YOUR INVESTMENT GUIDE TO TANZANIA
Investing in Tanzania: Seizing Opportunities in a Growing Economy
Tanzania is on the fast track to becoming an industrialized middle-income country by 2025. As part of this vision, the government is prioritizing the development of a robust industrial base. To support this transformation, Tanzania has set up Export Processing Zones (EPZs) and Special Economic Zones (SEZs) to drive growth in manufacturing, services, and export trade. EPZs primarily cater to manufacturing aimed at export markets, while SEZs encompass a broader range of industries, including agriculture, trade, tourism, mining, and forestry.
Tanzania offers significant fiscal incentives through its EPZ and SEZ schemes to attract both foreign direct investments (FDIs) and domestic direct investments (DDIs).
Regional integration refers to the process by which neighbouring countries come together to cooperate and coordinate their policies, regulations, infrastructure, and economies to achieve common goals and mutual benefits. In the context of Tanzania, regional integration typically involves collaboration with neighbouring countries in the East African region, such as Kenya, Uganda, Rwanda, Burundi, and South Sudan, as well as other regional blocs like the Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA).
In Tanzania, regional integration is pursued through active participation in regional organizations and agreements such as the East African Community (EAC). The EAC comprises five country states: Rwanda, Kenya, Uganda, Burundi, and Tanzania, with the objective of fostering economic integration and development within the region. Tanzania also engages in cross-border initiatives to address common challenges, improve connectivity, and harness shared resources for sustainable development.
In 2015, the East African Community (EAC) comprised a population of 145.5 million people and recorded a gross domestic product (GDP) of US$ 147.5 billion.
Tanzania’s manufacturing sector presents a range of opportunities driven by local demand and abundant resources. Potential areas include:
- Food Processing: Expanding the production of sugar, edible oils, meat, fish, and dairy products to reduce reliance on imports.
- Consumer Goods: Addressing growing demand in sectors like grain milling, chocolate, coffee, and spices, and exploring opportunities in the assembly of automobiles.
- Industrial Inputs: Leveraging natural gas, soda ash, and other minerals to support the petroleum, gas, and chemical industries.
Tanzania’s rich agricultural potential, including extensive arable land and favorable weather, positions it as a hub for agro-industries and agro-processing. Investments in irrigation, large-scale crop cultivation, and livestock farming are key to unlocking this potential. The country’s edible oil industry, in particular, holds significant promise, given the availability of crops like sunflower, cotton, and palm that can underpin a competitive domestic market.
Tanzania is a leading destination for mining investments, offering a rich variety of industrial minerals, precious metals, and gemstones. Key investment opportunities include:
- Mineral Processing: Establishing smelters and refineries for gold, iron ore, nickel, and uranium.
- Gemstone Processing: Leveraging Tanzania’s position as a global source of tanzanite and other valuable gemstones.
- Mineral Exports: The mining sector remains a significant contributor to Tanzania’s economy, with gold exports alone accounting for over 90% of the country’s mineral exports.
Despite exporting most of its minerals in raw form, the country has significant potential for value addition through processing and refining, which could generate employment and boost local industries.
Tourism is a major pillar of Tanzania’s economy, accounting for 24% of exports and 17.2% of GDP. With breathtaking landscapes, world-renowned wildlife parks, and pristine beaches, Tanzania offers numerous investment opportunities:
- Hospitality and Recreation: Developing tourist hotels, resorts, and recreational parks across mainland Tanzania and Zanzibar’s coastlines.
- Eco and Adventure Tourism: Capitalizing on Tanzania’s unique biodiversity and cultural heritage through eco-tourism projects, cultural tours, and safari experiences.
Infrastructure and Transport: Investing in air and land transport, marine and lake cruising, and supporting facilities like golf courses and convention centers.
Agriculture remains central to Tanzania’s economic development, providing raw materials for industries and employment for over 67% of the population. The sector’s vast potential lies in:
- Large-Scale Crop Cultivation: Expanding production of key crops like sugarcane, rice, coffee, and cotton, supported by irrigation and research initiatives.
- Livestock and Dairy: Developing commercial farms, processing facilities, and value-added products, given Tanzania’s large livestock population.
- Agro-Processing: Investing in processing plants for food products, edible oils, and leather goods to meet both domestic and export demand.
Tanzania has diverse and largely untapped energy resources, including natural gas, coal, hydro, geothermal, and renewables like solar and wind. Opportunities for investment include:
- Energy Generation and Distribution: Developing power plants and expanding transmission networks to increase electricity access.
- Petroleum Infrastructure: Constructing pipelines, storage facilities, and distribution centers to support the country’s growing energy needs.
- Rural Electrification: Investing in projects that bring sustainable energy solutions to rural areas, enhancing development and quality of life.
Tanzania’s services sector, particularly ICT, has seen remarkable growth over the past decade. Opportunities abound in:
- Telecommunications and Connectivity: Expanding mobile services in underserved areas and offering value-added data solutions.
- Financial Services: Investing in banks, microfinance institutions, and digital payment platforms to meet the needs of a growing middle class.
Tanzania’s rapid urbanization and economic growth are driving demand for residential, commercial, and mixed-use real estate projects. Key opportunities include:
- Residential and Commercial Developments: Partnering with local agencies to build and manage housing estates, shopping malls, and office spaces.
- Tourism and Hospitality Projects: Developing hotels, entertainment venues, and conference centers in key urban and tourist hubs.
- Affordable Housing: Addressing the growing need for housing solutions as more Tanzanians migrate to cities in search of better opportunities.
With extensive inland water bodies and a long coastline along the Indian Ocean, Tanzania’s fisheries sector offers investment prospects in:
- Fish Processing and Value Addition: Developing processing units for both marine and freshwater species, including shrimp farming and cage culture.
- Marine Infrastructure: Establishing fishing ports, boat building yards, and cold chain facilities to support the growing fishing industry.
Livestock: A Sector with High Growth Potential Tanzania’s livestock sector is rich in resources, with vast grazing lands and diverse natural vegetation. Investment opportunities include:
- Modernizing Ranches: Establishing joint ventures to improve existing ranches and farms for cattle, poultry, and pigs.
- Processing Facilities: Building modern slaughterhouses, tanneries, and meat processing plants to tap into the domestic and export markets.
Tanzania’s strategic vision for 2025 is focused on sustainable growth and industrialization. With its wealth of natural resources, stable business environment, and targeted incentives, the country offers unparalleled opportunities for investors across various sectors. Whether in manufacturing, energy, agriculture, or services, Tanzania’s rapidly growing economy is ready to welcome investments that drive long-term growth and prosperity.