corporate tanzania 2011 (excerpt)

8/6/2019 Corporate Tanzania 2011 (excerpt)

1/20

The Business, Trade and Investment Guide 2010/2011

CorporatetaNZaNIa

World Economic Forum

on Africa 2010

Dar es Salaam, Tanzania

5-7 May 2010 www.corporate-tanzania.com

With compliments from

H.E. President Jakaya M. Kikwete


2/20

P.O. Box 2939, Dar es Salaam, Tanzania

Tel. +255 22 211 0945-7 / 221 0950-2

Fax +255 22 212 8151 / 211 2573

[email protected] . www.bot-tz.org

WITH A HIGH GROWTH RATE AND LOW INFLATION,

THE BANK OF TANZANIA HAS CREATED THE IDEAL

ECONOMIC CLIMATE FOR FOREIGN INVESTMENT

IN TANZANIA

BANK OF TANZANIA

WE KEEP AN EYEON YOUR

INVESTMENTS


3/20

TANZANIA| CORPORATE GUIDES2

CONTENTS

K Country Profile4 Tanzania at a Glance6 Tanzania Offering Endless Opportunities

K History & Culture10 History and Culture Overview14 Zanzibar: Spicing it Up

K Politics16 Politics Overview18 The Progress in President Kikwete's Government22 Interview: President Jakaya M. Kikwete23 President's Agenda Vision29 Getting a Grip on Corruption

K Economy30 Economic Overview34 Interview: Mustafa H. Mkulo (MP),

Minister of Finance and Economic Affairs38 Progress and Successes of Privatisations40 Interview: Ms Mkwizu, Chairperson of

Tanzania Private Sector Foundation (TPSF)

K Banking, Finance & Insurance44 Banking and Finance Overview46 Interview: Prof. Ndulu, Governor, Bank of Tanzania52 Electronic Banking in Tanzania54 Insurance Overview

K Foreign Direct Investment56 FDI Overview58 Interview: Ole Naiko, Executive Director of Tanzania

Investment Centre (TIC)61 In Focus:Tanzania Investment Centre (TIC)62 Interview: Abdalla Abbas Omar,

President Zanzibar National Chamber of Commerce,Industry and Agriculture

64 Investment Opportunities66 Procedures for Investing in Tanzania

K Agriculture68 Agriculture Overview70 Interview: Hon. Stephen Masato Wasira (MP),

Minister of Agriculture74 Biofuels78 Interview: Salum Shamte, Chairman of

The Agricultural Council of Tanzania

K Industry82 Industry Overview84 Interview: Dr Nagu (MP), Minister of Trade, Industry

and Marketing90 Processing Local Resources at Home92 Interview: Elvis Musiba of Tanzania Private Sector

Foundation (TPSF)96 Coffee in Tanzania98 Interview: Dr Meru, Export Processing Zone Authority


4/20

CONTENTS

3CORPORATE GUIDES| TANZANIA

K Tourism102 Tourism Overview108 Interview: Hon. Shamsa Selengia Mwangunga (MP),

Minister of Natural Resources and Tourism113 In Focus: Tanzania Tourism Board114 Interview: Hon. Samia Suluhu Hassan, Zanzibar

Minister of Trade, Tourism and Investment118 Zanzibar: Eco & Spice122 Honeymooners and Adventurers126 Conference Travel in the EAC

K Infrastructure Telecommunications & IT128 Telecoms and ICT Overview130 Interview: Hon. Prof. Peter Msolla (MP),

Minister of Communications, Science andTechnology

135 In Focus: Seacom136 Tanzania Goes Online138 Tanzania's Mobile Still Booming

K Infrastructure Transport140 Transport Overview142 Interview: Dr. Shukuru J. Kawambwa (MP),

Minister of Infrastructure Development146 New Developments in Infrastructure

148 Investing in Transport150 Construction Overview

K Energy and Solid Minerals152 Energy Overview154 Interview: Hon. William Mganga Ngeleja (MP),

Minister of Energy and Minerals160 Solar Energy, Renewables and Alternatives162 Gas New Possibilities164 Solid Minerals Overview166 Interview: Ambassador Ami R. Mpungwe,

