Tanzania Review 2011_2012

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Contents

Celebrating 50 Years of Independence

PO Box 22731, Dar es SalaamTelephone: +255 754314865E-mail: [email protected] GibbonsPRODUCTIONCreative Solutions - René HartsliefDESIGNCreative Solutions - Michel GribbenPHOTOGRAPHYRené Hartslief, Marie Gibbons, Tanzania Tourist Board, Corporate Tanzania, The Tanzanite Experience, Mbeya Cement, Mollel Electrical Contractors Ltd, Atlas CopcoEDITORIAL RESEARCH & CONTENTLouella Morgan-JarvisWhile every care has been taken in the preparation of this publication, the publishers can accept no liability for any errors or omissions that may occur. This publication is the exclusive property of the publishers and no part of the contents may be reproduced in any form without prior written permission of the publishers.

Published by

Mining Industry

Physical Infrastructure

Social Infrastructure

Zanzibar

Useful Information

Map

Index to Advertisers

Foreword

Introduction

Trade & Investment

Business & Finance

Tourism

Agriculture & Fisheries

Manufacturing

3 38

4 46

8 58

14 62

24 70

30 71

34 72

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Despite being one of the poorer countries on the continent, with an annual per capita income of around US$ 500, Tanzania is rich in potential. Around 30 percent of its surface area comprises protected natural habitat, making it one of the most naturally diverse countries in the world. It also boasts world-famous attractions such as Mount Kilimanjaro, Ngorongoro Crater, the superb wildlife of the Serengeti and the exotic ‘spice island’ of Zanzibar.

50 years of independenceTanganyika – as Tanzania’s mainland was then known – achieved independence from British administration on 9 December 1961, with Julius Nyerere becoming the country’s prime minister and, on the adoption of a republican constitution a year later, its fi rst president.

THE TANZANIAN ECONOMYThe World Bank, International Monetary Fund (IMF) and bilateral donors have been instrumental in rehabilitating Tanzania’s aging physical infrastructure, in particular transport links which are crucial for both regional and international trade. In addition, banking reforms have helped increase private-sector growth and investment, while continued donor assistance and sensible macroeconomic policies have supported the country’s positive growth rate, even during the world recession.

Tanzania’s Gross Domestic Product (GDP) grew by an average of 7 percent per year between 2000 and 2008 as a result of expansion in the tourism industry and strong gold production. However, the economic base is still heavily dependent on agriculture, which accounts for more than one-quarter of GDP, 85 percent of exports, and employs some 60 percent of the workforce.

In 2008, Tanzania received the world’s largest Millennium Challenge Compact grant, worth US$ 698 million. With fi scal stimulus and loosened monetary policy helping to ease the impact of the global recession, GDP growth in 2009/10 was a respectable 6 percent, buoyed by high gold prices and increased output.

The economy in 2010 and beyondAccording to the Bank of Tanzania’s Monetary Policy Statement of February 2011, the country’s economic performance and outlook remain strong. Real GDP grew by 7.1 percent in the fi rst half of 2010 compared with 4.3 percent in the corresponding period of 2009. The higher growth rate was attributed to factors such as increased agricultural activity as well as notable growth in fi shing, mining and quarrying, manufacturing, wholesale and retail trade, electricity and gas, and real estate and business services. Following this good performance in the fi rst half of the year, projected growth of 7.0 percent for 2010 is likely to be attained.

Infl ation has taken a downward path for the most part of 2010 as a result of favourable weather conditions which improved food production in the East African Community (EAC) region. After 17 months of double-digit infl ation, annual headline infl ation dropped to single digits in February 2010 and remained at these levels until the end of the year. Infl ation stood at 4.2 percent in October 2010, but rose to 5.5 percent in November 2010 and 5.6 percent in December 2010 – just slightly more than the annual target of 5.0 percent.

For 2010, the overall balance of payments remained positive at a surplus of US$ 369.8 million, compared with a surplus of US$ 366.2 million recorded in the corresponding period a year earlier. This development is mainly on account of capital infl ows in the form of grants and foreign borrowing. Nevertheless, the current account defi cit widened by 11.8 percent to US$ 2 405.8 million following a rise in goods imports that outweighed the impact of the increase in exports of goods and services.

Gross offi cial reserves remained strong, closing at US$ 3 947.9 million at the end of December 2010 (equivalent to 6.3 months’ cover of projected imports of goods and services), compared with US$ 3 552.5 million recorded at the end of December 2009. Similarly, gross foreign assets of banks increased to US$ 1 060.9 million from US$ 985.8 million in the same period. In total, gross foreign banking system reserves amounted to US$ 5 008.9 million at the end of December 2010.

Introduction

With some 1 400 kilometres of Indian Ocean coastline, and sharing borders with eight other countries, Tanzania is the economic hub of East Africa.


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Higher growth in 2011In January 2010, government projections estimated economic growth of 7.2 percent in 2011 due to Tanzania’s strong recovery after the global fi nancial crisis.

In the second half of 2010/11, economic activity is expected to strengthen further, as the global economy continues to improve. This will provide a stronger base for revenue collection and also higher levels of credit growth, which will enhance economic growth. The good harvest of food crops in the region during 2010 is expected to keep infl ation in check, although there are downside risks driven by recent increases in global oil prices, increases in domestic power tariffs, and power rationing.

CLIMATELying just south of the equator, Tanzania’s climate remains pleasant throughout the year, with the hottest period between November and February (25°C to 31°C) and the coolest from May to August (15°C to 20°C). In the highlands, temperatures can drop to 10°C in winter and rise to around 23°C in summer, while the rest of the country rarely sees temperatures lower than 20°C.

There are two rainfall systems in Tanzania. In the southern, western and central areas, rains fall between December and April, while in the northern and north-eastern coastal region there are two rainy season – during November and December (short rains known as ‘mvuli’) and between March and May (long rains or ‘masika’).

PAST & PRESENTThe interior of Tanganyika, as the mainland of Tanzania was then known, was fi rst reconnoitred by European slavers, missionaries and explorers in the 1800s, with settlements, mission stations and trading posts built as far inland as Lake Tanganyika. In the late 19th century, the German East African Company gained control of large portions of the mainland, although the British held some infl uence over the Omani sultans ruling the Zanzibar Archipelago. By 1891, most of Tanganyika was under the colonial administration of German East Africa.

The Anglo-German agreement of 1890 made Zanzibar and Pemba a British protectorate, while Tanganyika fell under the direct administration of the German government, with headquarters set up in Dar es Salaam. While British rule through the Sultan did little to change the political status quo on Zanzibar over the next three decades, German rule on the mainland provoked local resistance and a growing sense of nationalism.

Following the defeat of Germany in World War I, Tanganyika was handed over to Britain for administration by a system of indirect rule. The ensuing years saw a growing movement for political self-determination, with Julius Nyerere founding the Tanganyika African National Union (TANU) in 1954. By the end of 1959, Britain had agreed to the establishment of internal self-governance for Tanganyika.

The country enjoyed a peaceful transition to independence under the moderate TANU, led by Nyerere, who became prime minister on independence in December 1961. One year later the new nation adopted a republican constitution, with Nyerere as its fi rst president.

Zanzibar’s quest for political independence began to gather momentum in the mid-1950s, with a popular revolution ousting the Omani sultan in 1963 and a new government being formed with the Afro-Shirazi Party (ASP) leader Abeid Karume as President.

United Republic of TanzaniaOn 26 April 1964, the sovereign republics of Tanganyika and Zanzibar united to form the United Republic of Tanganyika and Zanzibar – a unitary republic comprising the Union Government and the Zanzibar Revolutionary Government. The country’s name was changed to the United Republic of Tanzania on 29 October 1964. Under the terms of the union, Zanzibar retains considerable local autonomy.

To form a sole ruling party in both parts of the union, Julius Nyerere merged TANU with Zanzibar’s ruling ASP to form the Chama cha Mapinduzi (CCM) Revolutionary Party in February 1977. Ali Hassan Mwinyi succeeded Nyerere in 1985, undertaking a number of political and economic reforms. Up to this point, Tanzania had been a one-party state with a socialist economy. The fi rst multiparty general elections were held in 1995, and Benjamin Mkapa of the ruling CCM won around 62 percent of votes cast.

Re-elected in 2000 with 71 percent of the vote, Mkapa continued in his efforts to move Tanzania towards a free-market economy. He was succeeded by Jakaya Kikwete in the 2005 elections, which the CCM won by an even larger margin, picking up additional parliamentary seats. Kikwete was sworn in for a second fi ve-year term on 6 November 2010, with the ruling CCM party having earned 61 percent of the vote in the October elections.

Dogged by confl ict between competing interests, Zanzibar’s political landscape has been more volatile than the mainland’s, with the 2000 elections marred by irregularities and accusations of vote rigging. In an effort to ease political tension between the ruling CCM and opposition Civic United Front (CUF), a referendum held in July 2010 saw the approval of a constitutional change which allowed for a power-sharing agreement.

In the elections of 31 October 2010, Zanzibar’s presidential race was won by CCM candidate Ali Mohamed Shein, with 50.1 percent of the votes. The leader of the opposition CUF, Seif Sharif Hamad, received 49 percent of the votes, with the CCM and CUF subsequently forming a unity government.

Swahili is Tanzania’s offi cial – and by far the most widely used – language (93 percent), although English is spoken by at least one and a half million Tanzanians as their second language, and Arabic is widely spoken in Zanzibar.

MAIN CENTRESDar es Salaam: Known by locals as ‘Dar’, this cosmopolitan city is Tanzania’s main port and commercial, industrial and executive capital, as well as the hub of the entire East African region. It has 2 497 940 inhabitants, according to the 2002 Census, although 2010 estimates put the population at around three million. Most government offi ces are based here, as are diplomatic missions and non-governmental organisations.Founded in 1862 by Sultan Seyyid Majid, Dar es Salaam

7 Celebrating 50 Years of Independence

became the centre of administration under German, and later British, rule. Today modern high-rises jostle with mosques, temples and colonial architecture, such as the White Father’s House and St Joseph’s Cathedral. Sights worth seeing include the Botanical Gardens, National Museum and open-air Village Museum, as well as the Kariakoo Market, Mwenge crafts market, Kivukoni Fish Market, city centre and waterfront.

Dodoma: Centrally situated on the eastern edge of the southern highlands, Dodoma is the country’s offi cial capital and the seat of the legislature, although most government institutions are based in Dar es Salaam, some 300 kilometres to the east. Much smaller and less developed than Dar, with a population of around 155 000 (2003 est.), the town is at the centre of Tanzania’s wine industry. In recent times, the town’s economic base has declined in favour of the coastal city, but in the early days of independence there was a popular political lobby to move the entire government here.

Arusha: Built in the early 1900s by the German colonial government, this once quiet agricultural backwater is currently Tanzania’s second-largest city and among its most prosperous centres. Arusha is situated in the northern highlands among the foothills of Tanzania’s second-highest mountain, the imposing Mount Meru with its impressive crater, and these rich volcanic soils produce abundant crops of wheat, coffee, fl owers and pyrethrum. Known as the ‘Geneva of Africa’, Arusha is a focal point for international relations and diplomacy, being the site of the International Criminal Tribunal for Rwanda and the African Court on Human and Peoples’ Rights. Scheduled for completion in 2011, the new East African Community (EAC) headquarters is being built next to the Arusha International Conference Centre, the present location of the EAC Secretariat.

Mbeya: Located in the southern highlands, the agricultural centre of Mbeya is known for its pleasant climate and setting. Mbeya was founded in the 1930s during Tanzania’s gold rush, and the surrounding area has rich gold fi elds which continue to provide a lucrative source of income as well as attracting substantial international investment. Its close proximity to the Zambian border, in addition to its position on the Great North Road and the TAZARA railway line, makes the town an important link in the road and rail routes between Tanzania, Zambia and Malawi.

Mwanza: Tanzania’s fourth-largest city, the port of Mwanza is located on the south-eastern shore of Lake Victoria. Bordering Uganda to the northwest and Kenya to the northeast, this prosperous and busy city is a crucial transit point in the trade and transport routes between Tanzania and her northern neighbours. The land around Mwanza consists primarily of tea, cotton and coffee plantations, and large volumes of cash crops pass though here on their way to market.

Morogoro: Situated in the southern highlands of Tanzania at the base of the Uluguru Mountains, the agricultural centre of Morogoro has a population of 206 868 (2002 census) and is home to the Sokoine University of Agriculture. Good rainfall levels and relatively cool temperatures make the area ideal for the production of sisal, sugar cane, rice and tropical fruits. The town has also produced some of the country’s best known musicians, such as Salim Abdullah, founder of the Cuban Marimba jazz band, and Mbaraka Mwinshehe.

Zanzibar Town: The largest urban centre on Zanzibar, this port town lies along the island’s main waterfront. The Arabian-style old quarter, also known as Stone Town, is full of shops, bazaars, mosques and palaces, with many buildings dating back to the era of the slave trade. Top attractions include the waterfront market of Forodhani Gardens, as well as the House of Wonders and Palace Museum. Day-long spice tours to working plantations offer visitors the chance to observe the cultivation of cloves, vanilla, nutmeg, cinnamon, and other spices that have made the island famous.

Tanga: The country’s chief seaport after Dar es Salaam, the industrial, trading and export-import centre of Tanga serves as a link between northern Tanzania and the Indian Ocean trade routes. In the older sections of town, remnants of colonial and Arabian architecture point to the town’s past importance in the ivory and slave trade as well as a history of German occupation.

Moshi: At the heart of Tanzania’s coffee-producing region, the lovely town of Moshi lies amid vast coffee plantations at the foot of Mount Kilimanjaro. While its coffee plantations and international auctions are well worth seeing, Moshi is most frequently used as a base from which to climb Mount Kilimanjaro, the continent’s highest mountain. Other features of interest here include the economically lucrative sugar plantations and various cultural tourism programmes in the nearby villages.

Kigoma: The capital of western Tanzania, and Lake Tanganyika’s busiest port, Kigoma is a signifi cant centre for foreign trade as well as being the main arrival point for refugees coming from confl ict-beset countries in central Africa. It is also the fi nal stop on the Central Line railway, built in the early 20th century to transport agricultural produce from the hinterland to the seaport of Dar es Salaam.

Tabora: Located in the hinterland of western Tanzania, Tabora was once a focal point in the slave and ivory trade, when it served as a stopover for caravans from Lake Tanganyika and Central Africa en route to the coastal town of Bagamoyo. The town was also a well-known mission station during the 19th century, being visited by both Stanley and Livingstone. Tabora continued to fl ourish under German rule, when it became one of the most busy and prosperous centres in East Africa.

Musoma: Lying on the shores of Lake Victoria near the Kenyan border, the vibrant port of Musoma with its colourful market is also the site of the Mwalimu Julius K Nyerere Museum, which houses the late president’s memorabilia as well as featuring exhibits documenting the rise of nationalism, the independence movement and the early history of Tanzania.

Iringa: Located in the southern highlands of Tanzania, near the centres of Dodoma and Morogoro, Iringa is a quiet yet pleasant town primarily involved in regional agriculture and production. Once a centre of colonial administration under German occupation, the town was also the site of several battles during the First and Second World Wars. Today, Iringa’s market offers a colourful scene of traditional African culture, and is a popular stop for visitors to Ruaha National Park.

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One of the principal ways in which the economic crisis affected growth was in the area of trade, particularly tourism, export crops, regional manufacturing exports and lower capital infl ows in the form of Foreign Direct Investment (FDI). In 2009, the volume of world trade declined by 10.7 percent, compared to an increase of 2.8 percent in 2008, as a result of lower demand for merchandise exports in developed countries. At the same time, African exports (excluding South Africa), contracted by 33 percent following growth of 29 percent in 2008.

Notwithstanding the setbacks brought about by the global economic downturn, Tanzania has continued to focus on reducing the cost of doing business through programmes under Business Environment Strengthening for Tanzania (BEST), Business and Property Formalisation (BPF) and Tanzania National Business Council. Furthermore, development and expansion of Export Processing Zones (EPZs) and Special Economic Zones (SEZs), implementation of the SME policy and the Tanzania Trade Integrated Strategy (TTIS) are supporting expanded trade and investment.

Going forward, growth in the Tanzanian economy is being driven by the further recovery of the global economy, with improved demand for exports and increases in domestic economic activities fostered by the implementation of programmes such as Kilimo Kwanza in the agricultural sector. This has seen the economy rebounding to around 7 percent growth in 2010, with a projected rise to 7.8 percent by 2013.

Export recovery in 2010Tanzania’s export market recovered markedly in 2010, with the value of goods and services exported amounting to US$ 5 827.2 million – 21.9 percent higher than the previous year. The improvement was largely due to a signifi cant increase in the export of gold and manufactured goods as well as travel receipts.

In the year ending December 2010, the value of goods exported rose to US$ 3 687.4 million, compared to US$ 2 925.8 million recorded during the corresponding period a year earlier. Gold continued to dominate, accounting for 39.8 percent of total goods exported, followed by manufactured goods at 26.1 percent.

Traditional exports amounted to US$ 558.9 million, being 16.5 percent higher than the value recorded the previous year due to increases in both export volumes and unit prices of tobacco and cashew nuts. At the same time, non-traditional exports of US$ 3 128.5 million were recorded in 2010 compared with US$ 2 466.1 million in 2009, on the back of a substantial increase in the export value of gold and manufactured goods.

THE INVESTMENT CLIMATECharacterised by peace and stability, this multiparty democracy promotes good governance and the rule of law, and has implemented a series of political, economic and administrative reforms in the past two decades in order to encourage private sector investment and development.

There is no restriction on foreign exchange and the government has lent its support to an open investment regime, mobilisation of private capital initiatives and further liberalisation of the fi nancial sector in line with World Bank recommendations. Investments on the Dar es Salaam Stock Exchange (DSE) are open to foreign investment, capped at 60 percent.

Investments in Tanzania are guaranteed against nationalisation and expropriation, and the country is a signatory to several multilateral and bilateral agreements on the protection and promotion of foreign investment. It is a member of the Multilateral Investment Guarantee Agency (MIGA) as well as the International Centre for Settlement of Investment Disputes (ICSID).

Tanzania has a sizeable domestic and regional market. Bordering the Indian Ocean, it is well positioned geographically to exploit trade links with its land-locked neighbours and the international market. Development corridors include Mtwara, Central, Tanga and Dar es Salaam, which serve to bolster the country’s economy and streamline inter-regional trade.

Improvements to transport networks are a top priority, and private sector participation in infrastructure projects is being facilitated through the Public-Private Partnership Policy (2009) and Public-Private Partnership Act (2010).

Trade & Investment

Having weathered the storm of the global economic crisis that hit the world in 2008, Tanzania is beginning to reap the benefi ts of the economic recovery. This can be seen in increasing international trade as well as an ever greater number of investment applications in a variety of economic areas.

Celebrating 50 Years of Independence9

BACKGROUNDThe Tanzania Trade Development Authority (TanTrade) was established by Tanzania Trade Development Authority Act No. 4 of 2009. Its establishment followed a repeal of the Act of Parliament No. 5 of 1978 that established the Board of External Trade (BET) and Act of Parliament No. 15 of 1973 that established the Board of Internal Trade (BIT).

VISIONTo become a world-class focal point centrally positioned to support national economic excellence through trade development.

MISSIONTo enhance Tanzania’s economic performance through development and promotion of goods, services and ideas both in the local and foreign markets.

TanTrade’s MAIN ACTIVITIES1. Market Development Activities• Conducting market and product surveys to ascertain demand for Tanzania’s products through Collecting, Analyzing, Organizing and Disseminating Trade Information• Enhance quality management of goods and services• Enhance production capacities to cope with market demands• Participating in Regional and Multilateral Trade arrangements - for marked access initiatives• Organising Buyers/Seller Meetings• Pursuing integrated export promotion programmes

2. Product Development Activities• Product researches and re-engineering• Identify potential sectors, diagnose and prepare sectoral strategies• Initiate programmes, stimulate trade and sectoral growth• Conducting product development/adaptation programme through pilot projects• Improving products’ market performance through designs, multiple uses• Conducting product packaging and labelling development programmes• Provision to the general public, of standard requirements, regulations, prices trends and other market information requirements

3. Trade Information Function• Hosting of the Trade Point Portal (http://www.tantrade.or.tz)• Managing Trade Information Centre and WTO Reference Centre• Maintaining membership with clients through Business Services Bureau• Publication of Trade Currents Journals, Educative Brochures, etc.• Market/Products Report Dissemination seminars• Coordination of virtual exhibitions• Dissemination of online Electronic Trading Opportunity via Trade Point Portal

• Participation in efforts aimed at developing e-commerce in Tanzania• Establish Trade Information Dissemination Centres• Link Tanzania Diplomatic Missions Abroad and Foreign Trade Centre

4. SME’s Development Program• Conducting Capacity Building Programmes for different categories of importers and potential exporters on trade related subjects hands on training to SME’s through; - TanTrade Export Readiness Programme - Train for Trade for SME’s in Southern Africa - Specialised training with the support of CBI• Training of trainers/consultants• Training of general public on trade related issues• Conducting export quality management programmes

5. Trade Policy and Facilitation• Trade related policy analysis• Provide advisory services to the Government• Initiate and sustain policy advocacy to stimulate domestic and international trade• Participation in Business Environment Strengthening Programme for Tanzania• Participation in the formulation of various trade related policies• Analysis of national export performances• Participation in review programmes to streamline export procedures and documentation• Participation in the private/public sector partnership development programmes (CSR)

6. Development and integration of the internal trade• Review and align the domestic market system within the international standards• Work with collaborators to develop market centres’ infrastructure for product outlets• Work with collaborators in the supply side to improve designs, varieties of products to meet market demands• Establishment of trade dissemination centres (TeleCentres)• Conduct capacity building programmes in relation to product development and adaptation• Initiate and manage Tanzania brands for promotion• Improve and strengthen local marketing systems

7. Trade Promotion• Coordinating Tanzania’s participation in overseas trade fairs and exhibitions• Coordinating and organizing - incoming and outgoing trade missions• Organizing the Dar es Salaam International Trade Fair, Sectoral Exhibitions and the yearly Uhuru Festival• Coordinating Tanzania’s participation in overseas trade fairs and exhibitions• Develop and support domestic and foreign market penetration through local trade fairs, Uhuru Festival, expos, sectoral exhibitions and trade missions

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The country is rich with natural resource potential, from minerals such as gold, iron and coal to good arable land for growing products for export or domestic consumption, which is paving the way for agro-processing and agro-business. Tourism is another priority, with investment sought in areas such as the development of new hotels.

ENABLING INSTITUTIONSReplacing the boards of internal and external trade, the Tanzania Trade Development Authority (TanTrade) was established by the Tanzania Trade Development Authority Act No. 4 of 2009. TanTrade is involved in implementing the National Trade Policy, the National Export Development Strategy, the Trade Integration Strategy and the Agricultural Marketing Policy. Services offered include: research and development; branding and promotion of Tanzania’s goods and services; capacity building and SME development; advisory services on business competitiveness; product and market development; regulation of trade fairs; trade policy and facilitation; and trade information services.

Established by the Tanzanian Investment Act of 1997, the Tanzania Investment Centre (TIC) (www.tic.co.tz) is the main agency for promoting, coordinating, encouraging and facilitating investment in Tanzania. The TIC was named the Best Investment Promotion Agency in the World by the World Association of Investment Promotion Agencies (WAIPA) in 2007 and in 2008 won the Innovative Management Award, with its CEO elected Vice President of WAIPA.

The centre is actively involved in advising investors on the correct procedures for setting up businesses in Tanzania, providing joint venture opportunities between local and foreign investors and also acting as a consultant to government on investment-related issues. A one-stop facility for investors, the TIC also consists of immigration offi cers, an Assistant Registrar of Companies and Licensing, Land, Labour and Tanzania Revenue Authority liaison offi cers.

TIC expects to receive 750 investment projects worth US$ 3 billion in 2011, up from 570 projects worth US$ 2.3 billion in 2009 and 610 projects worth US$ 2.5 billion in 2010. While the manufacturing sector received more investment than any other sector in 2010, it is expected to be overtaken by tourism and construction in 2011. It is projected that over 80 000 jobs will be created from 750 projects in 2011, up from 57 000 in 2009 and 70 000 in 2010.

