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DISCOVER GLOBAL MARKETS: Sub-Saharan Africa Discover The United Republic of Tanzania Connecting you to global markets.

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Presentation on theme: "DISCOVER GLOBAL MARKETS: Sub-Saharan Africa Discover The United Republic of Tanzania Connecting you to global markets."— Presentation transcript:

1 DISCOVER GLOBAL MARKETS: Sub-Saharan Africa Discover The United Republic of Tanzania Connecting you to global markets

2 2 4/29/2015 Second Largest and Second Most Populous Continent

3 Overview of the Commercial Service Sub-Sahara Africa

4 Country Overview - Tanzania  7.2% GDP Annual Forecasted Growth for 2014  44.9M Population, Population Growth Rate = 2.7%  2013 GDP (official exchange rate) $32B  Import partners: China (21%), India (16%), South Africa (6%), Kenya (6%). UAE (5%)  Tanzania Main Imports: Capital goods (machinery & equipment), petroleum products, agricultural inputs, raw materials, consumer goods  Tanzania Main Exports: Agricultural products (cashews, tea, coffee, cotton, vegetables, cut flowers), fish, manufactured goods)  Agriculture accounts for 80% of the workforce

5 Country Overview - Tanzania  U.S. exports to Tanzania: $254M (2011); $412 (2012)  Leading U.S. exports: Transportation equipment, machinery, chemicals, computer & electronic products, used or 2 nd hand merchandise  Labor Force: 25.5 million (2013 estimate)  Tanzania is the U.S.’s 109 th Export Market  2014 World Bank Ease of doing business ranking: 145/189 (down from 134/183 in 2013)  2013 Transparency Int’l Corruption Index: 111/177 Sources: U.S. Department of Commerce CIA World Factbook, World Bank

6  Largely completed its transition to a liberalized market economy, though the government retains a presence in sectors such as telecommunications, banking, energy, and mining  The economy depends on agriculture, which accounts for more than one- quarter of GDP, provides 85% of exports, and employs about 80% of the work force  The financial sector in Tanzania has expanded in recent years and foreign- owned banks account for about 48% of the banking industry's total assets. Competition among foreign commercial banks has resulted in significant improvements in the efficiency and quality of financial services

7  All land in Tanzania is owned by the government, which can lease land for up to 99 years  Continued donor assistance and solid macroeconomic policies supported a positive growth rate. In 2008, Tanzania received the world's largest Millennium Challenge Compact grant, worth $698 million  “Big Results Now” Initiative

8 Top Ten Leading Countries with Registered Investment 2006-2012 (in $millions of USD) Source: Tanzania Investment Center

9 Tanzania’s – “Big Results Now” focuses on key sectors Announced by President Kikwete in 2013, is focused on transitioning Tanzania from a low to middle income country by 2025 6 National Key Results Areas by 2015: Energy – increase power generation and access for 5 million more Tanzanians Agriculture – focus on commercial farming, irrigation, marketing, storage/warehousing Transportation – increase port, rail throughput and decrease road travel times Water – restore (5m), sustain (15.2m) and extend (up to 7m) people Education – pass rate of 80% for primary and secondary schools Resource Mobilization – PPP projects valued at Tsh 6 trillion

10 Key Sector - ENERGY Generation, Transmission, Distribution BRN Goals: 1. Increase installed capacity from 1,438MW to 2,780 MW 2. Increase access to electricity from 21% to 30% 3. Increase energy consumption per cap from 97kWh to 236 Tanzania’s diverse energy potential includes: Natural Gas Coal Hydropower Geothermal Wind Solar Biomass Tanzania Electric Supply Company LTD (TANESCO) Is the Tanzanian parastatal organization established in 1964. It is wholly owned by the Government of Tanzania

11 Key Sector - ENERGY Points to note: A string of natural gas discoveries in Tanzania’s deep offshore waters has generated considerable interest. If the finds (Sonosongo, Mnazi Bay, Mkuranga) are found to be commercially viable, they could transform the economy. (Natural gas currently supplies about 30% - but has significant future potential if estimates prove out) Electricity is largely dominated by TANESCO. The government allows Independent Power Producers (IPPs ) to generate and sell power to TANESCO. Hydroelectric is the most important single source of energy, with a potential of 4.7 GW (of which only 10% is developed) Increasing interest in geothermal, wind and solar power. Tanzania averages 8 hours of sunlight per day – average 200 watts/sq.meter. Source: World Bank and IMF estimates

12 Key Sector - ENERGY Sub Sector Best Prospects  High efficiency gas turbines, parts and services  Diesel turbines, parts and services  Petroleum exploration services  Coal power generation  Electricity transmission equipment (transformers, cables, etc.)  Electrical metering and installation equipment Contacts and Resources Ministry of Energy and Minerals: https://mem.go.tz TANESCO: (see the “tenders” tab) Rural Energy Agency (REA): http://www.rea.go.tz Tanzania Petroleum Development Corporation: (see the “opportunties” tab)

13 Key Sector - INFRASTRUCTURE Transportation (Ports, Rail, Aviation, Roads) & Construction Compared to its peers, Tanzania’s infrastructure performs fairly well - but quality is still poor and has a negative impact on the economy’s productive capacity. Infrastructure has witnessed impressive investment in recent years and there is more to come. Transport and utilities infrastructure projects worth US$19 billion are in the pipeline. Many of these projects are expected to be financed by donors (in the form of loans), while the rest will be financed by the Government or via bilateral agreements with other countries such as China. Source: African Gearing Up, Future prospects in Africa for the transportation & logistics industry, Pricewaterhousecoopers, 2013 Points to note: BRN Goal: increase port, rail throughput and decrease road travel times