Chairperson, Tanzania Chamber of Mineralsand Energy

K Legal170 Interview: Harry Kitillya, Commissioner General,

Tanzania Revenue Authority (TRA)175 In Focus: Tanzania Revenue Authority (TRA)

176 Imprint


5/20

CONTENTS


K Tourism102 Tourism Overview108 Interview: Hon. Shamsa Selengia Mwangunga (MP),

Minister for Natural Resources and Tourism113 In Focus: Tanzania Tourism Board114 Interview: Hon. Samia Suluhu Hassan, Zanzibar

Minister of Trade, Tourism and Investment118 Zanzibar: Eco & Spice122 Honeymooners and Adventurers126 Conference Travel in the EAC

K Infrastructure Telecommunications & IT128 Telecoms and ICT Overview130 Interview: Hon. Prof. Peter Msolla (MP),

Minister of Communications, Science and Technology135 In Focus: Seacom136 Wireless Hotspots138 Tanzania Mobile Still Booming

K Infrastructure Transport140 Transport Overview142 Interview: Dr. Shukuru J. Kawambwa (MP),

Minister of Infrastructure Development146 New Developments in Infrastructure148 Investing in Transport

150 Construction Overview

K Energy and Solid Minerals152 Energy Overview154 Interview: Hon. William Mganga Ngeleja (MP),

Minister of Energy and Minerals160 Solar Energy, Renewables and Alternatives162 Gas New Possibilities164 Solid Minerals Overview166 Interview: Ambassador Ami R. Mpungwe, Chairperson,

Tanzania Chamber of Minerals and Energy

K Legal170 Interview: Harry Kitillya, Commissioner General,

Tanzania Revenue Authority (TRA)

175 In Focus: Tanzania Revenue Authority (TRA)

K Imprint


6/20


Country Profile

IndianOcean

IndianOcean

MaswaKilimanjaro

Mkomazi

Tarangire

Burigi

Uwanda

Ugala

Kizigo

Ruangwa

Selous

Mkumi

Lake Victoria

Lake

EyasiLakeManyara

LakeRukwa

LakeTanganjik

a

LakeN

yasa

Lake

Natron

ARUSHA

MARAKAGERA

MANYARA

DODOMA

KILIMANJARO

TANGA

LINDI

MTWARARUVUMA

PWANI

DAR ES SALAAM

ZANZIBAR

IRINGA

MOROGORO

MBEYA

SINGIDA

TABORA

RUKWA

KIGOMA

SHINYANGA

MWANZA

UKEREWE

Musoma

Mwanza

Bukoba

Shinyanga

Babati

Singida

ArushaMoshi

Tanga

Morogoro

Iringa

Lindi

MtwaraSongea

Mbeya

Sumbawanga

Kibaha

Dar Es Salaam

Kigoma

Tabora

DODOMA

Zanzibar

Mafia Island

Koani

Mahonda

Chake ChakeWete

Pemba Island

Tanzania at a Glance

Official Name:

United Republic of Tanzania

Conventional Short Form:

Tanzania

Capital and Seat of Government:

Dodoma, home to the legislative offices and the National

Assembly meetings, is the new official capital of Tanzania;

Dar es Salaam still is the economic capital (approx. 3 mil-

lion residents)

Form of Government:

Republic; multi-party system since 1992, current ruling

party CCM (Chama Cha Mapinduzi)

Head of State and Government:President Jakaya Mrisho Kikwete (since December 21,

2005), CCM. Commander in Chief of the Armed Forces of the

United Republic of Tanzania, Tanzanias fourth President

Area:

946.000 sq km

Population:

40.7 million

Ethnic Groups:

More than 120

Religious Groups (approx.):

Christians (40%), Muslims (40%),

indigenous religions (20 %);

Zanzibar 98% Muslims

Languages:

Swahili (official),

English (official, primary language of commerce,administration and higher education),

Arabic (widely spoken in Zanzibar),

many indigenous languages


7/20

Country Profile


GDP at Current Prices

2000 approx. TSH 8.153 billion









GDP Growth Rate

approx. 4.9 per cent









Inflation Rate: GNI Per-Capita Income:

approx. 6.0 per cent approx. 309.1 current USD









Economic Indicators


8/20


Country profile

In Tanzania, elements of great diver-

sity come together to create harmony.

