Presentation on theme: "UNITED REPUBLIC OF TANZANIA TANZANIA INVESTMENT CENTRE (TIC)"— Presentation transcript:
1UNITED REPUBLIC OF TANZANIA TANZANIA INVESTMENT CENTRE (TIC) PRESENTATION ONINVESTMENT CLIMATE AND OPPORTUNTIES IN TANZANIAPresented by: Mr. Revocatus Arbogast,On Behalf of Executive Director,Tanzania Investment Centre
2AGENDA Tanzania Economy Why Tanzania Market Access Investment Facilitation ServicesInstitutions which support investmentInvestment IncentivesTrend of InvestmentsInvestment opportunitiesConclusion
3T A N Z A N I A’S E C O N O M Y Inflation Population: 41.9 Million (2010 est.)GDP Per Capita $ 660(2010 Est.)Population Growth Rate 2.9 % (2010 est.)Real GDP Growth Rate % (2011 )Labour Force: million (2010 est.)Inflation12.7% (2011)Agriculture Employs 80% of the WorkforceSource: NBS/BOT
51. Peace & Political Stability Tanzania is politically stable, we have enjoyed political stability since independence in 1961, it is free from tribal or religious confrontation. We have elected National assembly and elected President who serve for the maximum of two Presidential term.2. Strategic Location of TanzaniaTanzania’s strategic geographical location and easy connectivity business locations worldwide is a motivating factor to investors. Has 3 major ports (Tanga, DSM and Mtwara – providing service to neighboring landlocked countries)3. Attractive Investment Fiscal RegimeTanzania has Stable and Predictable Fiscal Investment Regime - providing a Soft Landing to all investors. It recognizes that investors need to recover their Investment Costs first before paying corporation tax
66. Settlement of Disputes 4. Free Repatriation of Funds.Transfer of funds is allowed through any authorized bank in freely convertible currency of net profits, repayment of foreign loans, royalties, fees charges in respect of foreign technology, remittance of proceeds and payment of emoluments, etc5. Investment guaranteeInvestors in Tanzania are guaranteed against nationalization and expropriation. Tanzania is a signatory of several multilateral and bilateral agreements on protection and promotion of investment. Among other international agreements and membership, Tanzania is a member of Multilateral Investment Guarantee Agency (MIGA) and Africa Trade Insurance Agency (ATIA)6. Settlement of DisputesTanzania is a member of International Center for Settlement of Investment Disputes, A dispute which is not settled through negotiations may be submitted to arbitration in accordance with the rules of procedure for arbitration of the International Center for Settlement of Investment Disputes6
77. Access to credit from domestic sources Foreign investor may, in relation to the business enterprises which he operates obtain credit from domestic bank and financial institutions up to the limit established by the bank of Tanzania.7
8REGIONAL AND INTERNATIONAL MARKETS Tanzania enjoys Preferential Market Access with;Japan, Canada etcNegotiated EBA – European UnionAGOA (USA)Africa Growth andOpportunity ActOver 6,000 itemsEAST AFRICAAbout 130M PeopleChinaOver 4,000 ItemsSADC300m People
9INVESTMENT FACILITATION SERVICES Senior Government officials from the following Ministries/Government Departments have been stationed at TIC to assist investors to obtain various licenses and permits they need in order to start business.ImmigrationRegistrar of CompaniesBusiness LicenseLandLabourTanzania Revenue Authority
10OUR COMMITMENT TO INVESTORS Application Maximum Time takenCompany Registration daysIndustrial License dayBusiness license dayCertificate of incentives daysResident Permit Class ‘A’ daysResident Permit Class ‘B’ daysSpecial Pass day
11OUR COMMITMENT TO INVESTORS Application Maximum Time takenMeeting with TIC staff ImmediatelyArranging appointments hoursPreparation and confirmation daysof itinerary for Potential investors
12NATIONAL INVESTMENT STEERING COMMITTEE (NISC) In an effort to improve the business environment and foster economic growth through increased investment the Government formed a National Investment Steering Committee chaired by the Hon. Prime Minister.Other members of the committee are Minister of Finance, Minister of Industries and Trade, Minister of Agriculture, Minister of Lands, Attorney General, Governor of the Bank of Tanzania and the Executive Director TIC (Secretary).This committee is entrusted with the role of investment policy formulation and solving problems of investors on a fast track basis.
