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Tanzania.Pdf Tanzania Tanzania is expected to become one of the fastest- A rapidly growing economy growing economies in the world. Key drivers will be but still small in recent natural gas discoveries, regional integration, absolute terms reforms to ease of doing business and a long-term stable democracy. Tanzania is already one of sub- Saharan Africa’s most rapidly growing economies, but it is still rather small in absolute terms, Uganda with a market size of about US$28 billion. Recent discoveries Lake Victoria Kenya of natural gas offshore and a broad Rwanda Musoma number of planned infrastructure Musoma Kigali Port projects promise to further boost to Mwanza Kilimanjaro the economy. However, increased Burundi development will lead to greater Musongati Moshi congestion at the Port of Dar es Salaam, which the construction of a Isaka DRC Kigoma new US$10 billion port at Bagomoyo Central Corridor Korogwe Tanga will alleviate once it begins Kigoma Tabora Cairo-Capetown Highway Mwambani Port Port expansion operating in 2017. Bagamoyo La Port Project k e Dodoma Malindi With regard to the low level of Tanganyika Port Dar es Salaam human development and poverty, the Tanzanian Government has TAZARA Rail Port of called for more active private sector Dar es Salaam participation in its Second National (Rehabilitation Project) (expansion) Strategy for Growth and Reduction Mbeya Indian Kilwa of Poverty, MKUKUTA II, initiated in Ocean 2010.i There are positive signs that Zambia Lake Malawi Kilwa Port Mtwara Tanzania will stay on a favourable Mbamba Bay i expansion Port Port expansion growth path in the long run and w a l Mbamba Bay establish itself as a viable alternative a M to Kenya as a gateway to the East Mozambique African region. These bubbles represent the cities of Tanzania and the size of the bubbles indicates the population size of the city Airport Port Future Airport Future Port Future Railway Future Road Railway Road 74 Africa gearing up “In terms of rating it as an investment haven, I would say it has potential and I haven’t been exposed to any corruption. There are large areas that are relatively unexplored and therefore a good investment attraction.” Dick Kruger, Deputy Head: Techno Economics, Chamber of Mines Trading hub Despite reforms, challenges remain continues to play an important A liberalised trade regime role in the process of establishing and regional integration will a Common Market by the SADC Despite impressive reforms, foster economic growth and member states. the challenging business increase traffic volumes. environment and security Diverse natural resources provide still remain important International trade constitutes a the basis for attracting investment issues. significant proportion of GDP in and support economic growth. Tanzania, with exports and imports Tanzania is a significant producer of Tanzania’s historically state-led accounting for 31% and 50% of GDP gold and diamonds, with gold being economy is now more market-based respectively. The widening trade the most important mineral and key but remains hindered by weak deficit has been driven by a sharply growth area. Tanzanite gemstones property rights. Land in Tanzania rising oil import bill. and coal have the potential to become among the fastest-growing is officially government property and can only be leased from the Tanzania’s export base is fairly mining subsectors. Tanzania also Government for 33, 66 or 99 years, broad. The principal exports has substantial reserves of uranium depending on its use. However, include gold, coffee, cashew nuts, oxide. Exploration has also been annual land rentals are low and new manufactured goods and cotton. conducted in nickel, oil and natural legislation gives the lessee first right Major trading partners are from Asia gas. of refusal to extend a lease when it – with China and India of growing expires. importance – the Middle East and Tanzania achieved almost 7% Europe. average growth over the last decade. For the 2012-2017 period, the IMF In addition, recent reforms have been aimed at establishing a reliable Export growth remained below its projects annual economic growth to system of transferable property potential at 5.4% between 2001 vary between 6.6 and 7.2%, placing rights. Despite efforts to reform the and 2011. However, this is likely to it among the world’s fastest-growing ii business environment, the country change as the Government is actively economies over the medium term. continues to suffer from a regulatory working to increase competitiveness, At the same time per capita GDP environment that is not sufficiently while participating actively in will grow at a robust 5.7%, though responsive to the needs of investors. regional trade integration. Notable starting from a low base. Economic reforms in facilitating increasing growth is constrained by high Corruption is one of the major trade efficiency include the lifting levels of poverty and other poor obstacles facing investors in of price controls on most products socioeconomic indicators. Tanzania, even though