Opportunities for Investment in Tanzania


Agriculture has been destroyed by both internal and external factors. However, revival of the sector can provide European companies with a number of primary products desirable by their citizens and the world over. This is essentially coffee, cotton, tea, cashew nuts, cocoa, vanilla. These products account for about 48 percent of Tanzania's GDP, provide 65 percent of total export earnings and are by far the largest employer. The sectors annual growth rate declined from 4% in 1999 to 3% in 2000 as a result of low short and main rainfall seasons, pests and inadequate availability and distribution of inputs.

The introduction of free market economy in 1985 has had a positive effect on the sector through introduction of semi-mechanized methods and new technologies especially in such sub sectors as cutflower and agro-processing industries. The growth of other sub sectors, e.g., agricultural equipment, farm implements, agricultural inputs etc.is still characterized by import dependence. Investment in mechanized and intensive agriculture has not born fruits due to non-implementation of land law reforms that is expected to go hand in hand with the open economy. However, the government is in the final stage of submitting the land law reform bill to Parliament this year. It is expected that such reforms will attract more investors in agriculture.

In addition, the revival of agriculture is the only way to fill the pockets of majority of Tanzanians and hence increasing their purchasing power and demand for imported goods.

In terms of dynamic sub sectors in agriculture, the cut-flowers has had a multiplier effect in both imports and exports. The sub sector that was introduced some seven years ago has attracted investments in new technology on irrigation systems, greenhouses and refrigerated trucks. Kilimanjaro Airport Development Company (KADCO) which manages Kilimanjaro International Airport (KIA), the gateway for cut flowers in the north of the country has a plan for construction of cold storage facility for cut-flowers in year 2002.

The other contributors to the agricultural sector are fish especially Nile Perch in Lake Victoria that has attracted a number of fish filleting plants, "organic coffee" and pigeon peas in Arusha and Kilimanjaro regions that are being promoted by TechnoServe, as well as other non traditional crops.

In general, the agricultural sector offers European companies a big opportunity for technology investment in the areas of farm implements, agro-processing industries, agricultural machineries, irrigation equipment, fishing equipment, agricultural inputs as well as general commodity trading.

Information Technology

The IT sector has been the fastest growing sector in Tanzania for the past 10 years. The advent of the Internet has impacted growth across all sectors but notably in the accelerated growth of the computer market. In recognition of this phenomenon, the government removed duty on computers and peripherals in year 2000. The competitiveness of the market has widened the range of products on offer and lowered prices. All major brand names, Compaq, IBM, Apple, HP are represented by licensed distributors.

The Tanzania Telephone Company (TTCL) has been partly acquired by Dutch and German firms (MSI and Detecon). It has introduced new product lines and improved efficiency. There are four companies (DATEL, WILKINS, SIMBANET, TTCL) that are licensed for data communication. In addition, there are four cell phone providers (Mobitel, VodaCom, Zantel and Celtel), five TV stations (ITV, TVT, DTV, CTN, CEN) and 12 FM radio stations that offer a range of communication services to the public.

The IT sector, with its tremendous growth rate brings a big opportunity for business in Tanzania. The mushrooming number of Internet cafes in urban centers offers a big opportunity for computers, especially refurbished ones that are available in abundance in developed countries. In addition, most middle level managers and small businesses are taking advantage of the lower prices and are now computerizing offices and providing computer training in schools. This is potentially a big market for IT companies.

Environment and Energy

Tanzania has ratified several international and regional conventions with regard to environment regulations. However, like many developing countries, Tanzania is faced with fundamental environmental and energy challenges which have a big impact in the growth of the economy. Water pollution in coastal and inland waterways, industrial pollution in urban areas and de-forestations are the main environmental tyrannies facing Tanzania. Indeed, the country has not been able to take advantage of the available technologies to create a sustainable environmentally friendly situation The National Environment Management Council (NEMC) continues to offer technical assistance and raise awareness on rational resource use and environmental protection to government and general public.

