Doing Business in Tanzania
Webinar 13th May 2021 Doing Business in Tanzania
Agenda
1 Introduction to Webinar and Hosts (Enterprise Estonia & Stepchange Africa) 2 Welcome to Tanzania (Country Overview) 3 Sector Opportunities 4 The Real Deal: Challenges & Opportunities 5 Doing Business in Tanzania Testimonial 6 Question Time 7 Next Steps 8 Key Contacts
3 Introduction to Webinar and Hosts
4 Doing Business in Tanzania
Stepchange Africa Webinar Hosts & Guest
Amyn Esmail Andrew Herweg Bhanu Pratap Managing Partner Managing Partner Partner at ALCPA Ltd
Finance Business Development Tax International Development Marketing & Strategy Regulatory Commodities International Partnerships Compliance
5 Welcome to Tanzania
6 Doing Business in Tanzania
Country Overview: Tanzania
Key Information
Crossroads of East & Southern Africa
Population of ~62 million inhabitants
Official Language(s): Swahili & English
Dodoma as the capital region holds ~2 million inhabitants
Tanzania’s currency is the Tanzanian Shilling (TZS)
Dar es Salaam is the economic capital
Source: Stepchange Africa, UN; World Bank 7 Doing Business in Tanzania
What to Know
Key Indicators
Economic Performance Indicators Numbers
GDP US $63 billion
GDP growth rate per annum (‘21) 4.1%
GDP per capita US $ 1,122
Inflation 3.5%
Sources: World Bank 8 Doing Business in Tanzania
What to Know
Important Rates
Tax Elements Rates
Value Added Tax (VAT) 18%
Social Security rate (payable by companies) 15%
USD Exchange rate *2,309 TZS per $1.00
Corporate Tax rate 30%
Source: Bank of Tanzania; PwC 9 Doing Business in Tanzania
What to Know: Import & Export with the EU
Exports (Value Mio €) Key Takeaways
100 100 100 100 The COVID-19 pandemic caused 5% Precious metals 18% 19% 19% 8% setbacks across historically strong export markets (since 2017) 20% − Animal products (- 42 Mio €) Animal products 21% 19% 16% − Foodstuffs (-29 Mio €) 20% 29% Positive outlook is driven by Foodstuffs 33% 37% value-add agriculture products and increases from mining due to 47% high market prices of gold Plant based products 36% − Mineral products (+ 265 Mio €) 24% 24% Mineral products 4% 2017 2018 2019 2020
Source: European Commission 10 Doing Business in Tanzania
What to Know: Import & Export with the EU
Imports (Value Mio €) Key Takeaways
100 100 100 100 Since 2017, import market 4% Plant based products 8% 8% 9% performance has been stable or has shown growth for select products: Transport equip. 17% 20% 12% 9% 10% − Machinery (+ 78 Mio €) Base metals 5% 5% 11% − Base metals (+ 38 Mio €) 24% 24% − Plant based products (+13 Mio €) Chemicals products 30% 25% Growth markets for +5 years are: − Refined Petroleum − Machinery and Metals 47% 48% Machinery 40% 44% − Vegetable Products − Pharmaceuticals
2017 2018 2019 2020
Source: European Commission 11 Sector Opportunities
12 Doing Business in Tanzania
Sector Opportunities
ICT
Sleeping giant for ICT & innovation
18 innovation hubs (and growing) between Dar es Salaam, Mwanza and Arusha
Links to various sectors including:
− Agriculture: B2B marketplaces (Fruit & Veg); Home food deliveries − Financial Services: Remittances; P2P payments; Consumer lending − Healthcare: Telemedicine (doctor consultations) − Clean tech: Mini-grids; solar home systems
Home to East Africa’s most affordable internet data
Sources: Briter Bridges Africa; Stepchange Africa 13 Doing Business in Tanzania
Sector Opportunities
Agriculture
Important but under-industrialised sector − 67% of Tanzanians are engaged in the sector (mainly as subsistence farmers) − Accounts for 22% of GDP
Unique opportunities:
Agriculture: Live-stock and live-stock inputs
Agro-processing: sugar ethanol; palm & avocado oil
Fish: aqua-culture, deep sea fishing
Horticulture & Floriculture
Source: Stepchange Africa 14 Doing Business in Tanzania
Sector Opportunities
Manufacturing
Small sector but growing (4% growth y-o-y) − Mainly focused on creation of simple consumer products (i.e food, tobacco, furniture) − Contributes to half of Tanzania’s annual revenue collection − Third most vital sector after agriculture and tourism
Specific Opportunities:
Mining: metals processing, investment in smelters, production of LPG cylinders, valves and regulators
Construction: Production of materials for commercial and residential real estate (bricks, building blocks, wood building columns)
Food: processing and preservation of meat, fish, oils and fats
Source: Stepchange Africa 15 Doing Business in Tanzania
Visualizing Sector Opportunities
Mwanza Fisheries; Agriculture; Arusha Small Scale Manufacturing Agriculture; Tourism; Small Scale Manufacturing North Central & North East Tanzania Mining & Agriculture Dar es Salaam ‘Commercial Capital’ Dodoma Small scale manufacturing; ‘Political Capital’ Financial Services; ICT; Small scale manufacturing; Infrastructure (Port) Leisure & hospitality
Source: Stepchange Africa 16 The Real Deal Challenges & Opportunities
17 Doing Business in Tanzania
Looking above and beneath the surface
Progress: Challenges: Upgrade of national airline Poor infrastructure in rural areas. (Air Tanzania) and airports; wildly Limited health measures against Covid- popular tourism sector; 19. High youth unemployment and enhancement of sea-ports large informal market
Untapped Opportunities: Unforeseen obstacles: High population growth; Issues of government effectiveness and GoT’s investment in the small but rule of law (i.e. corruption). Climate growing middle class (10% of total change (lack of rain-fall impacts GDP) pop.); financial services
Sources: DANIDA; Stepchange Africa 18 Doing Business in Tanzania
Tackling underlying challenges
Corruption Items of Admirable Monitoring Movement Power Index Value Culture Grounds
Tanzania scores Slow decision Unreliable & Protecting goods, Creating a culture Hiring security poorly in making processes, expensive power services, property of ethics & values personnel to Transparency thus have systems & items of value by across and within counter grounds International’s patience reducing your company disturbances & Corruption Index attempted theft movements
Sources: TI Corruption Index; Stepchange Africa 19 Doing Business in Tanzania
The more you know!