13NATIONAL BUSINESS COUNCIL The Government has established the National Business Council to enhance Govt./Private sector “smart partnership”.The Business Council is chaired by the President and the Executive Director of Tanzania Private Sector Foundation is the secretary.The business council through Investors round table discussion advise the Government areas that need improvement
14INCENTIVES UNDER THE TIA, 1997 A) Tax incentivesExemption of import duty on projects capital/deemed capital goodsby 90%Reduced Value Added Tax (VAT) on projects capital goods including deemed capital goods to 10%B) Non Tax incentivesAutomatic immigration quota of up to 5 expatriates at the initial stage of the projectsUnconditional transferability through any authorized dealer bank in freely convertible currency of ; net profit, loan payment (servicing a foreign loan) royalties , fees and charges in respect of any technology transfer agreement,payment of emoluments and other benefits to foreign personnel.C) Strategic investor statusIn addition to existing investment incentives a potential investor may apply for a strategic investor status to seek additional investment incentives
16TREND OF PROJECTS REGISTERED WITH TIC FROM 2005 TO 2011 Number of ProjectsSource: TIC data
17OWNERSHIP OF PROJECTS REGISTERED BY TIC 1990 - 2011 Source; Tanzania Investment Centre, 2011
18TEN LEADING COUNTRIES THAT HAVE INVESTED IN TANZANIA (BY VALUE IN MILLION US$ ) 1990 –2011Source: TIC Database
19FDI INFLOWS TO TANZANIA FROM 2006 - 2011 Source: UNCTAD - World Investment Report – 2012
20INVESTMENT PROJECTS FROM SWEDEN IN TANZANIA, 1990 -2012 TourismTransportation-CargoManufacturingAgricultureConstructionTelecommunicationNatural resourcesServicesHuman ResourcesEnergyFinanceTOTAL Projects TOTAL Investment US$ 494 M
21Swedish Projects TANELEC-Manufactures of Electrical Equip Bagamoyo Eco Energy-Under Establishment for Sugar, Power and Bio fuels (PPP)Tanzania Portland Cement-Largest CementScania (Tanzania) Ltd-Workshop and Show roomBasic Transmission Ltd-Digital TV transmission (From Analogue to Digital)
23GOVERNMENT AND THE INTERNATIONAL COMMUNITY HAVE JOINED FORCES TO PROMOTE SAGCOT The Southern Agricultural Growth Corridor of Tanzania (SAGCOT) is an international public private partnership which aims to transform the area’s agricultural productivityIt was launched at the World Economic Forum on Africa in May 2010Members of the partnership represent government, global business, the Tanzanian private sector, farmers, foundations and donor institutionsBy catalysing large volumes of responsible private investment, the initiative aims to deliver rapid and sustainable agricultural growthInvestors in SAGCOT will benefit as public, private and donor organisations focus their investments, infrastructure developments and outgrower training on the corridor
25TANZANIA OFFERS IDEAL AGRO-CLIMATIC CONDITIONS FOR RICE CULTIVATION AND A READILY AVAILABLE MARKET Tanzania’s rice competitive advantageABUNDANT UNUSED LAND & RICH SOILSTanzania is slightly more than twice the size of CaliforniaTanzania has 44 million ha of arable landOnly 9.5 million ha of the arable land is under cultivationRich alluvial clay soils, suitable for riceRainfall ranges from 200mm and 1600mm of rain per annumLarge river systems permanently fed by the highlands of the Great Lakes regionTanzania has predominantly tropical climateAMPLE WATER & IDEAL CLIMATELocal market of approximately 42 million people and regional markets with approximately 370 million peopleLocal rice imports of $16 million in 2011EAC rice imports of $180 million in 2011SADC rice imports of $660 million in 2011LOCAL & REGIONAL MARKET POTENTIALSource: FAO, Trade Map