The Export Processing Zones Authority (EPZA) is an autonomous government agency established under section 12 of the EPZ (Amendments) Act of 2006. EPZA operates under the Ministry of Industry, Trade and Marketing, promoting investments in economic zones, in particular Export Processing Zones (EPZ) and Special Economic Zones (SEZ). Functioning as a one-stop shop for all prospective and existing investors, the EPZA is tasked with:• The development of EPZ/SEZ infrastructure• Provision of business services to EPZ/SEZ investors• The provision of EPZ/SEZ licenses

The Zanzibar Investment Promotion Agency (ZIPA) and the Zanzibar Free Economic Zones Authority (ZAFREZA) provide roughly equivalent incentives to those offered by the Mainland’s

policies, and are discussed in greater detail in the chapter on Zanzibar.

INVESTMENTThere are a number of opportunities for Foreign Direct Investment (FDI), particularly in areas such as agriculture, tourism and manufacturing, with Tanzania continuing to attract the highest infl ows of FDI in the East African region – an annual average of US$ 554.1 million between 2004 and 2009.

Tanzania’s receipt of FDI declined from US$ 744.0 million in 2008 to US$ 650.0 million in 2009, equivalent to a decrease of 14.5 percent. Much of this may be attributed to the adverse impact of the global fi nancial crisis, which led to postponement of foreign investments in Tanzania.

Investment projectsIn 2009, a total of 572 projects worth TZS 2 970 730.10 million were registered with employment potential of 56 615 people compared to 871 projects worth TZS 7 991 481 million with employment potential of 109 521 people in 2008. Out of total projects registered in 2009, 407 projects were new while 165 were for rehabilitation and expansion. Projects owned by local investors numbered 284, while 149 were owned by foreign investors and there were 139 joint venture projects.

During the same year manufacturing activities attracted the most investors, with 183 projects worth TZS 654 472 million and employment potential of 14 143 people. Other economic activities which attracted investors included tourism (151 projects worth TZS 519 259 million), commercial buildings (81 projects worth TZS 922 467 million), transport (61 projects worth TZS 303 849 million) and agriculture (27 projects worth TZS 45 626.10 million), among others.

Incentives for investorsInvestor incentives are provided for under the Tanzania Investment Act, Export Processing Zones (EPZ) Act, Mining Act and Special Economic Zones (SEZ) Act. Non-fi scal and fi scal incentives and investment guarantees include:• Zero percent import duty and VAT exemption on capital goods and import duty back scheme.• Refund of duty charged on imports used for producing goods for export and goods sold to foreign institutions like the UN and its agencies operating in Tanzania.• The recognition of private property and protection against any non-commercial risks.• Immigration quota of up to fi ve people.• Repatriation of all profi ts, gains and dividends from investment after tax.• Favourable investment allowances and deductions.

Established by the EPZ Act of 2002, Export Processing Zones attract investments in export-oriented industries, including agribusiness, textiles, electronics and Spatial Development Initiatives (SDIs). EPZ Investors may choose to operate in one of Tanzania’s industrial parks, sharing common infrastructure facilities and utilities, or as a stand-alone operation in a single factory unit outside the industrial parks, with the EPZA facilitating declarations for such areas.

Licensed EPZ investors enjoy fi scal incentives coupled with simplifi ed operating procedures and superior infrastructure for


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faster set-up and smoother operations. Additionally, the EPZA provides facilitation and after-care service to new and existing investors. Since inception, the EPZA has made some signifi cant achievements, such as successfully exporting goods worth more than TZS 300 billion as well as creating thousands of jobs. Further information on export processing zones may be found in the ‘Business & Finance’ chapter.

Established in 2006 as strategy to achieve the Mini-Tiger Plan 2020, Special Economic Zones (SEZs) act as a magnet for investment in specially designated areas by providing quality infrastructure, complemented by an attractive fi scal package, business support services, cluster formation and minimal regulations. The SEZ programme covers a wider range of allowable activities than those available in EPZs.

INVESTMENT OPPORTUNITIESWith only around a quarter of Tanzania’s 44 million hectares of arable agricultural land and 60 million hectares of land suitable for livestock development currently being utilised, commercial farming & ranching hold huge potential.

Tourism investment opportunities comprise hotels, conference tourism, beach tourism, historical sites, amusement parks, leisure parks, specialised cuisine restaurants, golf courses, air and land transport, wildlife farming and trading of live animals.

Tanzania possesses a comprehensive geological and minerals database, and there are opportunities in mining as well as mineral processing in the form of gemstone cutting and polishing and jewellery.

Potential exists in horticulture & fl oriculture as well as agro-processing, which covers the areas of food, garments and apparel, fi shing and fi sh processing.

Services sector investment includes ICT, education, health and fashion.

Energy investment opportunities are available in power generation from coal, natural gas, hydro and solar power.

Investment is also welcomes in economic infrastructure, and comprises road construction, bridges, real estate and telecommunications.

Other opportunities exist in timber and wood processing, forestry and furniture, as well as manufacturing industries and export processing zones.

TRADE AGREEMENTSTanzania’s geographical advantage and preferential trade agreements, which allow products to enter most of the world’s richer economies free of any customs duties and with limited quota restrictions, have created vast market opportunities for investors. The country is signatory to several international trade arrangements, including the African Growth and Opportunity Act (AGOA), The European Union’s Everything But Arms (EBA) programme, Japan’s Generalised System of Preferences and Canada’s PACT.

AGOA facilitates both higher levels of trade and investment in support of positive economic and political developments in the

region and encourages reciprocal trade and investment. In force until September 2015, AGOA covers 6500 products, including precious metals, minerals, cashewnuts, cotton, garments, handcraft, coffee, vegetables and fruits, and allows almost all Tanzanian textiles and apparel to enter the US duty and quota free, and under relaxed Rules of Origin.

Tanzanian exports under AGOA saw an increase in value to US$ 42.2 million in 2009 from US$ 40.3 million in 2008. Qualifying articles include:• Textiles and textile articles produced entirely in Tanzania• Apparel made of US yarns/fabrics and apparel made of yarns/ fabrics not produced in commercial quantities in the US• Clothes made of sub-Saharan African yarns/fabrics (subject to limited quotas)• Eligible hand-loomed, handmade or ‘folklore’ articles and ‘ethnic’ printed fabrics

The special AGOA apparel rule allows clothing made in Tanzania from third country yarns and fabrics to enter the US free of customs duties (subject to limited quota) until Sep 2012.

Regionally, Tanzania belongs to the East African Community (EAC), along with other founder members Kenya and Uganda, and Rwanda and Burundi, which joined the EAC in 2007. With its headquarters in Arusha, the group comprises a market of over 133 million people with a combined GDP of US$ 74 billion. Between 2005 and 2008, intra-EAC trade increased fromUS$ 1 847.3 million to US$ 2 715.4 million.

Following 18 months of negotiations between the fi ve partner states, the EAC Common Market Protocol, which provides for the free movement of labour, goods, services, capital and the right of establishment, came into force on 1 July 2010. Establishment of the Common Market is to be progressive and in accordance with schedules approved by the EAC Council of Ministers. Further efforts to widen and deepen integration should see the establishment of a Monetary Union in 2012.

Tanzania is also a member of the Southern African Development Community (SADC), a grouping of 15 countries with a combined population of some 257.7 million and a cumulative GDP of US $471.1 billion. Other members of SADC include South Africa, Zimbabwe, Zambia, Malawi, Madagascar, Botswana, Mauritius, Seychelles, Angola, Democratic Republic of Congo (DRC), Namibia, Lesotho, Swaziland and Mozambique. The principal aim of SADC is to coordinate and harmonise the socioeconomic policies and plans of its member states in order to ensure sustainable economic development and growth in the southern African region.

SADC launched a Free Trade Area (FTA) in 2008 involving zero tariff levels for 85 percent of all goods traded among member states. Liberalisation of tariffs on the remaining 15 percent of goods is expected to be completed in 2012, and is to be followed by a Customs Union and Common Market.

In an effort to scale up cooperation and expansion of trade, the Common Market for Eastern and Southern Africa (COMESA), SADC and the EAC are in the process of establishing the Tripartite Free Trade Area, comprising a population of some 700 million people. This will be followed by a Customs Union.


Vision StatementAn effective apex private sector organization, providing a focal point for the articulation of private sector-led approaches to Tanzania’s economic and social development.

Mission StatementTo promote private-sector-led social and economic development in Tanzania by providing member organizations with services they value, by understanding and representing their common interests, and by engaging in effective advocacy with the Government.

The Tanzania Private Sector Foundation (TPSF) was established on 4th November 1998 in order to promote private sector-led social and economic development in Tanzania.

Since its inception TPSF has served as a focal point for private sector advocacy with Government on behalf of the private sector with a core activity of impacting and infl uencing

policies that relate to the private sector. Through this advocacy programme TPSF seeks to raise issues, participate in and infl uence Government policy formulation and implementation in favour of the private sector. The programme is organized around the following themes:i. Policy Research - to conduct independent research on policy matters affecting the private sector and engage with the Government during the policy formulation and implementation processes to ensure that the private sector input is taken on boardii. Private Public Sector Dialogue covering policy and advocacy/lobbying initiatives in crosscutting issues such as taxation and infrastructure and sector-specifi c issues such as trade, tourism, agriculture, etc. In the latter set of issues TPSF seeks to add value to and support the work of its constituent members.iii. The National Business Forum - a platform for development and implementation of the policy impact agenda. This is the arena where researched policy issues are raised and an impact assessment made of the impact of the dialogue

and advocacy efforts with the Government.

MEMBERSHIP SERVICESTPSF is a membership organization and offers the following services to its members:i. Access to services, such as technical assistance and capacity building, that improve their position within their own constituencies;ii. Mechanisms for effective involvement of TPSF and its members in the analysis and articulation of policy and advocacy issues for engagement with the Government;iii. Integration of private sector development issues into sectoral, regional and national development programmes;iv. Results measured in terms of increased support from TPSF and enhanced attention by the Government;v. Assurance by TPSF of fairness, transparency and participatory approaches to members in the Foundation’s governance structures;vi. Access to information on private sector development policies, strategies and activities;vii. Access to TPSF professional advice and technical assistance to

members;viii. Provide a channel and platform for participation in policy formation; andix. Coordination and articulation of strategies to meet the collective needs of various private sector constituencies.

For further information on TPSF contact us on:Private Sector HousePlot 1288, Mwaya RoadMasaki, Msasani PeninsulaTel: +255 22 260 1913 / 1938Fax: +255 22 260 2368E-mail: [email protected]: www.tpsftz.org

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BUSINESS & THE PRIVATE SECTORThe Business Environment Strengthening for Tanzania (BEST) Programme was set up in 2003 to reduce the costs and delays involved in starting and operating a business by removing various legal and regulatory obstacles. In addition to improved business licensing, other areas that have benefi ted include land regulation and labour law reforms. The Business Activities Registration Act (BARA) of 2008 should also help to cut down on red tape. The Tanzanian government began implementing the Private Sector Competitiveness Project (PSCP) in 2007 in order to boost competitiveness, particularly among Micro, Small and Medium Enterprises (MSMEs), by reducing the cost of doing business while building capacity among domestic fi rms and facilitating their participation in international markets. The Property and Business Formalisation Programme (PBFP) aims to facilitate the transformation of property and business in the informal sector into legally held and formally operated entities in the economy, thus helping property owners to use their assets as collateral in accessing capital. A number of institutions and forums have been put in place to ensure broader participation in decision making, with input from the private sector, trade unions, professional associations, media, government departments and other representatives from civil society. Existing initiatives include the Tanzania National Business Council (TNBC), Investors’ Roundtables, Special Reform Task Forces, investment seminars, board membership in the Tanzania Investment Centre (TIC) and other government agencies.

The TNBC provides a forum for public-private sector dialogue with a view to reaching consensus and mutual understanding on strategic issues related to the investment process and business environment in Tanzania. The President of Tanzania chairs local and international roundtables, as well as the Chief Executive Offi cers’ Roundtable where the President meets private sector representatives to discuss ways of improving the country’s business competitiveness.

The Tanzania Private Sector Foundation (TPSF) was established in 1998 to promote private sector led social and economic development in Tanzania, serving as a focal point for private sector advocacy, and lobbying on behalf of the private sector. PrivatisationThe privatisation of formerly state-owned industries began with the Parastatal Sector Reform Policy of 1992, with the purpose of either selling off or restructuring parastatals, which had for the most part been a major fi nancial burden on government. The Privatisation Programme was launched the same year, with the intention of:• Enhancing the effi ciency of state enterprises and their contribution to the economy • Reducing the fi nancial burden of enterprises on the government budget • Expanding the role of the private sector to enable government to concentrate on maintaining law and order and the provision of essential public services• Encouraging wider participation by citizens in the ownership and management of enterprises The former Presidential Parastatal Sector Reform Commission (PSRC) began the privatisation process with about 400 public enterprises. As at 31 December, 2007, there remained 37 enterprises which were at various stages of the divestiture process. Consolidated Holding Corporation (CHC) is responsible for all the remaining tasks of the PSRC.

CHC has continued with the remaining divestiture work. This included the preparatory work for the Initial Public Offering of a 21 percent stake in the National Microfi nance Bank (NMB) Limited. The corporation has also been involved in the settlement of labour-related issues relating to Tanzania Railway Limited and the National Insurance Corporation. The success of the privatisation programme has been evident in the marked improvement in productivity and value added to the economy, including job creation and effi ciency in areas such as telecommunications. Privatisation has also enabled more than 10 000 Tanzanians to acquire shares in these companies through the stock exchange.

Business & Finance

Improvements in Tanzania’s business environment have seen the simplifi cation and speeding up of the investment process and procedures involved in setting up a business, while the substantial increase in commercial bank credit to the private sector refl ects government’s efforts to promote private sector growth and a continued focus on empowerment initiatives.


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Currently, measures are being taken to strengthen the management of public corporations and institutions with a view to improving their effi ciency, productivity and revenues, and thereby reduce their dependency on government subsidies. In April 2010, parliament passed amendments to the Public Enterprises Act aimed at empowering the Treasury Registrar’s Offi ce to become an autonomous authority with the mandate to oversee management and operations of public corporations and institutions. In line with these amendments, the structure of the Treasury Registrar’s Offi ce is being reviewed. Government will also evaluate public corporations and institutions in order to identify areas that need to be addressed. EXPORT PROCESSING ZONES Tanzania’s Export Processing Zones (EPZ) and Special Economic Zones (SEZ) provide for the establishment of export oriented investments within the designated zones which enjoy physical and procedural incentives and lower operational costs, thereby enabling both local and foreign investors to be internationally competitive. Procedural incentives comprise being able to operate under a single license issued by the EPZ Authority, on-site customs inspection in the EPZs, One-Stop Service Centre for investors, facilitation and after-care services, and rapid project approval. EPZ enterprises must be situated in specifi c areas that are treated as being outside the customs territory for VAT, customs tariff and exchange control purposes. Investors may choose from two different set-ups: • EPZ Industrial Parks, where investors locate their operations within the designated zone together with other investors and share common infrastructure facilities and utilities. There are currently six such industrial parks in Tanzania – Benjamin William Mkapa SEZ, Hifadhi EPZ, Millennium Business Park, Kisongo EPZ, Kamal Industrial Park and Global Industrial Park.• The EPZ Stand-Alone, where single factory units are set up outside the industrial parks, with the EPZ Authority facilitating declarations for these areas. In January 2011, eight new companies were granted certifi cates by the Tanzania Export Processing Zones Authority (EPZA). These are the latest of a total of 85 companies that have been registered to work under the EPZA. Those companies already registered can be divided into two categories – infrastructure developers and manufacturers – with a total of 42 companies making up the infrastructure developer’s category and 43 the manufacturer’s category. In addition, a number of Indian companies have decided to increase their presence in Tanzania with an investment of more than US$ 250 million and the construction of factories scheduled to begin in 2011. ECONOMIC EMPOWERMENTGovernment continues to implement the National Economic Empowerment Policy of 2004. The empowerment policy aims to create a favourable environment for investment and economic growth; improve the tax system and its administration; review laws, rules and regulations to ensure that they meet the requirements of a market oriented economy; and ease the availability of capital in order to enable more Tanzanians to access loans.

Current initiatives focus on the establishment and strengthening of Savings and Credit Cooperative Societies (SACCOS) in order to increase opportunities for entrepreneurs, particularly women and the youth, to access credit from fi nancial institutions and government programmes. The emphasis is also on training as a means of enhancing entrepreneurial skills. Over the past few years, the Economic Empowerment Fund has providing a total of TZS 31.5 billion to CRDB Bank and National Microfi nance Bank Limited (NMB) for on-lending to small and medium-sized entrepreneurs. By December 2009, a total of 66 559 entrepreneurs had benefi ted from loans provided by the fund, comprising 42 851 men and 23 708 women. The Small Entrepreneurs Loan Facility (SELF) project continues to provide microfi nance services to small entrepreneurs, with loans to benefi ciaries increasing by 348 percent between 2005 and March 2010, and the number of microfi nance institutions benefi ting from such loans rising from 175 to 247 over the same period. Correspondingly, the number of benefi ciaries increased from 20 526 in 2005 to 69 795 in 2010, 58 percent of whom were women. Established in December 2007 with start-up capital of TZS 400 million, the Mwananchi Empowerment Fund has been another important avenue for developing Tanzania’s entrepreneurs. By December 2009, loans amounting to TZS 4.2 billion had been disbursed to 4 437 entrepreneurs: 1 341 women and 3 096 men. The Export Credit Guarantee Scheme and the Small and Medium Entrepreneurs Credit Guarantee Scheme increased their capital from TZS 500 million in September 2005 to TZS 5 751 million in March 2010. This strengthened capacity of the two schemes to provide more loans to entrepreneurs through the designated banks. In addition, government recognises the important role played by non-governmental organisations (NGOs) such as FINCA, Presidential Trust Fund (PTF), PRIDE, VICOBA, etc, in the provision of microfi nance services. BANKING & FINANCIAL SERVICESThe fi nancial sector in Tanzania has undergone substantial structural change since it was liberalised in 1991 and opened to private and foreign capital. The system is dominated by banking institutions, which account for about 75 percent of the total assets, followed by pension funds, whose assets account for about 21 percent, the insurance sector with 2.0 percent of total assets, and the remaining fi nancial intermediaries, which hold about 2 percent. From a state monopoly led by the Bank of Tanzania (BoT) and the National Bank of Commerce (NBC) in the early 1990s, the banking sector had by June 2010 grown to accommodate 41 banks, 19 of which were foreign-owned. Over the same period, the total assets of banks rose from just 6 percent of GDP to more than 40 percent of GDP. Some 57 percent of total assets are held by four large banks. The combination of the strength of the country’s supervisory abilities and limited links with global fi nancial markets have helped to keep Tanzania’s fi nancial sector sound and robust


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while the world went through the most severe fi nancial crisis of recent times. The banking system has remained adequately capitalised against any potential fi nancial risk and the ratio of non-performing loans to total loans has remained within prudential limits. Furthermore, it has managed to keep enough liquidity to operate smoothly and cover liabilities without recourse to the central bank. The strong economic performance and stability that Tanzania has enjoyed over the past decade owes much to the reforms that have taken place in the fi nancial sector. With some policy intervention, private sector growth has been kept afl oat, albeit at a slower pace than its pre-crisis performance. Commercial banks’ credit to selected major economic activities sustained positive growth rates during the year ending December 2010, with most being held in personal loans followed by trade activities, manufacturing and agriculture. Credit to the private sector grew by 20.0 percent in this period, higher than the 9.6 percent recorded in the same period a year earlier. This increase refl ects the banks’ recovering confi dence in the economy following easing of the global fi nancial crisis. In 2010, a window for lending to the agriculture sector was opened at the Tanzania Investment Bank, and is being used to increase credit to agriculture. The recent appointment of a Pension Funds Regulator, who will work in close collaboration with other regulators in the fi nancial sector, is expected to reinforce the stability and resilience of the industry. Success has been achieved in sustaining single digit infl ation for most of the past decade, and the economy has shown remarkable resilience to shocks. Likewise, the exchange rate of the Tanzanian Shilling has remained stable, with market-determined interest rates being fairly stable as well. Nevertheless, access to fi nancial services in Tanzania is still very low, even by sub-Saharan African standards. The FinScope Survey conducted in 2009 found that only 12.4 percent of the adult population use banks and other formal fi nancial institutions. Efforts to improve fi nancial literacy in order to enhance fi nancial inclusion and consumer protection are thus part of the second generation of fi nancial sector reforms. Furthermore, commercial banks’ lending rates are still too high. Although the spread between lending and deposits rates has been narrowing, it needs to be reduced further. The establishment of a credit reference bureau should help to reduce credit risk, increase the number of bank borrowers and reduce lending rates. The Bank of TanzaniaThe Bank of Tanzania (BoT) was established by the Bank of Tanzania Act (1965), which was amended in 1995 and later in 2006 to ensure conformance with ongoing economic reforms. As the country’s central bank, BoT formulates, implements and is responsible for monetary policy, including exchange rate policy. It issues currency and regulates and supervises banks and fi nancial institutions, including mortgage fi nancing, development fi nancing, lease fi nancing, licensing and revocation of licenses. The National Payment System (NPS) is a vital component of the broader fi nancial system. BoT provides prudential oversight

of the system and implements measures to ensure the resilience and modernisation of the system in line with adapted international best practices and standards. The Tanzania Interbank Settlement System (TISS) is a real time gross settlement system. By virtue of the large values of payments that are settled through the system, and its inter-connections with participating fi nancial institutions, TISS is a systemically important payment system. On average, the large-value transactions settled in real time comprise about 80 percent of the total value settled, with low-value high-volume transactions cleared by BoT’s Electronic Clearing House and settled in consolidated batches at specifi c times of the day. The Banking and Financial Institutions Act of 2006 consolidated laws relating to banking so as to harmonise the operations of all fi nancial institutions in Tanzania, foster sound banking activities and regulate credit operations. The Act also established a Credit Reference Bureau. The process of privatising or streamlining the remaining government-owned banks and other fi nancial service providers continues. At the end of 2010 the Central Bank of Tanzania increased the minimum capital requirements for commercial banks from TZS 5 billion to TZS 15 billion. Banking servicesThe reorganisation of the state-owned National Bank of Commerce (NBC) in 1997 gave rise to the following entities: • NBC Holding Corporation (renamed Consolidated Holding Corporation)• NBC Limited (formerly NBC 1997 Limited) • National Microfi nance Bank (NMB) Limited Consolidated Holding Corporation (CHC) was established in 1997 and charged with carrying on the business of both a holding company and an investment company in relation to NMB and NBC Limited respectively. It has been granted successive fi ve-year mandates through amendments to the NBC Act of 1997, the most recent on 30 September 2007, which grants the corporation an extension on its mandate up to 30 June 2011 and vests all remaining activities from Loans and Advances Realisation Trust (LART), Air Tanzania Holding Corporation (ATHCO) and SIMU 2000 Ltd, to CHC. Following further privatisation in 2005, government has reduced its share in the National Microfi nance Bank (NMB) to 30 percent. NMB listed on the DSE in November 2008, and is presently the largest bank in Tanzania, by customer base as well as branch network, with over 139 branches located in more than 80 percent of Tanzania’s districts. Succeeding the former Cooperative and Rural Development Bank (CRDB), a public institution with the majority shares held by the Tanzanian government, CRDB Bank was re-established on 1 July 1996 as a private commercial bank. CRDB fi rst listed its shares on the DSE in 2009, the same year in which it posted a net profi t of US$ 26.65 million. In 2010 the bank was awarded a certifi cate of excellence for standard banking services in East Africa by SuperBrands.

