Experts predict that by 2025, expected consumer and business spending on the African continent will be more than $5.6 billion, and the population will be 1.2 billion, doubling by 2050. Therefore, Africa is the future of the world economy. One of the most developed and promising countries in this region is Tanzania.
The United State of Tanzania offers investors a wide range of investment opportunities. With a growing economy, rich natural resource base and strategic location, Tanzania is an attractive destination for investors seeking growth and profit potential.
The manufacturing sector is in its infancy with few areas being exploited, resulting in unprocessed agricultural products dominating the main exports.
Tanzania offers a number of natural resources that provide large quantities of raw materials for the manufacturing sector. The country's government also provides tax incentives and advantages for investors in Free Economic Zones (FEZ).
Tanzania has access to African and global markets through free trade agreements, including:
This sector remains central to Tanzania's industrialization as it provides markets for manufactured products and industrial raw materials. Tanzania has 44 million hectares of arable land, of which an estimated 29.4 million hectares are suitable for irrigation. Agriculture accounts for about 85% of total exports and 67% of the labor force.
The country is known for its export of agricultural products such as corn, coffee, cotton, sisal, sesame, sunflower and tea. The agricultural sector is not only the driving force of the Tanzanian economy, but also the livelihood of the majority of Tanzanians. Crop production and horticulture contribute 29% of agricultural GDP, and the Tanzania Ministry of Finance has many institutions that offer special financial assistance to agriculture-oriented businesses through the Tanzania Agricultural Development Bank.
have enormous potential
This destination attracts tourists and makes it a plus for the country in terms of increasing GDP. The sector employs about half a million people and is the country's largest source of foreign exchange. However, tourism is concentrated mainly in the “northern ring” Arusha, Mount Kilimanjaro, Tarangire National Park, Lake Manyara, Ngorongoro Nature Reserve, Serengeti and Zanzibar.
The Tanzanian government is committed to developing the country as a multi-center tourism destination.
Beaches in the south and the Katavi area, focused on nature and adventure travel. Wildlife viewing represents a significant portion of the overall tourism and leisure market in Tanzania. The country's government wants to develop this segment by expanding it beyond the northern chain.
By 2025, authorities expect 2 million visitors a year and have partnered with the World Bank to implement structural reforms that will lead to private sector growth outside the northern district.
The medical industry is the only area that is less competitive. The country has ideal opportunities for the development of the medical sector.
Investment opportunities include the production of medical equipment, drugs, injections, gloves, IVs, laboratory equipment, cosmetics, condoms, masks, medical clothing, etc.
The mining industry has placed Tanzania among African economies in terms of attracting foreign direct investment.
Tanzania is one of the countries with rich mineral resources. The database shows that minerals found in Tanzania are grouped into the following main categories:
The country has great potential, especially in the mining of gold, base metals, diamonds, ferrous minerals and a wide range of precious stones, including the world famous tanzanite (blue zoisite), found in the Proterozoic metamorphic rocks of the Usagar and Ubendia systems.
Other gemstones mined here are ruby, rhodonite, sapphire, emerald, amethyst, chrysoprase, peridot and tourmaline. Recently, a large alluvial occurrence was discovered in the southern region of Ruvuma, Mtwara and Lindi. Varieties include chrysoberyl, spinel, sapphire, garnets, zircons and diamonds.
Coal, uranium and various industrial minerals such as soda, kaolin, tin, gypsum, phosphate and building stone are abundant. Coal resources similar in quality to Gondwana coals in southern Africa are found in the Ruhuhu and Songwe-Kiwira basins in the limestone, and high purity dolomite reserves are found in the white marble deposit in the Morogoro region. Thus, the potential for the production of dimensional stone and refractory limestone is high.
Various clays — bentonite, kaolin and fuller's earth — discovered in large deposits and exploited only to a small extent. The Pugu kaolin deposit, located approximately 30 km west of Dar es Salaam, has great development potential.
The lakes of rift valleys are associated with evaporation and salt deposits, which are of economic importance. Studies of soda ash deposits on Lake Natron have revealed the possibility of extracting more than one million tons per year.
