D I P L O M AT I C A| TRADE WINDS
Mpoki Mwasumbi Ulisubisya
E
ast Africa’s Tanzania is a mountainous and densely forested country, except in the central zones. Mount Kilimanjaro, Africa’s highest mountain, is in northeastern Tanzania. Three of Africa’s Great Lakes are partly within Tanzania — Lake Victoria, Lake Tanganyika and Lake Nyasa — which is located on the East Indian Ocean shore, with about 1,200 kilometres of inviting beaches along the Zanzibar Archipelago, just offshore. Tanzania is a fast-growing economy that for the past decade has seen an average growth rate oscillating near 7 per cent. Of its 44 million hectares of arable land, 33 per cent is under cultivation. Crops include maize, rice, sorghum, millet, wheat, beans, cassava, potatoes, bananas, coffee, sisal, cashew nuts, tea, cotton and tobacco. Recent data indicate that the services sector, which includes trade, contributes about 45 per cent of the GDP, while agriculture is responsible for 25 per cent and industries (manufacturing and non-manufacturing) account for 30 per cent. Tanzania enjoys an abundance of natural wealth, which offers tremendous investment opportunities — it has a sizable domestic and sub-regional market; a wide raw-materials supply base, including land, forest and minerals; an abundant and inexpensive skilled workforce; assurance of personal safety and a suitable market-policy orientation. An excellent geographical location, arable land, worldrenowned tourist attractions (Kilimanjaro, Tarangire, Lake Manyara, Serengeti, Ngorongoro, Ruaha, Mahale, Gombe Stream and the Spice islands of Zanzibar) and natural resources all make it a viable market for foreign investment. Tanzania’s history of political stability 28
Tanzania has a wide raw materials supply base, including land, forest and minerals. This gold mine is a joint venture between the Tanzanian government and Barrick Gold.
has encouraged foreign direct investment. The government attaches great importance to the role of trade in realizing national goals on poverty eradication through structural transformation of the economy, with the private sector taking a leading role as an engine for national economic growth, offering room for further growth with an external catalytic push. Tanzania offers a well-balanced competitive package of fiscal and non-fiscal trade incentives in priority sectors such as manufacturing, agriculture, tourism, petroleum, gas and mining. For all these sectors, except petroleum and gas sectors, acquisition of all capital goods and parts are zero-rated for import-duty purposes. Leading investment sectors include agriculture and agri-based industries, mining, petroleum and gas, tourism, infrastructure, finance, banking and insurance. Priority investment sectors include energy, manufacturing, chemical industries, natural resources (fishing and forestry), construction and real-estate development, management consultancy, human resource development (health, hospitality and educational facilities), media, ICT and export-oriented endeavours. Major import commodities have included agricultural implements and pesticides, industrial raw materials, machinery and transportation equipment, petroleum and petroleum products, construction materials and consumer goods (textiles, clothing), to cite a
few. Tanzania’s principal export commodities include minerals (gold, gemstones, diamonds, coal), coffee, cotton, cashew nuts, tea, sisal, tobacco, pyrethrum and cloves. Major reasons for investing in Tanzania include a high degree of investment security because of unparalleled political stability, prevailing democracy and the rule of law. Business-friendly macroeconomic stability features low inflation (4.2 per cent), stable exchange rates supported by unrestricted and unconditional transferability of profits, loan repayments, emoluments and royalties. The country also has a reliable power supply and an extensive fibre-optic network and is rapidly emerging as an effective entry point and gateway for trade into East, Central and Southern Africa. The government has simplified investment regulations in order to attract investors from around the world. Investment in Tanzania is overseen by the Tanzania Investments Centre (TIC), a one-stop government agency responsible for all investment matters. It has been responsible for streamlining bureaucracy when it comes to foreign investments. In 2018, two-way merchandise trade between Canada and Tanzania totalled $131.9 million. Canada sent $113.3 million worth of exports to Tanzania and imported $18.6 million worth of goods and services from Tanzania. Canada’s highest-valued imports from Tanzania in 2017 were coffee, seeds, fruits and spores for sowing, together accounting for 58.9 per cent of the total value of Canadian imports from Tanzania. Tanzania is a growing market for Canadian businesses, and Canadian mining companies are among the largest foreign investors. Wheat and used textiles together account for 68.7 per cent of the total value of Canadian exports to Tanzania. Business opportunities for Canadian companies active in Tanzania exist in power, renewable energy, the oil and gas sector and transportation. In addition, there are lucrative investment opportunities in infrastructure. Mpoki Mwasumbi Ulisubisya is Tanzania’s high commissioner to Canada. Reach him at mpoki.ulisubisya@nje.go.tz or (613) 302-4928. SPRING 2020 | APR-MAY-JUN
IMAGE COURTESY OF ACACIA MINING
Tanzania: A beckoning investment opportunity