Today, CRDB Tanzania is one of the largest commercial banks in the country, with a network of over 62 branches and more


than 200 ATMs. Following the recently adopted East African Community (EAC) Common Market, the bank plans to open a branch in each of the EAC member states. By February 2011 there were a total of 29 registered commercial banks operating in the sector. At the same time, there were nine registered regional unit banks, which include community and cooperative banks, and fi ve registered fi nancial institutions. As of June 2010, mobile phone payment services were provided by two commercial banks and four mobile network operators. In recognition of the importance of developing a rigorous supervisory oversight for this fast-developing industry, the Bank of Tanzania has signed an MOU with the Tanzania Communication Regulatory Authority (TCRA), which provides a mechanism for regulatory and supervisory coordination between the two regulators. Preparations were underway in early 2011 for the establishment of a new community bank, Tanzania Machinga Bank. Furthermore, in February 2011 Bank M Tanzania Limited became the fi rst local bank to issue corporate bonds on the Dar es Salaam Stock Exchange. Microfi nance and SMEsWhile multinational banks once catered only for larger corporations, the role of Small and Medium Enterprises (SMEs) has become increasingly important to economic growth. The microfi nance subsector services SMEs in the domestic market as well as other sectors historically ignored by commercial banks. The second Small Entrepreneurs Loan Facility (SELF II) was developed to support the country’s microfi nance sector. SELF was originally founded some ten years earlier with the intention of providing loans for microfi nance institutions (MFIs) such as SACCOS, NGOs and community banks, that would in turn lend money to underserved entrepreneurs in the rural and urban areas. Government, in partnership with the African Development Bank (ADB), has already disbursed TZS 44 billion through the SELF II project, compared with the TZS 10 billion that was disbursed during the initial project. With the overall goal of inclusive fi nancial services delivery, the SELF II project will provide capacity building to around 1 600 micro-credit institutions with a total of 820 000 benefi ciaries, compared with SELF I, which had some 70 000 benefi ciaries. Government plans to eventually convert SELF into an autonomous corporate entity. Pension funds and social securityA sound pension system is a powerful force in developing capital markets and supporting the provision of long-term fi nance. By end June 2010, Tanzania had six pension funds covering formal sector employees. Although pension coverage is mandatory for formal sector employees, only 40 percent are currently covered. Pension funds’ assets account for 21 percent of total assets of the fi nancial system, while the investment portfolios of these pension funds are concentrated mainly in two areas: government securities and illiquid commercial real estate. The envisaged opening up of capital account transactions may

offer opportunities for diversifi cation of investment avenues for pension funds. The three largest pension funds hold about 85 percent of the sector’s total assets. The pension sector is currently undergoing reforms which are aimed at achieving the following objectives:• Facilitating the entry of private pension funds to the fi nancial system• Establishing an effective supervisory and regulatory framework for private pension funds• Formulation of investment guidelines• Instituting best practices of corporate governance in pension funds• Determining the level of soundness and risk management in pension funds So far, substantial progress has been made towards establishing an effective regulatory framework for the sector. The Social Security Act, which was passed by the Parliament in June 2008, provided for the establishment of the Social Security Regulatory Authority (SSRA), which will share supervisory responsibilities with the Bank of Tanzania. The CEO and the Board of SSRA have been appointed, and government is fi nalising the procedures to make the SSRA operational. The National Social Security Fund (NSSF) provides a wide range of short and long term benefi ts to Tanzanians through: old age pension; disability pension; survivors’ pension; employment injury benefi t; social health insurance benefi t; maternity benefi t and funeral grants benefi t. The East and Central Africa Social Security Association (ECAS-SA) was established in 2007 in order to create a forum for social security institutions to network and share experiences and expertise in social security management. It provides a forum for fostering cooperation, assists in development and implementation of quality and effective practices, and designs and implements ways of improving the fi nancial management of

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social security institutions and other entities administering social security in the sub region. The association’s strategic plan (2009/10-2011/12) takes into account declining donor support, the worldwide economic crisis and competition for scarce resources. Insurance and investment Once monopolised by the state-owned National Insurance Corporation (NIC), the insurance industry was substantially liberalised with the Insurance Act of 1996. Since then, a number of international insurance companies have set up in Tanzania. By June 2010 the sector comprised 22 insurance companies with total assets amounting to TZS 331.38 billion, compared to TZS 304.26 billion recorded in June 2009, representing an annual growth of 8.9 percent. Five companies hold about 70 percent of the overall market share in terms of assets, with the NIC accounting for about 39 percent of the sector’s total assets. The new Insurance Act of 2009 has seen the establishment of the Tanzania Insurance Regulatory Authority (TIRA), which regulates and supervises the sector, promoting best practices. In addition, the Bank of Tanzania in collaboration with TIRA monitors the fi nancial health of insurance companies. Momentum Tanzania is a trusted insurance company focusing on meeting the healthcare and general insurance needs of individuals and corporate houses in Tanzania, and plans to introduce life insurance in the near future. The company is part of Momentum Africa and First Rand Group of South Africa, which has witnessed phenomenal growth on the African continent, where it has a presence in 13 countries. Momentum’s performance is underpinned by a culture of innovation, fl exibility, tenacity and growth. Its range of products is aimed at enhancing the quality of life and well-being of its customers, employees and communities in which it operates. In the fi rst year of operations, Momentum Tanzania had written a gross premium income of TZS 8 billion and built up a strong client base. In 2010, its second year, the company posted a gross written premium of TZS 14 billion, thereby recording phenomenal growth of 75 percent over the previous year. Momentum Tanzania offers a wide range of general and health insurance products to suit the specifi c requirements of diverse clientele. General insurance products include individual and package policies to cater to all types of casualty, property and liability covers. Health insurance products offer a wide array of combinations for in-patient and out-patient cover, with add-on special benefi ts. The company is linked to about 300 service providers across Tanzania, comprising hospitals, pharmacies and clinics, to ensure that its members enjoy prompt and personalised healthcare facilities. Unit Trust of Tanzania (UTT) is a government entity under the Ministry of Finance and Economic Affairs, and is responsible for promoting a savings and investment culture in the country, launching and managing collective investment schemes and warehousing shares from privatised public enterprises. Investment advantages include risk diversifi cation as well as benefi ts from economies of scale and low transaction costs.

TAXATIONTax administration in Tanzania has a three-tier structure. Central government tax is administered by the Tanzania Revenue Authority (TRA), while local government tax administration is undertaken by local authorities. In Zanzibar, the Zanzibar Revenue Board administers local taxes and levies, including VAT, while the TRA collects Union Government taxes, comprising customs and excise duty and income tax, which are remitted to the Zanzibar Government. The tax base and rate structure of the Tanzanian tax system has been rationalised and streamlined with a view to instituting a fair, simple, equitable, effi cient and taxpayer/investor-friendly regime. The regulatory framework has been harmonised, an incentive regime put in place and rates gradually reduced. To attract investment, government has abolished protectionist excises, replaced Sales Tax with VAT, and the two-tier corporate tax with a single rate. Tanzania’s corporate tax rate is 30 percent, and 25 percent for companies listed on the Dar es Salaam Stock Exchange (DSE), while VAT is chargeable on goods and services at 18 percent on Tanzania Mainland and 20 percent in Zanzibar, and at zero percent for exports. Withholding taxes on business and capital incomes such as dividends, interest and royalties are also applicable at rates ranging between 10 and 20 percent. Changes to the Income Tax Act in the 2010/11 budget include:• Amending section 11 of the Income Tax Act CAP 332 to introduce ring fencing within the mining areas, thereby ensuring that each mine is taxed separately• Lowering the individual income tax rate from 15 percent to 14 percent for employees as a way of reducing the tax burden on lower income earners• Extending the application of withholding taxes on goods and services to non-TIN holders supplying goods and services to all taxpayers One of the challenges to revenue collection is the existence of a large informal sector which is not adequately integrated into the formal economy, hence contributing minimally to domestic revenue. Current measures being implemented to strengthen revenue collection include:• Strengthening systems for tax collection and, where possible, using the banking system for tax collection• Putting in place a strategy to improve services in the tourism industry, in particular grading hotels in accordance with international standards, with a view to increasing revenue collection from fees• Enforcing the implementation of the Finance Act that directs parastatals and other public institutions to remit to the Treasury surplus funds generated from their operations• Widening the tax base by registering new tax payers and improving the business environment to support private sector growth• Closely monitoring the implementation of the TRA’s Third Five Year Corporate Plan, which has been the basis for increased tax revenue collection• Implementing measures to increase collection of non-tax revenue by government ministries and departments• Reviewing procedures for tax exemptions with a view to strengthening controls• Enhancing capacity building of local authorities through allocation of adequate manpower in order to strengthen assessment and collection of revenue


Tanzania Revenue AuthorityEstablished in 1996, the Tanzania Revenue Authority (TRA) is an agency of the central government responsible for assessment and collection of taxes. The revenue collection trend has been impressive, with annual collections increasing from TZS 523 billion in 1996/97 to TZS 4 601 452 billion in 2009/10. The TRA’s good performance has been made possible through a number of initiatives, the main one being the implementation of its three strategic corporate plans. Under the fi rst strategic corporate plan (1998/99-2003/04) the authority concentrated on improving its physical infrastructure, staff capacity and skills base. The second corporate plan (2003/04-2007/08) introduced major reforms in tax administration and put in place strategic revenue collection measures. Destination inspection of goods was introduced to facilitate quick clearance of imports and improve customer service, and it became possible to pay duties and taxes directly through the banking system instead of making payments at tax offi ces. In addition, a dedicated department was established for large taxpayers, who account for some 80 percent of total tax collected, and the departments of Income tax and Value Added Tax were merged to form the Domestic Revenue Department, which caters for all domestic taxes under one roof. Automation and modernisation of systems and procedures was prioritised. This included introduction of the ASYCUDA system under Customs, as well as the ITAX and Computerised Motor Vehicle Registration systems. The third corporate plan (2008/09-2012/13) aims to consolidate these achievements with a greater emphasis on quality service

to taxpayers. In this regard, TRA began in 2008 to implement a Quality Management System based on ISO 9001: 2008 International Standards. THE STOCK EXCHANGEThe Dar es Salaam Stock Exchange (DSE) was incorporated in 1996 as a company limited by guarantee and became operational in April 1998. The DSE is a non-profi t making body created to facilitate the government implementation of reforms and to encourage wider share ownership of privatised and other companies in Tanzania. The exchange began the process of demutualisation in 2010. DSE membership consists of Licensed Dealing Members (LDMs) and Associate Members. Trading is conducted under an Automated Trading Electronic System (DATES). Clearing and settlement is conducted through an electronic Central Depository System (CDS), which has been operational since 1999. With a view to integrating regional markets, discussions are currently underway for East Africa Stock Exchange Association (EASEA) member states to integrate their trading and payment systems within the EAC market. The DSE was voted ‘The Best Sustainable Stock Exchange in Africa 2011’ by World Finance magazine. Market trading activities are monitored by both the Capital Markets and Securities Authority (CMSA) and DSE. Pursuant to the provisions of the Capital Markets and Securities Act (1994), the DSE has established a Fidelity Fund Account to be used to compensate investors who suffer fi nancial loss arising from fraud, misappropriation of funds or negligence by LDMs. Products currently being traded include:• Equities, with 16 listed companies

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• Corporate Bonds• Government Bonds• Units Trusts Current market developmentsIn the fourth quarter of 2010, market capitalisation declined slightly from TZS 4 938 billion to TZS 4 895 billion. The all share index started falling from the end of September 2010, after recording a continuous rise during the previous quarter, though it had begun to gain momentum once more by the end of the year. During the quarter under review, equity turnover grew by 53.6 percent when compared with the previous quarter. However, overall turnover generated during the 12-month period ended 31 December 2010 declined by 29 percent compared with the same period in 2009. In the secondary equity market, foreign investors’ participation continued to grow during the fourth quarter of 2010, accounting for 77 percent of total turnover. In the year ending December 2010, foreign investors’ transactions contributed 22.1 percent to total turnover. During the 12-month period ended 31 December 2010, government bonds with a face value of TZS 205.8 billion were traded, which was 47.6 percent higher than bond turnover recorded during the previous year.

While there were no new equities listed during the September-December period of 2010, a total of eight treasury bonds with different maturity dates valued at TZS 221 billion were listed, bringing the total number of listed treasury bonds to 73 by the end of the quarter. At the same time there were two new listings of corporate bonds, by Standard Chartered Bank and PRIDE, with preparations underway for listing a Bank M corporate bond worth TZS 3 billion. A total of seven corporate bonds were listed as at the end of the quarter, which were worth TZS 77.7 billion. Incentives for issuers and investorsIncentives to issuers include:• Reduced corporate tax from 30 percent to 25 percent where at least 30 percent of the issued shares are held by the public. • Tax deductibility of all Initial Public Offering (IPO) costs for the purposes of income tax determination. All IPO costs are accepted by the Tanzania Revenue Authority (TRA) as acceptable expenses used in the generation of income and profi ts, and therefore are taken into consideration when determining profi t for tax purposes. • Withholding tax on investment income made by a Collective Investment Scheme (CIS) is fi nal tax. Investors in a CIS are not charged tax on the income distributed by the CIS after the scheme’s income taxation. Incentives to investors comprise:• Zero capital gains tax as opposed to 10 percent for unlisted companies.• Zero stamp duty on transactions executed at the DSE compared to 6 percent for unlisted companies.• Withholding tax of 5 percent on dividend income as opposed to 10 percent for unlisted companies. • Zero withholding tax on interest income from listed bonds whose maturities are three years and above. • Exemption from withholding tax on income accruing to fi delity funds maintained by the DSE for investor protection.• Income received by Collective Investment Scheme (CIS) investors is tax-exempt.

FINANCIAL STABILITYSpecifi c interventions by government to mitigate the impact of the fi nancial crisis and subsequent economic slowdown have included the guaranteed rescheduling of outstanding loans and the provision of working capital on concessional terms, with government providing soft loan facilities for on-lending to businesses whose operations have been adversely affected. At present, the Bank of Tanzania is focusing on a number of priority areas in order to maintain fi nancial stability in the economy.

The following specifi c measures are being undertaken to ensure that Tanzania’s fi nancial systems remain stable:• Continuation of sound monetary policy to ensure price stability in the economy. This is an essential pre-condition for sustainable economic growth and maintenance of macroeconomic stability and fi nancial stability in particular.• Sustenance of daily surveillance of the fi nancial transactions in the banking sector and through the payment and settlement systems. This enables the Bank to identify any early warning signals of systemic risks to the fi nancial system, and hence take appropriate measures.• Sustenance of prudential surveillance and supervision over banks and the national payment system in order to


strengthen the resilience of the banking and payment systems, respectively. With regard to banks, the Bank of Tanzania will continue to perfect its model of risk-based banking supervision. The on-site risk based examination of banks is complemented by an offsite surveillance – a combination that plays a major role in detecting early warning signals of any fi nancial distress and facilitates pre-emptive interventions.• Speeding up of the establishment and operationalising of a Credit Reference Bureau to facilitate the sharing of information on creditworthiness of customers in the banking system as one of the measures to manage credit risk.• Ensuring compliance by banks to the new increased capital requirements within the agreed grace period. This capital enhancement on its own is not a substitute for banks’ own risk-management practices. Consequently, the Bank of Tanzania shall continue to require banks to put in place and sustain robust mechanisms for risk assessments of their operations to facilitate timely detection and reporting of any emerging risks.• In addition to the work of the Financial Stability Department, the Bank is committed to make the envisaged fi nancial regulators forum provide an effective platform for coordination of fi nancial crisis preparedness and management in the country.• Enhancement of the crisis response mechanism through development of an effective and coordinated national fi nancial crisis management and resolution framework. This involves, among others, strengthening the role of the existing Deposit Insurance Board (DIB) in safeguarding fi nancial stability and preserving public confi dence in the fi nancial sector, and development of contingency plans for provision of systemic emergence liquidity in times of need, and for systemic bank

resolutions.• Enhancement of coordination between the Bank of Tanzania and its regional peers in order to to handle emerging challenges associated with the EAC-Monetary Union and further capital account liberalisation. Furthermore, the Monetary Affairs Committee of EAC central banks has given the Bank of Tanzania a coordinating role in harmonising the EAC member states’ fi nancial stability frameworks in a bid to develop a regional framework for fi nancial stability analysis and reporting.

Zanzibar Institute of Financial Administration - Photo Courtesy: Marie Gibbons

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With 16 national parks, 33 game reserves and 43 game controlled areas, some 28 percent of Tanzania’s total land area is set aside for conservation. In addition, the country boasts seven world heritage sites, including the Ngorongoro Conservation Area, Serengeti National Park and Mount Kilimanjaro. In recent years, increased investment in tourism services has seen major improvements in air access and infrastructure development in terms of road networks, particularly on safari circuits, as well as the construction of new luxury hotels on the mainland and Zanzibar.

The top ten destinations in Tanzania include:• Ngorongoro Crater• Serengeti National Park• Zanzibar and Pemba• Tarangire National Park• Lake Manyara National Park• Mt. Kilimanjaro• Selous Game Reserve• Ruaha National Park• Mafi a Island• Mount Meru

The 2008 Tanzania Tourism Sector Survey, involving 6 388 international tourists, was carried out at fi ve of the country’s entry/exit points. According to the survey fi ndings, the average length of stay in Tanzania mainland is nine nights as compared to ten in Zanzibar, and the overall average expenditure per visitor is US$ 209 per person per night for tourists on a package tour and US$ 186 per night for non-package tour visitors.

During 2008 and 2009 the country’s tourism industry felt the knock-on effect of the global recession on its major source economies through a slowdown in tourist arrivals. In 2010, as economic recovery spread to many of Tanzania’s source markets, the industry began to register positive growth once more.

Out of 181 countries in 2011, the World Travel & Tourism Council (WTTC) ranked Tanzania’s travel and tourism industry 86th in absolute size, 59th in relative contribution to the national economy and 20th in growth potential.

Statistics from the Bank of Tanzania’s monthly report of January 2011 put the country’s travel receipts at US$ 1 302.6 million in the year ending December 2010 – a 12.3 percent increase over the amount recorded for 2009. In addition to the continuing global recovery, an increase in daily scheduled fl ights during the year contributed to the rise in travel receipts. For example, Turkish Airlines now fl ies to Tanzania three times a week, while Oman Air has four weekly fl ights, and Ethiopian Airlines has increased its fl ights from seven to 12 times per week.

The tourism product in 2011 and beyondAccording to the World Travel and Tourism Council (WTTC), the direct contribution of travel and tourism to GDP is expected to be 4.5 percent of total GDP in 2011, rising by 6.6 percent per annum to 4.7 percent in 2021. At the same time, its total contribution to GDP, including wider economic impacts, is forecast to rise by 6.6 percent per annum from 12.9 percent of GDP in 2011 to 13.4 percent by 2021.

The direct contribution of the sector to employment is estimated at 377 000 direct jobs in 2011 (3.7 percent of total employment), rising to 497 000 jobs (3.9 percent) by 2021. When this is broadened to include jobs indirectly supported by the industry, the fi gure rises from 1 124 000 jobs (11.2 percent of total employment) in 2011 to 1 477 000 jobs (11.7 percent) by 2021.

Visitor exports are expected to generate TZS 1 974.7 billion (22.6 percent of total exports) in 2011, growing by 11.7 percent per annum in nominal terms to TZS 3 830.2 billion (26.8 percent) in 2021. Investment is estimated at TZS 1 086.4 billion, or 9.6 percent of total investment, in 2011, and is forecast to rise by 5.4 percent per annum to reach TZS 1 833.6 billion, or 9.4 percent of total investment, in 2021.

PROMOTING TOURISMThe Tanzania Tourist Board (TTB), together with the Ministry of Tourism and Natural Resources and the private sector, promotes the country’s many attractions in both domestic and international markets, notably Europe and the United States (US).

Tourism

A sought-after tourism destination, Tanzania is blessed with a variety of cultural and scenic attractions, and an impressive network of wildlife protected areas.

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The marketing of Tanzania abroad has for many years been focused on the US, in the form of advertisements and promotional material in popular television, magazines, newspapers and billboards. From 66 953 American tourist arrivals in 2008, the number of visitors from the US reached a record high of 68 379 in 2009.

While the US remains the main source of foreign tourists to Tanzania, the TTB is looking to boost other markets, such as the United Kingdom (UK), with a view to doubling the current number of visitors from that source. This is being pursued through an advertising campaign launched in 2010 using billboards in premier soccer league stadia. Statistics show that Tanzania currently receives a maximum of 58 000 tourists from the UK every year, with a marginal annual growth rate.

The most common techniques used in destination promotion include participation in local and international tourism trade fairs, road shows, media/public relations, and advertising in local and international media. The country has recently participated in the Tourism Indaba and World Destination Sports Expo in South Africa, JATA World Tourism Fair in Tokyo, World Travel Market in London, Luxury Travel Show in Las Vegas, ITB in Berlin and China Outbound Travel and Tourism Mart in Beijing.

Other promotional events during 2011 include the Harley-Davidson Kilimanjaro Expedition – a motorbike rally involving a fl eet of 50 bikers – and the Kilimanjaro Marathon, which brings together more than 4 000 participants from around the world. TTB has also embarked on an innovative strategy to help attract more local tourists to the country’s numerous tourism destinations by encouraging and promoting live musical performances and education.

‘Tanzania – The Land of Kilimanjaro, Zanzibar and the Serengeti’, a 60-second commercial produced for the TTB, won a Platinum REMI award at the 43rd Annual WorldFest Houston International Film Festival.

Celebrating half a century of independenceThe Tanzania Tourist Board is planning a series of events for the tourism industry in the run-up to 9 December 2011, which will mark a half-century of independence for East Africa’s largest country. Events will include dedicated celebrations as well as workshops, meetings and commemorations highlighting Tanzania’s many achievements. Other proposals include introducing a series of commemorative postal stamps and publishing guidebooks and publicity material for the occasion.

Tanzania was the fi rst of the East African countries to attain independence from Britain in 1961, and has been spared the civil strife seen in many neighbouring countries. Much of this may be attributed to the efforts of the country’s founding father, Julius Nyerere, who overcame colonialism, internal divisions and Cold War intrigue to peacefully lead Tanzania to independence, instilling a sense of the importance of nationalism above tribalism in the fl edgling nation.

Planned by the Nyerere Educational Resource Centre, a documentary fi lm about Mwalimu Julius Nyerere is set to premiere in December 2011, in time for the 50th anniversary celebrations. This two-hour documentary comprises interviews

with Nyerere’s colleagues and peers, archival fi lm and photographs, and input from Tanzania’s leading scholars. Nyerere, as a fi gure of unique intellect and integrity, provides a powerful perspective from which to contemplate this history and understand the historical context of the challenges Africa now faces.

Branding TanzaniaThe TTB is also in the process of developing a brand for destination Tanzania. In order to establish the perceived image which visitors have of the country, a survey was carried out which entailed administering more than 2 543 questionnaires to non-resident visitors at designated airports, hotels and other tourist areas in Dar es Salaam, Arusha and Zanzibar, visitors in selected Tanzanian embassies, and during the Leisure Travel Fair in Moscow. According to the survey, the top fi ve perceptions of Tanzania are:• Friendly people (27.1 percent)• Beautiful country (22.1 percent)• Positive image (14.6 percent)• Beautiful nature (13.9 percent)• Diverse culture (9.7 percent)

On 4 March 2011, the board in collaboration with the Tourism Confederation of Tanzania (TCT) organised a Stakeholders’ Consultative Meeting to help establish a destination brand for Tanzania based on the perceptions evident in the survey.

POLICIES & PROGRAMMESThe National Tourism Policy adopted in 1991 set the overall objectives and strategies necessary for ensuring sustainable tourism development in Tanzania. This saw the establishment of the Tanzania Tourist Board (TTB), improved private sector participation and the approval of new tourism-related projects in collaboration with the Tanzania Investment Centre (TIC). Tourism development in Zanzibar falls under the Zanzibar Commission for Tourism (ZCT), while the Tourism Confederation of Tanzania (TCT) is the main national private sector body representing the industry.

The Tourism Policy was revised in 1999 to focus more on community-based tourism and the sustainable conservation and management of both the environment and local culture to create a low-impact, high-quality eco-tourism product. The spotlight is currently on the development of niche markets, such as bird watching, hunting, fi shing and scuba diving, and cultural as well as conference tourism.

Steps have been taken to improve existing infrastructure, and investment opportunities are available in construction and management of hotels, lodges and restaurants, infrastructure ventures, aviation projects, training institutes, tour operations, travel agencies and marketing organisations. The Mtwara Development Corridor initiative, which spans southern Tanzania, southern and central Malawi, northern Mozambique and eastern and northern Zambia, is also the focus of ‘bush and beach’ tourism projects.

