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Tanzania - Best Business Opportunities,Identification and Selection of right Project,
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Tanzania is the largest of the East Africancountries and one of the poorest countries inthe world, but also one of Africa's premiertourist destinations. With attractions likeMount Kilimanjaro, the Great Lakes,Ngorongoro, Serengeti National Park, and theislands of Pemba and Zanzibar, to name only
some. Tanzania's population of 47.4 million(2014) is highly diverse, composed ofnumerous ethnic, linguistic,
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Introduction
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and religious groups. Tanzania is a presidentialconstitutional republic, and since 1996, its official
capital has been Dodoma, where the President'sOffice, the National Assembly, and some governmentministries are located. Dar es Salaam, the formercapital, retains most government offices and is the
country's largest city, principal port, and leadingcommercial center. Tanzania is a least developingcountry with many untapped natural resources. Theeconomy is relatively diversified and a number of
opportunities remain untapped in many sectors thusoffer a wide range of opportunities to potentialinvestors. Manufacturing sector is at its infancy stagewith few exploited areas while
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Trade sector has been marked with negative tradebalances and major exports have been dominated byunprocessed agricultural commodities. Tanzania is in thebottom ten percent of the world's economies in terms ofper capita income. The economy depends heavily onagriculture that accounts for more than 40% of GDP andprovides 85% of exports and employs 80% of the work
force. The recent reforms in banking have helpedincrease private-sector growth and investment. Continueddonor assistance and solid macroeconomic policiessupported real GDP growth of 7.1% in 2008. Tanzania is an
emerging economy with a very high growth potential.Whilst the economy is relatively diversified, a number ofopportunities remain untapped in many sectors.
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These investment opportunities have been dividedinto two categories: the Lead Sectors and thePriority sectors. The Lead Sectors include:Agriculture and Agro-based Industries; Mining;Petroleum and Gas; Tourism, and Infrastructure.The Priority Sectors include: Energy, Manufacturing,
Chemical Industries, Natural Resources (Fishing &Forestry), Construction and Real EstateDevelopment, Management Consultancy, HumanResource Development (Hospitals, Health Centers,
and Educational Facilities), Radio and TelevisionBroadcasting and Export Oriented Projects.
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Geography and Climate
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Tanzania is the 13th largest country in Africa andthe 31st largest in the world, ranked between thelarger Egypt and smaller Nigeria. It borders Kenyaand Uganda to the north; Rwanda, Burundi, and the
Democratic Republic of the Congo to the west; andZambia, Malawi, and Mozambique to the south. Inthe northeast of Tanzania is a mountainous regionthat includes Mt. Meru (14,979 ft/4,566 m) and
Mount Kilimanjaro (19,340 ft. /5,895 m), the latterof which is the highest point in Africa and possiblythe most breathtaking mountain imaginable.
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The climate of Tanzania varies according the geographiczones, but in a nutshell it is universally hot and humid atthe coast, with the heat and humid increasing between
November and March. Rainfall peaks in April and May,with a second surge between Nov and Dec. Tanzania hasa tropical climate but has regional variations due totopography.[3] In the highlands, temperatures range
between 10 and 20 °C (50 and 68 °F) during cold and hotseasons respectively. The rest of the country hastemperatures rarely falling lower than 20 °C (68 °F).The hottest period extends between November and
February (25-31 °C or 77.0-87.8 °F)
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while the coldest period occurs between
May and August (15-20 °C or 59-68 °F). Theclimate of Tanzania varies quite a bit,considering that its environment includes
both the highest and the lowest points onthe continent. While the narrow lowlandcoastal region is consistently hot andhumid, the central regions of Tanzania aresufficiently elevated so as to offer muchcooler temperatures.
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Economy
The United Republic of Tanzania is the second largest
economy in the East African Community and the twelfthlargest in Africa. The country is largely dependent onagriculture for employment, accounting for about halfof the employed workforce. Tanzania has an area of
945,090sq.km and a population of 27.5 million, of whom26.7 million live on the mainland and 0.76 million live inZanzibar. A large part of Tanzania is covered bywoodlands, bush lands and wooded grassland. Arable
land occupies some 40 million hectares of which 6million is under cultivation. The East African nation of
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Tanzania has an estimated population of 47.4 million as of2014. With the support of the International Monetary Fund(IMF), the World Bank Group (WBG), and other development
partners, Tanzania has been able to make important economicand structural reforms and sustain its economic growth ratesover the last decade. Productive economic growth in recentyears has helped to promote prosperity, but widespreadpoverty still plagues an economy that lacks fundamental
aspects of economic freedom. A greater commitment tostructural and institutional reforms is needed to create anefficient entrepreneurial environment and open markets.Tanzania is a natural trade hub. It is well placed in terms of
its geographical location in facilitating trade in the EastAfrican Community countries and the land locked countries.Tanzania can take advantage of its position as a resourcebase.
