DISCOVER GLOBAL MARKETS: Sub-Saharan Africa Connecting you to global markets Discover The United Republic of Tanzania
Second Largest and Second Most Populous Continent 2 3/19/2018
Overview of the Commercial Service Sub-Sahara Africa
Country Overview - Tanzania 7. 2% GDP Annual Forecasted Growth for 2014 44. 9 M Population, Population Growth Rate = 2. 7% 2013 GDP (official exchange rate) $32 B Import partners: China (21%), India (16%), South Africa (6%), Kenya (6%). UAE (5%) Ø Tanzania Main Imports: Capital goods (machinery & equipment), petroleum products, agricultural inputs, raw materials, consumer goods Ø Tanzania Main Exports: Agricultural products (cashews, tea, coffee, cotton, vegetables, cut flowers), fish, manufactured goods) Ø Agriculture accounts for 80% of the workforce Ø Ø
Country Overview - Tanzania Ø U. S. exports to Tanzania: $254 M (2011); $412 (2012) Ø Leading U. S. exports: Transportation equipment, machinery, chemicals, computer & electronic products, used or 2 nd hand merchandise Ø Labor Force: 25. 5 million (2013 estimate) Ø Tanzania is the U. S. ’s 109 th Export Market Ø 2014 World Bank Ease of doing business ranking: 145/189 (down from 134/183 in 2013) Ø 2013 Transparency Int’l Corruption Index: 111/177 Sources: U. S. Department of Commerce CIA World Factbook, World Bank
Ø Largely completed its transition to a liberalized market economy, though the government retains a presence in sectors such as telecommunications, banking, energy, and mining Ø The economy depends on agriculture, which accounts for more than onequarter of GDP, provides 85% of exports, and employs about 80% of the work force Ø The financial sector in Tanzania has expanded in recent years and foreignowned banks account for about 48% of the banking industry's total assets. Competition among foreign commercial banks has resulted in significant improvements in the efficiency and quality of financial services
Ø All land in Tanzania is owned by the government, which can lease land for up to 99 years Ø Continued donor assistance and solid macroeconomic policies supported a positive growth rate. In 2008, Tanzania received the world's largest Millennium Challenge Compact grant, worth $698 million Ø “Big Results Now” Initiative
Top Ten Leading Countries with Registered Investment 2006 -2012 (in $millions of USD) Source: Tanzania Investment Center
Tanzania’s – “Big Results Now” focuses on key sectors Announced by President Kikwete in 2013, is focused on transitioning Tanzania from a low to middle income country by 2025 6 National Key Results Areas by 2015: ü Energy – increase power generation and access for 5 million more Tanzanians ü Agriculture – focus on commercial farming, irrigation, marketing, storage/warehousing ü Transportation – increase port, rail throughput and decrease road travel times ü Water – restore (5 m), sustain (15. 2 m) and extend (up to 7 m) people ü Education – pass rate of 80% for primary and secondary schools ü Resource Mobilization – PPP projects valued at Tsh 6 trillion
Key Sector - ENERGY Generation, Transmission, Distribution BRN Goals: 1. Increase installed capacity from 1, 438 MW to 2, 780 MW 2. Increase access to electricity from 21% to 30% 3. Increase energy consumption per cap from 97 k. Wh to 236 Tanzania’s diverse energy potential includes: Natural Gas Coal Hydropower Geothermal Wind Solar Biomass Tanzania Electric Supply Company LTD (TANESCO) Is the Tanzanian parastatal organization established in 1964. It is wholly owned by the Government of Tanzania
Key Sector - ENERGY Points to note: ü A string of natural gas discoveries in Tanzania’s deep offshore waters has generated considerable interest. If the finds (Sonosongo, Mnazi Bay, Mkuranga) are found to be commercially viable, they could transform the economy. (Natural gas currently supplies about 30% - but has significant future potential if estimates prove out) ü Electricity is largely dominated by TANESCO. The government allows Independent Power Producers (IPPs ) to generate and sell power to TANESCO. ü Hydroelectric is the most important single source of energy, with a potential of 4. 7 GW (of which only 10% is developed) ü Increasing interest in geothermal, wind and solar power. Tanzania averages 8 hours of sunlight per day – average 200 watts/sq. meter. Source: World Bank and IMF estimates
Key Sector - ENERGY Sub Sector Best Prospects Ø Ø Ø High efficiency gas turbines, parts and services Diesel turbines, parts and services Petroleum exploration services Coal power generation Electricity transmission equipment (transformers, cables, etc. ) Electrical metering and installation equipment Contacts and Resources ü ü Ministry of Energy and Minerals: https: //mem. go. tz TANESCO: http: //www. tanesco. tz (see the “tenders” tab) Rural Energy Agency (REA): http: //www. rea. go. tz Tanzania Petroleum Development Corporation: http: //www. tpdc-tz. com/tpdc (see the “opportunties” tab)
Key Sector - INFRASTRUCTURE Transportation (Ports, Rail, Aviation, Roads) & Construction BRN Goal: increase port, rail throughput and decrease road travel times Points to note: ü Compared to its peers, Tanzania’s infrastructure performs fairly well but quality is still poor and has a negative impact on the economy’s productive capacity. ü Infrastructure has witnessed impressive investment in recent years and there is more to come. Transport and utilities infrastructure projects worth US$19 billion are in the pipeline. ü Many of these projects are expected to be financed by donors (in the form of loans), while the rest will be financed by the Government or via bilateral agreements with other countries such as China. Source: African Gearing Up, Future prospects in Africa for the transportation & logistics industry, Pricewaterhousecoopers, 2013
Key Sector - INFRASTRUCTURE Transportation (Ports, Rail, Aviation, Roads) & Construction Best Prospects Ø Ports – Dar es Salaam throughput 7 m tons, 93% of port traffic. Volumes increasing by 15% annually. Possible areas for new investment: Tanga, Mtwara, Mwanza (Lake Victoria), Kigoma and Kasanga (Lake Tanganyika) Ø Rail – system requires improvement (2 major lines operated by TRL, and TAZARA). Locomotives and rolling stock, inland container depots, new lines, specialized rail maintenance Ø Aviation – 4 int’l airports (DAR, ZIA, KIA & MWZ). 126 in total. 3. 4 m passengers. Upgrading, warehousing, cold storage, shopping services. Ø Construction – 12 -15% growth. Large unmet demand for housing & urban commercial projects. Basics provided by inexpensive suppliers, oppts for higher end, efficient pre-fabricated quality building supplies/materials. Contacts and Resources ü Go. T website, Transport, http: //www. tanzania. go. tz/home/pages/286 ü Tanzania Investment Center, http: //www. tic. co. tz ü Many more, contact CS Dar es Salaam or your local EAC, www. Export. gov
Key Sector - AGRIBUSINESS BRN Goals: focus on commercial farming, irrigation, marketing, storage/warehousing Tanzania’s range of climates favors the production of a variety of products including coffee, tea, cashew nuts, cotton, tobacco, sugar, rice, fruits & vegetables, meat and cut flowers. The vast majority produced are exported raw/unprocessed.
