Tanzania enjoys an abundance of natural wealth, which offers tremendous investment opportunities for investors. These include an excellent geographical location (six land locked countries depend on Tanzania ports as their cheapest entry and exit ports); arable land; world renowned tourist attractions (Serengeti, Kilimanjaro, Ngorongoro, and the Spice islands of Zanzibar); natural resources; a sizable domestic and sub regional market; a wide local raw materials supply base; abundant and inexpensive skills; assurance of personal safety; warm friendly people and a suitable market policy orientation.
The following are among the major reasons why you should invest in Tanzania:
Investment Opportunities in Tanzania
Tanzania possess vast natural resources and is endowed with unique comparative advantages thus offering exceptionally attractive opportunities to investors. After three decades of a centrally planned and state run economy, Tanzania has now privatized state-owned business enterprises, liberalized all spheres of economic activity and put in place a business-friendly environment, which is backed by a strong enabling and facilitative framework.
Tanzania is an emerging economy with a very high growth potential. Whilst the economy is relatively diversified, a number of opportunities remain untapped in many sectors. The Tanzanian government has taken serious steps to liberalize the economy and encourage both domestic sector private and foreign investments. The recent reforms in the banking sector have increased the private sector growth and assistance. The continued assistance from international organizations and solid macroeconomic policies has kept Tanzania stable despite the world recession.
Following its liberalized trade regime and a sustained economic growth, Tanzania has enormous opportunities in both domestic and external markets. Currently, Tanzania exports coffee, cotton, manufactures, cashew nuts, minerals, tea, sisal, tobacco, cloves and pyrethrum to Germany, Japan, India, Belgium-Luxembourg and Britain ; and imports machinery and transport equipment, textiles and clothing, petroleum products and food & drinks from Britain, Kenya, Japan, Saudi Arabia, India and China.
Tanzania is also strategically located as it provides an entrance to six landlocked neighboring countries. Therefore business opportunities in Tanzania go beyond its borders, by considering the East African Community (with almost 90 million people), SADC (300 million people), EU (through Everything but Arms initiative), US market through the African Growth and Opportunity Act (AGOA) window, and Chinese market through Special Preferential Tariff Agreement with China. In all these markets products from Tanzania receive either relatively low tariff or tariff free treatment.
Investments and personal security
Availability of Resources
Starting and sustaining Business in Tanzania
Reaching your markets
By air By air – Tanzania is served by major airlines which fly from Tanzania to major hubs in the world. Regular flights fly from Dar es Salaam Kilimanjaro and Zanzibar International Airports and hired cargo planes from Mwanza/KIA to Europe. Currently, Turkish Airlines, Emirates, Qatar Air and Kenya airways fly out from Dar es Salaam, Kilimanjaro and Zanzibar International Airports on daily basis.
By sea There are regular ships sailing from Dar es Salaam, Tanga and Mtwara Ports including but not limited to: container cargo, fuel tankers, roro’s, break bulk cargo, liquefied cargo and refrigerated cargo. Dar es Salaam, Tanga and Mtwara Ports are currently operating container cargo ships, fuel tankers, roro’s on regular basis to ship in and out all type of break bulk, cargo, containerize cargo, liquefied cargo and refrigerated cargo.
By Rail Tanzania is connected to Kenya, Zambia and Uganda by rail. A three phase, high-speed railway line is also under construction.
By Road There is a good road network connecting Tanzania to its eight neighboring countries and beyond.
Some proactive companies from the globe have already set their footing in Tanzania including those from European Countries, USA, UAE, China and Turkey who have invested in Petroleum exploration, Tourism, mining and many more other sectors. Opportunities are literally limitless.
Investment Opportunities by Sectors
Tanzania is a country where opportunities abound. Investors are welcome to bring along capital, technology and expertise so that these limitless opportunities could be tapped for the mutual benefit of the investors and peoples of Tanzania. Investment opportunities include but not limited to the following:
| Large scale commercial farming || Agro Processing || Ranching and Livestock development || Fishing and fish processing || Floriculture and Horticulture |
| Timber & wood processing || Tourism and Hospitality sector || Service Sector ICT || Health development || Infrastructure development |
| Exhibition & Conversation Industry Development || Energy generation || Mining and Oil Exploration || Gemstone & Industrial mineral mining. || Gemstone cutting and polishing. |
| Lapidary || Food processing || Hotel and resort construction || Economic Infrastructure on BOO/BOT || Road Construction. |
| Bridge Construction. || Airport Infrastructure and Related Services || Airport construction & operation. || Air Ground transport exhibition and convention centers etc || Real Estate develpment |
| Telecommunication. || Shipping || EPZ (Export rocessing Zone) Infrastructure Development. || Production & Services |
Agriculture is one of the leading economic sectors of Tanzania; it contributes to around 21% to the country’s GDP and provides employment to around 80% of the population. The presence of favorable climatic conditions provide opportunities in commercial farming of various cash crops such as coffee, cotton, tobacco, sisal, cashew nuts, sugar and pyrethrum. The temperate climate in the highland region of Tanzania is ideal for horticulture and floriculture. The laws for land leasing have now eased to 99 years for foreign companies. One of the major problems faced by Tanzania in agriculture is of irrigation.
Endowed with one of the largest freshwater lakes in the world, Tanzania has substantial fish resources of 730,000 metric tons per year. Investment in this sector is regulated by the Fisheries Act of 1970 under the Ministry of Natural Resources and Tourism. The major markets for export are the European Union and Japan.