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Land & Natural Resources
The main natural resources in Tanzania are land,
rivers, lakes, the ocean, and forests/woodlands.Natural resources are used for crops cultivation,grazing (for livestock), wildlife, wood (as an energysource and for building materials), fishing and
minerals' mining. Tanzania has plenty ofuncultivated arable land for agriculturalinvestment. The main forms of Land Tenure inTanzania today are: Right of Occupancy - a title tothe use and occupation of land; Customary orTraditional Land Tenure; and Communal LandTenure.
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In practice, most agricultural land is held undereither customary or communal systems and most
of agricultural land is not surveyed. Few usershave documents showing their legal rights andduties or even boundaries Tanzania enjoys anabundance of natural wealth which offers
tremendous investment opportunities. It hasabundant tourist attractions that are mostlyunderutilized. It's climatic and soil conditionsgive it comparative advantage in farming of a
variety of crops. It has mineral wealth largelystill unexploited.
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Abundant trainable and inexpensive skilled labourforce. Tanzania is rich in natural resources such asgas, minerals and uranium. There are also severaljoint forestry and environmental projects by Finnishand Tanzanian non-governmental organizations.These projects receive direct funding from the
Finnish foreign ministry. Small-scale projects carriedout by Tanzanian NGOs can also be funded throughthe Finnish embassy's local cooperation fund.Another set of resources is offered by Tanzania's
mineral potential. Yet other opportunities may befound in agriculture, for which soil and climate aremost favourable in many parts of the country.
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Agricultural Development
The Tanzanian economy is heavily based onagriculture, which accounts for 24.5% of grossdomestic product, provides 85% of exports, and
accounts for half of the employed workforce. Theagricultural sector grew 4.3% in 2012, less thanhalf of the Millennium Development Goal targetof 10.8%. 16.4% of the land is arable, with 2.4%
of the land planted with permanentcrops.Agriculture sector is the leading sector ofthe economy of Tanzania and accounts for overhalf of the GDP and export earnings.
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The primary objective of Agricultural sector Developmentstrategy (ASDS) is to create an enabling and conductiveenvironment for improving profitability of the sector as the
basis for improved farm incomes and rural poverty reductionin medium and long term. The geographical coverage of theAgricultural Sector Development Programme (ASDP) will bemaintained, i.e. 132 rural districts of the mainland whereabout 90 per cent of the poor - defined as those living on lessthan a dollar a day - live. Some 80 per cent of the country'srural poor are engaged in agricultural activities. All fundingfor agricultural development (both external and domestic)has been brought together under a single sector programme
and expenditure framework, owned and led by theGovernment, with development partners progressivelyaligning and harmonizing their procedures with countrysystems.
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FOCUS SECTORS FOR INVESTMENT
Manufacturing Sector
Manufacturing sector into six zones; theNorthern zone, the Lake Zone, the Southernzone, the Western zone, the Central zone andthe Coastal zone. The Manufacturing sectorcontributes marginally to the GDP compared
to agriculture. Manufacturing contributes 8.8%of GDP (of mainland Tanzania in 2008).
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The government has privatised state-owned industries andencouraged foreign direct investment through incentives
such as access to land and the right to transfer 100% offoreign exchange and profit outside the country. In 2005manufacturing received 22% of foreign direct investment(FDI). Light Manufacturing in Tanzania argues that for
Tanzania to remain one of the fastest growing economiesin Sub-Saharan Africa, it has to make progress in thestructural transformation that can lift workers from low-productivity agriculture and the informal sector to higherproductivity activities. Manufacturing, which has been themain vehicle throughout the world to achieve thistransformation, has remained stunted in Tanzania.
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Mining & Minerals
Mining is one of Tanzania's fastest growingsectors. It makes up at least half of the country's
foreign exchange earnings each year. Thesemeasures have all assisted in attractingexploration capital to the country. Tanzania'smining industry has experienced a boom in
mineral exploration and mining activities. Sixlarge gold mines are responsible for much of thecountry's production.
