranging from historical, cultural and archaeological sites to unspoiled beaches offer
investment opportunities that cannot be matched anywhere in eastern and central Africa
Country Note: Kenya
Profile
• Kenya is the financial and transportation hub in East
Africa. After independence, Kenya promoted rapid
economic growth through public investment,
encouragement of smallholder agricultural
production, and incentives for private industrial
investment.
• The Kenyan economy remains dependant on
agriculture. It employs 80% of the population and
accounts for 50% of all exports and 25% of the GDP.
• With support of the World Bank Group (WBG),
International Monetary Fund (IMF) and other
development partners, Kenya has made significant
structural and economic reforms that have
contributed to sustained economic growth in the past
decade. Development challenges include poverty and
inequality, and vulnerable of the economy to internal
and external shocks.
• Major trading partners of Kenya are India, South Africa, China, Japan, Saudi Arabia and the
United States of America.
• Kenya is a member of UN, Commonwealth, African Union, WTO, East African Community (EAC),
Inter-Governmental Authority on Development (IGAD), Common Market for Eastern and
Southern Africa (COMESA).
Political scenario
• From its independence in 1963 till 2002, the ruling party had been the Kenya African National
Union (KANU) with President Jomo Kenyatta leading the country until his death in 1978.
• Uhuru Kenyatta is the Current President of Kenya since 9 April 2013.
• The government’s draft constitution was defeated by the Orange Democratic Movement (ODM),
a new opposition coalition of the government defectors and KANU, in a popular referendum in
November 2005.
• Devolution is rated the biggest gain from the August 2010 constitution, which ushered in a new
political and economic governance system. It has strengthened accountability and public service
delivery at local levels. The government’s agenda is to address challenges including land reforms
and security to improve economic and social outcomes, accelerate growth and equity in
distribution of resources, and reduce extreme poverty and youth employment.
• Government type: Presidential
• Provinces: 7 provinces and 1 area
• Independence: 12 December 1963 from England
• Legal system: Mixed legal system of English common law, Islamic law, and customary law;
judicial review in a new Supreme Court established pursuant to the new constitution
Key facts and economic indicators
Languages: Kiswahili (official), English
Population (July 2015 est.): 45.92
million
Government Type: Constitutional
Republic
Currency: Kenyan Shilling (KES)
GDP (current US$ 2014): 60.94 billion
Inflation Rate (2015 est.): 6.4%
GDP (Real Growth rate, 2015 est.):
6.5%
Investment (Gross fixed, 2015 est.):
23.6% of GDP
Total Exports (2014) : $ 5.5 billion
Total Imports (2014) : $ 16.3 billion
Business scenario
Kenya has the potential to be one of Africa’s great success stories from its growing and youthful
population, a dynamic private sector, a new constitution, and its pivotal role in East Africa. According
to the October 2015 Kenya Economic Update, Kenya is poised to be among the fastest growing
economies in Eastern Africa. Besides, the 2016 Country Economic Memorandum says that Kenya’s
growth prospects will depend a lot on Innovation, Oil, and Urbanization on the long term.
Kenya’s growth is projected to rise to 5.9% in 2016 and 6.1 % in 2017. The positive outlook is based
on infrastructure investments. Fiscal consolidation is expected to ease pressure on domestic interest
rates and increase credit uptake by the private sector. Low commodity prices had a net positive
impact in Kenya in 2015. The gains through low oil prices and the rising earnings from tea have offset
the loss in earnings from other exports (coffee and horticulture). As a result, the current account
deficit contracted from 10.4% to 7.1% of GDP. The contraction in the current account deficit will
continue to be supported by declining commodity prices and rising exports of tea.
The Kenyan Central Bank has done a remarkable job in containing inflation to single digit numbers in
the last ten years. Sound monetary policy restored stability in the currency markets and contained
the 12-month average overall inflation at 6.6% in December 2015. The Central Bank effectively
managed currency volatility and running down Forex reserves to cushion the shilling. So, the Kenya
shilling stabilized, and the depreciation moderated in comparison to other regional currencies.
Kenya is making efforts to lower the cost of doing business by conducting extensive business
regulatory reforms intended to substantially reduce the number of licensing requirements and to
make the licensing regimes more simple and transparent and focused on legitimate regulatory
purposes.
Kenya is a signatory to a large and growing number of tax treaties and investment promotion and
protection Agreements such as the Multilateral Trade System (MTS) ACP Cotonou Agreement, and
the Africa Growth and Opportunities Act. This allows exports from Kenya to enjoy preferential access
to world markets under a number of special access and duty reduction programmes. Kenya is
signatory to a number of multilateral and bilateral trade agreements as part of its trade policy.
Kenya is a member of the World Trade Organization (WTO) making her products access more than
90% of world markets at Most Favored Nation (MFN) treatment. In addition, Kenya is member to
several trade arrangements and beneficiary to trade-enhancing schemes that include the Africa
Growth and opportunity act (AGOA); ACP-EU Trade Agreement and Common Market of Eastern and
Southern Africa (COMESA).