In 2008, preparations commenced for the implementation of a Maritime Cultural Heritage Programme. The programme will include the investigation and documentation of a number of sites as part of developing a Maritime Heritage Database with a view to providing information on the value of Tanzania’s underwater and maritime heritage and the need for its


protection. A survey of the Great Northern shipwreck – a site with both historical and natural signifi cance – began in April 2009.

In the medium term, government is focusing on:• Increasing natural and cultural resources under community and private sector management through scaling up Wildlife Management Areas (WMA)• Strengthening cultural centres through improving cultural archives and information centres• Implementing the Wildlife Conservation Act No.5 of 2009 through enforcing its regulations on management, protection, conservation and utilisation of wildlife resources• Improving tourism services through training of tourist service providers, hotel classifi cation, and improving cultural, beach and eco-tourism• Improving revenue collection efforts from natural, cultural and tourism operations

Funded jointly by French and Tanzanian governments, the National College Of Tourism Project aims to establish a National Training Facility that will assume the role of a centre of excellence for educating and training prospective employees in the tourism and hospitality industries.

TOURISM ATTRACTIONSTanzania’s scenery and topography, unmatched variety of fauna and fl ora as well as a fascinating heritage – not to mention its friendly and welcoming people – form the basis of an unparalled tourism product. Visitors can enjoy pristine sandy beaches, coral reefs and marine parks; sites rich in history, from early hominid remains to rock art and architecture; cultural tourism, game hunting and the best wildlife photographic safaris on the continent. It is therefore little wonder that the country contains a total of seven UNESCO World Heritage Sites.

Set in the enormous caldera of an extinct volcano, Ngorongoro Conservation Area (NCA) in northern Tanzania boasts a spectacular blend of landscapes, wildlife, people and archaeology, unsurpassed anywhere else in Africa. Declared a World Heritage Site in 1979 and the Eighth Wonder of the World in 1982, the NCA is also an international biosphere reserve. Here pastoralism as practised by the Masaai coexists in harmony with natural resources conservation and tourism.

The NCA encompasses a large concentration of wildlife, with over 25 000 large mammal including black rhino, elephant, wildebeest, hippo, zebra, giraffe, buffalo, antelope and lion. From here the nearby crater of Empakai, fi lled with a deep alkaline lake, and the active volcano of Oldonyo Lengai, can be seen. Excavations carried out in the Olduvai Gorge have unearthed one of humankind’s earliest ancestors – Homo habilis – and at Laitoli site early hominid footprints can be seen which date back some 3.6 million years.

Other top heritage sites include:• The ruins and irrigation system surrounding Engaruka, left by a highly developed yet unidentifi ed civilisation some 500 years ago.• The towns of Lindi and Mikindani, which were both central ports in the network of Indian Ocean trade.• Tendunguru, which is a signifi cant site for palaeontology, as the remains of the largest known dinosaur species were discovered here.

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• Important archaeological remnants from the Swahili coast may be found in the island ruins of Kilwa Kisiwani and the nearby Songo Mnara.• Over 150 caves at the Kondoa rock art site, which bear images refl ecting the religion and rituals of their early inhabitants.• Zanzibar’s historic Stone Town, with a rich architectural resource refl ecting its part in the seaborne trade between Asia and Africa.

National Museum of Tanzania (NMT) is a scientifi c, educational and cultural institution for collecting, conserving, displaying and researching cultural and natural matters, and includes the Museum and House of Culture Dar es Salaam, Village Museum, Arusha Declaration Museum, Natural History Museum and Mwalimu JK Nyerere Museum.

The country’s many natural wonders and rich wildlife experience may be experienced on a walking or boat safari, or even from a hot air balloon drifting over the Serengeti. Adventure tourists can hike on the slopes of Mount Meru, scale the heights of Kilimanjaro, or explore an ocean wonderland on a diving or snorkelling excursion. There is also horse riding and mountain biking, with canoeing trips in Arusha National Park and excellent deep sea fi shing in the vicinity of Zanzibar and Pemba. Then there are soda lakes like Lake Manyara and Lake Natron, and the freshwater lakes of Victoria, Tanganyika and Nyasa, where tourists can enjoy fi shing trips, hiking and swimming.

Tourism opportunities on the islands of Zanzibar and Pemba, known for the historic Stone Town, beautiful beaches and spice plantations, are covered under the ‘Zanzibar’ chapter.

The Tanzanite ExperienceLocated in the foothills of Mount Kilimanjaro is the valuable, rare and mysterious gemstone known as tanzanite, which was discovered in 1967. The supply of tanzanite is fi nite, and could diminish considerably within the next 15 to 20 years. The ‘Tanzanite Experience’ has been developed to create a greater awareness of the blue/purple mineral zoisite through tourism and education. Visitors are treated to an adventurous underground tour down a mine shaft to learn about the history, geology, process and mining ethics of tanzanite.

NATIONAL PARKS & GAME RESERVESThe Tanganyika National Parks Ordinance of 1959 established the organisation now known as Tanzania National Parks (TANAPA). Conservation in Tanzania is governed by the Wildlife Conservation Act No.5 of 2009.

Human activity is closely monitored and all development strictly regulated. Buildings in the parks must be unobtrusive and waste disposal is carefully controlled. Park visitors and facilities are widely distributed to prevent harassment of animals and to minimise the human impact on the environment. Even in Tanzania’s most popular park, the Serengeti, more than 7 000 square kilometres – almost half the park’s area – remains a wilderness zone with no roads.

Tourism provides valuable revenue to support the conservation work of the national parks as well as wildlife research and the education and livelihood of local communities. In addition, tourism helps to generate international awareness of conservation issues, while the physical presence of tourists assists in deterring poachers and helps park rangers in their game management work.

Easily the country’s most famous national park, the Serengeti National Park in northern Tanzania encompasses 14 763 square kilometres of protected grasslands, savannah, riverine forest and woodlands bordering Kenya’s Masai Mara Game Park. It is also the site of the annual migration of around 200 000 zebra, 300 000 Thomson’s gazelle and over a million wildebeest to new grazing lands some thousand kilometres to the north. The Serengeti is known for its rich populations of leopard and lion, as well as endangered black rhino and cheetah.

Comprising two dormant volcanoes (Kibo and Mawenzi) and one extinct volcano (Shira), Mount Kilimanjaro is also one of the world’s highest freestanding mountains. At 5 895 metres, Kibo peak is covered with snow and ice throughout the year, despite Kilimanjaro’s position just three degrees south of the equator. With a diverse variety of attractions, which range from terrestrial wilderness to permanent glaciers on the mountain peaks, Kilimanjaro National Park was declared a UNESCO World Heritage Site in 1989, and continues to draw climbers from around the world. Climbing to the peak takes fi ve to six days, with routes taking hikers from lush tropical rainforest, populated with leopard, antelope and elephant, through heath and moorland and then into the icy, arctic terrain of the summit.


Covering an area of 54 600 square kilometres in southern Tanzania, the Selous Game Reserve is one of the largest wildlife reserves of the world, and offers visitors a true taste of untamed Africa. Designated a World Heritage Site in 1982 because of its pristine environment and diversity of fauna, Selous is characterised by grassland plains, seasonally fl ooded pans, riverine forests and lakes. This unique ecosystem boasts larger concentrations of wildlife, such as hippopotamus, crocodile and the rare African wild dog, than any other game reserve in Africa, and supports 30 000 elephant, 200 000 buffalo, 80 000 wildebeest and ever increasing numbers of black rhino.

A remote wilderness of undisturbed wildlife and breathtaking vistas, the recently expanded Ruaha National Park is Tanzania’s largest national park and lies 130 kilometres west of Iringa town. Inhabited by hippos, crocodiles and turtles, the Great Ruaha River has created spectacular gorges and scenery. The park is also known for its sable and roan antelopes, rich birdlife and high concentration of elephants.

The smallest of Tanzania’s national parks, Gombe Stream’s claim to fame is its chimpanzee population which was studied by British researcher Jane Goodall. Set between steep mountains and valleys, this narrow strip of primeval forest is also home to a wide variety of other primates, including blue or red-tail monkeys.

Tanzania’s other principal parks comprise the protected habitat of Lake Victoria’s Rubondo Island; the rainforests, beaches and chimpanzees of Mahale Mountains National Park; the popular and easily accessible Mikumi National Park, with its fl ood plain, open grasslands and diversity of birdlife; and the hot springs, famous tree-climbing lions and dense populations of elephant and buffalo in Lake Manyara National Park. A wonderful beach and bush experience awaits visitors to Saadani National Park, while Katavi is the country’s fourth-largest protected wildlife area and excellent for game viewing.

In the southern highlands there are magnifi cent wildfl owers to be found in Kitulo Plateau National Park. The Amani Nature Reserve contains some of the planet’s most biologically diverse rainforests; Arusha National Park is the site of the country’s second-highest mountain, Mount Meru; while Tarangire National Park is known for its elephants and massive baobabs and the forested Udzungwa Mountains for both primates and bird watching. Located just south of the border with Kenya and east of the Pare Mountains, Mkomazi National Park is the focus of a breeding programme to save the endangered black rhino.

Safari CircuitsTanzania’s many game parks are often divided into groups of parks based on geographical proximity, making the huge number and range of wildlife attractions more manageable for tourists. Safari circuits include the following.• Northern Circuit: The most popular of the safari circuits, known for its wildlife and big game, this region contains the Serengeti, Mount Kilimanjaro, Lake Manyara National Park, Tarangire National Park and the spectacular Ngorongoro Crater, one of the largest volcanic craters in the world and home to large concentrations of wildlife. Short day-trips from Arusha might take in Mount Meru and the Momela Lakes,

which are to be found in Arusha National Park. A more leisurely option is to traverse the beautiful Crater Highlands. Tourists visiting between December and April will be able to view the annual wildebeest migration across the Serengeti. Top attractions for hikers include Mount Kilimanjaro and the crater of Mount Meru.• Southern Circuit: Containing the continent’s largest game reserve, the Selous Game Reserve, this region is characterised by vast expanses of untouched African wilderness and a fascinating diversity of ecosystems. On the southern Swahili Coast, the seldom visited town of Mikimazi is an pleasant base for diving expeditions and trips to the abandoned ruins of the ancient Swahili trading post.• Western Circuit: The western areas of Tanzania are home to remote destinations such as the rugged Katavi National Park and offer activities like chimpanzee trekking. At Lake Victoria, pastimes including boating, fi shing and hiking can be enjoyed.• Eastern Circuit: Includes parks such as Saadani and Mikumi, as well as Mafi a Island Marine Park, and affords tourists centred in Dar es Salaam the opportunity of seeing Tanzania’s world-renowned wildlife assets without having to travel all the way to Arusha and the north.

Situated on the Northern Safari Circuit, Tarangire National Park is presently being enlarged to incorporate a major forest. This is expected to not only provide extra protection for the area but should also attract additional visitors to the park.

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Despite growing at an average of four percent per annum for the past decade, agriculture has exhibited a modestly declining trend in its contribution to GDP, refl ecting the gradual modernisation of the economy and expanding output in other sectors. The sector comprised 24.7 percent of Tanzania’s GDP in 2009, down from 25.4 percent in 2008.

Agriculture added 3.2 percent gross value to GDP in 2009, rising to 3.8 percent in the fi rst three quarters of 2010 (January-September). It is expected that the implementation of the Kilimo Kwanza (Agriculture First) initiative and government efforts to modernise agricultural activities, which include improving road network, markets and irrigation, the opening of the window for agricultural lending at Tanzania Investment Bank (TIB) and the ongoing initiative to establish an Agricultural Development Bank, should enable growth to rebound to 5.7 percent by 2013. CROP PRODUCTIONTanzania has nine agro-ecological zones: coastal plains, eastern plateaus and mountain blocks, southern highlands, northern rift zone and volcanic highlands, central plateau, Rukwa (Ruaha rift valley), inland sedimentary, Ufi pa and western highlands. Major staple crops include maize, sorghum, millet, rice, wheat, pulses (mainly beans), cassava (tapioca), potatoes, bananas and plantains. A wide range of tropical and temperate fruits are also produced, such as oranges, pineapples, mangoes, avocados, apples and grapes.

Agriculture’s higher growth rate up to the end of the third quarter of 2010, compared with the same period in 2009, may be attributed to the increase in the harvest of major food crops. The quantity of maize harvested went up by 20.0 percent from 3 309 thousand tonnes in the third quarter of 2009 to 3 971 thousand tonnes in the third quarter of 2010.

Millet/Sorghum harvested in the third quarter of 2009 was 721 thousand tonnes compared to 761 thousand tonnes in the corresponding quarter of 2010, which is an increase of 6.0 percent, while cassava harvested increased by 3.0 percent from 2 915 thousand tonnes in the third quarter of 2009 to 3 003 thousand tonnes in the third quarter of 2010.

Export cropsTanzania’s main export crops include coffee, cashews, tobacco, tea, cloves and other spices, horticultural crops, oil seeds (groundnuts, sesame, and sunfl ower) and fresh cut fl owers. Traditional exports, especially cotton and coffee, were severely affected by the impact of the global fi nancial crisis in 2009/10 as world market prices declined substantially.

In the year to January 2011, the value of traditional exports was US$ 610.0 million, 22.4 percent higher than that in the corresponding period a year earlier, largely due to a signifi cant increase in both export volumes and unit prices of tobacco and cashew nuts. Over this period, the volume of cashew nuts exported rose by 75.2 percent and unit prices by 46.1 percent, while the volume of tobacco exports rose by 25.6 percent.

LIVESTOCKTanzania has plentiful livestock resources, ranking third in Africa in terms of cattle population after Ethiopia (31 million) and Sudan (30 million). There are an estimated 18.5 million cattle, 13.1 million goats, 3.6 million sheep and 30 million indigenous poultry, among other species. The livestock subsector contributes almost 16 percent to agricultural GDP.

Of the 88.6 million hectares of land resource, 60 million hectares are rangelands suitable for livestock grazing. While the country’s rangelands have a carrying capacity of 20 million livestock units, presently only 17 million are kept. There is therefore ample land for the industry to expand. Current challenges facing the sector include animal diseases, poor infrastructure and lack of reliable markets, investments and processing industries. Nearly all animal products – such as meat, dairy and skins – are absorbed by the domestic market.The 2010/11 budget prioritises strengthening extension services and research on production of better livestock breeds with high productivity, and improving the provision of subsidies on veterinary drugs and vaccination.

FISHERIESTanzania has a coastline of 1 450 kilometres and an Exclusive Economic Zone in the Indian Ocean of about 223 000 square kilometres. It also has access to large inland water bodies in

Agriculture & Fisheries

Made up of crops, livestock, forestry and hunting, the agricultural sector, together with fi sheries, is a vital source of revenue and jobs, employing some 80 percent of the workforce.


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the form of the great lakes, together with extensive riverine and inland drainage systems and wetlands. Fresh water bodies are estimated to cover 54 337 square kilometres – some 5.7 percent of the the country’s total surface area.

Major fi sh catches include sardines, catfi sh, tilapia, Nile perch, dagaa and, to a lesser extent, prawn fi shing in coastal areas. The country’s inland fi shing industry – in particular the lakes of Victoria, Tanganyika and Nyasa – has been the focus of much activity in recent years. Nile perch is the primary fi shing catch in Lake Victoria, and there is also potential for developing fi shing resources in Lake Nyasa and Tanzania’s coastal areas, especially deep sea fi shing and commercial prawn fi shing.

There is an estimated potential of 730 000 metric tonnes of fi sh, although the average catch is in the region of 350 000 metric tonnes per year, implying great potential for increased fi sh production in Tanzania. However, efforts to develop and expand the fi shing industry have been hampered by territorial disputes (in the case of Lake Nyasa) and illegal fi shing activities, as well as the need for investment to upgrade the local fi shing fl eet and other infrastructure. The growth rate of fi shing economic activities was 2.7 percent in 2009, a signifi cant decline from 5 percent in 2008. This weaker performance is attributed to continued use of poor fi shing gear, destruction of fi sh hatcheries and low production to meet world market demand, as well as greater competition in the European countries resulting from increased fi sh farming in Asia, particularly China and Vietnam.

The fi sheries subsector registered an improved performance in 2010, with an average growth rate of almost 9.1 percent recorded over the fi rst three quarters of the year, mainly as a result of increased demand for fi sh and fi sh products in both local and foreign markets.

SECTORAL CHALLENGESAccording to East African Community Facts & Figures (2009), Tanzania has 48.1 million hectares of agricultural land. However, just 9.5 million hectares of this is cultivated. Unlike several other countries in the region, the vast majority of land available for cultivation is neither virgin forest nor environmentally sensitive.

One reason for such underutilisation is the fact that agriculture in Tanzania remains largely unmechanised. According to government fi gures, nearly three quarters of the country’s crops are cultivated by hand hoe; a further 20 percent are cultivated by ox plough and only 10 percent by tractor. Production and development are also limited by the fact that most farms are organised around smallholder subsistence models, with the average farm size between 0.5 and 3.0 hectares.

AGRICULTURE FIRSTIn 2006 Tanzania launched the Agriculture Sector Development Programme (ASDP), a comprehensive initiative designed to address constraints to agricultural growth. In 2009, the country introduced a new initiative called Kilimo Kwanza (Agriculture First). Its primary thrust is to bring the private sector on board, encouraging peasant and small-scale farmers to shift to more commercial modes of production, and make the agricultural sector attractive to investors.

The Tanzanian government recognises the importance and potential of agriculture as a contributor to wealth creation, allocating the sector TZS 903.8 billion in the 2010/11 budget – an increase of 35.5 percent over the TZS 666.9 billion allocated in 2009/10.

In July 2010, Tanzania joined other African countries in signing the Compact for the Comprehensive Africa Agriculture Development Programme (CAADP). This is a shared framework to accelerate sectoral growth. The CAADP process in Tanzania draws on lessons learned from the implementation of the ASDP, enabling the country to gather all its agricultural development initiatives under one umbrella.

Rising above the global crisisA number of measures have been put in place to redress the adverse impacts of the global economic crisis, with productivity and growth in agriculture being boosted through:• Improvements to the rural road network and irrigation infrastructure, including rain water harvesting• Improvements to storage facilities for agricultural crops and livestock products and assistance to farmers in identifying reliable markets• Strengthening the capacity of the Strategic Grain Reserve • Ensuring the timely availability of inputs for arable agriculture and livestock farming• Giving priority in the allocation of farm implements and other inputs to the major food crop production regions of Mbeya, Ruvuma, Rukwa, Iringa, Morogoro and Kigoma• Identifying and surveying land for large-scale food crop farming to take advantage of the existing opportunity in terms of local and world market demand

FOCUS ON INVESTMENTTanzania’s government has taken a number of steps to encourage investment in agriculture. Reformed land policies allow for 99-year leases to foreign companies, while liberalisation within the industry enables the private sector to compete in the processing and marketing of cash crops. Promising investment opportunities in the agriculture sector are: agro-processing; inputs and machinery manufacturing; irrigation infrastructure development; production of cut-fl owers, fruits and vegetables; and the production of traditional cash crops such as coffee, tea, pyrethrum, cashew nuts, sugar, cotton and sisal.

South African alcohol producer and distributor Distell is spearheading a viticultural initiative in association with Tanzania Distilleries (TDL) which is expected to enable wine farmers in the Dodoma highlands to double their crops within three to fi ve years. Currently the country’s vineyards occupy 150 hectares around Dodoma, and are planted to red and white Makutopora, chenin blanc, shiraz and cabernet sauvignon.

Photographs Courtesy: Ministry of Agriculture & Natural Resources

A SHORT PROFILEFollowing the 2010 general elections the name and structure of the Ministry has changed. The previous Ministry was called the Ministry of Agriculture, Livestock and Environment (MALE) and the new Ministry is the Ministry of Agriculture and Natural Resources (MANR). The Ministry is now responsible for all issues to do with agricultural sector development and management of natural resources. In terms of structure there are certain institutions that were under MALE that have been shifted into other Ministries, such as Environment and Cooperatives Departments while the Livestock and Fisheries Departments have been formed into a new Ministry called Ministry of Livestock and Fisheries. All the remaining institutions that were previously under MALE are still under MANR mandate.

The new structure of the Ministry therefore consists of the following departments. The Department of Policy, Planning and Research, the Department of Administration and Human Resources, the Department of Food Security and Nutrition, the Departments of Agriculture, the Department of Forestry and Non-renewable Natural Resources, the Department of Irrigation, the Institute of Agricultural Research, and Kizimbani Agricultural Training Institute. Other development programmes and projects are implemented for the purpose of improving services delivery to the targets with wider reach to the farmers’ level such as World Bank funded Participatory Agricultural Development and Empowerment Project (PADEP) and IFAD funded Agriculture Service Support Programme / Agriculture Sector Development Programme-Livestock (ASSP/ASDP-L), through participatory approach such as adaptive research and farmer fi eld schools all aiming at reducing income poverty and improving the general well being of the farmers.

FUTURE OUTLOOK ON AGRICULTUREFor a long time in history, agriculture has continued to be an important pillar to support livelihood of a larger proportion of our people. This sector is responsible for ensuring food security by providing crops, livestock and marine products suffi cient to feed over 1,000,000 people residing in Zanzibar. Agriculture is a direct source of employment to about 42 percent of the population and contributes to more than a quarter of the national economy. Zanzibar has a great potential for developing agriculture, taking into account its comparative advantage of having good soils and rainfalls to support crop production as well as natural pastures for feeding livestock. The great diversity of marine macro fl ora and fauna species and a variety of forest resources provides unique opportunity for the islands to fairly taking a lead in fulfi lling the demand for domestic and export market of farm products, especially fruits and spices at the regional and international horizon.

Like many other regional states of the sub-Sahara Africa, agriculture sector in Zanzibar is invariably devastated by a number of challenges, mainly associated with continuous application of inappropriate farming technologies, limited investment opportunities, and a slow pace towards commercializing agricultural production. Agricultural development is also defi ed by a poor marketing infrastructure and perpetuated by unpredictable impacts of climate changes. In order to address these challenges, joint initiatives are required to uphold the national endeavours towards the attainment of bona fi de green revolution.

Since the beginning of the millennium, the Government has been compellingly embarking on the implementation of its national macro policies, strategies and programmes. The Zanzibar Growth Strategy (ZGS), Strategy for Growth and Reduction of Poverty (ZSGRP) and a long-term economic vision (Vision 2020) became a central focus in the attention of all major sectors namely; economic, social welfare as well as national governance. The Zanzibar Agricultural Transformation Initiative (ATI) emerged at about time that Zanzibar is getting prepared to launch its second phase of the ZSGRP, now to be referred as MKUZA II. An overall viewpoint of the ATI dwells on the creation of good environment for production, processing and marketing of agricultural products in the next ten years from which, a range of interventions will be required to make these aspirations possible. In this regard, a full commitment from all parties particularly the public and private sectors is essential. The Government is determined to undertake all necessary steps required to facilitate implementation process of this initiative as part of its obligation for realisation of the long term socio-economic development as foreseen in Vision 2020.

As described hereunder, the accomplishment of ATI philosophy is largely dependent on political will, professional commitment and private sector led transformation. The overriding objective of ATI is to provide an enabling environment to enhance and sustain the growth and development of agricultural sector to become commercial and more globally competitive. Specifi c objectives are to:i) increase public investment in agricultural sector;ii) promote private sector investment in agricultural production;iii) enhance productivity and competitiveness of the sector;iv) promote export diversifi cation;v) create employment and wealth; andvi) deepen linkages with other growth sectors of the economy.

MAIN COMPONENTS OF ZANZIBAR AGRICULTURAL TRANSFORMATION INITIATIVEIncreased public sector investmentThis entails provision of support services required for increasing and sustaining agricultural production and productivity, growth of real farm income, sustainable livelihood and food security. Zanzibar Agricultural Transformation Initiative aims to enhance capacity and effi ciency in services delivery in terms of (i) technological development (research, infrastructure and support services), (ii) build institutional and human capacity to best serve the sector, (iii) provision of favourable policy, legislative and regulatory environment supportive to increased private sector participation into the sector.

Commercialising agriculture productionThe main focus of this component is to promote the development of value chains of a few selected high value commodities based on comparative advantage, farmer preference and market demand through: a) transformation of subsistence smallholder farming into viable commercial production units that are feasible for private sector investment (service provision, market access); b) promoting adequate utilisation of productive land and industrial resources through joint venture schemes (medium to large scale fi rms) for increasing employment and agricultural output; c) enhanced investment in identifi ed priorities areas to increase agricultural output.

Enhanced market linkages and tradeThe Zanzibar food balance sheet is characterized by a high dependence on importation of basic food stuffs. An estimated 49 percent of Zanzibar’s annual food requirements are accounted for by food imports. This is exacerbated by increased tourism industry that imposed enhanced demands of fresh fruits, vegetables, fi sh and livestock products. Apparently about 80 percent of fresh vegetables and 20 percent of fresh fruits consumed in this market segment are imported. On the other side, the perceived comparative advantages in the production of cloves, tropical fruits, spices and essential oils for export markets are not yet fully exploited. The purpose of Zanzibar Agricultural Transformation Initiative is therefore to increase share of local agricultural products in domestic market and to capitalize on opportunities for external markets for products with competitive advantages.

Tel: +255 24 2231169 • PO Box 159, Zanzibar • www.kilimoznz.or.tz

Ministry of Agriculture and Natural Resources

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The privatisation of most government-owned manufacturing enterprises in the late 1990s set in motion a process of steady growth within the sector, and the Tanzanian government has prioritised manufacturing as a catalyst for future economic expansion. According to the Tanzania Development Vision 2025, the country aims to move from an under-productive agricultural economy to a semi-industrialised one led by modernised and highly productive agricultural activities which are effectively integrated and supported by industrial and service activities in both rural and urban areas.

The Medium Term Plan and Budget Framework for 2010/11-2012/13 puts emphasis on the following areas:• Promoting SMEs and supporting expansion and deepening of value addition through agro-processing• Development of industrial premises for SME promotion and development of incubator sites• Development and transfer of appropriate user and environmentally-friendly industrial technologies, including production of farm implements• Development of basic industries by providing more support to the National Development Corporation (NDC)• Continued development of EPZs and SEZs

Current trends in manufacturingNotwithstanding the negative effects of the global fi nancial crisis and the general decline in the demand for manufactured exports, the performance of the manufacturing sector has remained relatively strong over the past few years, with growth of 9.9 percent in 2008 and 8 percent in 2009. This is partly due to the increased demand for cement required for construction related to the 2010 Football World Cup in South Africa.

Manufacturing activity recorded a growth rate of 8.3 percent in the third quarter of 2010 compared to 7.3 percent in the same quarter of 2009. The higher growth rate was attributed to an increase in the manufacturing indices of cement, beverages and other food products. The Ministry of Finance and Economic Affairs expects growth to have risen to 8.6 percent in 2010. The volume index of cement increased from 223 in the third quarter of 2009 to 255 in the third quarter of 2010, while

chemicals increased from 340 to 379 over the same period, tobacco from 407 to 418, and processed food from 160 to 170. At the same time, the index for beverages increased from 217 in the third quarter of 2009 to 227 in the quarter under review, and the index of other food from 232 to 244.

In 2009, manufacturing activities attracted the most investors, with 183 projects worth TZS 654 472 million and employment potential of 14 143 people. According to the Tanzania Investment Centre (TIC), the manufacturing sector once again emerged top in 2010 in attracting investment projects.

MANUFACTURING ACTIVITIESMost manufacturing concerns are situated in Dar es Salaam, the country’s industrial and commercial centre, as well as around the larger cities – particularly Arusha in northern Tanzania.

Principal manufacturing activities comprise food, beverage and tobacco processing; textiles and clothing; paper and paper products; leather and footwear manufacturing; chemicals, rubber and plastics.

Adding value to locally produced products, agro-processing is vital to primary sectors like agriculture. Crops such as cotton, coffee, tea, sugar cane, sisal and tobacco require processing to be made into more valuable fi nished commodities. The current low investment in agro-processing is being addressed by government through the continued promotion of private sector investment in the subsector.

Food processing and refi ning covers both large and small-scale industries, and includes dairy products, canning and preserving of fruits and vegetables, canning of fi sh and similar foods, manufacture of animal and vegetable oils, grain milling, sugar production and prepared animal feeds.

The beverages industry includes the distilling and blending of spirits; manufacture of wines, cider and beer; production of soft drinks and carbonated water; and the bottling of natural spring and minerals water. The world’s second largest brewer of beer, SAB Miller, currently owns 52.83 percent of Tanzania Breweries

Manufacturing

Growth in manufacturing averaged 9 percent between 2004 and 2009, and the sector is expected to expand further as a result of improved power supply, development and expansion of Export Processing Zones (EPZs), as well as implementation of the SME policy and the Tanzania Trade Integrated Strategy (TTIS).


36

Ltd (TBL) which has a total of four factories. TBL also owns 65 percent of Tanzania Distilleries and owns and controls the maltings in Moshi. The company’s total share of the beer market stands at 74 percent.

The tobacco subsector comprises the manufacturing of cigarettes and tobacco. The export value of manufactured tobacco rose by 55.5 percent between January 2010 and January 2011, on an annual basis, from US$ 7.0 million to US$ 10.9 million.

Both horticulture and fl oriculture have grown signifi cantly over the past two decades. Today, roses are the main export fl ower, making up some three quarters of exports. Other fl owers include lisianthus, carnations and chrysanthemums. The export value of horticultural products, consisting principally of cut fl owers, rose by 33.2 percent between the year ending January 2010 and the year ending January 2011, from US$ 33.7 million to US$ 44.9 million.

The textiles and garments subsector comprises spinning, weaving and fi nishing of textiles as well as garments manufacture, knitting and the manufacturing of carpets, rugs, cordage, rope and twines. Tanzania’s labour-intensive textiles industry, which has historically focused on supplying the local market, has come under pressure in recent years due to cheap imports from the East. The export market consists mainly of cotton yarns and home linens. The value of cotton yarn exports rose by 22.2 percent between the year ending January 2010

and the year ending January 2011, from US$ 9.4 million toUS$ 11.5 million.

Tanzania has three main cement producers: Tanzania Portland Cement Company (TPCC), Tanga Cement Company and Mbeya Cement Company. Operating under the Twiga brand, TPCC is the country’s largest producer. The second largest manufacturer, Tanga Cement, produces the Simba brand, while Mbeya Cement Company, whose majority shareholder is Lafarge, produces the Tembo brand. Spurred by robust growth in construction, the industry has grown rapidly over the past few years, with modernisation and expansion programmes having seen the installation of state-of-the-art technologies.

Export DevelopmentThe export market for manufactured goods comprises cotton yarn, manufactured coffee, manufactured tobacco, sisal products (yarn and twine), plastics, textiles and apparel and iron/steel.

After a decline in the value of manufactured goods exported in the 2009/10 fi nancial year as a result of lower demand in neighbouring countries following the global fi nancial crisis, the export value of manufactured goods almost doubled in the year ending January 2011 to US$ 994.4 million from US$ 497.7 million the previous year. Much of this increase was recorded in vegetable oils, paper and plastic products. Manufactured goods accounted for 30.2 percent of all non-traditional exports over this period.


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While the mining industry is relatively small in terms of its contribution to Tanzania’s Gross Domestic Product (GDP), which stands at around 3.3 percent, it brings in signifi cant export revenue – some 40 percent of earnings in 2009. Government wishes to expand the sector’s contribution to GDP to 10 percent by 2025.

While the mining sector enjoyed an average annual growth rate of 13 percent between 2000 and 2007, growth fell to 2.5 percent in 2008, and to a record low of 1.2 percent in 2009 in the wake of the global fi nancial crisis, with a number of major projects being put on hold. However, the fortunes of the industry started to improve once more in the latter part of 2009, with growth of 3.7 percent forecast for 2010 in line with the recovering global economy and higher commodity prices. Export earnings from minerals have also rebounded, with the value of minerals exported increasing by 23.4 percent in the year to January 2011 compared with the same period a year earlier.

According to business survey group Business Monitor International (BMI), the subsectors of coal, nickel and uranium should expand signifi cantly over the next few years. Furthermore, an average annual growth of 7.7 percent is forecast for the mining sector as a whole over the 2010-2015 period, with gold output expected to increase as new projects come on-stream and large-scale commercial coal and uranium mining set to begin, as well as two nickel mining projects.

Sustainable Management of Mineral Resources Project Running from 2009/10 to 2013/14, the Sustainable Management of Mineral Resources Project (SMMRP) is a fi ve-year programme fi nanced with an IDA Credit of US$ 50 million equivalent, with co-fi nancing from the government of US$ 5 million equivalent. The project consists of the following components:

• Improving the benefi ts of the mineral sector for Tanzania by addressing small-scale and artisanal mining, linkage of the sector with local economies, and development of human resources

• Strengthening governance and transparency in the sector by supporting policy and legal review and public awareness

campaigns, and strengthening institutional capacity to manage the sector and its linkages with other government institutions

• Stimulating investment through upgrading geological information, and strengthening the information and promotion unit at the Ministry of Energy and Minerals

The project will also support strategic assessment of the State Mining Corporation (STAMICO) and its future in the sector.

MINING POLICY & LEGISLATIONReplacing the Mineral Policy of 1997, a new Mineral Policy was implemented in 2009. Seeking to improve the contribution of the mining sector to Tanzania’s GDP, the policy’s objectives are primarily to promote economic integration between mining and other economic sectors, as well as strengthening the legal and regulatory framework to enhance value addition and employment creation.

In addition, the Mining Act of 1993 has been revised, with the new Mining Act of 2010 bringing a number of changes to mining legislation, including:

• An increase in the royalty rate levied on precious and base metals from 3 percent to 4 percent

• An increase in the royalty rate levied on diamonds from 5 percent to 6 percent, with a fl at rate of 7 percent for uranium and a standard rate of 3 percent for other minerals

• The option for government to hold a stake in all future mining projects (the amount to be determined on a case-by-case basis)

• The option to require mining companies operating in Tanzania to list on the local stock exchange (although it is unclear whether this is legally enforceable)

The revised Mining Act also puts a hold on the issuing of any new gemstone mining licences to foreign companies and makes provision for specifi c areas to be set aside for artisanal miners.

Mining Industry

Tanzania is Africa’s fourth largest producer of gold after South Africa, Ghana and Mali, as well as being home to substantial deposits of other metals and minerals, most importantly diamonds, coloured gemstones, coal, cobalt, nickel and uranium.


MINISTRY OF ENERGY AND MINERALSIntroductionThe Tanzania Ministry of Energy and Minerals is an effective institution, contributing significantly to the acceleration of socio-economic development through utilization of energy and mineral resources. Its mission is to set and monitor implementation of policies, strategies and laws for sustainability of energy and mineral resources to enhance growth and development of the economy.The energy sector has the responsibility of creating conditions for the provision of safe, reliable, efficient, cost-effective and environmentally appropriate energy services to all sectors on a sustainable basis, while, the mineral sector has the responsibilities of setting policies, strategies and laws; regulate mineral exploration, production, trading, value addition and mineral actors for sustainable development of mineral resources and integrate with other sectors of the economy.

Energy sectorTanzania is endowed with diverse energy resources including biomass, natural gas, hydro, coal, geothermal, solar and wind, uranium, much of which is untapped.There is plentiful natural gas, coal, hydropower, solar and biomass resource potential; it has one of the world’s lowest levels of electricity consumption per capita. Considerable scope exists for accelerating electrification to meet the growing demand especially in the rural areas through off-grid solutions.Investment opportunities exist for developing hydropower dams, solar photovoltaic systems, biomass based co-generation in sugar, wood, and tea factories to provide electricity. Tanzania has not yet found oil and is therefore dependent on imported petroleum products; it has excellent unexploited but potential sedimentary basins.

Investment opportunities in the energy sector include:-• Rural electrification;• Exploration of petroleum;• Generation, transmission and distribution of electricity;• Development of new and renewable energy resources; and promotion of energy efficiency and conservation initiatives.

Mineral sectorTanzania’s mining industry has experienced a boom in both mineral exploration and mining activities during the past years. Notable developments during the boom period include the commissioning of seven large-scale gold mines at Nzega, Geita, Bulyanhulu, North Mara, Buhemba, Tulawaka and Buzwagi. Factors that led to the rapid growth of the mineral sector in Tanzania include: conducive geological environment, major economic reforms which have been undertaken since mid 1980’s and political stability of the country.

Tanzania Mineral EndowmentMineral exploration and geological work undertaken so far reveal that Tanzania has a diverse mineral resource base. Most mineralization falls into a number of geological environments.These include the following:• Gold occurrences hosted by the Archean greenstone belts and banded iron formations• Gold and base-metal occurrences in the Proterozoic Ubendian Supergroup• Kimberlite pipes in the central and southern parts of the Archean craton• Nickel, cobalt, copper, tin and tungsten bearing rock formations in the Karagwe-Ankolean Supergroup in northwest Tanzania• Major gemstone occurrences in the Proterozoic Usagaran (eastern Tanzania) and Ubendian Supergroups. Main gemstone types include: tanzanite, ruby, green garnet, green tourmaline, rhodolite, sapphire, emerald, aquamarine and chrysoprase• Carbonatites associated with the East African Rift Valley system• Iron ore hosted in anorthositic intrusives in the Proterozoic Ubendian Supergroup• Evaporites in the Rift Valley and younger formations along the coastal belt• Coal resources in the Karoo Supergroup in south-western Tanzania• Uranium occurrences in the Karoo Supergroup in southwestern and southern Tanzania and in superficial deposits within the Archaean craton in central Tanzania• A variety of industrial minerals such as kaolin, diatomite, gypsum, pozollana, limestone, meerschaum, bentonite, ball clay and dimension and artstones (granites, marble, anyolite) occurring in different rock formations.

Fiscal regimeTanzania has a globally competitive and investor-friendly fiscal regime, which was formulated in 1997. Royalty on minerals is administered under the Mining Act, 2010.Tanzania offers internationally competitive tax incentives which guarantees investors’ security of tenure, repatriation of capital and profits; and transparency in the issuance and administration of mineral rights.

Contacts:Ministry of Energy and Minerals, Samora Avenue, PO Box 2000, Dar es Salaam, Website: www.mem.go.tz

Mr. David K. Jairo, Permanent SecretaryTel: +255 22 2112793, E-mail: [email protected]

Eng. Bashir J. Mrindoko, Commissioner for Energy & Petroleum AffairsTel: +255 22 2139455, E-mail: [email protected] / [email protected]

Dr. Dalaly P. Kafumu, Commissioner for MineralsTel: +255 22 2137142, E-mail: [email protected]

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Furthermore, in the 2010/11 budget, Section 11 of the Income Tax Act CAP 332 was amended to introduce ring fencing within the mining areas. The measure will ensure that each mine is taxed separately, and applies to all mining companies.

Tanzania earned US$ 57 million from mining royalties in 2009, and this fi gure is expected to double once the new mining law comes into force.

GOLDTanzania is one of the continent’s largest gold producers, with estimated resources in excess of 50 million ounces in northern Tanzania’s Lake Victoria Goldfi elds. Gold exports earned US$ 1.076 billion in 2009, up from US$ 932.4 million the previous year. With the price of gold increasing to an average of US$ 1 244.6 per troy ounce in the year ending January 2011, from US$ 994.3 per troy ounce in the preceding year, gold export receipts rose by 24.5 percent over the same period, to US$ 1 579.9 million.,

African Barrick Gold (ABG), a subsidiary of Barrick Gold, has four producing gold mines in north-west Tanzania, and has to date invested over US$ 1.6 billion in capital in Tanzania. ABG’s mines comprise North Mara, Bulyanhulu, Tulawaka and Buzwagi, which together have proven and probable gold reserves of around 16.8 million ounces, and produced some 716 000 ounces in 2010. In 2011, ABG expects production to be in the range of 697 000 to 758 000 ounces.

Bulyanhulu Mine in the Kahama District some 55 kilometres south of Lake Victoria is operated by the wholly-owned ABG subsidiary Kahama Mining Corporation Ltd. The mine is an underground trackless operation and is transitioning towards narrow vein conventional mining, with transition expected to be completed by 2014.

As at 31 December 2010 the life of the mine was estimated in excess of 25 years based on proven and probable reserves, and total employment stood at 2 940 individuals. Total production in 2010 was approximately 260 000 ounces of gold.

Located approximately 120 kilometres south of Mwanza, Buzwagi Mine is the country’s second-largest mining operation and largest single open pit, with a throughput capacity of 12 000 tonnes of ore per day. The fi rst gold was poured at Buzwagi in May 2009, and total production of some 186 000 ounces of gold was recorded in 2010. Buzwagi’s life of mine as at 31 December 2010 was estimated to be approximately 13 years based on proven and probable reserves.

The Tulawaka Mine is a joint venture between MDN Inc. (30 percent) and Pangea Goldfi elds Inc. (70 percent), a wholly owned subsidiary of ABG. Current operating capacity is approximately 1 320 tonnes per day. Total production in 2010 was around 42 000 attributable ounces of gold.

In order to increase the mine’s value, operations in 2010 focused primarily on exploration activities aimed at extending the mine life, and in 2011 efforts continued to be directed at developing resources at depth. While Tulawaka’s life of mine as at 31 December 2010 was estimated at just one and a half years, an updated mine plan based on current successful underground drilling results may see an extension of the mine life.

ABG’s North Mara Mine consists of three open pits and has an estimated mine life of around ten years. Total production in 2010 was approximately 213 000 ounces of gold. Plans were announced in 2010 to build an underground operation here, following an initial resource of 370 000 ounces discovered beneath two of the open pits. Further drilling in 2011 is expected to boost the underground resource to more than 1 million ounces.

The Geita Mine, AngloGold Ashanti’s only operation in Tanzania, has proven and probable reserves of 11.27 million ounces of gold. Development of ‘Cut 6’ in the Nyankanga pit to reach more high-grade ore has improved overall mill throughput by 20 percent, with accelerated exploration expected to result in a further 3.6 million ounces being added to the mine’s reserves in the next few years. These improvements have seen output rising to 272 000 ounces of gold in 2009, and further to 357 000 ounces in 2010, with the production forecast for 2011 between 485 000 and 506 000 ounces.

Shanta Gold Limited is an exciting gold exploration and development company, engaged in greenfi elds to advanced exploration in highly prospective under-explored areas in Tanzania, including Chunya, Mgusu, Singida and Songea. The Singida and Chunya developments are currently being fast-tracked, with signifi cant steps having been taken towards the completion of a defi nitive feasibility study and securing the mining licences for the Singida project, where mine construction is expected to begin in early 2012.

DIAMONDSTanzania has been an important diamond producer for several decades, with the open pit Williamson Mine at Mwadui in northern Tanzania having been operated continuously for more than 70 years, during which time it has produced over 20 million carats. At 146 hectares, Williamson is the largest kimberlite pipe ever to be mined economically. It regularly produces large, high-quality stones and is a source of rare and extremely valuable fancy pink diamonds. In November 2008, De Beers sold its entire 75 percent stake in the mine to Petra Diamonds Limited. The Tanzanian government owns the remaining 25 percent.

In the 2010 fi nancial year, 101 071 carats of diamonds were recovered compared to 84 486 carats the previous year. At the same time, revenue increased from US$ 9.4 million to US$ 14.4 million, and the average price per carat rose by 25 percent. While the temporary closure of the mine for redevelopment and expansion is expected to see diamond production and exports fall sharply during 2011, subsequent production is forecast to

Photo Courtesy: René Hartslief


42

reach new heights given Petra’s plans to increase output to600 000 carats annually over the medium term.

GEMSTONESTanzania has an abundance of coloured gemstones, including minerals such as ruby, sapphire, amethyst and emerald, and remains the only source of the sought-after gemstone tanzanite.

Following the formulation of the Mineral Policy (2009) and enactment of the Mining Act (2010), minerals value addition activities in the country have been given strong emphasis. Government has therefore introduced a ban on the export of rough Tanzanite weighing more than one gram, and is reviving local and international gemstone, jewellery and mineral shows, operationalising the Arusha Gemmological Centre and encouraging private investment in lapidary.

In addition, the Ministry of Energy and Minerals in collaboration with the Tanzania Mineral Dealer’s Association (TAMIDA) decided to revive the International Gem, Jewellery and Minerals Fair in Arusha in order to attract foreign exhibitors from East, South and Central African countries such as Mozambique, Madagascar, Kenya and Democratic Republic of Congo.

TanzaniteOne thousand times rarer than diamonds, Tanzanite is found south-east of Arusha at the foot of Mount Kilimanjaro, with an estimated resource of 50 million carats. TanzaniteOne Limited,

a South African company with more than 700 employees, owns the mining licence for Block C, the largest block at the centre of a resource which produces three quarters of the world’s tanzanite.

Using state-of-the-art optical sorters and technically advanced processing and sorting methods, the mine has enhanced its sorting techniques to unlock further value. Sales in 2010 amounted to US$ 15.8 million compared with US$ 12.5 million in 2009, with production increasing to 2.2 million carats from 1.9 million carats over the same period, with an average grade of 59 carats per tonne substantially better than the 51 carats per tonne achieved in 2009. Furthermore, a new cutting and polishing facility was commissioned at its Block C operation.

A ban on the export of rough tanzanite larger than 5 carats (1 gram) came into effect on 31 December 2010, and the company and other industry stakeholders are in ongoing negotiations with government in this regard. Nevertheless, the company opened its own cutting and polishing facility located at the Block C tanzanite operation in December 2010, and the continued expansion of sales from this facility, in addition to agreements with other cutting facilities in the country and the sale of material not affected by the ban, should help TanzaniteOne to maintain its revenue stream.

TsavoriteTsavorite, a brilliant green gemstone found in similar geology to tanzanite, has a price per carat of approximately three times that of tanzanite. An inferred resource of between 18.24 and 24.96 million tonnes of potentially open pit mineable tsavorite-bearing eluvial and alluvial deposits has been established, with TanzaniteOne to begin a bulk sampling programme in the fi rst half of 2011.

NICKELTanzania has an estimated 1.5 million tonnes of nickel. The Kabanga Nickel Project located in north-western Tanzania near the Burundi border is one of the world’s largest undeveloped nickel sulphide deposits. A 50:50 joint venture between Barrick Gold and Xstrata Nickel, Kabanga has measured and indicated resources estimated at 37.4 million tonnes at 2.59 percent nickel and an additional 16 million tonnes of inferred resources at 2.9 percent nickel, with a 1 percent nickel equivalent and 1 percent nickel cut off grade.

A peer review of the draft Social, Environmental Impact Assessment report has been completed, and the report is being revised concurrently with the draft feasibility study report, with both reports expected to be submitted in the fi rst half of 2011.

URANIUMTanzania has strong uranium potential (some 54 million pounds), with numerous occurrences of surface uranium mineralisation having been identifi ed. Presently, the most promising of these are Uranex NL’s Manyoni Project, situated about 70 kilometres west of Dodoma, and Mantra Resources’ Mkuju River Project in Southern Tanzania. The mining of uranium (U3O8) at both these projects is expected to begin within the next year or two.

As of April 2011, Russia’s JSC Atomredmetzoloto (ARMZ) was to acquire all of the issued share capital in Mantra, including the fl agship Mkuju River Project. Construction of the mining

Amethyst - Photo Courtesy: René Hartslief

Tanzanite laboratory - Photo Courtesy: The Tanzanite Experience


44

plant was scheduled to start in the fi rst quarter of 2011, with operations beginning in the fourth quarter of 2013. A pre-feasibility study in March 2010 indicated that, once developed, the mine would produce 1 650 tonnes of uranium oxide a year, which is three times more than South Africa. This has the potential to position Tanzania as the third, and perhaps even the second, largest producer of uranium in Africa.

COALComprising the Mbalawala sub-basin, the Ngaka Central Basin and the Mbuyura/Mkapa sub-basin, the Ngaka coalfi elds are in the Ruvumu District of South-Western Tanzania, some 40 kilometres east of Lake Nyasa. Mbalawala is being developed through Tancoal Energy Limited, a joint venture comprising Atomic Resource’s 85 percent owned Tanzanian subsidiary, Pacifi c Corporation East Africa (PCEA), which owns a 70 percent interest in Tancoal, and the National Development Corporation (NDC) of Tanzania, which owns 30 percent. In September 2010, Atomic announced the results of its bankable feasibility study for the Mbalawala Coal Project, for the development of a conventional open-cast pit. The study states that Mbalawala has a JORC-compliant mineable resource of 40 million tonnes of coal and that the project could support a production rate of around 1.5 million tonnes per annum for a mine life of 25 years. The study also upgraded the combined coal resource of the Mbalawala block by 18 percent, from 212 million tonnes to 251 million tonnes. The goal is to develop a mining operation as well as a 400-megawatt power station, utilising proven clean coal gasifi cation technology. Chinese company Sichuan Hongda Corporation Limited is to develop the Mchuchuma Coal Mine in partnership with NDC, with the intention of mining 3 million tonnes of coal per annum and setting up a 600-megawatt thermal power station. Half of the generated power will be supplied to the Liganga Iron Ore project and the rest will be fed into the national grid. Sichuan Hongda and China Africa Development Fund plan to invest about US$ 3 billion in both the Mchuchuma Coal and Liganga Iron Ore Project.

Liganga Iron Ore ProjectThe largest known iron ore resource in Tanzania is located in the Liganga Hills, where estimated reserves range from 200 million to over 200 billion tonnes. Associated minerals comprise vanadium and titanium magnetite, both important raw materials for the iron and steel industry.

The Kiwira Coal Mine Project in the Ileje/Kyela districts is under development by Kiwira Coal and Power Limited (KCPL), a company jointly owned by Tanpower Resources Limited (70 percent) and the Government of Tanzania (30 percent). Shares are being transferred from Tanpower Resources back to the government in order to put the mine under the control of National Social and Security Fund (NSSF) and STAMICO. Planned development will see the building of a power station within the next fi ve years to produce 500 megawatts of electricity, which will be sold to TANESCO.

Together, the three coal mining mega projects of Mbalawala, Kiwira and Mchuchuma are set to become Tanzania’s biggest energy project since attaining independence, and will have a combined total of 1500 megawatts. This will transform the Southern Corridor and Tanzania as a whole, which presently has installed capacity of just 1034 megawatts. Two substantial coalfi elds are present in the Ruhuhu coal basin in Southern Tanzania, comprising eight Karoo Basins containing 11 recognised coalfi elds with published resources exceeding 1 billion tonnes. There is thus potential to develop both domestic and export markets for coal, including a number of regional industrial and power generation opportunities in Tanzania and bordering Malawi, the Democratic Republic of Congo (DRC), Zambia and Kenya, as well as export markets to India and China via the ports at Mtwara and Nacala.

Exploration commenced in 2010, with fi eld mapping undertaken at the Gumbiro South Prospect, where outcropping coal seams had previously been identifi ed close to the licence boundary. A 20-kilometre strike of prospective coal geology was identifi ed for follow-up drilling.

Covering 3 500 square kilometres, the Songea Coal Project in the Ruhuhu basin is owned 100 percent by Uranex NL, and is favourably located for the discovery of large-tonnage, high-quality thermal coal. The two most signifi cant coalfi elds – Ketewaka-Mchuchuma and Ngaka – occur in a similar geological setting within 50 kilometres of Songea. The exploration project currently underway is to include desktop studies, geological mapping, fi eld traverses and sampling to confi rm coal seams for planned drilling in June 2011.




Shanta Mining Company Limited (SMCL) is focused on bringing Tanzanian ore bodies to account which are generally seen as too small or too difficult by large mining companies. By focusing specifically on smaller resources Shanta has been able to build a resource base which supports the building of the New Luika gold mine in the Chunya district in 2011 and is undertaking a feasibility study which we have every confidence will result in a gold mine in the Singida area in 2012.

Shanta places emphasis on bringing New Luika and Singida into production as quickly and efficiently as possible and also on finding additional resources in order to grow the company into one which specialises in the economic development of ore bodies which have been overlooked by large mining companies.

Shanta is a London (AIM) listed company which is Tanzanian in origin, with significant Tanzanian shareholding which intends to focus on turning small to medium size Tanzanian ore bodies to account in the best interests of all its stakeholders.

Shanta Mining Company Limited (SMCL) intends to make maximum use of Tanzanian contractors and Tanzanian goods and services, where these are legal, ethical and competitive in price and quality. Equally Shanta will as far as possible recruit labour from the immediate vicinity of the projects it builds. Shanta will endeavour to develop Tanzanian capacity in supply of goods and services where such capacity does not currently exist.

Recognising that communities often do not benefit significantly from mine development Shanta has a clear strategy to ensure that communities directly affected by Shanta mine projects are able to benefit in a sustained manner.

In order to achieve this Shanta will focus on supporting national, regional and local development projects rather than creating new projects which are not foreseen in development plans and budgets. Shanta’s ability to support these projects will depend on how well the local communities support Shanta. The more successful Shanta projects are, the more funding and support will be available for development projects.

Shanta is specifically focused on leaving in place community trusts which will provide sustainable funding for development projects after the mining projects have been completed and closed. The amount of capital which is placed in these trusts will depend on how well Shanta, the affected communities and the government of Tanzania work together to ensure an efficient mining operation.

Shanta intends to grow continually and so become a significant mining and economic entity in Tanzania.

Tel: +255 22 2601831-2/29Fax: +255 22 2601826PO Box 79408, Dar es SalaamE-mail: [email protected]: www.shantagold.com

46

Investing in key economic infrastructure, in particular electricity, water, roads, railways, ports and airports, has been prioritised. Recognising the importance of infrastructure for economic growth, the government has continued to place considerable focus on infrastructure development. As such, infrastructure has been allocated TZS 1 505.1 billion in the 2010/11 budget compared to TZS 1 096.6 billion in the previous year, representing an increase of 37.3 percent. Furthermore, the Public-Private Partnership Policy of 2009 and Public-Private Partnership Act of 2010 are facilitating the participation of the private sector in infrastructure projects.

In 2008 the presidents of Tanzania and the United States of America signed the fi ve-year Millennium Challenge Compact (MCC) agreement. The grant of US$ 698.1 million is being used to stimulate economic growth and increase household incomes through targeted investments in transportation, energy, and water. Millennium Challenge Account – Tanzania (MCA-T) is the mandated entity supervising the day-to-day activities of the compact implementation, and works in close consultation with the Millennium Challenge Corporation.

COMMUNICATIONSDuring the past ten years, Tanzania has seen impressive growth in Information and Communications Technology (ICT) following a series of policy reforms. Today the industry is characterised by a liberalised market, healthy competition and continually improving technology and infrastructure, including the establishment of a technology and service-neutral licensing regime.

Other landmarks in the sector have included the landing of the fi rst fi bre optic international submarine cables in the country in 2009 and 2010, while the fi rst phase of the national fi bre backbone network to connect population centres around the country has been switched on. ICT governance has been improved through the establishment of the National ICT Policy (2003), with the streamlining of the sector resulting in the merging of the Tanzania Communication Commission (TCC) with the Tanzania Broadcasting Commission (TBC) in 2003

to form the Tanzania Communications Regulatory Authority (TCRA), which regulates telecommunications, broadcasting and postal services.

Established in 2008, the Ministry of Communication, Science and Technology is involved in policy formulation, monitoring and evaluation, and regulatory and legal matters pertaining to communication, ICT, science, technology and innovation. Current programmes and projects include: National Communications Infrastructure Backbone Network; establishment of a new address system and postcode; establishment of Universal Communications Access Fund (UCAF); Pan-African e-network (tele-education and tele-medicine) initiatives; and the establishment of multipurpose telecentres in Tanzania. It has been recommended that the Ministry of Communication, Science and Technology be merged with the Ministry of Information, Culture and Sports to form a new Ministry of Information and Communication Technology.

Numerous new players have entered the market following the introduction of the converged licensing regime in 2006. The liberalisation of Voice over Internet Protocol (VoIP) telephony and introduction of third generation mobile services and wireless broadband networks is making mobile networks the leading Internet service providers, backed by their extensive national infrastructure and subscriber bases in the voice market. Mobile money transfer and m-banking is also gaining ground.

Tanzania has two fi xed-line operators – TTCL and Zantel – and eight mobile networks, the main ones being Vodacom, Bharti Airtel (formerly Zain), Tigo and Zantel. Four additional players are licensed under the new converged regulatory regime. While the country’s fi xed line sector has remained stagnant since 2000, the mobile sector has in the past decade grown at over 40 percent per year. By June 2010 the number of mobile phone subscribers had reached 18.5 million, with penetration of over 50 percent recorded by the end of 2010.

The communications sector has outpaced all other economic sectors for a number of years. It grew by 21.9 percent in 2009, and growth of 20.2 percent is expected in 2010.

Physical Infrastructure

Cost-effective and dependable utilities as well as modern and effi cient communications and transport systems are essential for future economic growth and social development.


48

CONSTRUCTIONThe construction sector currently contributes between 6 and 7 percent to Tanzania’s Gross Domestic Product (GDP). In 2009, activities in the sector grew at a rate of 7.5 percent, with a growth rate of 8.6 percent forecast for 2010. This is attributed to an increase in the construction of residential and non-residential buildings, roads and bridges, and land improvement activities.

Tanzania is expected to receive an additional 8.5 percent in foreign direct investment during 2010 following government’s reversal of the decision to charge tariffs on capital goods for construction projects. In July 2010, the Ministry of Finance scrapped import duties on materials for the construction of hotels, restaurants, offi ce towers and other building projects. Ongoing projects involving foreign companies include the refurbishment of a hotel in Dar es Salaam and a second one in Arusha, as well as construction relating to the mining industry. Other construction projects range from road and airport construction and refurbishment to residential and commercial buildings.

TRANSPORTATIONTanzania’s transport infrastructure comprises road, rail, air, water and pipeline. The country relies heavily on the transport network to connect its largely rural population to services and economic opportunities, as well as to transfer goods and people between local and global markets. The country’s roads, railways and ports are of vital importance domestically; they also serve to link the East African region, particularly Tanzania’s landlocked neighbours such as Burundi, Malawi, Rwanda, Uganda and Zambia, to international markets.

The 1 720-kilometre long TAZAMA pipeline, which is jointly owned by Zambia and Tanzania, allows the importation of crude oil from Dar es Salaam to Ndola refi nery in Zambia. There is another pipeline of 232 kilometres which is used to transport natural gas from Songo-Songo to Dar es Salaam.

In 2003, a National Transport Policy was put in place in order to guide the development of the sector, and a Public-Private Partnership (PPP) Policy and Act have been developed. The ten-year Transport Sector Investment Programme (TSIP) presents Tanzania’s strategy for achieving future transport-related goals. TSIP is being implemented in two fi ve-year phases, from 2007/08 to 2016/17.

Transport services grew by 6.0 percent in 2009, with a projected rise to 6.9 percent in 2010.

Transport corridorsTanzania has two primary corridors:

• The Central Transport Corridor connects Dar es Salaam and the coastal regions with the Western and Lake Victoria regions of Tanzania, thereby linking the country’s main port to the neighbouring countries of Burundi, Rwanda, Uganda and the Democratic Republic of Congo (DRC) via Dodoma.

• The Southern Corridor links Dar es Salaam to Zambia in the south-west via the 1 860-kilometre TAZARA railway line, which then connects with Zambia Railways. Some 970 kilometres of line is in Tanzania and 890 kilometres in Zambia.

Current initiatives include the Second Central Transport Corridor Project, which is being undertaken with assistance

from the World Bank. The project includes the construction of Bus Rapid Transit (BRT) infrastructure in Dar es Salaam to upgrade the public transport network and reduce traffi c congestion, the upgrading of 170 kilometres of road between the towns of Korogwe and Same to trunk road standard, and work to improve the Zanzibar Airport runway. It is anticipated that the project will be completed by the end of 2011.

Road networkThe length of Tanzania Mainland’s total road network is estimated to be 86 472 kilometres, based on the Road Act of 2007. The Ministry of Infrastructure Development, through the Tanzania National Roads Agency (TANROADS), manages about 29 847 kilometres, comprising 10 601 kilometres of trunk roads (5 062 kilometres paved and 5 538 kilometres unpaved) and 19 246 kilometres of regional roads (646 kilometres paved and 18 600 kilometres unpaved). The remaining urban, district and feeder roads (56 625 kilometres in total) are the responsibility of the Prime Minister’s Offi ce Regional Administration and Local Government (PMO-RALG).

In the past decade, the condition of trunk and regional roads has steadily improved due to various maintenance interventions and development activities. According to President Jakaya Kikwete, some 11 000 kilometres of road network across the country will be tarmacked before 2015. Current projects include the 17.2 kilometre Mwenge-Tegeta road in Dar es Salaam, a dual carriageway project fi nanced by the government of Japan and scheduled for completion by 2013.

Collections for the Road Fund have increased from TZS 73 billion in 2005/06 to TZS 218.4 billion in 2008/09 and further to TZS 284 billion in 2009/10. However, this funds only 59 percent of road maintenance needs.

Current roads sector projects under the MCA-T include:

• Tanga-Horohoro road, involving upgrading from gravel to asphalt concrete a stretch of 65 kilometres of the highway connecting Tanga and Horohoro at the Kenyan border.

• Songea-Namtumbo and Peramiho-Mbinga road, part of the Mtwara-Mbamba Bay road, comprising a stretch of 61 kilometres between Songea and Namtumbo and a stretch of 78 kilometres between Peramiho junction and Mbinga town, which are being upgraded from earth to double bituminous surfacing.

• Tunduma-Sumbawanga road, comprising three sections – Tunduma-Ikana (64 kilometres), Ikana-Laela (64 kilometres) and Laela-Sumbawanga (96.5 kilometres).

• Pemba Rural roads, rehabilitation of a total of 35 kilometres of selected rural roads in the north region of Pemba Island in Zanzibar to bitumen standard.

Air transportEstablished in 1999, the Tanzania Airports Authority (TAA) is a semi-autonomous agency that owns, operates, develops and maintains 62 airports and airstrips on Tanzania Mainland, including Julius Nyerere International Airport (JNIA) and Kilimanjaro International Airport (KIA), with the latter having been concessioned to the Kilimanjaro Airports Development


Company (KADCO). Other international airports include Zanzibar and Mwanza, with the main domestic airports being Arusha and Mtwara.

Since 2005, the TAA and the Tanzania Civil Aviation Authority (TCAA) have implemented a number of development projects aimed at modernising the country’s airports and expanding the air transport infrastructure. Construction work, involving the rehabilitation of taxiways, runways and sewage system, is underway at JNIA, with the project set to be completed by May 2011. Upgrading is also ongoing at KIA and Zanzibar International Airport, where the runway is being improved, and the domestic airports of Mwanza, Bukoba, Dodoma, Kigoma, Mafi a and Songwe. In addition, the upgrading of the Mafi a Island Airport is being undertaken through the MCA-T.

As a result, the number of registered air operators in the country has been steadily increasing, while the aviation industry has grown at an average of 9 percent per annum. During 2009 Air Tanzania fl ew 60 018 passengers, while Precision Air fl ew 583 000 passengers and Coastal Aviation some 141 995 passengers.

Despite government’s efforts to acquire a suitable company to invest in and run the national carrier, Air Tanzania Company Ltd (ATCL), the airline was grounded in March 2011. PrecisionAir and Fly 540 were expected to take over destinations previously served by Air Tanzania. PrecisionAir’s plans to list on the Dar es Salaam Stock Exchange (DSE) will help it to acquire two Boeing 737-300s and two ATR72-500s, enabling it to expand its routes.

Marine and lake transportTanzania has a total of 63 ports, nine along the coast and 54 on the lakes. Bordered to the east by the Indian Ocean, Tanzania’s

coastline boasts the bustling ports of Dar es Salaam, Tanga and Mtwara, in addition to six smaller coastal ports, while there are also a number of inland ports on the lakes of Victoria, Tanganyika and Nyasa – 11 main lake ports and 43 smaller ones.

Most marine transport is routed through the port of Dar es Salaam, which handles 90 percent of the country’s total ocean freight and is an important outlet for neighbouring land-locked countries. The Dar es Salaam container terminal is operated by Tanzania International Container Terminal Services (TICTS). There are plans to increase the capacity of seaports from the current 10 000 million tonnes to about 20 000 million tonnes per year.

Dar es Salaam port is a major gateway to the eastern DRC, Rwanda, Burundi, Zambia, Malawi and Uganda.

In the past few years, Tanzania has seen huge improvements in its capacity to effi ciently move goods and handle other trade logistics, with a vast reduction in container dwell time as well as turnaround time for ships at Dar es Salaam port. This follows investment by the Tanzania Revenue Authority (TRA) of US$ 19 million and the Tanzania Ports Authority (TPA) of some €12 million to modernise ports by providing additional cargo handling equipment and improving and upgrading facilities. Furthermore, government has ended the TICTS monopoly in an effort to increase effi ciency by allowing competition in the provision of services.

While three years ago ships could wait anything up to 20 days before offl oading at Dar es Salaam port, by 2011 this had fallen to four days or less. The creation of the inland container depots (ICDs) has also facilitated the movement of containers, reducing the level of congestion. ICDs at the moment can handle some

50


The Ministry of Communications, Science and Technology was established in February, 2008 as per Government Notice No. 20 of February, 2008.

Vision and Mission The Vision of the Ministry is: “To have a knowledge based society with the capacity and capability to harness Science, Technology and Innovation and ICT for the transformation of the economy that is sustainable and globally competitive”.Its Mission is: “To facilitate human capital development and knowledge generation for sustainable wealth creation and better livelihood of Tanzanians through policy development, and promotion of science, technology and communications”.

Roles and FunctionsThe roles and functions of the Ministry are:i) To initiate the formulation of Policy guidelines and conduct review of Policies of Postal Services, Telecommunications Policy, Science, Technology and Innovation, Research and Development and Information, Communications and Technologies;ii) To monitor, evaluate and set standards during implementation of policies under the Ministry;iii) To coordinate and promote the use of Information, Communication and Technology (ICT), Communication Services, Science, Technology and Innovations (STI), and Research and Development (R&D) for the development of the Nation in line with involvement of the private sector; and iv) To oversee regional and international communication and linkages to the attainment of the Ministry’s policy objectives.

TANZANIA BECOMES ICT HUB FOR INTERNATIONAL TRAFFIC TRANSITThe National ICT Broadband Backbone (NICTBB) infrastructure project is a bold step taken by the Tanzania Government to connect all regional and district headquarters with high capacity, state-of-the-art Fibre Optic Network. The NICTBB, when completed, will connect Tanzania with its neighbouring countries (Uganda, Rwanda, Burundi, Zambia, Kenya, Malawi, Congo DRC and Mozambique) as well as connect the region to the international submarine cable landing stations on the shores of the Indian Ocean especially Dar es Salaam and Mombasa. This project is in line with the National ICT Policy (NICTP) objective of “building, strengthening and developing a reliable and sustainable National ICT Infrastructure to provide reliable and affordable connectivity of broadband quality, within which internet access would be among services that can be provided countrywide”.

Given that Tanzania is strategically located on the shores of the Indian Ocean and surrounded by fi ve landlocked countries (Rwanda, Burundi, Uganda, Malawi and Zambia), it is evident that completion of the NICTBB project will make Tanzania an ICT hub for international traffi c transit. The NICTBB is being executed as part of the ‘National ICT Infrastructure Development Programme’. This programme is expected to evolve the National ICT Broadband Backbone to a fully meshed network as well as provide an IP over SDH core network to enable businesses and individuals easy access to communication services. The master plan for ICT Infrastructure Development Program is expected to be completed by end of year 2015. The programme will deliver a total of about 20,000km of OFC network as well as a 400Gbps countrywide IP Network.

Phase I of the project has a route length consisting of 2,305km of new Optic Fibre and 2,050km of existing Optic Fibre. The implementation (trenching and laying of OFC) for phase I started on 20th July, 2009 and completed in June, 2010. When completed (phase I and II), the National ICT Infrastructure Backbone will provide reliable and effi cient connectivity and access to communications services to all regional and district headquarters, public and private institutions in Tanzania (Mainland and Zanzibar) at affordable prices. The Government of Tanzania desires to continue evolving the National ICT Infrastructure Backbone to realize a coherent Future – Proof National ICT Infrastructure consisting of a fi ne – meshed Optic Fibre Cable network, initially with points of presence (PoPs) at all regional and district headquarters.

The project implementation for Phase I has been well executed and has covered 16 regions out of 26. In addition, Phase I allows for cross border connectivity to six (6) neighbouring countries (Kenya, Uganda, Malawi, Burundi, Rwanda and Zambia). All the OFC materials and equipment supplied meet the international standards (ITU-T).

The NICTBB is sustainable and has high capacity that will enable Tanzanians to realize maximum benefi ts from ICT opportunities. Surely, the NICTBB will bring in immense business opportunities to Tanzanian Communications industry as it will enable almost every business to be conducted easily using high quality broadband enabled ICT services. A number of activities, including but not limited to, video conferencing, e-health, e-education, e-commerce and VoIP calls have now been made possible through the high capacity bandwidth available on the National ICT Broadband Backbone.

For further information contact:The Permanent Secretary, Ministry of Communication, Science and Technology.

Plot 1168/19 Jamhuri Street • P. O. Box 2645, DAR ES SALAAM, TANZANIA.Tel: +255 (22) 2111254/7 • Fax: +255 (22) 2112533.

E-mail: [email protected] • Web: www.mst.go.tz

The Ministry of Communications, Science and Technology was established in February, 2008 as per Government Notice No. 20

52

9 000 containers outside the port at a cheaper storage rate to that charged for those stored at the port. Nevertheless, challenges remain, such as lack of space to increase capacity (in the case of Dar es Salaam port) and inadequate transport services from other modes such as railways and roads.

Tanzania’s main lake ports of Mwanza, Kigoma and Kyela are used to transport cargo and passengers inland as well as between neighbouring countries. There are investment opportunities in reliable ferry connections to carry containerised and transit cargo on Lake Victoria and Lake Tanganyika. There are presently 16 operating vessels on the lakes.

Rail transportTanzania’s railway network is 3 676 kilometres in length, consisting of two separate railway systems which operate on different gauges – the 2 706-kilometre Tanzania Railways network and the 975-kilometre narrow-gauge line run by the Tanzania Zambia Railway Authority (TAZARA). During 2008, railway infrastructure comprised 216 stations, with 1 569 000 passengers transported and 954 000 tonnes of cargo.

In 2007, TRC was concessioned to Tanzania Railways Limited (TRL). However, the performance of the rail company has continued to decline, mainly due to problems such as increased competition from other transport modes and alternative routes, as well as dilapidated infrastructure and below-standard services as a result of outdated equipment and shortages of locomotives and wagons.

TAZARA was deigned to transport 5 million tonnes of cargo per year and is currently moving just 600 000. There is room to expand cargo activities, with Zambia’s copper and fertilisers destined for the Dar es Salaam port, and there are also opportunities to increase the number of passengers and expand tourism. In 2010 the railway’s average revenue was around US$ 3 million per month, with at least US$ 5 million needed per month to comfortably cover day-to-day operational costs. A US$ 40 million loan was granted to TAZARA in December 2009 through the governments of Tanzania and Zambia by the Chinese under the 14th Protocol. Discussions for the concessioning of the railway are ongoing.