less severe and a decrease in the number of than in neighbouring Kenya. road blocks to facilitate greater At the beginning of 2012, inflation Tanzania’s ranking in Transparency cross-border trade, although further stood at 19.8%, but thanks to International’s Corruption reduction is still required. structural and fiscal reforms on the part of the Government, the IMF Perception Index 2012, though high at 102 out of 174 countries, is Tanzania is a member of the predicted it would reach single better than that of most of its African East African Community (EAC) digits by mid-2013. This proved to peers. as well as the Southern African be correct as the Tanzania Bureau Development Community (SADC). of Statistics reported that annual Furthermore, the lack of efficiency Given its active role in these inflation stood at 9.4% in April within state institutions and the regional trade communities, the 2013 and 6.1% by September 2013. goods market as well as an overall Government’s plans for increasing This has been accompanied by lack of business sophistication trade competitiveness have a continuing decline in prices of add to the challenge of domestic sped up. Tanzania has pursued staple foods which, together with productivity growth. Access to implementation of the EAC Common low lending rates, provides a more finance is another bottleneck to the Market Protocol, which became positive environment for investment iii development of the private sector. operational in July 2010, and growth. PwC 75 By the end of 2015, power 80% supply is expected to exceed of the labour force employed 3GW in agriculture Security is an issue in Tanzania, Africa in 2010 and is expected to Tanzania still has some way to go in with armed banditry prevalent move up to fifth by 2020 and fourth translating its large population into in regions near the borders to by 2050. Consequently, there is a a competitive advantage. Rwanda and Burundi. Outside large labour force and a sustained Existing labour regulations allow Tanzania these regions and at election times, surplus of labour. Up to 80% of the crime is the most common security labour force is employed in the foreign investors to recruit only up to risk. Traffic is a leading safety agriculture sector. five expatriates. Although additional concern with congestion becoming work permits for expatriates may be an increasing problem in larger Tanzania’s socioeconomic indicators granted under certain conditions, it urban areas. To protect passengers, remain weak. Its score on the can sometimes be difficult to get the busses are not permitted to drive Human Development Index in necessary approval. cross-country at night. 2011 was similar to the average for sub-Saharan Africa. The level of Power Unskilled workforce education among youth and people in rural areas is also comparatively Tanzania’s electricity industry has low. grown at a slightly slower pace The unskilled local than the economy as a whole over workforce is a major Shortages of skilled labour are the past decade, making electricity challenge. a significant challenge for firms shortages and frequent power operating in Tanzania, particularly outages a constraint to economic in new and fast-growing sectors Tanzania has a large population and growth. Only 20% of the population of the economy. This has spurred of 45 million currently has access a robust population growth rate. It growing levels of government and had the sixth-largest population in to electricity. Improving supply and private investment in education, but distribution will assist the country in attaining higher levels of economic growth. Tanzania presently produces Key indicators about 800MW of electricity, scarcely meeting demand, which is expected to be double that amount by 2015. Population size (million, 2012) 47.8 Population growth (2012-2020, avg p.a.) 3.0% Although demand for electricity is expected to continue to outstrip GDP (US$ billion, 2012) 28.2 supply in the short term, by the GDP growth forecast 2012-2017 (avg, y/y rate) 7.0% end of 2015, supply is expected to exceed 3GW, as various power GDP per capita (US$, 2012) 628 projects come onstream. The Global competitiveness index 2012 (global rank/144 120 (3.60) increase in capacity will be enough (score 1-7)) to meet domestic demand and stimulate the manufacturing sectors Corp. Income Tax (CIT) rate 30.0% as well as providing a surplus for iv Top exports Precious metal ores export. and concentrates, other than silver (14.5%); Tobacco, partly or wholly stemmed/ stripped (8.7%); Coffee, not roasted, not decaffeinated (6.4%) Logistics Performance Index 2012 (global rank/155 88 (2.65) (score 1-5)) Global Competitiveness Index 2012 - Infrastructure 132 (2.27) (global rank/144 (score 1-7)) 76 Africa gearing up Pre-Arrival Tourism 2nd Declaration system highest earner of will improve foreign currency customs procedures Agriculture Economic Logistics improving diversification Agriculture is crucial to Logistics Performance Index Tanzania’s economy and Economic diversification is Customs domestic employment.
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