Kenya has a growing infrastructure which has helped in boosting trade and growth in other sectors
as well. It has vast roads and rail networks and is the airlines hub for major regional and
international routes. Kenya’s proximity to other African corridors such as the Kampala- Entebbe
corridor in neighboring country of Uganda also positions it as a regional business hub for East Africa.
The Nairobi metropolitan region in Kenya is one of the fourteen main African corridors for trade.
As the leading economy in East Africa, Kenyas’ strategic location and its well-developed business
infrastructure make it a natural choice for investors and many international firms have made it their
regional hub. This grants investors access to over 385 million consumers. Nairobi is also a major
transport Hub in East Africa with connections from Jomo Kenyatta International Airport to major
destinations around the world. All these are coupled with a convenient Time zone of (GMT +3).
India has a total of 21 FDI projects in Kenya. Tata Chemicals Ltd. acquired Magadi Soda Company
Limited in 2005. Several leading Indian public sector insurance companies participate in KenIndia
Assurance Co. Ltd. More recent investments by Indian corporates in businesses in Kenya include
Essar Energy (petroleum refining), Bharti Airtel, Reliance Industries Ltd. (petroleum retail); Tata
(Africa) (automobiles, IT, pharmaceuticals, etc.). Several Indian firms including KEC, Karuturi Ltd.,
Kalpataru Power Transmission Ltd., Power Grid Corporation of India Ltd., Kirloskar Brothers Ltd.,
Mahindra & Mahindra, Thermax, WIPRO, Jain Irrigation System Ltd., Punj Lloyd, VIL Ltd., Emcure, Dr.
Reddy, Cipla, Cadila, TVS and Mahindra Satyams, etc., have a business presence in Kenya as do the
Bank of India and the Bank of Baroda. HDFC and the Central Bank of India have Representative
Offices in Kenya.
Key industries: small-scale consumer goods (plastic, furniture, batteries, textiles, clothing, soap,
cigarettes, flour), agricultural products, horticulture, oil refining; aluminum, steel, lead; cement,
commercial ship repair, tourism
Exports: $5.5billion (2015 est.)
Key export commodities: tea, horticultural products, coffee, petroleum products, fish, cement
Key export destinations: Uganda 11.8%, US 7.7%, Netherlands 7.5%, Tanzania 7.4%, Zambia 5.7%,
UK 5.6%, Egypt 4.4%, Pakistan 4.3%, UAE 4.1%
Imports: $16.3 billion (2015 est.)
Key import commodities: machinery and transportation equipment, petroleum products, motor
vehicles, iron and steel, resins and plastics;
Key import partners: China 23.4%, India 21.3%, US 7.6%, UAE 6%, Japan 4.5%
Initiatives to foster investment & trade
• To facilitate trade, the Government of Kenya plans to set up
two special economic clusters, in Mombasa and Kisum, for
manufacturing establishments. Additionally, plans to set up
five small and medium enterprises (SMEs), industrial parks
and special economic zones (SEZs) are underway.
• Kenya has no additional procedures for foreigners. It takes
as long to establish a domestic enterprise as a foreign-
owned limited liability company. According to the World
Bank’s Investment Across Borders, this process (34 days and
12 procedures) is faster than both the regional average for countries in Sub-Saharan Africa and
the global average.
• To speed up administrative start-up procedures, the Kenya Investment Authority issues an
investment certificate for investments of US$100,000 and beyond. The certificate consolidates
requisite health, safety, and environment licenses and is valid for 12 months.
Tax structure overview
• For taxpayers with annual gross turnover not exceeding KSH 5 million, Kenya levies a turnover
tax of 3%.
• Effective from 1 January 2016, the net gain derived on the disposal of an interest in a person is
taxable if the interest derives 20% or more of its value directly or indirectly from immovable
Tax Rates (%)
Corporate tax 30
Capital Gains tax 5
Withholding tax
(Dividends)
10
Branch tax 37.5
property in Kenya. Property transfers are subject to stamp duties at 4% on urban property and
2% on rural property.
• The Government of Kenya imposes reduced corporate tax of 20% for five years after a company
is listed on a stock exchange approved under the Capital Markets Act, and wherein a company’s
listed capital is at least 40% of its paid-up capital.
Source: The 2015 worldwide corporate tax guide
Bilateral agreements and LoCs
• Important bilateral treaties and agreements are:
o Agreement on Trade (1981)
o Cultural Cooperation Agreement (1981)
o Double Taxation Avoidance Agreement (1989)
o Joint Commission (1999)
o MoU on Foreign office Consultations (2003)
• Students from Kenya have been coming to India regularly since 1950s to pursue higher
education. In addition, over 50 trainees benefit from ITEC/ICCR Scholarship schemes every year.
Kenya’s defence personnel have also been attending senior level defence training programmes
in India.
• India extended a Line of Credit (LoC) of US$61.6 million to Kenya through EXIM Bank to support
the development of the country’s power transmission sector.