The heights of Kilimanjaro are balanced

by the depths of the Great Rift Valley and

Lake Tanganyika, while a mostly agri-

cultural people nonetheless have their

urban and industrial centres. The great-

est of these, Dar es Salaam, encapsu-lates in its name one of the countrys

foremost strengths: the citys name

means heaven of peace, and the coun-

trys political stability and peaceful tra-

dition is exemplified in the term.

Population

Tanzania is home to approx. 40.7 mil-

lion people, with 1.2 million of those liv-

ing on the Isles of Zanzibar. Forty per

cent (including around 98% of the popu-lation of Zanzibar) identify as Muslim,

another 40% are Christian, and about

20% hold traditional beliefs. There are

around 120 ethnic groups on mainland

Tanzania, none of which comprise more

than 10% of the population; larger eth-

nic groups include Chagga, Gogo, Ha,

Haya, Masai, Nyamwezi and Sukuma.

This diversity has not led to ethnic or

ideological conflict Tanzanias popu-

lation is untroubled by division and its

political system is stable.

Dar es Salaam is the countrys largestcity and the seat of much of government

and industry, although Dodoma became

the official capital in 1996. Other major

urban centres include Mwanza and

Arusha, but 80% of Tanzanias popula-

tion is rural and derives its income from

agriculture. The national language is

Swahili, a Bantu-based language, while

the countrys official languages are

Swahili and English.

Geography

The largest country in East Africa,Tanzanias total area is 946.000 square

km, making it the 31st largest country

in the world. Stretching to the Indian

Tanzania Offering EndlessOpportunitiesWhile economic diversity and democracy pave the way

The heights of Kilimanjaro are balancedby the depths of the Great Rift Valley andLake Tanganyika.


9/20

Country profile



10/20


Country profile

Ocean on its eastern coast, Tanzania

borders Burundi, DRC, Kenya, Malawi,

Mozambique, Rwanda, Uganda and

Zambia, providing an important route

to the sea through the countrys mari-

time ports. Kilimanjaro, the highest

mountain in Africa, is situated among

Tanzanias north-eastern mountains.

The vast plains of the Serengeti, where

the Great Migration sees 2 million

zebra and wildebeest every year follow

the rains from north to south and then

back again, extends from north-west-

ern Tanzania into south-western Kenya.

Lake Victoria in the north is the largest

lake in Africa, and Lake Tanganyika inthe west is the second oldest and sec-

ond deepest lake in the world, after Lake

Baikal in Siberia.

NaturalResources

As well as its breathtaking geograph-

ical features, which each year attract

thousands of tourists from around the

world, Tanzania possesses a wide range

of valuable natural wealth. The country

has deposits of gold, iron, nickel, tan-zanite and other gemstones. Tanzania is

the third largest gold-producing country

in Africa, and after discoveries of new

deposits in the countrys south in 2009,

could before long rise in the ranks to

become the largest producer on the con-

tinent. Uranium deposits were found in

the country in 2009 and production of the

material is due to start in 2012. Natural

gas has been found off Tanzanias coast,

and exploration for oil is ongoing, with

international companies expecting to

find petroleum in the country in the nearfuture. Large amounts of arable land

provide the bedrock for the countrys

agricultural sector and open the door to

a burgeoning and potentially lucrative

biofuel industry.

Economy

Tanzania has been praised by inter-

national organisations for its macroeco-

nomic stability and GDP growth in 2008/9

was 7.4%. The global economic crisis hadits effect on Tanzania as elsewhere, and

GDP growth for 2009 is forecast at 5.5%,

rising to 6% to 2010.

A robust government stimulus pack-

age ensured the countrys economy

came through the global downturn with-

out suffering major turmoil.

Agriculture is the largest sector of the

economy, employing 80% of the people

and accounting for 27% of GDP. Other

sectors are showing promise also tour-

ism and mining have proven strong for-

eign exchange earners in recent years.

Telecommunications was the best per-

forming sector in 2008/9, growing by

20.5%, and construction too recorded

strong growth at 10.5%.