27Per capita sugar consumption 2010/11 est. MORE THAN 300,000 TONS OF SUGAR SUPPLY GAP IN TANZANIA, SET TO INCREASE EXPONENTIALLYThe primary market opportunity for sugar producers in Tanzania is local: as existing sugar estates reach peak production, the supply gap is set to increase at an estimated 6% per annum from the current 300,000 tons / year, driven by economic and population growthAs incomes rise, sugar consumption in Tanzania is expected to increase rapidly from the current low levels of per capita consumptionDespite rapid production growth of existing estates following privatizations in the late 1990’s, supply could not keep up with demand over the last decadeThe supply gap is set to increase as existing estates reach their full capacity: the Sugar Board of Tanzania estimates that current producers could peak at 400,000 tons by 2020Regional Markets-East Africa300,000 tons sugar deficit in Tanzania(1000 tons)Demand incl. industrialEstimated sugar demandProduction>300,000 tonscurrent supply gap>600,000 tonssupply gap by 2020World average per capita sugar consumption+18 kg/yrPer capita sugar consumption 2010/11 est.Source: Sugar Board of Tanzania, Illovo, Mtibwa, TPC, FAO
28Map of existing and proposed new sugar estates TARGET SUGAR ZONES HAVE BEEN EARMARKED FOR SUGAR PRODUCTION BY THE GOVERNMENTThere are 4 existing estates in Tanzania, producing a total of 300,000 tons of sugar per year and reaching their full capacityIn order to fill the local and regional sugar gap, the Government of Tanzania is looking to develop an additional 3 – 5 large sugar projects and working to prepare additional sites for sugar investments2 immediate site opportunities are described in annex, namely Ruipa and MkulaziMtibwa sugar millKilombero sugar millTPC sugar millKagera sugar millWami siteRuipa siteMkulazi siteNew target sugar zonesEstablished millMap of existing and proposed new sugar estatesSource: Sugar Board of Tanzania
29Opportunities for Investors in the Livestock Sector
30SIGNIFICANT GROWTH AND INVESTMENT OPPORTUNITIES EXIST ACROSS THE LIVESTOCK PRODUCTION CHAIN Currently only 2% of all livestock are raised on commercial farmsFew animals are fattened before being slaughteredRaising & fatteningThe training of local traders can create a useful network for buying livestock from rural areasLive animal tradingOnly four abattoirs operate in Tanzania – insufficient to meet growing demand for hygienic & quality meatApproximately 4mil steers at age 2-4years may be available for fattening/slaughtering at any one timeSignificant investment opportunities across the production chainSlaughteringLess than 1% of all meat is processed locally, at the same time vast quantities of processed meat are imported from KenyaMeat processingLess than 5% of all hides are processed to leatherA 40% export levy on unprocessed skins creates a significant competitive advantage for local firmsLeather processingMore than 700MT of quality meat are imported to Tanzania every yearLocal, regional and global meat demand is risingRetailing & marketing
31NARCO is a parastatal organization with the responsibility of producing beef cattle for Domestic and Export markets.National Ranching Company (NARCO) has eight (8) existing core ranches comprising of an area of 230,384 hectares with nearly 45,000 heads of cattle, 3,025 sheep and 2,000 goats.National Ranching Company ranches have the total capacity of 92,500 animals. NARCO cattle are raised on natural pastures and mineral water.The company has a total of 124 non core ranches with total area of 289,069 hectares which are sub-leased to private livestock keepers.Investment opportunities are in Kongwa Ranch (Dodoma), Misenyi Ranch (Kagera), Mabare (Kagera), Kagoma (Kagera) and Kalumbo (Rukwa)
33Power Generation and Distribution The Government plan is to increase generation of electricity to 2,780 MW by 2015.An enabling legislation and Institutional framework is now in place to allow the private sector to engage in the Electricity Generation, Transmission and Distribution sector.