• In April 2015, GOI approved US$100 million LOC to Government of Kenya for Agricultural
Mechanisation Project, in January 2016 GOI decided to extend a LOC of US$ 15 million (as first
tranche out of US$ 30 million) to IDB Capital Limited, Kenya for development of various SMEs
and in February 2016, a LOC of US$ 29.95 million was approved by GOI to the Government of
Kenya for upgradation of Rift Valley Textiles Factory (RIVATEX East Africa Limited).
• Kenya and India have been co-operating with each other in the UN, NAM, Commonwealth and
on issues of interest to G-77. Kenya is a member of G-15 as well as IOR-ARC.
• Bilateral Trade in 2015-16
Total trade: US$ 3,153.41million
Exports: US$ 3,025.86 million
Imports: US$ 127.55 million
Indian cos. doing business in Kenya
Bank of Baroda, Bank of India, Bharti Airtel, Cadila, Central Bank of India, Cipla, Devki Group, Dr.
Reddy's Laboratories Limited, Emcure, Essar Energy, HDFC, Jain Irrigation System Ltd., Kalpataru
Power Transmission Ltd., Karuturi Ltd., KEC International, KenIndia Assurance Co. Ltd., Kirloskar
Brothers Ltd., Mahindra & Mahindra, Power Grid Corporation of India Ltd., Punj Lloyd, Reliance
Industries Ltd., Tata (Africa) (automobiles, IT, pharmaceuticals, etc.), Tata Chemicals Ltd., TCIL,
Thermax, TVS, VIL Ltd., WIPRO
Social developments
Kenya has met a few of the Millennium Development Goals (MDG) targets, including reduced child
mortality, near universal primary school enrolment and narrower gender gaps in education.
Interventions and increased spending on health and education are paying dividends. Devolved
health care and free maternal health care at all public health facilities will improve health care
outcomes and develop a more equitable health care system.
Potential sectors for trade and investments
Agriculture-
Infrastructure and construction-
Investments into these projects can either be through direct investments or through public private
partnerships.
Manufacturing-
Telecommunications-
• World Bank states that over the last decade, ICT has outperformed all others sectors in Kenya,
growing at an average of 20 per cent annually. Kenya has the largest mobile money platform in
the world.
There are joint venture opportunities for foreign investors seeking local counterparts, Sugar and
Cotton processing factories have been earmarked by the government for privatization. Others
include export-oriented agri-business, horticulture and processing of oil crops and investment in
large scale irrigation schemes.
Kenya's competitive advantage as an investment location for agriculture is supported by various
investor friendly factors that include:
• Availability of a well-established export market for agricultural products
• Availability of multinationals in the sector
• Availability of affordable labour and agricultural land
• Bilateral agreements that favour local production.
Kenya envisages a massive upgrading and extension of the country's infrastructure. The country has
highlighted a number of infrastructure projects that present significant opportunities for investors in
the coming years.
• Redevelopment of the Northern Corridor
• Development of a commuter railways system around Nairobi
• Building of a standard gauge line to replace the current Kenya-Uganda railway
• Design and Construction of a new terminal at Jomo Kenyatta International Airport
• Development of a new corridor from Lamu to South Sudan and Ethiopia (LAPSET)
• Kenya is promoting development of Special Economic Zones (SEZs), Industrial Parks, Industrial
Clusters, promotion of small and medium scale manufacturing firms, development of niche
products, and commercialization of research and development results.
• Investment opportunities exist for direct and joint-venture investments in iron and steel
industries, manufacture of fertilizer, agro-processing, machine tools and machinery, motor
vehicle assembly and manufacture of spare parts agro-processing, manufacture of garments,
assembly of automotive components and electronics, manufacture of plastics, paper, chemicals,
pharmaceuticals, metal and engineering products for both domestic and export markets.
• The telecom sector of Kenya represents significant opportunities for new entrants and investors.
The unmet market and low penetration leaves sufficient space for new players to enter the
country’s mobile and internet market.
• IT-enabled services, call centers for inbound and outbound calls, and the development of
broadband infrastructure hold investment potential.
• The size of the local ICT market is estimated at US$ 500 million and it is of note that companies
such as Spanco, followed Airtel into Kenya to continue servicing them. These companies are
expected to expand into the region , given Kenya's its relative sophistication compared to
neighboring markets, and in order to service clients' expansion plans into the EAC and beyond.
Retail trade and consumer goods-
Investment opportunities include construction of 10 wholesale markets with a total investment of
US$49 million; investment in infrastructure via PPPs, export houses, distribution centers, etc.
Banking & financial services
• Kenya is under-insured with penetration level of about 1 % of GDP. This signifies the necessity
of having an insurance sector that can add more to the economic development of the country
therefore a huge potential for the insurance business in Kenya.
• Opportunities exist in the fields of lease hire, microfinance, investment banking, insurance and
business advisory services
• Financial services are expected to play critical in the next 18 or so years by providing better
intermediation between saving and investments.
• Banking sector is dominated by five large banks which account for the bulky of deposits. The
remaining banks are small and have limited outreach. This has reduced competition and
resulted in high cost of credit. Further given the low penetration of the formal financial services,
investing in Microfinance institutions, banks and SACCO's would have a considerable potential
to address the large remaining demand for financial services by the large section of population
that is unbanked.