Investmentopportunities

The Tanzania Investment Centre (TIC)

coordinates, promotes and facilitates

investment in the country. The centre

helps both local and foreign investors,

establish businesses and obtain licenc-

es and permits, as well as assisting in

any other matters that arise in efforts

to set up shop in Tanzania, from the ini-

tial stages of planning an investment to

after-care service for established con-cerns.

Investments in Tanzania are guaran-

teed against nationalisation and expro-

priation. The government offers various

incentives to investors, such as import

duty and VAT exemption on capital goods

and guaranteed transfer of net profits

and dividends. For projects over USD20

million likely to offer significant ben-

efit to Tanzanias economy or society,

investors are invited to negotiate special

incentives with the government.

Tanzanias natural riches and peace-

ful climate provide the base for future

prosperity. With the help of interna-

tional investment, the country can see

its promise fully realised in the years to

come.


11/20

Country profile



12/20


History & Culture

Long before the start of recorded

history, Tanzania was home to human-

itys earliest ancestors in the Olduvai

Gorge in Northern Tanzania, their fos-

silized remains prove that the cradle of

humanity supported these pre-humans

even before the start of mankinds jour-

ney. Since then, the country has seenempires rise and fall and each of the

peoples that have passed through it

have left their mark in its unique history

and culture.

Before the Republic

The societies of inland Tanzania were

made up of Bantu and Nilotic peoples, as

well as remnants of earlier settlers, and

were left untroubled by influence from

outside Africa until the nineteenth cen-tury. On the coast, however, the arrival

of Arab traders in the eighth century was

the start of a long relationship with for-

eign incomers the Persians came in

the twelfth century and the Portuguese

in the early sixteenth century, and in

the early eighteenth century, the region

fell under the control of the Sultanate

of Oman, when Omani Arabs drove out

the Portuguese with the help of the

indigenous people. In the nineteenth

century, Germans and British startedto explore inland Tanzania, and by 1884,

European colonisation had begun.

Britain and Germany carved up the land

between them, with Germany govern-

ing what became known as Tanganyika

and Britain controlling the islands of

Zanzibar through the Sultan of Zanzibar.

European governance was not unchal-

lenged by the people of Tanganyika: the

Maji Maji War of 1905-7 broke out in

resistance to German rule and brought

about the deaths of between 120000and 300000 indigenous Africans. After

the First World War, Tanganyika passed

into the hands of the British Empire,

History and Culture OverviewTanzania's remarkable transformation to one of East Africa's powerhouses

... the Persians came in the twelfth centuryand the Portuguese in the early sixteenthcentury, and in the early eighteenth century,the region fell under the control of theSultanate of Oman.


13/20

History & Culture



14/20


History & Culture

who continued to administer it when

it became a UN trusteeship after the

Second World War.

Independence and regional involve-

ment

In 1961, Tanganyika got its inde-

pendence, in a peaceful transition of

power between the British authori-

ties and the new political party, the

Tanganyika African National Union.

Julius Nyerere became the countrys

Prime Minister, and the following year,

its first President, when the Republic of

Tanganyika was declared. After Zanzibar

received independence in 1963, it joined

with Tanganyika in April 1964 to form theRepublic of Tanzania. Under Nyerere, the

country experimented with socialism,

one-party rule and a centralised econ-

omy. In 1985, the country held its first

ever multi-party elections and in 1995,

Benjamin Mkapa became Tanzanias

first democratically elected president

since 1961. By then, the country had

transformed itself into a market-orient-

ed economy, begun liberalisation and set

fiscal reforms in train, and established

links with the IMF and the World Bank.

Tanzanias current president, Jakaya

Kikwete, was elected in 2005.

Because of its peaceful political tra-

dition, Tanzania has served as a haven

for refugees from violent events in the

rest of East Africa. The country has

acted as a peace broker and stabilising

influence in the region in the past, play-

ing an important role in negotiations to

end violence in Rwanda and Burundi,

and President Kikwete was hailed for

his involvement in ending the violence in

Kenya in 2008. The establishment of the

East African Community in 2000, signal-

ling a closer union between Burundi,

Kenya, Rwanda, Tanzania and Uganda,

will give Tanzania the opportunity to

develop further in cooperation with its

East African neighbours.