34WIND ENERGYWind energy resources provide a renewable energy, which is friendly to the environment. There exist adequate wind energy resources in Tanzania.The analysed wind speed data revealed that the wind energy potential in Tanzania is fairly high.
35ENERGYPROJECTSTanzania has extensive unexploited hydroelectric resources.These include identified sites that have been studied to feasibility study namely:-Ruhudji (358MW),Rumakali (222MW) andSongwe River (>300 MW) which forms part of the physical boundary between the United Republic of Tanzania and the Republic of Malawi.The total unexploited hydroelectric power potential is estimated to be at least 4500 MW.
36TANESCO PROJECTS SCOPE OF WORK REHABILITATION EXPANSION TOTAL [USD] Rehabilitation and expansion projects request a total of US Dollar 130,228,630 for 6 regions of Mbeya, Kagera, Singida, Manyara, Ruvuma, and Rukwa.SCOPE OF WORKREHABILITATIONEXPANSIONTOTAL[USD]SUBSTATIONS1,310,8067,325,2018,636,00733kV LINES18,772,80141,735,55260,508,35311kV LINES2,874,8906,715,4379,590,327LT LINES21,683,95429,809,99051,493,94444,642,45185,586,179130,228,630
38MININGMining Investment is now the second contributor to GDP after Tourism.
39OPPORTUNITIESIN MININGTo develop open cast and undergroundminingTo extract Precious / Base Metals, IndustrialMinerals and Hydro Carbon Minerals etcCutting and Polishing of mineralsRefining, Processing and Smelting ofminerals
40OIL AND GAS OPPORTUNITIES IN TANZANIA Hydrocarbon exploration in Tanzania, a number of available blocks in sedimentary basin both onshore and offshore Currently, open acreage include the Rufiji basin, inland rift basins of L. Rukwa, L. Tanganyika, L. Nyasa, and the Ruhuhu Karoo Basin.4040
41DOWN STREAM INVESTMENT OPPORTUNITIES IN THE GAS SUBSECTOR Fertilizers and Petrochemicals productionCompressed Natural Gas (CNG) for vehiclesPiped Natural Gas (PNG)/CNG for households (Millions of forest hectors are burnt every year)Liquefied Petroleum Gas (LPG) Production
43PORT PROJECTS AVAILABLE FOR INVESTMENTStrengthening and Deepening of Berths 1-7,Dar es Salaam PortDevelopment of Mbegani Port at BagamoyoDevelopment of Mwambani Port in TangaDevelopment of Kisarawe Cargo FreightStation (KCFS)Expansion and Modernization of Mtwara PortDevelopment of Dar Harbour Water Front
44R A I L W A Y S Investment Opportunities exists in Rehabilitation of existing railway linesConstruct new railway linesUpgrade & construct strategic line
46AIRPORTS PROJECTSRehabilitation and Extension of Existing Terminal II Building as a short term measure andConstruction of a complete new Terminal III Building to cater as medium and long terms measure at JK Nyerere International AirportRehabilitation and construction of pavements [runway, apron, taxiways and access road] andconstruction of terminal building and security improvements at Arusha Airport.Construction of Airport pavements on access roads, passenger apron, cargo apron, taxiways andConstruction of new PAX. Terminal and Cargo Building at Mwanza Airport.
48EPZA PROJECTS Establishment of EPZ and SEZ Industrial Parks Establishment of Tourism ParkEstablishment of Free Port FacilitiesEstablishment of Free Trade ZoneScience and technological ParksInternational Business CentreConstruction of Industrial Sheds at the BWM-SEZ
49Welcome to invest in Tanzania. C O N C L U S I O NWelcome to invest in Tanzania.Tanzania Investment Centre and Zanzibar Investment Promotion Authority will take you step by step to conform with the legal and regulatory requirement, until your investment project is fully established as per your plans.
50THANK YOU FOR YOUR ATTENTION ContactsExecutive DirectorTanzania Investment CentreP.O.Box 938Dar es SalaamTel:Fax:Website: