DISCOVER GLOBAL MARKETS:Sub-Saharan Africa

Discover The United Republic of Tanzania

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04/18/23

Overview of the Commercial ServiceSub-Sahara Africa

Country Overview - Tanzania 7.2% GDP Annual Forecasted Growth for 2014 44.9M Population, Population Growth Rate = 2.7% 2013 GDP (official exchange rate) $32B Import partners: China (21%), India (16%), South Africa (6%),

Kenya (6%). UAE (5%) Tanzania Main Imports: Capital goods (machinery & equipment),

petroleum products, agricultural inputs, raw materials, consumer goods

Tanzania Main Exports: Agricultural products (cashews, tea, coffee, cotton, vegetables, cut flowers), fish, manufactured goods)

Agriculture accounts for 80% of the workforce

Country Overview - Tanzania U.S. exports to Tanzania: $254M (2011); $412 (2012) Leading U.S. exports: Transportation equipment, machinery,

chemicals, computer & electronic products, used or 2nd hand merchandise

Labor Force: 25.5 million (2013 estimate) Tanzania is the U.S.’s 109th Export Market 2014 World Bank Ease of doing business ranking: 145/189

(down from 134/183 in 2013) 2013 Transparency Int’l Corruption Index: 111/177

Sources: U.S. Department of CommerceCIA World Factbook, World Bank

Largely completed its transition to a liberalized market economy, though the government retains a presence in sectors such as telecommunications, banking, energy, and mining

The economy depends on agriculture, which accounts for more than one-quarter of GDP, provides 85% of exports, and employs about 80% of the work force

The financial sector in Tanzania has expanded in recent years and foreign-owned 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

All land in Tanzania is owned by the government, which can lease land for up to 99 years

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

“Big Results Now” Initiative

UK36%

India14%

Kenya11%

China11%

USA7%

Netherland7%

S. Africa5%

Canada4%

Germany2% Oman

2%

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:

Energy – increase power generation and access for 5 million more Tanzanians

Agriculture – focus on commercial farming, irrigation, marketing, storage/warehousing

Transportation – increase port, rail throughput and decrease road travel times

Water – restore (5m), sustain (15.2m) and extend (up to 7m) people

Education – pass rate of 80% for primary and secondary schools

Resource Mobilization – PPP projects valued at Tsh 6 trillion

Key Sector - ENERGYGeneration, Transmission, Distribution

BRN Goals: 1. Increase installed capacity from 1,438MW to 2,780 MW 2. Increase access to electricity from 21% to 30% 3. Increase energy consumption per cap from 97kWh to 236

Tanzania’s diverse energy potential includes:

Natural GasCoal

HydropowerGeothermal

WindSolar

Biomass

Tanzania Electric SupplyCompany LTD (TANESCO)Is the Tanzanian parastatal organization established in 1964. It is wholly owned by theGovernment of Tanzania

Key Sector - ENERGYPoints to note:

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)

Electricity is largely dominated by TANESCO. The government allows Independent Power Producers (IPPs ) to generate and sell power to TANESCO.

Hydroelectric is the most important single source of energy, with a potential of 4.7 GW (of which only 10% is developed)

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 - ENERGYSub Sector Best Prospects

High efficiency gas turbines, parts and servicesDiesel turbines, parts and servicesPetroleum exploration servicesCoal power generation Electricity transmission equipment (transformers, cables, etc.)Electrical metering and installation equipment

Contacts and ResourcesMinistry of Energy and Minerals: https://mem.go.tzTANESCO: http://www.tanesco.co.tz (see the “tenders” tab)Rural Energy Agency (REA): http://www.rea.go.tzTanzania Petroleum Development Corporation: http://www.tpdc-tz.com/tpdc (see the “opportunties” tab)

Key Sector - INFRASTRUCTURETransportation (Ports, Rail, Aviation, Roads) & Construction

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.

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.

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 thetransportation & logistics industry, Pricewaterhousecoopers, 2013

Points to note:

BRN Goal: increase port, rail throughput and decrease road travel times

Key Sector - INFRASTRUCTURETransportation (Ports, Rail, Aviation, Roads) & Construction

Best ProspectsPorts – Dar es Salaam throughput 7m 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)Rail – system requires improvement (2major lines operated by TRL, and TAZARA). Locomotives and rolling stock, inland container depots, new lines, specialized rail maintenanceAviation – 4 int’l airports (DAR, ZIA, KIA & MWZ). 126 in total. 3.4m passengers. Upgrading, warehousing, cold storage, shopping services. 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 ResourcesGoT website, Transport, http://www.tanzania.go.tz/home/pages/286Tanzania Investment Center, http://www.tic.co.tzMany more, contact CS Dar es Salaam or your local EAC, www. Export.gov

Key Sector - AGRIBUSINESSBRN 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 - AGRIBUSINESSPoints to note: 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

44 million hectares of arable land, 24% under cultivation GoT has introduced “Kilimo Kwanza” (Agriculture First) and SAGCOT

(PPP) with the intent of commercializing agriculture to help with self-sufficiency

Huge unmet need for irrigation, >1% irrigated; huge unmet need for storage, post harvest losses = 20-40%; 3rd largest livestock herds, but virtually no commercialization

Duty exemptions on agricultural equipment

Key Sector - AGRIBUSINESSSub Sector Best Prospects

Production of fruit juices and vegetable canningNut, coffee, sugar cane processingFish and meat processing and packaging for exportDairy product processingHorticultural packaging (cut flowers and vegetables)Small farming tractors/mechanizationStorage technologies and equipmentIrrigation equipment

Contacts and ResourcesMinistry of Agriculture, http://www.agriculture.go.tzSouthern Agricultural Growth Corridor, http://www.sagcot.comTanzania Investment Center, http://www.tic.co.tzFeed 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 - TOURISMDescription 2009 2010 2011Total number of tourists

714,367 782,699 867,994

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 Area2.Ruins of Kilwa Kisiwani & Ruins of Songo Mnara3.Serengeti National Park4.Selous Game Reserve5.Kilimanjaro National Park6.Stone Town of Zanzibar

Key Sector - TOURISMBest Prospects

Construction and management of hotels, entertainment complexes and restaurantsImprovement of airport terminals and shopsHospitality trainingTour operationsTravel agenciesMarketing services

Contacts and ResourcesTanzania Ministry of Natural Resources and Tourism, http://www.mnrt.go.tzTanzania Tourist Board, http://www.tanzaniatouristboard.com Tanzania National Parks, http://www.tanzaniaparks.comTanzania Association of Tour Operators, http://tatotz.org

Other Sectors to Consider

If you are considering TanzaniaSuggested Market Entry Strategies:Research the market, visit, make local contactsConsider joint-ventures and shared ownership (helps

with land access)Marketing is usually done through a local

agent/distributorSuccessful investing is aided by having a Rep on the

groundBureaucratic obstacles can be minimized by working

with local lawyer or law firm

If you are considering Tanzania

Patience – energy, infrastructure, red tape (think long term)

Price – price sensitivity (you will need to offer more than a good price)

People – relationships and network building (one trip will not suffice)

Passion – have a vision (be committed) And have a Plan B (just in case!) Ambassador to South Africa, Donald Gipps (2009-2013)

What’s your capacity for risk: distance, time, payment terms?

Be aware of the 5 “P’s”

You might needa Plan B!

And an SUV!

ASANTE SANA! (Thank You)Robert (RJ) DonovanSenior Commercial OfficerU.S. Embassy, Dar es SalaamUnited Republic of TanzaniaRj.Donovan@trade.gov