Tanzanian culture

Tanzania is home to 120 different

peoples and ethnic diversity enrichesthe countrys cultural life. Over 100

languages are spoken, most from the

Bantu family, although Swahili is the

national lingua franca. The traditional

ngoma, a Swahili word combining the

meanings of drums, dance and song, is

still practised in festivals by many of the

countrys various tribes, each with their

own specific and spectacular variant of

the activity. Storytelling too is an impor-

tant part of the heritage of Tanzanias

people, as the legacy of an oral tradi-

tion that used its folklore as a means ofentertaining and imparting information

across generations. Tanzanias people

safeguard their individual cultural herit-

age, even as they adapt to embrace the

promise of the twenty-first century.

Storytelling too is an important part of theheritage of Tanzanias people, as the legacyof an oral tradition that used its folklore asa means of entertaining and impartinginformation across generations.


15/20

History & Culture



16/20


History & Culture

The union between Tanganyika and

Zanzibar in 1964 created modern-day

Tanzania. Since then, Zanzibars major

islands of Unguja and Pemba and the

archipelago in which they lie have

retained a strong and distinctive cul-

tural and political identity. Governed by

the mainland only in matters affectingthe entire union, Zanzibars own parlia-

ment has responsibility for the major-

ity of issues affecting the islands, and

the semi-autonomous union between

Zanzibar and the mainland is a relation-

ship almost unique in the world.

History and people

From the eighth century, Zanzibar

was a trading centre for Persians and

Arabs, who used the islands of Unguja(commonly called Zanzibar island) and

Pemba as a base to control the African

coastline all the way from Mozambique

to Somalia. Zanzibaris claim that their

islands were the birthplace of the

Swahili language, now a lingua franca

across much of East Africa, which origi-

nated from the interplay of the African

indigenous people and the Arab incom-

ers. After 200 years of Portuguese

control, the Sultanate of Oman took

over Zanzibar in 1698, following which

Zanzibar came under the sway of theBritish Empire, becoming a British pro-

tectorate in 1890. In December 1963,

the islands gained independence from

Britain as a constitutional monarchy

under the Sultan of Zanzibar, but one

month later, the Zanzibar Revolution

brought about the establishment of the

Republic of Zanzibar and Pemba. In April

1964, the islands united with the main-

land in the new Republic of Tanzania.

Zanzibars people are in the main

Africans of Bantu descent, with a minori-ty of people with Indian, Persian and Arab

origins. Zanzibaris are mostly Muslim,

unlike the population of the mainland,

Zanzibar: Spicing it UpAn oasis of immense beauty and heritage offer a wealth of experiences

... the semi-autonomous union betweenZanzibar and the mainland is a relationshipalmost unique in the world.


17/20

History & Culture


where Muslims, Christians and people

holding indigenous beliefs coexist in

more or less equal numbers. Around

two thirds of the regions 1.2 million

people live on Zanzibar island and the

largest urban centre is Zanzibar City on

the west coast of the island.

Politics

Since 1964, Zanzibar has had its own

government, made up of the President

of Zanzibar, the Revolutionary Council

and the House of Representatives. The

Zanzibari government has jurisdiction

over all matters relating to the islandsthat are not considered to affect the

union between Zanzibar and the main-

land. Still, relations between Zanzibar

and the mainland have at times been

prickly, as the two parts of the coun-

try work at finding a balance between

shared sovereignty and oversight from

the central government in Tanzania.

Internal political conflicts too have

been considerably more pointed than

those on the mainland, with the coun-trys two main parties, the CUF and the

CCM, clashing over government control,

leading to outbreaks of violence after

elections in 2001 and 2005. But talks

between the two parties in October 2009

were hailed as a breakthrough and it is

hoped that the elections due to be held

in 2010 will be the start of a new era of

cooperation between Zanzibars major

political parties.

Economy

The mainstay of Zanzibars economy

for many years was the clove trade. The

first clove plantations were established

in Zanzibar while it was still under the

control of the Sultanate of Oman, and for

a long time, Zanzibar was the worlds big-

gest producer of the spice. But sales have

dropped 80% since the 1970s, in part dueto increased competition from Indonesia

and Madagascar, now the top two players

in the international clove market.