Four management systems for assistance on adoption of environmentally sustainable natural resources management practices have been identified, namely : 1) the network of national parks, 2) the national system of game reserves as a second network of protected areas, 3) community-based approaches in areas adjacent to protected areas on lands owned by communities and supported by local districts and 4) coastal resources at both the national and local levels.

With regard to Energy, petrol fuel, hydro electric and coal are major sources of commercial energy in the country. Charcoal which results from tree burning is also widely used in urban areas with a very big price of environment degradation. The trend of energy consumption in Tanzania is dominated by biomass that accounts for 90%, petrol accounts for 8% and electricity accounts for 1.2%. Other energy sources such as coal, solar and wind accounts for less than 1%. The growth rate of the energy sector was 4% in 1999 and 5% in 2000 as a result of increase in production of electricity and demand by consumers particularly the industrial ones.

The opportunities available for the environment and energy sector are in the areas of : (i) petroleum-Tanzania Petroleum Development Corporation in collaboration with international companies, Dublin International, CANOP (T) Ltd and Ndovu Resources continue research and exploration in southern regions and along the coastal line (ii) solar - Global Environment Facility (GEF) sponsored data collection for preparation of solar development programme. Negotiations are in progress on reducing duties on solar equipment; (iii) natural gas - negotiations are ongoing on how to utilize natural gas found in deposits in the south coastal areas; (iv) wind: research on establishing speed of wind has been completed and potential areas are identified for wing energy and (v) geothermal on which research is on going and a private company, First Energy in collaboration with investors is working on possibility of starting an electricity generation project.


The Health sector is faced by many challenges especially in the advent of HIV disease and immunity of chloroquine medicine to malaria. Statistics for 1996 to 1999 indicate that there has been little change in number of patients reporting and admitted in hospitals.

Malaria, AIDS, diarrhea and acute respiratory diseases are major causes and leading diseases for admissions and deaths. Medical services have been highly improved to ensure availability of drugs and essential medical equipment in hospitals and health centers. By year 2000, Tanzania had 179 hospitals, 529 health centers and 4005 dispensaries. In terms of ownership, government owned 60% of all health facilities, 20% was owned by the private sector, 15% by religious institutions and 5% by public institutions.

Tanzania imports almost 90% of its pharmaceuticals and medical equipment. Both imports and manufacturing of pharmaceuticals are regulated by the Tanzania Pharmacy Board. The three pharmaceutical manufacturing companies, Keko Pharmaceutical Industry, Shellys Pharmaceutical Industries and Mansoor Daya Industries of Dar es Salaam are faced with cheap competing products mainly from India, China and other Far East countries.

Sales opportunities available in the health sector are in hospital equipment, research and production facilities, drugs and pharmaceuticals, preventive facilities e.g., condoms, mosquito nets, etc


The Tanzania Statistics Bureau does not keep data on construction activities in the economy. The available data is on construction of public works under the Ministry of Works. However, with the advent of the market economy, there are construction activities in the private sector that is not captured and could provide very significant information for income and job creation.

The Registration Board of Contractors registers contractors of various categories, monitors performance of contractors and building capacity in line with the current liberalized economical environment. The Board also registers and accredits engineers in the country while Tanzania Association of Consultants keeps a register of consultants. The two organizations provide a forum for construction issues. The National Construction Council is a regulatory body for civil engineering contractors. It approves the classification and registers/de-register contractors.

Tanzania recognizes that rural districts in Tanzania are the hub of agricultural production and home to 80% of the country's population. In view of that, the development objectives focus on a regional roads programme down to the district level, which is responsible for supporting road maintenance to 60% of the country's roads. The objectives envisage, among other things, increasing the percentage of district roads rehabilitated/maintained by the private sector from 5% of all district roads (1997) to 80% in 2003. Additionally, over 1,000 Tanzanian contractors and consultants will receive both direct and indirect assistance in management and execution of road rehabilitation and road maintenance contracts.

The biggest opportunity available for the construction industry is in facilitation of importation of construction equipment for hire to small contractors. Small road contractors in Tanzania would benefit from the facility since they are unable to invest on equipment of their own.

Consumer Goods

Local industry accounts for some 15 percent of consumer goods used in Tanzania. It is mainly limited to the processing of agricultural products and light consumer goods. The gap of 85% is imported from South Africa, Kenya, the Middle East, India, the Far East (Singapore, Malaysia and South Korea, China, Japan and USA, UK countries). The increased trade, resulting from open market policy, has been well received but has also brought some concerns as some low quality products such as milk and milk products, fruit and fruit juices, toys, etc. from the international market are dumped in the Tanzanian market. The Tanzania Bureau of Standard has intervened and in some instances averted dumping of these products in Tanzania.

With a population of about 35 million, the slow pace of industrialization coupled with adoption of regional integration in East and sub-Saharan Africa, Tanzania's dependence on imported consumer goods is likely to remain for the coming 20 years or so. However, recent government effort in facilitating Export Processing Zones is expected to revamp the agro processing and increase agricultural goods for export and the internal market.

EAHP seeks to increase access to finance and improving management skills of the small and medium size sectors. It is expected that after provision of such services the small manufacturing enterprises will be able to contribute to the economy by increasing supply of goods.

Financial Services

Tanzania Finance and Enterprise Development (TFED) project (1993 – 1997) assisted the government of Tanzania to lay down a framework for reforms and ultimately liberalized the financial sector. Before 1995, public/state banks dominated the market. Interest rates were very high, investments were made with no basis for economic/financial viability, cost of borrowing was very high and lending to the private sector was limited to short term loan products.

Reforms of the financial sector exposed the public banks and the government to free market forces. Treasury Bills interest rates leveled to market rates, inefficient banks were closed or restructured while others were sold and acquired by efficient venturers and to top it all new local banks and foreign multinational banks entered the market. The list of banks operating in Tanzania is as shown below:

· Foreign banks:

· National Banks:

(1) CRDB Bank (2) Akiba Commercial Bank (3) Tanzania Investment Bank (4) AZANIA Bankcorp (5) National Micro Finance Bank (6) CF Bank (7) EXIM (T) Bank (8) National Bureau de Change (9) Tanzania Postal Bank (10) Kilimanjaro Cooperative Bank and (11) 3 small community banks in Dar es Salaam, Mwanga and Mufindi

· Other Financial Institutions:

· Non Financial Institutions that offers some financial services:


Gold mines are located in the northwest regions of Mwanza and Shinyanga as well as Mara region to the East of Lake Victoria. In year 2000 sales from gold export recorded an increase of 208% compared to 1999. Export sales of diamond from Williamson Diamonds at Mwadui recorded an increase of 70% from $ 43.75 million compared to $25.76 in 1999. Big international companies that are involved in mineral prospecting include Kahama Gold Mines Corporation, Ashanti Goldfields Limited, Resolute Limited, Afrika Mashariki Gold Mine, Anglo – American Minerals, Tanganyika Gold Mines, Pangaea Minerals, Kiwira Coal Mines as well as Williamson Diamonds Limited.




Tanzania's position on the world map makes it an obvious operator of land, marine and air transportation modes. Tanzania has 85,000 kms of roads out of which 13,630 are tarmac roads and 30,000 kms of rural roads. Tanzania also has 4,460 kms of two railway lines systems one running from Dar es Salaam to Mwanza, with a junction to Kigoma, Arusha and Tanga and another exclusively running from Dar es Salaam to Zambia. On waterways, Tanzania has a fleet of vessels in the inland waterways in lakes Victoria, Tanganyika and Nyasa and coastal shipping services. The country has four major costal ports at Dar es Salaam, Tanga, Mtwara and Zanzibar. In addition, the country has two international airports at Dar es Salaam and Kilimanjaro, and a number of other small airport and air strips.

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