Tanzania has around 33.5 hectares of forests and woodlands out of which 13 million has been kept a side as forest reserves. The importance of Tanzania’s forests is increasing as there is an expansion in the tourism portfolio and an increase in the requirement of organic forest products. Softwood and hardwood plantations provide a wide range of investment opportunities in saw-milling, partial boards, furniture and pulp-paper industry.
Tanzania has 12 national parks, 17 game reserves, 50 game controlled areas, 2 marine parks, 2 marine reserves and a conservation area. It is the only country which has dedicated around 25% of its land to wildlife reserves and game reserves. The wildlife resources are considered one of the best in the world. Tanzania has a vibrant culture notably the Maasai culture and art and the Makonde sculptures and carvings done in ebony. Investment opportunities exist in the development of hotels, campsites in some of the heritage sites like Bagamoyo, Pangani, Tabora and Kilwa.
Manufacturing The manufacturing sector contributes to around 10.2% of the country’s GDP. The Tanzanian government is laying stress on diversification and is encouraging the establishment of certain import substitution industries. The major industries of the region are beverages, steel and metal, cement and ceramics, chemicals, electrical engineering, canning, animal feed processing, bottling and glassware. Investment opportunities exist in manufacturing of pottery, china and earthenware, food, beverages, cigarettes and also in construction materials and electrical goods.
Banking and Insurance
The financial sector was liberalized in 1991 under the Banking and Financial Sector Act. The opportunities in the banking and insurance sector exist in expanding product and services by nontraditional means such as brokerage, asset management, real estate financing, lease finance and agriculture finance. With the coming up of the Dar es Salaam Stock Exchange (DSE) there are opportunities in the mutual fund segment and the unit trust segment.
Laws and Regulations Governing Investments in Tanzania
Constitution of the United Republic of Tanzania
The Constitution of the United Republic of Tanzania, 1977 is the mother of all laws of the country. It has set up an independent judiciary, among other organs of the State and does recognize the sacred right of individuals to acquire and own property. Legislation’s passed since 1990 to improve the investment climate in Tanzania include: – Tanzania Investment Act, 1997 (No. 26 of 1997): This is an act to guide investment activities in Tanzania, to provide for more favorable conditions for investors. It provides definitions for inter alia local investor, foreign investor and local capital. This Act does not, in terms of Article 2, apply to:
- Investments in mining and oil exploration currently covered under the Petroleum (Exploration and Production) Act, 1980, and the Mining Act 1998;
- Investments in Zanzibar, which are administered under a separate legislation applicable in Zanzibar only;
- Investments below US$ 300,000 and US$ 100,000 for foreign investors (wholly owned or joint venture) and local investors respectively.
Financial Laws (Miscellaneous Amendments) Act, 1997 (Act No. 27 of 1997):
Aimed at amending certain financial laws, in order to address areas in affected legislations that had potential conflict with some provisions in the Tanzania Investment Act of 1997. The legislations which were affected by this Act are some sections of the Income Tax Act, 1973, Customs Tariff Act 1976, Sales Tax Act, 1976 (since repealed) and the Immigration Act, 1995.
Capital Markets and Securities Act, 1994 (No. 5 of 1994):
This Act provides for the establishment of a Capital Markets and Securities Authority (CMSA) for the purpose of promoting and facilitating the development of capital markets and securities in Tanzania.
Mining Act, 1998 (No. 5 of 1998):
Provides for minerals mining, trading and any other relevant matters.
Banking and Financial Institutions Act 1991 (No. 12 of 1991):
An Act intended to harmonize the operations of all financial institutions in Tanzania, to foster sound banking activities, to regulate credit operations, and to provide for other matters related to these purposes.
BOT Act 2006:
The Act expressly specifies functions and objectives of the regulation and supervision of banks and financial institutions in Tanzania
The Land Act, 1999 (No. 4 of 1999):
The Act expressly specifies functions and objectives of the regulation and supervision of banks and financial institutions in Tanzania.
The Village Land Act, 1999 (No. 5 of 1999):
Provides for the management and administration of land in villages, and for related matters. Value Added Tax Act, 1997 (No. 24 of 1997): Provides for the imposition of tax to be known as Value Added Tax on supplies of goods and services and for related matters.
Immigration Act, 1995 (No. 7 of 1995):
Aimed to provide for the enactment of one law for control of immigration in the United Republic of Tanzania and for matters incidental to or connected with immigration.
Foreign Exchange Act, 1992 (No. 1 of 1992):
Act to provide for the administration and management of dealings and other acts in relation to gold, foreign currency, securities, payments, debts, imports, exports, transfer or settlement of property.
Customs Tariff (Amendment) Act (No. 1 of 1976):
Provides for the imposition of duties on goods imported into Tanzania.
Business Licensing Act (No. 25 of 1972):
Provide for licensing of business operations. No firm or business entity can enter into business activities before getting a business license.
Employment Ordinance Act: Cap 366:
Ordinance intended to amend and consolidate laws relating to labour, and to regulate conditions of employment and employees.
Severance Allowance Act: Cap 487 (No. 57 of 1962):
This was enacted in 1962 to guide the payment to all employees on the termination of their employment in certain circumstances.
Security of Employment Act: Cap 574, No. 62:
It provides for the establishment of workers? Committees in certain businesses, restricts the power employers to summarily dismiss employees or matters related to the discipline of employees etc.
Workmen’s Compensation Ordinance: Cap 263:
An ordinance to provide for compensation to workmen for injuries suffered in the course of their employment.