WATER & SANITATIONDevelopment targets set out in the National Development Vision 2025, Millennium Development Goals and National Strategy for Growth and Reduction of Poverty (MKUKUTA) aim to achieve by 2010: clean and safe water to 65 percent and 90 percent of the population in rural and urban areas respectively (up from 53 percent and 73 percent in 2003); the expansion of urban sewerage from 17 percent in 2003 to 30 percent; adequate sanitary facilities in all schools; 95 percent access to basic sanitation; and to reduce water-related environmental pollution levels from 20 percent in 2003 to 10 percent. The Water Sector Development Programme (WSDP) is one of the largest water sector programmes in Africa, with a US$ 1 billion budget over a fi ve-year period (2007-2012), and was initiated to strengthen institutions for integrated water resources management as well as to improve access to and delivery of sustainable water supply and sanitation services. Under the WSDP, Urban Water Supply and Sewerage Authorities (UWSSAs) have been established in 19 major urban

centres. In addition, the Dar es Salaam Water and Sanitation Authority (DAWASA) has been established. Current priorities include strengthening the rehabilitation and construction of sewage water infrastructure in urban centres for environmental protection. The MCA-T has a number of water sector projects underway, including:• Expanding the capacity of Lower Ruvu Water Treatment Plant serving Dar es Salaam and coastal regions from about 180 million to about 270 million litres per day by 2013• Reducing Non-Revenue Water (NRW) in Dar es Salaam through rehabilitating and extending the water distribution network from Tegeta up to Bagamoyo town and assessing water uses and losses• Improvement of Morogoro Municipality water supply system, comprising the rehabilitation and construction of Mambogo Water Treatment Plant and rehabilitation of Mafi ga Treatment Plant facilities, which should increase water production from the current 22 million to 33 million litres per day by 2013

ENERGYThe state-owned Tanzania Electric Supply Company (TANESCO) is responsible for the generation, transmission, distribution and sale of electricity across Tanzania Mainland, and also provides bulk power supply to the State Fuel and Power Corporation (SFPC) of Zanzibar. Currently, TANESCO has an installed capacity of 561 megawatts from its six hydropower plants of Kidatu, Kihansi, Mtera, Pangani, Hale and Nyumba ya Mungu, and 145 megawatts from its two gas-fi red power plants in Dar es Salaam. There are also a number of diesel-based generators in the more isolated areas contributing around 36-megawatts in total, with a 60-megawatt plant at Nyakato, Mwanza, scheduled to join the grid in 2011. In addition, TANESCO purchases 282 megawatts from independent power producers (IPPs), including diesel-based Independent Power Tanzania Ltd (IPTL) and SONGAS with the Songo-Songo gas to electricity project. IPPs supplied 33 percent of the country’s total power requirements in 2008.

Overall, there are a total of 334 megawatts of installed capacity in natural gas fi red turbines, with about 25 industries in Dar es Salaam also using natural gas as a source of energy. Medium-term strategies include increasing power generation, particularly with regard to distribution and increased access in rural areas. In addition, with the National Energy Policy emphasising utilisation of locally available energy resources, government is intensifying efforts to establish national oil reserve facilities and expand gas production facilities at Songo-Songo and Mnazi Bay. The growth rate of electricity was 16.2 percent in the third quarter of 2010 compared to 11.2 percent in the corresponding quarter of 2009. The higher growth rate was attributed to the increase in both hydro and gas power generated. Part of the TANESCO National Grid Reinforcement Strategy, the Tanzania Backbone Interconnector Project is expected to provide access to cost-effi cient electricity. In December 2010 the utility provider was granted a US$ 135 million loan from the European Investment Bank (EIB) in order to co-fi nance a new


TANZANIA COMMUNICATIONS REGULATORY AUTHORITY (TCRA)

IntroductionThe Tanzania Communications Regulatory Authority (TCRA) is a quasi independent Government body established under the Tanzania Communications Regulatory Act No.12 of 2003 to regulate the electronic communications (telecommunications and broadcasting), and Postal services, and management of the national frequency spectrum in the United Republic of Tanzania. The Authority became operational on 1st November 2003 and effectively took over the functions of the now defunct Tanzania Communications Commission (TTC) and Tanzania Broadcasting Commission (TBC) respectively.

TCRA Vision, Mission and Strategy

VisionTo be a world-class regulator, creating a level playing field among communication service providers and promoting accessible and affordable services to consumers in Tanzania.

MissionTo develop an effective and efficient communications regulatory framework, promote efficiency among the communications services providers, and protect consumer interests with an objective of contributing to socio-economic and technological development in the United Republic of Tanzania.

Strategic objectives• To establish a conducive environment that encourages private participation in network development in order to achieve the goal of universal service.• To promote provision of efficient and reliable information and communication services based on international standards through administration of incentive regulation;• To protect interests of consumers through rigorous enforcement of established standards and licence conditions;• To establish a level playing field in order to promote effective competition with the objective of developing advanced infrastructure, technology, human capacity and products thus serving as the engine for economic growth and development.• To collaborate with institutions of higher education and other stakeholders to conduct research with the objective of promoting Information and Communication Technologies.• To collaborate with other regulators and international organisations with the objective of harmonizing standards and technologies in order to enhance technical capability and improve quality of ICTs goods and services.• To encourage sharing of infrastructure facilities in order to protect the environment and to optimize the utilization of available resources.• To exercise efficient management of scarce national resources namely radio frequency spectrum and telecommunication numbers.

TCRA has the following functions;• To issue, renew and cancel licences;• To establish standards for regulated goods and services;• To establish standards for the terms and conditions of supply of the regulated goods and services;• To regulate rates and charges;• To monitor the performance of the regulated sectors in relation to:- 1) Levels of investment; 2) Availability, quality and standards of service; 3) The cost of services; 4) The efficiency of production and distribution of services• To facilitate the resolutions of complaints and disputes between operator vs operator and consumer vs operator;• To disseminate information about matters relevant to the functions of the Authority.

In carrying out its functions, the Authority strives to enhance the welfare of the Tanzanian society by:-• Promoting effective competition and economic efficiency;• Protecting the interests of consumers;• Protecting financial viability of efficient suppliers;• Promoting the availability of regulated services to all consumers including low income, rural and disadvantaged consumers;• Enhancing public knowledge, awareness and understanding of the regulated sectors including:- 1. The rights and obligations of consumers;

THE UNITED REPUBLIC OF TANZANIA

2. The way in which complaints may be initiated and resolved; 3. The duties, functions and activities of the Authority

Types of licences(A) Converged Licence Framework (CLF)The Converged licences are technology neutral and service neutral. (i) Network Facility Licence (NFL) (ii) Network Service Licence (NSL) (iii) Application Service Licence (ASL) (iv) Content Service Licence (CSL)

The Converged Licence Framework has four market segments; 1) International, 2) National, 3) Regional and 4) District

(B) Other LicencesThere are seven (7) licence categories issued by the Authority that do not fall under the Converged LicensingFramework (CLF). These are:- (i) Postal Services Licence (ii) Courier Service Licence; There are four categories of these; • International, • East African • National, • Inter-City (iii) Radio Communications and Frequency Spectrum User Licence (iv) Installation and Maintenance Licence (v) Importation and Distribution Licence (vi)EquipmentCertificationLicence (vii) Numbering and Electronic Address Licence

Accomplishments and ongoing activities of the Authority• Implementation of a converged licensing frame work covering Telecoms, Broadcasting and Postal service;• Introduction of internet exchange points to cater for national internet traffic;• Introduction of tzccTLD domain name registration;• Implementation of an interconnection determination 1 in 2004 and 2 in 2007 to facilitate easy communication across networks at cost based rates;• Telecentres opened in a number of regions across the country;• Introduction of consumer complaints guidelines;• Sensitization of operators on consumer issues;• Initiation and coordination of post code new physical addressing project;• Coordination the Central equipment identification and SIM registration;• Implementation of a new and comprehensive numbering plan in 2006;• Content monitoring in broadcasting;• Introduction of child helpline;• Introduction of zonal office;• Awarded as a best regulator in Africa in 2006 and in 2009.

TCRAOfficesandContactsHEAD OFFICETanzania Communications Regulatory Authority (TCRA)Mawasiliano TowersPlot 2005/5/1, Block C, Sam Nujoma RoadP.O Box 474, DAR ES SALAAMTel: +255 22 2412011-2; +255 784 558270Fax: +255 22 2412009-10 E-Mail: [email protected]: www.tcra.go.tz

TCRANorthernZoneOfficeSummit Centre, Third Floor, Block B, Sokoine RoadP. O. Box 15675, ARUSHATel: +255 27 2548947E-mail: [email protected]

TCRACentralZoneOfficePlot No. 7B, Block 41, Natron, Kisasa AreaDar es Salaam RoadP. O. Box 2229, DODOMATel: +255 26 2350021E-mail: [email protected]

TCRASouthernHighlandsZoneOfficeNSSF Building, Karume AvenueP. O. Box 1375, MBEYATel: +255 25 2502940, Fax: +255 25 2502941E-mail: [email protected]

TCRALakeZoneOfficeNSSF Commercial Complex4th Floor, Wing B, Kenyatta RoadP.O Box 3108, MWANZATelephone/Fax: +255 28 2541082Email: [email protected]

TCRAZanzibarZoneOfficePlot No. S/CHR 95, Chukwani AreaP. O. Box 3284, ZANZIBARTel: +255 24 2230562, Fax: +255 24 2235060E-mail: [email protected]

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667-kilometre, 400-kilovolt AC double circuit transmission line that is to be built between the cities of Iringa, Dodoma, Singida and Shinyanga. Altogether, the transmission project will receive US$ 468 million.

Under the auspices of MCA-T, energy sector projects worth US$ 206 million are presently underway. The Hydro Project, Cable Project and Transmission and Distribution Project have been arranged into fi ve design and build contract packages, including:• 8-megawatt Malagarasi hydropower station and Kigoma Transmission and Distribution network• Zanzibar Interconnector: construction of the second Submarine Cable (100 megawatts) linking Unguja Island to Tanzania’s national grid at Ubungo, some 40 kilometres away• Zanzibar Interconnector 132-kilovolt Overhead Lines• 24 substations (23 on Mainland plus Mtoni in Zanzibar)• Distribution Network Rehabilitation and Extension to supply power to villages and urban areas in six mainland regions (Tanga, Morogoro, Iringa, Mbeya, Dodoma and Mwanza), which involves construction of a total of 78 networks made up of some 252 kilometres of 11 kilovolts and 1 247 kilometres of 33 kilovolts Thermal power projectsThree coal mining mega projects are set to become Tanzania’s biggest energy project since attaining independence, and will have a combined total of 1500 megawatts. Atomic Resource’s Mbalawala Coal Project will see the building of a 400-megawatt power station, utilising proven clean coal gasifi cation technology. The Mchuchuma Coal Mine development involves the setting up a 600-megawatt thermal power station, with half the generated power to be supplied to the Liganga Iron Ore project and the rest fed into the national grid. KCPL’s


Kiwira Coal Mine Project involves the development of a power station within the next fi ve years to produce 500 megawatts of electricity, which will be sold to TANESCO.

Oil and gas developmentExploration for oil and gas in Tanzania began in the 1950s, and natural gas has been used since July 2004 for power generation, with the southern regions of Mtwara and Lindi now accessing reliable power supply from natural gas instead of the previous thermal generators. Tanzania’s four gas reserves comprise Songo-Songo, Mnazi Bay, Mkuranga and Kiliwani. Songo-Songo has proven reserves of about 850 billion cubic feet and possible reserves of more than 1.5 trillion cubic feet, while Mnazi Bay has 242 billion cubic feet of proven reserves and possible reserves of more than 2 trillion cubic feet. The Mkuranga and Kiliwani gas reserves were discovered in 2007 and 2008 and have yet to be appraised. Plans are underway to expand power generation using natural gas from both the Songo-Songo and Mnazi Bay gas fi elds. With Tanzania having great potential for further reserves, the Ministry of Energy and Minerals is in the process of enacting legislation and making regulations which will cater for the processing, transportation, distribution and storage of natural gas.

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HEALTH CARESurvey data collected from various sources, including the United Nations Children’s Fund (UNICEF), the Joint United Nations Programme on HIV and AIDS (UNAIDS) and the World Health Organisation (WHO), suggest that Tanzania’s health profi le is typical of developing countries. Its total fertility rate remains high (between 5.2 and 5.7), while life expectancy at birth is just under 52 years.

While in some areas services have improved markedly and health indicators are generally more positive, the country continues to face a number of serious challenges, and it is unlikely that all MKUKUTA 2010 health targets as well as 2015 health Millennium Development Goals (MDGs) will be met. Reducing the maternal mortality rate remains a major challenge for Tanzania. Progress has also been slow in the area of safe water and sanitation.

In 2009/10 government allocated TZS 800.4 billion for the health sector, and a further TZS 1 181.7 billion in the 2010/11 budget. This is equal to 12 percent of the total national budget, while the country’s aim is to reach 15 percent.

The strategic focus of the health sector includes the ongoing implementation of various public and primary health programmes and the strengthening of mother and child health services (MCH), with the spotlight on:

• Continued implementation of The Primary Health Services Development Programme 2007-2017 (MMAM), with the objective of improving the quality of reproductive and child health

• Continuation of the National HIV/AIDS Control Programme

• Strengthening the capacity of human resources at all levels

• Rehabilitating and constructing health centres and acquiring equipment

• Improving the centre for heart surgery at Muhimbili National Hospital

Health Sector Performance Profi le ReportA number of positive developments have taken place in Tanzania’s health sector. These include confi rmed gains in child survival, with progressive and signifi cant declines in under fi ve and infant mortality. Newborn deaths are still a challenge, and account for almost 30 percent of all deaths in children younger than fi ve years in Tanzania. However, while infant mortality rates increased from 91 per 1000 live births in 1990 to 99 per 1000 live births in 1999, between 2000 and 2009 the number of deaths decreased to 51 per 1000 live births (a 49 percent decrease).

Achievements in child health are attributed to health sector reforms, increased coverage of effective interventions; immunisation, Vitamin A supplements, Integrated Management of Childhood Illness, improved malaria control through Insecticide Treated Nets and access to effective anti-malarial treatment. Vaccination against measles remains high (88 percent) and is set to rise towards the target of 90 percent by 2010.

The tuberculosis (TB) treatment success rate is high at 84.7 percent, one of the highest in the world. Furthermore, various studies indicate that major reductions have taken place in the incidence of malaria. The prevalence of malaria shows a drastically decreasing trend from 49.2 percent in 2000 to 0.8 percent in 2009.

The government has scaled up specialty services, including neurosurgical services in Tanzania. It has equipped major hospitals with essential diagnostic equipment such as CT scan machines, MRI, modern x-ray machines and image intensifi ers. It has recently acquired a brand new ultramodern neurosurgical operating microscope: a Pentero.

The Muhimbili Medical School is being extended so that it can take in more than 12 000 students as compared to the current 2 400. A new school of medicine at the University of Dodoma is currently under construction.

The implementation of MMAM is ongoing, with increased student enrolment in health training institutions, posting of

Social Infrastructure

The implementation of the National Strategy for Growth and Reduction of Poverty – MKUKUTA – has seen improvements registered in development indicators for both education and health in the fi ve-year period leading up to 2010.

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trained staff to councils and building of more dispensaries and health centres to increase access to services.

Despite these positive steps, a number of challenges remain, particularly in areas such as the maternal mortality rate, with no improvement in skilled attendance at birth and no net increase in the skilled human resource situation. The health sector will require a threefold increase in workforce with an annual tenfold increase in hire rate over the next ten years if MMAM is to be successfully implemented.

Future development within the sector is contingent upon urgent and sustained strengthening of emergency obstetric, neonatal and child care (EmONC) at all levels to address high maternal and newborn mortality in Tanzania. Presently only 5 percent of health facilities provide EmONC services. Continued implementation of MMAM is also vital, particularly the human resource component.

Furthermore, existing non-functioning health facilities need to be operationalised in collaboration with PMO-RALG. There is also an urgent need to review and strengthen the functioning of the Health Management Information System (HMIS). For improved management, sustained supportive supervision at all levels is also needed.

HIV/AIDSHIV/AIDS remains a signifi cant public health concern in Tanzania. According to the Tanzania HIV & AIDS and Malaria Indicator Survey of 2008, HIV prevalence decreased between 2003 and 2008 as the proportion of people infected dropped from 7 to 5.7 percent. This is estimated to be close to 1.5 million people, 10 percent being children. Women were more affected at 6.6 percent of the total population compared to 4.6 percent for men.

Tanzania is one of eight countries in the world to pilot the Delivering as One (DaO) reform, which deepens the role of the UN in effective monitoring of the epidemic.

The Tanzanian National HIV and AIDS Policy was reviewed in mid March 2010. It took into consideration demographic, technological, economic and socio-cultural changes since the policy was developed in 2001. Such development includes drivers of the epidemic, access to ARVs, HIV vaccination and compliance with other government directives. The National Multi-Sectoral Prevention Strategy 2009-2012 and Gender Operational Plan 2010-2012 were launched in April 2011.

Tanzania’s AIDS response is making it possible to administer antiretroviral drugs to nearly 70 percent of HIV-positive pregnant women in 2011. This service is available in 80 percent of health facilities in the country. The aim is to prevent HIV transmission from mother-to-child (PMTCT).

Government is targeting regions like Kagera and Iringa, where HIV/AIDS prevalence has been above the national average.

The Tanzania Commission for AIDS (TACAIDS), established in 2001, provides leadership and coordination of multi-sectoral responses. The Tanzania Parliamentarians AIDS Coalition (TAPAC), formed in 2001, counts more than 300 MPs as members.

EDUCATION & TRAININGEducation is identifi ed as a main area of focus in the government’s National Strategy for Growth and Reduction of Poverty (MKUKUTA). The Education Sector Development Programme (ESDP), was conceived in the early 1990s as a means of addressing school infrastructure shortages as well as the need for increased enrolment, gender balance and outreach to those segments of the population unable to access education. Two other anchor programmes were adopted to spearhead the implementation of this major programme. These comprised the Primary Education Development Programme (PEDP) and the Secondary Education Development Programme (SEDP).


ESRF ECONOMIC AND SOCIAL RESEARCH FOUNDATION

The Economic and Social Research Foundation (ESRF) is an independent policy research institution based in Dar es Salaam, Tanzania. It was established in 1994 after two years of analysis, planning and development in response to the need for development of institutional capacity for policy analysis. The primary objectives of the Foundation are to strengthen capabilities in policy analysis and decision making, to articulate and enhance understanding of policy options in Government, the public sector, the donor community, and the growing private sector and civil society. ESRF played a catalytic role in the country’s socio-economic reforms in the late 1980s and early 1990s.

ESRF Vision and MissionVision: to become a regional and international centre of excellence in capacity development for policy analysis and development management, policy research, and policy dialogue by the year 2015.Mission: Advancing knowledge and analysis to public and private sector entities through sound policy research fi ndings, capacity development and by advocating good development management practices.

ESRF ObjectivesThe overall objective of ESRF is to develop capacity in economic and social policy analysis and development management by conducting and disseminating results from social and economic policy research, facilitating policy dialogue and conducting training on policy analysis and development management.

The activities of ESRF are as follows:Research and Publications• Growth and wealth creation• Governance• Globalisation and regional integration• Social services and the quality of life• Natural Resource Management UnitCapacity Development and Policy Voice• Short-term training• Post-graduate Diploma in poverty analysis (funded by UNDP)• IFP (International Fellowship Programme - funded by Ford Foundation International Fellowship Programme)• Policy dialoguesCommission Studies - Demand-driven studiesKnowledge Management - ICT (Information and Communication Technology and Library)• TZ Online - www.tzonline.org• TAKNET (Tanzania Knowledge Network) - www.taknet.or.tz• Tanzania Development Gateway - www.tanzaniagateway.org

ESRF Headquarters

For more information please contact: The Executive Director

Economic and Social Research Foundation (ESRF)Tel: +255 22 2790260

E-mail: [email protected] • Website: www.esrftz.org

That the Tanzanian government considers education a top priority is evidenced by the fact that the sector receives more public funding than any other sector in the country. In the 2009/10 national budget, education was allocated TZS 1 743.9 billion. In the 2010/11 national budget, education was allocated TZS 2 045.5 billion.

In 1974 the Tanzanian government formulated the Universal Primary Education Policy, which saw a primary school being built in each village in the country.

The sector has seen signifi cant increases in enrolment rates at all levels. By 2008, net enrolment in primary education reached 97.2 percent from 94.8 percent in 2005, while that of secondary education reached 26.1 percent from 10.1 percent in 2005.

The construction of more classrooms and schools has seen enrolment in primary schools almost double in the past ten years, from 4 382 410 pupils in 2000 to 8 441 553 in 2009. During the same period, the number of secondary schools increased more than fourfold from 927 in 2000 to 4 102 in 2009, with enrolment growing almost six times from 261 896 to 1 466 402. This puts Tanzania on course to meet not only the 2010 MKUKUTA targets but also the 2015 MDGs targeting education.

There is nevertheless an acute shortage of teachers, with the present demand for primary school teachers in the region of 103 321, and a current teacher-student ratio of just 1:50. This underlines the need for teacher training. The government has thus invested in teacher training at the University of Dar es Salaam, Chang’ombe Teachers University, Mkwawa University and the University of Dodoma. It has also launched the Tanzania Beyond Tomorrow project, which will use Information and Communication Technology to enable learners to access the Internet

Education infrastructureBilingual education (English and Kiswahili) is the norm, and is mandated by law. The structure of the formal education and training system comprises two years of pre-primary education, seven years of primary education, four years of junior secondary, two years of senior secondary and up to three or more years of tertiary education.

In the education sector, one of the main achievements in the past few years is a higher enrolment rate. For primary education, the net enrolment ratio in Mainland Tanzania reached 95.4 percent in 2010.

There are 32 universities in Tanzania, including University of Dar es Salaam, the oldest (1961) and largest university in the country, Sokoine University of Agriculture (1984) in Morogoro, and Muhimbili University of Health Sciences in Dar es Salaam. Of these, 11 are public institutions and 21 are privately run. The Inter-University Council for East Africa (IUCEA) has used its 5-year Corporate Strategic Plan for the period 2006/2007 to 2010/2011 to enable greater access to tertiary education for Tanzanians.

Ministry of Education, Zanzibar - Photo Courtesy: Marie Gibbons

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Zanzibar comprises more than 50 small islets and two main islands (Unguja and Pemba), which are the focus of most economic activity. Unguja, also known as Zanzibar, is the larger and more developed of the two islands at 2 332 square kilometres, while Pemba is the smaller at 868 square kilometres.

The vast majority of the population reside on the two main islands, and Zanzibar is one of the most densely populated and fastest growing areas on the continent. Over 60 percent of Zanzibaris live on Unguja (Zanzibar), which has some 469 people per square kilometre and a population growth rate of 3.5 percent per annum.

The population of Zanzibar was 984 625 in 2002, the year of the last census, with an annual growth rate of 3.1 percent. Based on these fi gures, the population for 2011 is estimated at 1 257 014.

Zanzibar Town is the capital city, located on the western side of Unguja. Zanzibar Town also contains the UNESCO World Heritage Site of Stone Town.

ClimateWhile Zanzibar is consistently hot, humid and sunny, its geographical location attracts seasonal monsoon winds that temper its tropical climate. There are two rainy seasons, with the long season lasting from March to May and the short rainy season between October and December. On average, Pemba receives more rainfall (1 900 millimetres) than Unguja (1 600 millimetres).

Temperatures are high during the short dry season (January to February) with average maximum temperatures around 32 degrees Celsius. For the rest of the year, maximum and minimum temperatures average around 29.3 and 21.1 degrees respectively; although these can feel far hotter given the high humidity.

Marine ConservationThe marine environment of Zanzibar is a rich and diverse ecosystem that includes coral reefs, seagrass beds, mangrove

forests, and sandy beaches. The system supports complex populations of marine life critical to Zanzibar’s socio-economic development. Examples include both the fi sheries and tourism industries, which underpin most peoples’ livelihoods.

So as to ensure the sound management of these important resources, the government of Zanzibar has created a network of marine conservation areas that is co-managed with local communities. At present there are three Marine Conservation Areas (MCAs); namely, the Menai Bay Conservation Area (MBCA), the Mnemba Island Conservation Area (MIMCA) and the Pemba Channel Conservation Area (PECCA).

A further two areas are to be gazetted as MCAs in the near future, which will help in fashioning a unique model of marine conservation as it will result in around 75 percent of Zanzibar’s internal waters being under special protection. Marine conservation in Zanzibar allows for multiple uses, yet contains core areas that will be harvested by common agreement and protected by law.

History and politicsBy the fi rst century AD Zanzibar was an established stopover for eastern trade caravans from Arabia, Persia, India and China travelling into the continental mainland. These caravans also interacted with the indigenous Swahili residents of the islands. Zanzibar eventually became a permanent home to many wealthy Arab traders and their families, who established garrisons on the islands and built the fi rst mosque in the southern hemisphere. The legacies of this infl uence can be seen in the fact that a large proportion of Zanzibaris are of the Islamic faith and that Islamic architectural styles dominate Stone Town. Zanzibaris claim that their islands were the birthplace of the Swahili language, now a lingua franca across much of East Africa. Their Swahili cuisine is legendary. Spices feature prominently: cinnamon, nutmeg, pepper and cloves, among others, are all used to add a unique fl avour. The 15th century brought Zanzibar under Portuguese occupation, which lasted for the next 200 years. In 1698,

Zanzibar

An archipelago situated about 35 kilometres off the coast of mainland Tanzania, Zanzibar has its own autonomous government, while remaining part of the United Republic of Tanzania.