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Largely because of these six firms, Tanzanian goldproduction has increased dramatically in recent years.Tanzania is fast becoming one of Africa's leading gold-producing regions. After three decades of relativeeconomic uncertainty, in 1997 the Tanzaniangovernment re-opened its doors to foreign investors,which helped lay the way for economic rejuvenation.The diverse natural mineral resources in Tanzaniainclude gold, iron ore, nickel, copper, cobalt, silver,diamond, tanzanite, ruby, garnet, limestone, sodaash, gypsum, salt, phosphate, coal, uranium, gravel,sand and dimension stones. The mining industry ofTanzania provides jobs for over one million people inTanzania,
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the majority being employed in artisanalmining operations. The mining industrymakes a significant contribution to theTanzanian economy, mainly through theextraction of copper, gold, and silver, along
with some industrial minerals andgemstones such as diamonds. Internationalmining companies dominate the industry in
the extraction of gold and diamonds, withadditional small scale mining operationsscattered across the country.
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Tourism and Travel
Tanzania is a country with many touristattractions. Approximately 38 percent ofTanzania's land area is set aside in protected
areas for conservation. Tourism in areas suchas construction of hotel accommodations;entertainment facilities; camping; lodges andguesthouses of international standard;
participation in development of beachtourism, historical sites; amusement parks;
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deep sea fishing and sea and lake cruising, themeparks and gambling resorts. Tanzania's most well
known tourist attractions are located in thenorthern part of the country and include MountKilimanjaro, Africa's highest mountain. Travel andtourism contributed 12.7 percent of Tanzania's
gross domestic product and employed 11.0percent of the country's labour force (1,189,300jobs) in 2013. The sector is growing rapidly, risingfrom US $1.74 billion in 2004 to US $4.48 billion in2013. In 2012, 1,043,000 tourists arrived atTanzania's borders compared to 590,000 in 2005.
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The Tanzania Tourist Board promotestourism internationally; the Tourism
Confederation of Tanzania is the umbrellaorganisation representing the travel andtourism industry. The focus of marketing is
on North America, Europe and Africa. TheTourist Board hopes to make tourism thesector which contributes the most to GDP
by 2025 and infrastructure is developing.
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Transport Infrastructure
The Tanzania transport sector plays a crucial role inthe growth of the Tanzanian economy; it facilitatesdomestic and international trade, contributes tonational integration, and provides access to jobs,
health, education and other essential facilities.Improving transport infrastructure, consisting ofroads, railways, airports and waterways, is a highgovernment priority. Most transport in Tanzania is by
road; road transport constitutes over 75% of thecountry's freight traffic and 80% of its passengertraffic.
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Tanzania has two railway companies: TAZARA,which provides service between Dar es Salaam andKapiri Mposhi (in a copper-mining district inZambia), and Tanzania Railways Limited, whichconnects Dar es Salaam with central and northern
Tanzania. In the past five years, the transportsector in Tanzania has helped to integrate market-strengthening competition, increased access tofarming techniques, promoted trade, tourism, and
foreign investment, and has also contributed tothe government revenue.
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The growth and performance of theTanzania transport sector have continued toimprove both because of governmentefforts and because of private sectorinvestment in road rehabilitation, the
expansion of telecommunications services,the modernization of port services, and theimprovement in marine, railway and air
transport services.
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Agriculture and Fisheries
Agriculture, forestry and fisheries contributenearly half (45%) of GDP (of mainland Tanzania in2007), with a coastline stretching over 1,424 km,a water area of 276, 920 km2 and access tothree large lakes. The presence of favourableclimatic conditions provide opportunities incommercial farming of various cash crops such as
coffee, cotton, tobacco, sisal, cashew nuts,sugar and pyrethrum.
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Fishery products are exported to regionalmarkets such as the Congo, South Africa
and the Sudan. Endowed with one of thelargest freshwater lakes in the world,Tanzania has substantial fish resources of
730,000 metric tons per year. As much ofTanzania's fisheries industry is dominatedby small, artisanal fishing, the largest
companies are those involved in fishprocessing.
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Aquaculture is a growing sector with muchpotential for investment. Shrimps, seaweedand tilapia are the most commonly farmedmarine produce. Freshwater fish farming isalso a growing sector employing around
14,000 people (2013). An estimated 3000people are involved in seaweed farmingwhich, in the early 2000s, was becoming
one of the most popular cash crops in theislands of Tanga and Zanzibar.
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POTENTIAL SECTORS
Agriculture and Agro processing:
Horticulture
Large-scale commercial farmingLivestock and poultry industryFood processing
Agro-processingAquaculture, marine and freshwater
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Mining, oil and gas:
Mining and oil and gas upstreamServices to the mining and oil and gasindustryOil and gas downstreamGemstone processing
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Manufacturing:
Consumer productsBuilding and infrastructure materialsPharmaceutical and cosmetic productsPackaging productsAgricultural inputs and equipmentWood based productsAnimal and leather-based products
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