Graphite occurs in rich gneisses mainly in the Usagaran system. At the Merelani deposit, northern Tanzania, sufficient reserves were discovered for a 40-year production at a production rate of 15,000 tons per year of high-quality flake graphite with a purity of 97-98%.
Non-ferrous metals occur in a belt running from Kagera through Kigoma to the Mbeya, Ruvuma and Mtwara regions, with recent estimates indicating resources of 500,000 tonnes of nickel, 75,000 tonnes of copper and 45,000 tonnes of cobalt.
Gold and diamonds have always been the basis of the country's mineral production. Tanzania has been a major diamond producer for decades, with the bulk of production coming from the Mwadui region, where commercial mining began in 1925. But gold is a resource that currently offers one of the best investment destinations.
Current inferred opportunities range from former mines in the Archean greenstone belts around Lake Victoria to Proterozoic rocks and conceptual lower deposits in the Karoo and younger rocks. Several gold deposits have already been discovered in the Lake Victoria gold mines, which are at various stages of development.
Gasoline, hydroelectric power and coal are the main sources of commercial energy in the country. The energy consumption trend in Tanzania is dominated by biomass, accounting for 90%, petrol — 8% and electricity — 1.2%. Other energy sources such as coal, solar and wind account for less than 1%.
Several gas fields have been discovered along the Indian Ocean coastline at Songosongo, Mnazi Bay and Mkuranga in the Coastal Region. These discoveries are catalysts for the development of natural gas production in Tanzania. There are currently 22 oil companies engaged in oil and gas exploration in the country. These companies include: BG Group, Statoil, Petrobas and Ophir Energy.
The coastal region of East Africa, extending to the Seychelles, contains 441.1 trillion cubic feet of natural gas (according to the US Geological Survey), in Tanzania alone — more than 54 trillion cubic feet.
There are still many deepwater blocks to be explored and the Tanzania Petroleum Development Corporation (TPDC) is inviting oil and gas companies and other specialized investors to participate in hydrocarbon exploration in the country.
The potential of telecommunications and ICT in Tanzania remains largely untapped. The government has invested large amounts of capital into the National Fiber Optic Cable Network, known as the National ICT Backbone (NICTBB). After connecting to submarine fiber operators EASSy and SEACOM, the cost of bandwidth fell by more than 80%.
The expansion and upgrading of towers in Tanzania is increasing mobile phone usage and causing prices to fall. Some experts estimate that mobile phone usage could rival Kenya's in the next five to seven years. Mobile banking is far from reaching its full potential in the Tanzanian market. The country remains virtually unbanked, with less than 20% of residents having a formal bank account. Kenyan ICT darling M-Pesa has over 40,000 agents across Tanzania, a clear signal of growing opportunity in the country. More can be done, especially through the development of local companies, as well as the expansion of other African companies into the country.
The sector will also benefit from government and non-government investment in education programs, including laptop distribution, e-learning and training centers.
Tanzania's roads and railways are not the best in the region, but the government is making active efforts to change this with the support of development finance institutions (DFIs). The African Development Bank (AfDB) has approved a loan for the Tanzania-Kenya road project.
Growing improvements in roads and railways in East Africa are opening up logistics opportunities in a country where the urbanization rate is around 30% and many farms operate a considerable distance from Dar es Salaam's ports. Fuel and power prices have generally undermined logistics and warehousing in Africa, but changing dynamics around these two factors in Tanzania should boost profits in the near future. Both fuel and electricity prices should gradually begin to fall thanks to new investments in each sector. As they fall, manufacturing and industry will grow, giving way to demand for logistics and warehousing for a variety of sectors.
Housing in Dar es Salaam and other cosmopolitan areas is experiencing an acute shortage, among other reasons, due to the rapid growth of economic projects that have attracted huge numbers of people (foreign and local) in need of accommodation. Investors can join forces with the National Housing Corporation (NHC) or the Tanzania Building Agency (TBA), as well as other private companies, and provide commercial construction solutions for residential and commercial purposes.
Tanzania has outstanding natural resources for livestock development, including a variety of livestock breeds and extensive grazing lands.
All major economic indicators point to a sharp increase in national, regional and global demand for Tanzanian livestock products as the population grows in size and wealth.
Tanzania, with its geographic location linking eastern and southern Africa and the interior to the coast, has the potential to become a major player in the regional livestock investment market.
Meat trade has increased significantly, and more and more countries are looking to fill supply gaps through imports.
The area of freshwater cover in Tanzania is about 54,337 sq. km (6.1% of the total area of the country). The coastline is about 1424 km. The country has three large inland lakes: Lake Victoria (shared with Kenya and Uganda), Lake Tanganyika (shared with Burundi, DRC and Zambia) and Lake Nyasa (shared with Malawi and Mozambique).
The banking sector in Tanzania is booming, with assets and profits growing. Thanks to this, new trading and commercial banks, exchange offices, insurance companies, the stock exchange and related financial divisions entered the market. There are four categories of banks in Tanzania, targeting different markets and clienteles: local private banks, regional banks, international banks and multinational banks.
The Port of Dar es Salaam is Tanzania's main port with a design capacity of 14.1 million tonnes of dry cargo and 6.0 million tonnes of liquid cargo. The port has a quay with a total length of about 2600 meters with 11 deep-water berths. About 95% of Tanzania's international trade passes through the port of Dar es Salaam. The port serves landlocked countries: Malawi, Zambia, Democratic Republic of Congo, Burundi, Rwanda, Uganda and Zimbabwe. It is strategically located and provides convenient freight connections not only to the countries of East and Central Africa, but also to the countries of the Middle and Far East, Europe, Australia and America.
The Tanzania Ports Authority is implementing the Dar es Salaam Sea Gateway Projects (DMGP), which will improve efficiency and effectiveness by transforming it into a world-class port with optimized efficiency to accommodate larger ships. But also port modernization projects include strengthening and deepening of berths 1-7 and the RORO terminal, deepening the entrance channel, turning circle and harbor basin, strengthening and deepening 8-11, as well as the construction of a new terminal.
Tanga — The port with the longest service life in East Africa. This is a lighter port with two shallow berths. A 354 km long highway links it to the port of Dar es Salaam in the south. The port of Tanga is located on the northern coast of Tanzania near the border with Kenya. The current modernized capacity is 1,201,000 tons per year.
Port of Mtwara — one of the three largest ports operated by the Tanzania Ports Authority. The port is mainly intended for handling general cargo.
The construction of the Julius Nyerere hydroelectric power station, the largest in the East African Community (EAC), is more than 45% completed. The US$2.9 billion project is expected to add 2,115 MW to the national grid.
Another hydroelectric power station is being built on the Rufiji River in eastern Tanzania. It is expected to produce 5,920 GWh of electricity per year. The generated electricity will be transmitted via a new 400 kV high-voltage transmission line to a substation where it will be integrated into the national grid.
The project is expected to expand access to cheap electricity, which will contribute to economic growth, and will also attract new investment into the country. It will also transform the country through the production and supply of electricity for both domestic and industrial use.
Tanzania Standard Gauge Railway (SGR) — this is a railway system under construction connecting the country with the neighboring countries of Rwanda and Uganda, and through these two countries — with Burundi and the Democratic Republic of the Congo. Tanzania's new SGR is set to replace the old, inefficient meter gauge railway system and reduce traffic congestion. This will lead to a reduction in transport costs by 40%. Each freight train is expected to carry up to 10,000 tons, the equivalent of 500 trucks.
The project is being implemented in 5 stages: the 1st stage section is 202 km long (Dar es Salaam - Morogoro), the 2nd stage section is 348 km long (Morogoro-Makutopora), the 3rd stage section is 294 km long (Makutopora-Tabora); The 4th stage section is 130 km long (Tabora-Isaka) and the 5th stage section is 341 km long (Isaka-Mwanza).