Tourism has emerged as a viable

substitute for the clove industry, as

the islands attract a growing number

of international visitors every year. The

historic centre of Zanzibar City, Stone

Town, is a designated UNESCO World

Heritage Site and the islands many

beaches, impressive scenery and col-

ourful wildlife are a draw for tourists

from around the world.

Investment in Zanzibar is governed

by the Zanzibar Investment Promotion

Authority (ZIPA), which facilitates and

promotes investment in the islands,

including in the islands Export

Processing and Free Zones, where

investors can avail of incentives for pro-ducing export-oriented goods.

The historic centre of Zanzibar City, StoneTown, is a designated UNESCO WorldHeritage Site and the islands many beaches,impressive scenery and colourful wildlife area draw for tourists from around the world.


18/20

TANZANIA| CORPORATE GUIDES17 6

Corporate Tanzania 2010/2011 is a Corporate Guides

International Ltd. publication, produced in collaboration

with the Tanzania Investment Centre (TIC).

Publisher:

Corporate Guides International Ltd.

Executive Director: Elke Gill

[email protected]

Editorial Director: Anji Gill

[email protected]

Senior Media Consultant: Joanna Bergin

[email protected]

Design & Production:

CONIN Werbeagentur GmbH, Cologne, Germany

Contributors:

Justine Doody, Johnny Paige, Steven Mather,

Lisa Venbrux, Conor de Lion and Anthony Kiely

Please visit our websites:

www.corporate-tanzania.com

www.corporate-tanzania.net

For editorial information please write to:

[email protected]

To advertise within Corporate Tanzania please write to:

[email protected]

To purchase your own copy please write to:

[email protected]

Further facts & figures can be found on:


Sources of Facts, Figures, Graphs, Tables:

Australian Department of Foreign Affairs and Trade

Bank of Tanzania

Economist Intelligence Unit (EIU)

Global Mobile

Governmental Sources

Interviews: Corporate Guides Research

International Monetary Fund (IMF)

International Telecommunication Union (ITU)

Organisation for Economic Co-Operation and Development

(OECD)

Paul Budde Communication

Reuters

Tanzania Bankers Association

Tanzania Communications Regulatory Authority (TCRA)

Tanzania Investment Centre (TIC)Tanzania National Bureau of Statistics (NBS)

Tanzania Revenue Authority (TRA)

Tanzania Tourist Board (TTB)

United Nations Environment Programme (UNEP)

World Bank

World Tourism Organization (WTO)

Image Sources:

Government of Tanzania

Joanna Bergin

iStock Photo

Raji Gill

Corporate Guides International Ltd. (CGI)


[email protected]

Tanzania Investment Centre (TIC)

www.tic.co.tz

[email protected]

Imprint

Whilst every effort has been made to ensure the accuracy of the information contained in this book, the authors and publishers accept noresponsibility for any loss, financal or otherwise, sustained by any person using this publication. No part of this publication may be reproduced,stored in retrieval system or transmitted in any form by any means, without prior written permission of Corporate Guides. All rights are reserved.


19/20

Karibu Zanzibar and Pemba

Zanzibar Commission for Tourism

Marketing Zanzibar to the world

Facilitating sustainable tourism development through the creation of a world class destination

Attracting tourism and investment to benefit Zanzibaris and contribute to economic growth

Zanzibar Office:

PO Box 1410

Amaan Road, Near Amaan Stadium

Tel. +255 24 2233485/6

Fax: +255 24 2233448/2230966

Pemba Office:

PO Box 250

Chake-Chake

Tel. +255 24 2452124

Email: zanzbartour ism@zanzibar tourism.net Web: www.zanzibartourism.ne t


20/20

the BANK OF TANZANIA

P.O. Box 2939, Dar es Salaam, Tanzania

Tel. +255 22 211 0945-7 / 221 0950-2

Fax +255 22 212 8151 / 211 2573

WITH A HIGH GROWTH RATE AND LOW INFLATION,

THE BANK OF TANZANIA HAS CREATED THE IDEAL

ECONOMIC CLIMATE FOR FOREIGN INVESTMENT

corporate tanzania 2011 (excerpt)

Documents