14 Key Sector - INFRASTRUCTURE Transportation (Ports, Rail, Aviation, Roads) & Construction Best Prospects  Ports – Dar es Salaam throughput 7m tons, 93% of port traffic. Volumes increasing by 15% annually. Possible areas for new investment: Tanga, Mtwara, Mwanza (Lake Victoria), Kigoma and Kasanga (Lake Tanganyika)  Rail – system requires improvement (2major lines operated by TRL, and TAZARA). Locomotives and rolling stock, inland container depots, new lines, specialized rail maintenance  Aviation – 4 int’l airports (DAR, ZIA, KIA & MWZ). 126 in total. 3.4m passengers. Upgrading, warehousing, cold storage, shopping services.  Construction – 12-15% growth. Large unmet demand for housing & urban commercial projects. Basics provided by inexpensive suppliers, oppts for higher end, efficient pre-fabricated quality building supplies/materials. Contacts and Resources GoT website, Transport, Tanzania Investment Center, Many more, contact CS Dar es Salaam or your local EAC, www.

15 Key Sector - AGRIBUSINESS BRN Goals: focus on commercial farming, irrigation, marketing, storage/warehousing Tanzania’s range of climates favors the production of a variety of products including coffee, tea, cashew nuts, cotton, tobacco, sugar, rice, fruits & vegetables, meat and cut flowers. The vast majority produced are exported raw/unprocessed.

16 Key Sector - AGRIBUSINESS Points to note:  Agriculture accounts for nearly half of Tanzania’s GDP, 70% of rural household incomes, and approximately 76% of the population works in agriculture – therefore critical for sustained growth, poverty reduction and rural development  44 million hectares of arable land, 24% under cultivation  GoT has introduced “Kilimo Kwanza” (Agriculture First) and SAGCOT (PPP) with the intent of commercializing agriculture to help with self- sufficiency  Huge unmet need for irrigation, >1% irrigated; huge unmet need for storage, post harvest losses = 20-40%; 3 rd largest livestock herds, but virtually no commercialization  Duty exemptions on agricultural equipment

17 Key Sector - AGRIBUSINESS Sub Sector Best Prospects  Production of fruit juices and vegetable canning  Nut, coffee, sugar cane processing  Fish and meat processing and packaging for export  Dairy product processing  Horticultural packaging (cut flowers and vegetables)  Small farming tractors/mechanization  Storage technologies and equipment  Irrigation equipment Contacts and Resources Ministry of Agriculture, http://www.agriculture.go.tz Southern Agricultural Growth Corridor, http://www.sagcot.com Tanzania Investment Center, Feed the Future,

18 Key Sector - TOURISM Tanzania’s wildlife resources are considered among the finest in the world. They include the Serengeti plains, Lake Manyara, the Ngorongoro Crater, and Africa’s highest mountain, Mount Kilimanjaro. Zanzibar, with its sandy beaches and history is well known 44% of Tanzania’s land area is set aside for: 15 National Parks 28 Game Reserves 44 Game controlled areas 2 Marine Parks

19 Key Sector - TOURISM Description200920102011 Total number of tourists 714,367782,699867,994 Number of tourists in hotels 665,000719,097753,818 Average number of bed-nights per visit 11 10 Average daily expenditure per tourist*(USD) 231.10328.10355.10 Total earnings (USD Millions) 1,159.821,254.51,324.83 Home to six World Heritage Sites: 1.Ngorongoro Conservation Area 2.Ruins of Kilwa Kisiwani & Ruins of Songo Mnara 3.Serengeti National Park 4.Selous Game Reserve 5.Kilimanjaro National Park 6.Stone Town of Zanzibar

20 Key Sector - TOURISM Best Prospects  Construction and management of hotels, entertainment complexes and restaurants  Improvement of airport terminals and shops  Hospitality training  Tour operations  Travel agencies  Marketing services Contacts and Resources Tanzania Ministry of Natural Resources and Tourism, http://www.mnrt.go.tz Tanzania Tourist Board, http://www.tanzaniatouristboard.com Tanzania National Parks, http://www.tanzaniaparks.com Tanzania Association of Tour Operators, http://tatotz.org

21 Other Sectors to Consider Mining ICT Healthcare Financial Services Education Consumer Goods/Franchising

22 If you are considering Tanzania Suggested Market Entry Strategies: Research the market, visit, make local contacts Consider joint-ventures and shared ownership (helps with land access) Marketing is usually done through a local agent/distributor Successful investing is aided by having a Rep on the ground Bureaucratic obstacles can be minimized by working with local lawyer or law firm

23 If you are considering Tanzania  Patience – energy, infrastructure, red tape (think long term)  Price – price sensitivity (you will need to offer more than a good price)  People – relationships and network building (one trip will not suffice)  Passion – have a vision (be committed)  And have a Plan B (just in case!) Ambassador to South Africa, Donald Gipps (2009-2013)  What’s your capacity for risk: distance, time, payment terms? Be aware of the 5 “P’s”

24 You might need a Plan B! And an SUV!

25 ASANTE SANA! (Thank You) Robert (RJ) Donovan Senior Commercial Officer U.S. Embassy, Dar es Salaam United Republic of Tanzania

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