Key Sector - AGRIBUSINESS Points to note: Ø Agriculture accounts for nearly half of Tanzania’s GDP, 70% of rural household incomes, and approximately 76% of the population works in agriculture – therefore critical for sustained growth, poverty reduction and rural development Ø 44 million hectares of arable land, 24% under cultivation Ø Go. T has introduced “Kilimo Kwanza” (Agriculture First) and SAGCOT (PPP) with the intent of commercializing agriculture to help with self-sufficiency Ø Huge unmet need for irrigation, >1% irrigated; huge unmet need for storage, post harvest losses = 20 -40%; 3 rd largest livestock herds, but virtually no commercialization Ø Duty exemptions on agricultural equipment
Key Sector - AGRIBUSINESS Sub Sector Best Prospects Ø Ø Ø Ø Production of fruit juices and vegetable canning Nut, coffee, sugar cane processing Fish and meat processing and packaging for export Dairy product processing Horticultural packaging (cut flowers and vegetables) Small farming tractors/mechanization Storage technologies and equipment Irrigation equipment Contacts and Resources ü ü Ministry of Agriculture, http: //www. agriculture. go. tz Southern Agricultural Growth Corridor, http: //www. sagcot. com Tanzania Investment Center, http: //www. tic. co. tz Feed the Future, http: //www. feedthefuture. gov/country/tanzania
Key Sector - TOURISM Tanzania’s wildlife resources are considered among the finest in the world. They include the Serengeti plains, Lake Manyara, the Ngorongoro Crater, and Africa’s highest mountain, Mount Kilimanjaro. Zanzibar, with its sandy beaches and history is well known 44% of Tanzania’s land area is set aside for: • 15 National Parks • 28 Game Reserves • 44 Game controlled areas • 2 Marine Parks
Key Sector - TOURISM Description Total number of tourists 2009 714, 367 2010 782, 699 2011 867, 994 Number of tourists in hotels 665, 000 719, 097 753, 818 Average number of bed -nights per visit 11 11 10 Average daily expenditure per tourist*(USD) 231. 10 328. 10 355. 10 Total earnings (USD Millions) 1, 159. 82 1, 254. 5 1, 324. 83 Home to six World Heritage Sites: 1. Ngorongoro Conservation Area 2. Ruins of Kilwa Kisiwani & Ruins of Songo Mnara 3. Serengeti National Park 4. Selous Game Reserve 5. Kilimanjaro National Park 6. Stone Town of Zanzibar
Key Sector - TOURISM Best Prospects Ø Construction and management of hotels, entertainment complexes and restaurants Ø Improvement of airport terminals and shops Ø Hospitality training Ø Tour operations Ø Travel agencies Ø Marketing services Contacts and Resources ü ü Tanzania Ministry of Natural Resources and Tourism, http: //www. mnrt. go. tz Tanzania Tourist Board, http: //www. tanzaniatouristboard. com Tanzania National Parks, http: //www. tanzaniaparks. com Tanzania Association of Tour Operators, http: //tatotz. org
Other Sectors to Consider Mining ICT Healthcare Financial Services Education Consumer Goods/Franchising
If you are considering Tanzania Suggested Market Entry Strategies: ü Research the market, visit, make local contacts ü Consider joint-ventures and shared ownership (helps with land access) ü Marketing is usually done through a local agent/distributor ü Successful investing is aided by having a Rep on the ground ü Bureaucratic obstacles can be minimized by working with local lawyer or law firm
If you are considering Tanzania q What’s your capacity for risk: distance, time, payment terms? Be aware of the 5 “P’s” Ø Patience – energy, infrastructure, red tape (think long term) Ø Price – price sensitivity (you will need to offer more than a good price) Ø People – relationships and network building (one trip will not suffice) Ø Passion – have a vision (be committed) Ø And have a Plan B (just in case!) Ambassador to South Africa, Donald Gipps (2009 -2013)
You might need a Plan B! And an SUV!
ASANTE SANA! (Thank You) Robert (RJ) Donovan Senior Commercial Officer U. S. Embassy, Dar es Salaam United Republic of Tanzania Rj. Donovan@trade. gov
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