For more information please contact:EXECUTIVE DIRECTOR

P.O. BOX 2286 – ZANZIBARTEL: 255-24-2233026/2237858 • FAX: 255-24-2232737

Email: [email protected] • [email protected]: www.zanzibarinvest.org

ZANZIBAR …A place not to miss in your life time

Zanzibar has been a trading hub for millennia. Taking advantage of its strategic location, Zanzibar is once again ready to act as a gateway for your trade around the World.

Zanzibar Investment Promotion Authority (ZIPA) is a government institution operating under Zanzibar Investment Promotion and Protection Act No. 11 of 2004. Its main objective is to promote and facilitate investments and trade in Zanzibar.

ZIPA is also responsible for administration, control and management of Freeport and Free Economic zones. The zones have been purposely created to cater for manufacturing and processing for exports as well as duty-free transit trade.

With more than 15 years of experience and knowledge we offer tailor-made services to our clients; You are therefore invited to explore the opportunities in the Export Processing Zones (EPZs) as well as Free Port Zones.

Investment Opportunities available in the Zones include: •Developer - for those engaged in developing physical infrastructure and construction of industrial sheds/warehouses for zones to be occupied on lease by enterprises •Licenced Enterprises - for companies directly involved in export-oriented business activities and Transit Trade such as: i. manufacturing or processing ii. commercial activities (breaking bulk, repackaging, re-labelling and trading)

Welcome Zanzibar for investment or to enjoy its hospitality!

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Zanzibar fell under the control of the Sultanate of Oman, which developed an economy of trade and cash crops, with a ruling Arab elite. In the 19th century Zanzibar once again came under European domination, fi rst in the form of German and later British rule. Zanzibar gained independence from the British Empire in 1963 as a constitutional monarchy.

Zanzibar has been part of present-day Tanzania since 1964 when it united with Tanganyika (as it was then known) to form the United Republic of Tanzania. It maintains an independent government structure with a president, chief minister, cabinet (Revolutionary Council), parliament (House of Representatives) and judiciary. While certain matters such as defence, foreign affairs, and higher education are regulated by the government in Dar es Salaam, the Government of Zanzibar formulates and implements socioeconomic development plans, manages budget and fi nancial affairs, maintains and controls foreign exchange reserves and is responsible for servicing its foreign debt autonomously from mainland Tanzania.

Internal political confl icts have been considerably more pointed than those on the mainland, with the country’s two main parties, the CUF and the CCM, clashing over government control, leading to outbreaks of violence after elections in 2001 and 2005. But talks between the two parties in October 2009 were hailed as a breakthrough and the elections in 2010 were peaceful following the approval of a power-sharing agreement. The CCM and CUF have subsequently formed a unity government.

TOURISMThe small island economy of Zanzibar is increasingly orienting itself towards the service sector as a lynch-pin of economic growth, with tourism having become one of its priority sectors. The industry is regulated by the Zanzibar Commission for Tourism (ZCT), which was established in 1992. Tourism policy is guided by the Promotion of Tourism Act (1996), The Zanzibar Tourism Master Plan (2003), Strategy of Half a Million Tourists in Zanzibar (2007-2014) and the Zanzibar Tourism Policy Statement of 2003. Visitor arrivals to Zanzibar increased to 97 711 in the fi rst nine months of 2009 compared with 95 430 visitors in the same

period in 2008. This may be attributed to events such as the Sauti Za Busar music festival in Zanzibar, with increased arrivals from Italy as well as the United Kingdom, Germany, France, South America and South Africa. Tourist Exit Survey 2009An exit survey was undertaken at the airport in Zanzibar between 27 July and 2 August 2009, and at the sea port for two weeks from July until 8 August 2009. A total of 645 completed response forms were collected – 536 from the airport and 109 from the sea port.

Some 43 percent of those interviewed at the airport were Italian, and 22 percent at the sea port were British. In total, 30 percent of those interviewed were Italian, 16 percent British and 11 percent German. The 22 percent ‘other’ included Spanish, South African and Scandinavian travellers. The majority of airport arrivals were in the age bracket 30-55 years, whilst the majority of port arrivals were equally under 35 years or older than 55 years. 96 percent of travellers visited Zanzibar for leisure, with 3 percent on business and 1 percent visiting friends and relatives. Approximately half of the visitors were package tourists and half were independent visitors, though there were more independent travellers arriving by the sea port. Visitors were asked where they were staying in Zanzibar. The majority of visitors (over 250) spent some time in Stone Town, Zone 1. Zone 2, North and north-east was a popular area, with Nungwi being the next most frequented (250). Kiwengwa and Kendwa were also popular, and Jambiani and Paje in Zone 3 had around 100 visitors each. Overall guest satisfaction showed that 100 visitors (47 percent) at the airport and 66 visitors (65 percent) at the sea port found their holiday exceeded their expectations, which was 53.38 percent of all visitors surveyed. A further 42.77 percent of the guests – 47 percent at the airport and 33 percent at the seaport – agreed that their holiday met their expectations, and 5 percent of the airport departures (10 visitors) and 2 visitors at the seaport said that their experience did not meet their expectations.

Blue Bay Resort - Photo Courtesy: Marie Gibbons

Arab Tea House, Bagamoyo - Photo Courtesy: Marie Gibbons


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Tourism resourcesZanzibar boasts a wide variety of tourism options, from the historical and cultural sites of Stone Town to beach and leisure activities and eco-adventure holidays. There are a number of upmarket hotels and resorts on both the east and west coasts of Unguja Island that are easily accessible from the airport and Zanzibar Town. Many of these establishments are situated right on the coast with private beaches, spa services and marine activities.

For those interested in culture and history, Stone Town is an ideal place from which to begin. A UNESCO World Heritage Site since 2000, Stone Town gained its name from the approximately 1 700 multi-story ‘stone’ buildings (they were actually constructed with coral and mortar, not stone) in the old town area. The area is also known for its architectural richness.

Today, many of the winding streets and high townhouses of old Stone Town remain unchanged and visitors can walk between the sultan’s palace, the House of Wonders, the Portuguese fort and gardens, the merchants’ houses, and the Turkish baths of the old city. While only 83 square blocks in size, it contains 23 ‘landmark buildings’, two cathedrals, over 50 mosques, 157 balconies, verandahs and loggias, and more than 200 massive and elaborately carved teak wood doors. These doors have become a symbol of Swahili culture in East Africa, and Stone Town is home to many fi ne examples. Stone Town also gives the tourist a rich variety of shopping options, including jewellery, kangas and kikois (cloth), locally produced tinga tinga paintings, carvings, perfumes and massage oils, and spices.

Other excellent cultural sites include the ruins of the Beit el Mtoni, the largest palace in Zanzibar, built in 1828 during the reign of Omani Sultan Said. Before being abandoned in the 1880s it was home to over 1 000 residents, including Said’s daughter, Princess Sayyida Salme. Salme became famous when she eloped with a German merchant and settled with him in Hamburg. She later wrote her memoirs, which included detailed descriptions of life at Mtoni Palace.Divers in Stone Town can easily arrange a day trip to the surrounding reefs. Numerous dive schools rent equipment and embark on longer journeys. Turtles, manta rays, dolphins, and other large marine species are often sighted. It is also possible to visit a nearby shipwreck.

The Chole Island Marine Park just off Stone Town – and nearby Prison, Grave, and Snake Islands – make for a refreshing day-trip. Prison Island offers an opportunity to see its giant land tortoises, some of which are thought to be over a century old. Throughout the Zanzibar Archipelago, the annual Zanzibar Cultural Festival (www.ziff.or.tz) showcases the many traditions and celebrations of the region. The Festival occurs each year in July, directly after the international Zanzibar International Film Festival (ZIFF) Festival of the Dhow Countries. Performers come from many countries around Africa, but Swahili culture is mostly represented. Zanzibari taraab music and traditional dances are performed by a rich ensemble of cultural troupes from Tanzania and abroad. Audiences can enjoy exhibitions of arts and crafts that promote local culture. Street carnivals in Stone Town, small fairs, and canoe races also take place.

On the northern island of Pemba, the festival marks the annual bull fi ght, a remnant of Portuguese presence on the islands, where trained bulls prance after unarmed men in a humorous version of the Iberian spectacle.

Ecotourism opportunities abound in Zanzibar. Jozani Forest, less than half an hour’s drive from Zanzibar Town, is home to the last indigenous population of (Kirk’s) Red Colobus Monkey in the world. Jozani is a conservation project aimed at preserving not only the Red Colobus, but also a number of other species, including the rare forest antelope, Ader’s Duiker and many kinds of birds. It is also an example of some of the last indigenous forest ecosystems on the islands, containing six distinct forest types and 100 different trees.

For those interested in the marine and beach experience, Zanzibar has many opportunities for snorkelling and exploring spectacular coral reefs. Six kilometres off Unguja Island, Chumbe Island Coral Park was designated Tanzania’s fi rst Marine National Park in 1994. Its coral reef, which was declared ‘world’s best shallow water coral reef’ by the Australian Institute of Marine Sciences, is home to nearly 400 species of fi sh, turtles, dolphins and the giant coconut crab. Visiting Chumbe is also an excellent way to enjoy Zanzibar’s spectacular beach and marine sights while adhering to conservation principles. The park operates on a ‘zero impact’



conservation principle. Accommodation is in huts that are built wholly from local materials. Water and electricity on the island are self-sustaining and generated through green technology, such as solar panelling and rainwater fi ltering systems. Chumbe is considered one of the world’s most successful ecotourism projects. Pemba Island is smaller, more lush and hilly than Unguja, and receives far fewer tourists. While this means a less developed tourism infrastructure on the island, it also provides the opportunity to experience beautiful and unspoiled beaches with few other people around. Small guesthouses are dotted around the island and there are a few upmarket hotels and resorts specialising in deep sea diving. Pemba also contains the Ngezi Forest, a protected area home to indigenous fl ora and fauna such as the Pemba Flying Fox (bat) and the Pemba Palm, found only on this island.

Fundu Lagoon, located on the southwest of the island, and accessible only by boat, is a perfect getaway. On nearby Mafi a Island, Shambe Kilole Lodge overlooks the archipelago and offers the promise of viewing whale sharks breaking the water’s surface. There are also many historical sites and ruins to explore on Pemba, including mosques and tombs, and the old fort town of Chake Chake. The Pujini ruins near Chake Chake are the remnants of a 13th century fortifi ed town. INVESTMENT POTENTIALInvestment in Zanzibar is governed by the Zanzibar Investment Promotion Authority (ZIPA), which facilitates and promotes investment in the islands, including Export Processing and Free Zones, where investors can access incentives for producing export-oriented goods.

Zanzibar has been gaining importance as an investment destination, both regionally and globally. The country is relatively stable politically, socially and economically, and private investments are welcomed and protected both constitutionally and through international conventions. Free repatriation of profi ts is allowed, as well as 100 percent foreign ownership. Furthermore, Zanzibar’s strategic location within

East African trade routes makes it an effective springboard for entering the region. Established through the Investment Code of 2004, the Zanzibar Investment Promotion Authority (ZIPA) is a one-stop investment centre that acts as a focal point for investment promotion and facilitation in Zanzibar. Investment incentives include exemption from taxes on goods for export and exemption from corporate tax, among other incentives. There are a number of local investors willing to take part in joint ventures with foreign investors. ZIPA facilitates the issuance of work and residence permits for investors, expatriate personnel and their dependants. Zanzibar is connected to the National Power Grid through an underwater marine cable from mainland Tanzania. While the island of Pemba is served by industrial diesel oil-run generators, plans are underway to connect it to the National Grid. There are adequate water reserves for industrial and household use, with minimum infrastructure needed to ensure that water supply reaches any part of the island.

A network of tarmac trunk roads covers most of Zanzibar, and there is a passable network of tertiary roads reaching all rural areas. The main seaport is situated in Stone Town and caters for ocean going vessels, cargo-handling services, passenger cruise ships and ferryboats. Tourists and cargo may be fl own in through Zanzibar International Airport, which is capable of handling a variety of different aircraft sizes. The airport is presently undergoing rehabilitation for the extension of its runway and the upgrading of the passenger terminal.

There are various local, regional and international fi nancial institutions offering a wide range of services, and while land is government-owned, it can be acquired by lease for up to 49 years (renewable). Zanzibar is well served by the main telecommunications companies operating in Tanzania, and Internet services are available at very competitive rates.

Zanzibar has a number of sectors that offer lucrative investment opportunities:

• Exciting tourism activities and attractions, particularly ecotourism, brings investment opportunities in upmarket hotels

Tembo Hotel - Photo Courtesy: Marie Gibbons

Monument in memory of the slaves, Zanzibar - Photo Courtesy: Marie Gibbons

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and resorts, tourism support services (such as restaurants, diving and sea sports), exhibition and conference centres, and theme parks.

• Zanzibar also offers great potential for investment in the service sector, including education, health care centres, business and fi nancial services, and information and communications technology.

• Opportunities in agriculture include the export of fresh tropical fruits, horticulture and fl oriculture, fruit processing and canning, poultry production, production of ornamental fi sh, agro-processing and value addition in marine products, animal feed, dairy, coconut by-products, milling and packaging. Zanzibar is also known for its exotic home-grown spices, such as cloves, cinnamon, cardamom, nutmeg, black pepper and chillies, and this sector offers great potential for expansion and the creation of forward linkages through value addition.

• Infrastructure development is another key area, with the development and construction of a commercial port at Mpigaduri under concession arrangements and power generation using eco-friendly sources such as wind, biogas and solar power encouraged.

• With the country’s location alongside excellent marine resources, the fi shing industry has almost limitless potential for development. Various types of fi sh, shrimps, lobsters, seaweed and other marine resources are plentiful, and investors may choose suitable areas for deep sea fi shing, processing and canning, or aqua culture (fi sh farming and seaweed production).

An area ripe with potential, seaweed farming employs more than 18 000 people, with annual production reaching 10 000 metric tonnes and room for expansion in production as well as processing.

Free Economic ZonesIn order to create a conducive environment for the manufacturing sector to thrive, the Free Zone Programme was established in 1992, with a Free Zone Authority set up the same year and then a Free Port Authority in 1998 to foster transit

trade in fi nished and value-added products. Free Economic Zones, otherwise known as Export Processing Zones (EPZs), comprise geographical areas specialising in manufacturing, processing, warehousing or assembling goods or services for export. Following the enactment of the Investment Promotion and Protection Act No. 11 of 2004, and the subsequent merger of the three institutions formerly responsible for investment promotion, the development, management and promotion of the free zones (both the Export Processing Zones and the Freeports) were put under one umbrella – the Zanzibar Investment Promotion Authority (ZIPA). These zones offer fi rm free trade conditions and a liberal regulatory environment. Potential investors must carryout an industrial or processing activity and export not less than 80 percent of their product So far, there are fi ve declared Free Economic Zones, three of which are for export-oriented manufacturing and services. The three sites which have been declared Export Processing Zones, allowing the duty-free import of raw and intermediate materials and capital goods to manufacturers for export, include:

• Amaan Industrial Park, some 3 kilometres from the seaport and 2 kilometres from the airport, covers an area of 12.5 hectares and has existing infrastructure such as sheds/ warehouses, utilities and onsite customs inspection. The hub of industrial activities in the EPZ sector, Amaan houses nine operating projects and has created employment for some 660 workers. These projects export on average goods worth US$ 2.7 million annually.

• Fumba Free Zone, situated 24 kilometres from the seaport and 10 kilometres from Zanzibar International Airport, covers an area of 3 000 hectares and is ideal for light engineering and projects based on the maximum use of local raw materials, such as marine and agricultural resources and garment manufacturing. It is accessible through a 13-kilometre ring road, which cuts through the hinterland from Maungani to Fumba through Nyamanzi. Projects already operational here include a tourist resort and a fi breglass boat factory, as well as other investments involving tourism, industry and real estate that are at various stages of development.

• Offering untouched land ready to host potential investors, Micheweni Free Zone on the north-eastern tip of Pemba covers an area of 808.4 hectares and is 75 kilometres from Mkoani seaport and 45 kilometres from the airport. The zone is accessible through a road from Micheweni Township to Maziwang’ombe village.

Free Port Zones offer duty-free storage of transit goods as well as opportunities in labelling and packaging, sorting, grading and cleaning, simple assembly, minor processing, quality control and catering.

• The Maruhubi Zone is located about 3 kilometres from the Malindi seaport in Zanzibar town and covers an area of 5 hectares. It has all basic facilities, including warehouses for rent, 24-hour security, onsite customs services, electricity, water and telecommunications. Currently there are 14 projects operating at the zone in fi elds such as car-dealership, cosmetics and auto-spares.

Dhow - Photo Courtesy: Marie Gibbons


• The Airport Zone is intended to cater for air cargo-based operations. Investments are encouraged for the development of the site as well as its future operation, considering the improvements made to Zanzibar International Airport.

Export developmentDuring the quarter ending September 2010, procurement of major traditional export crops increased to 4 542.4 tonnes from 4 148 tonnes recorded in the corresponding quarter in 2009, mainly attributed to an increase in clove production. The increase in clove production was on an account of favourable weather condition and a rise in producer prices following recovery of world market prices for cloves.

In response to good world market price for cloves, the Zanzibar State Trade Corporation (ZSTC) increased clove producer prices for grades one and two to TZS 3 500 and TZS 3 000 per kilogram from TZS 3 000 and TZS 2 800 per kilogram in the corresponding quarter in 2009. Seaweed purchases increased to 2 530 tonnes from 2 407 tonnes procured during the corresponding quarter in the previous year. In 2010, exports of goods and services amounted to US$ 120.1 million, below US$ 127.6 million posted in 2009. This outturn was mainly on account of decline in clove and manufactured goods exports. Clove exports amounted to US$ 7.5 million, down from US$ 14.6 million, while manufactured goods exports declined to US$ 3.4 million from US$ 5.0 million. AGRICULTUREZanzibar has recently launched a ten-year programme – Mageuzi ya Kilimo – to transform its agricultural sector, which already accounts for an average of 70 percent of foreign exchange earnings. The programme aims to make Zanzibar an agriculture-driven economy by 2020, and it is hoped that the islands will become self-suffi cient in food as well as being

a major exporter of agricultural commodities. This is in line with the Zanzibar Development Vision 2020 and the Zanzibar Agriculture Sector Strategic Plan.

Agriculture on Zanzibar includes crop production, livestock development, fi sheries and forestry. However, its contribution to GDP is presently only around 25 percent, despite the fact that it is by far the largest job creator on the islands, providing about 70 percent of total employment.

Agricultural production has remained predominantly subsistence, small-scale and rain-fed, with minimal use of inputs such as fertilisers and pesticides. The resulting low yields mean that tourist establishments often have to rely on produce from outside Zanzibar. For example, some 80 percent of rice consumed in Zanzibar is imported from the mainland or overseas.

Old Fort in Kilwa - Photo Courtesy: Tanzania Tourist Board

70

Offi cial name: United Republic of Tanzania

Location: East Africa

Capital: Dodoma (seat of government), Dar es Salaam (economic)

Form of Government: Republic; multiparty system since 1992

Head of State and Government: President Jakaya Kikwete (since 21 December 2005); Zanzibar is semi-autonomous and since 2010 a government of national unity, comprising President Ali Mohammed Shein (CCM) and Vice President Seif Shariff Hamad (CUF).

Border countries: Kenya, Uganda, Rwanda, Burundi, the Democratic Republic of Congo (DRC), Zambia, Malawi and Mozambique.

Total area: 883 590 square kilometres of land (Zanzibar 1 650 square kilometres, Pemba island 984 square kilometres) and roughly 59 000 square kilometres of water.

Lakes: Lake Victoria (largest lake in Africa and second largest in the world); Lake Tanganyika (second deepest in the world); Lake Nyasa.

Highest point: Mount Kilimanjaro (5 892 metres)

Climate: Tropical, with hot and humid coastal areas, although temperatures may fall below freezing in high-altitude areas such as Kilimanjaro and the Ngorongoro Highlands. There are two rainy seasons – late March to June and November to January. December to March is hot and dry; June, July and August are cool and cloudy.

Population: 45.1 million – Tanzania Mainland 43.8 million; Zanzibar 1.3 million (2011 estimate)

Ethnic groups: Over 90% indigenous African groups of Bantu and Nilotic origin; also minority population comprising Indian, Pakistani, Goan, Arab and European.

Religions: Christianity (45%), Islam (35%) and indigenous beliefs (20%), with Zanzibar almost completely Muslim.

Languages: There are two offi cial languages – Kiswahili and English (the primary language of commerce, administration and higher education). Arabic is widely spoken in Zanzibar and there are many indigenous languages (over 135).

Weights and measures: Metric system

Electricity: Local current is 220v, 50 cycle AC

Time difference: GMT +03:00

Currency: Tanzanian shilling (Tsh/TZS), divided into 100 cents.

Business and banking hours: Businesses are generally open weekdays 08:00 - 17:00, Saturdays 08:00 - 13:00. Most banks open from 08:30 - 15:00 on weekdays, 08:30 - 13:30 on Saturdays. Many shops stay open later.

Foreign exchange: Travellers’ cheques, dollars or pounds may be exchanged at any authorised bank or bureaux de change in the main towns.

Credit cards & ATMs: Access, MasterCard, Visa, American-Express, and Eurocard are accepted by most hotels, restaurants, travel agencies and the larger stores. There are ATMs available in branches of major banks.

Visa requirements: Visitors must have a valid passport, and most require a visa, with three-month single-entry tourist visas available at Tanzanian embassies abroad.

Health precautions: Visitors require anti-malarial drugs. While the yellow fever vaccination is no longer offi cially required when entering Tanzania, it is still a requirement if you wish to visit Zanzibar.

Communications: There are eight mobile telephone operators, and roaming lines work near most major cities and towns. Internet cafés are plentiful in major city centres. International Direct Dial is available.

Dialling code: The country code for Tanzania is +255. The outgoing international code is 00 for the United States and 000 for all other countries.

Useful Information


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Index to Advertisers

African Assay Laboratories Tanzania Ltd ...................................41Atlas Copco ................................................................................47Braeburn Schools .......................................................................60Capricorn Hotels .........................................................................29CFAO DT Dobie Tanzania ..........................................................49Consolidated Holding Corporation..............................................23Drilling and Dam Construction Agency .......................................56East African Elevator Company Ltd ............................................57Ecobank......................................................................................19Economic and Social Research Foundation...............................61Export Processing Zones Authority ............................................22Gem Centre ................................................................................28Hanspaul Automechs Ltd............................................................35Layne Drilling ..............................................................................43Mantra Tanzania Limited ............................................................41Mbeya Cement Company Limited ..............................................36Ministry of Agriculture and Natural Resources ...........................33Ministry of Communication, Science and Technology ................51Ministry of Energy and Minerals .................................................39Mollel Electrical Contractors Ltd .................................................56Momentum Tanzania Insurance Company ......... inside back coverNational Bank of Commerce.........................................................2

NMB ............................................................................................17Oryx Gas Tanzania Ltd ...............................................................57Shanta Mining Company ............................................................45Southern Sun Hotels (T) Limited ..................................................5Strategis .....................................................................................59Tanganyika Farmers’ Association Ltd .........................................31Tantrade........................................................................................9Tanzania Communications Regulatory Authority ........................54Tanzania Distilleries ....................................................................37Tanzania National Parks .............................................................25Tanzania National Reinsurance Corporation ..............................15Tanzania Portland Cement Company ................. inside front coverTanzania Private Sector Foundation...........................................13Tanzania Revenue Authority .......................................................21The Tanzanite Experience ..........................................................27Trapca ........................................................................................ 11Vodacom.....................................................................................53Zanzibar Commission for Tourism ..............................................65Zanzibar Institute of Tourism Development ................................69Zanzibar Investment Promotion Authority...................................63Zanzibar Shipping and Agency Corporation ...............................66

Documents

Tanzania Review 2011_2012