Unique Opportunities Good to know
Import & Export – Home to three deep water ports Lack of skilled labour force, so make sure you (Dar, Tanga, Mtwara) incorporate in-house training programmes for staff
Gateway to six land-lock countries (i.e. Zambia; English is the language for business but Malawi, Uganda) comprehension drops dramatically outside of urban areas. Learn Swahili. Creation of special economic zones gives incentives such as subsides for new businesses Safe & secure country, rarely security issues compared to neighbouring countries Focus on international businesses to do more joint ventures with Tanzanian businesses New leadership provides cautious optimism for the next several years
Sources: Stepchange Africa; Tanzania Investment Centre; UK Government 20 Doing Business in Tanzania
Catalyst for Growth
What to Know!
+/- 17% of Tanzania’s global exports are destined for the EU Member States
According to IMF and EUROSTAT statistics, total trade between the EU and Tanzania amounted to €1.3 billion in 2016
Areas for growth and expansion beyond Dar es Salaam (i.e Arusha; Mwanza; Dodoma)
44 million hectares of arable fertile land
Member of the East African Community (EAC) and Southern African Development Community (SADC)
Sources: Worldbank; Stepchange Africa 21 Doing Business in Tanzania Testimonial
22 Question Time
23 Next Steps
24 Doing Business in Tanzania
End-to-end execution of long-term co-creation potentials
Lifecycle of doing business in Tanzania
I 2 3 4 Listen Research Reach out Visit
Follow each webinar to Target and scale key sectors Contact the webinar Go & see your investments to receive do-it-best insights by knowing the ins & outs stakeholders & focal points ensure long-term success
15th April 2021
29th April 2021 Stay committed and establish trustful partnerships 13th May 2021
Source: Stepchange Africa Past Webinars Upcoming Webinars 25 Key Contacts
26 Doing Business in Tanzania
Network & Collaboration Potential
Key Contacts Immediate client benefit
Andrew Herweg European Union Business Group Bhanu Pratap Stepchange Africa Target-oriented, pragmatic Tanzania ALCPA Ltd Business growth support Private Sector Lobby Group Tax & Financial advisory and hands-on kick-start... andrew.herweg@stepchangeafri [email protected] [email protected] ca.com Eubgtz.com Alcpaltd.com stepchangeafrica.com ...with a tailored go-to- Tanzania Private Sector Seedspace Dar market strategy & use Tanzania Revenue Authority Foundation Co-working; Innovation cases... National Tax Authority Private Sector Lobby Group [email protected] [email protected] Via the form tra.go.tz Tpsftz.org ...via field-tested and Seedspace.co innovative ways of working...
EU Delegation Tanzania Port Authority (Economic Growth) Tanzania Investment Centre Port Authority Data & Economic Research Investment arm of Gov. Tanzania ...towards a successful [email protected] delegation- [email protected] business transformation. Ports.go.tz [email protected] Tic.go.tz eeas.europa.eu
Source: Stepchange Africa 27 Stepchange Africa is an established partnership Contact us between five unique, well-rounded and experienced thinkers, doers, entrepreneurs and long-time consultants based between the fast growing economies in Africa to Europe’s economic centres and beyond.
We provide customer-centric and hands-on cross- Suite 124, Unit B., 63-66 Hatton Garden, industrial solutions to fast growing start-ups, Holborn, London, UK, EC1N 8LE established SMEs and larger corporations that are operating, investing and expanding in Africa. [email protected]
We are at the forefront of innovation, transformation, technology, change, creativity and agility, dedicated www.stepchangeafrica.com to become Africa’s most preferred growth partner. +49 1522 4632368 For further information please visit our webpage or one of our media channels. Stepchange Africa
@StepchangeAfri1
Copyright @Stepchange Africa LLP 2021. All rights reserved.
EU Business & Tanzania In Detail
30 Doing Business in Tanzania
EU Businesses in Tanzania
Sources: The European Business Group (Tanzania) 31 Other sector opportunities appendix
32 Doing Business in Tanzania
Sector Opportunities
Tourism
Top African country for foreign visitors (passenger numbers)
Accounts for 24% of exports and 17% of GDP.
Unique opportunities include:
Construction of hotels along coastline of mainland Tanzania
Development of eco-tourism facilities
Creation of leisure parks & golf courses
Source: Government of Tanzania; Stepchange Africa 33 Doing Business in Tanzania
Sector Opportunities
Services
Provision of mobile services in rural areas
Provision and operation of value added network/data services (internet, voice mail, electronic mail services)
Repair and maintenance of telecommunications facilities
Financial services which include establishment of financial institutions, microfinance banks, investment banks, agricultural banks and commercial banks
Source: Government of Tanzania; Stepchange Africa 34 Doing Business in Tanzania
Advantages of investing in Tanzania
Abundance Cost Market Coastline of resources Structure Growth
Investment in Favourable labour Secondary cities, More than 1,400 heavy industries & operating costs allow expansion Km of coastline, offer possible and generous tax within Tanzania ripe for higher returns incentives development
Source: Stepchange Africa 35