AN OVERVIEW OF INVESTMENT CLIMATE ANDOPPORTUNITIES IN TANZANIA

TANZANIA INVESTMENT CENTRE

AGENDA

INTRODUCTION

ECONOMIC OVERVIEW

TANZANIA’S INVESTMENT TRENDS

WHY INVEST IN TANZANIA

INVESTMENT INCENTIVES

INVESTMENT OPPORTUNITIES

CONCLUSION

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Tanzania aims to become an industrialized economy andlogistics hub for Africa.- To be a semi-industrialized country by 2025.

- TIC is mandated by the Government to champion theindustrialization vision of the country by facilitating

Investors to establish manufacturing projects.

TANZANIA VISION

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TANZANIA INVESTMENT CENTRE

Coordinating, promoting and facilitating

TIC is the Primary Agency of the Government for:

- Coordinating,

- Encouraging,

- Promoting, and - Facilitating investments

TIC advises the Government on investment policy andrelated matters.

GET TO KNOW TIC

TANZANIA INVESTMENT CENTRE (TIC) -CERTIFICATE OF INCENTIVES

OCCUPATIONAL SAFETY & HEALTH –OSHA

ONE STOP FACILITATION CENTER

NATIONAL IDENTIFICATION AUTHORITY - NIDA

WORK PERMIT- CLASS A & B -MINISTRY OF LABOR

RESIDENCE PERMIT CLASS A & B -IMMIGRATION DEPART

LAND DERIVATIVE RIGHT -MINISTRY OF LANDS

ENVIRONMENT CERTIFICATE - NEMC

PRODUCT STANDARD CERTIFICATE - TBS

TAXPAYER IDENTIFICATION NUMBER - TRA

TIC

COMPANY INCORPORATION, INDUSTRIAL & BUSINESS LICENSE - BRELA

MEDICINES AND MEDICAL DEVICES -TMDA

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

GDP Growth 7.00% 6.3% 6.5% 7.0% 7.0% 7.3% 6.9% 7.0% 7.1% 7.1% 7.1% 7.1%

Per Capita (USD) 530 573 660 778 878 971 1071 1178 1293 1416 1550 1707

0

200

400

600

800

1000

1200

1400

1600

1800

5.60%

5.80%

6.00%

6.20%

6.40%

6.60%

6.80%

7.00%

7.20%

7.40%

Source: Bank of Tanzania

TREND AND FORECAST OF GDP GROWTH AND PER CAPITA INCOME

THE MOST FAVOURABLE ECOSYSTEM/ INHERENT ADVANTAGES:

Peace & Political Stability

Multiparty Democracy

Good governanceStable post-

electionNo civil wars

Access to Markets

EAC: 177 mil.SADC: 342milTFTA: 650milAGOA: US (6,000

items)

EBA: EU

Economic Stability

High growthLow inflation

Resilient economy

Rich NaturalResources

Arable Land,Natural gas,Extractives,

Tourist Destinations,Labour force

InvestmentGuarantees

BIT’sBTA’sMIGAATIAICSID

StrategicLocation

*Serves 6 LLC *3 major Port

*3 International Airports

WHY INVEST IN TANZANIA?

INVESTMENT CATEGORIES

A. Normal Investors

Minimum capital requirement

Foreign investors - USD 500,000

Local investors – USD 100,000

B. Strategic Investors

Minimum capital requirement

Foreign investors - USD 50,000,000

Local investors – USD 20,000,000

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ADDITIONAL INCENTIVES FOR STRATEGIC INVESTORS

STRATEGIC INVESTOR STATUS

1. The amount of capital to be invested (normally above US$ 50 million)

2. The contribution of the project in terms of creating employment opportunities

3. New and innovative technology to be introduced by the Prospective strategic

investment project

4. The extent to which the Project brings capacity to manufacture products for

export and the earning of foreign exchange

5. Whether the Investment is in the Special Economic Zone or Geographically

disadvantaged regions

FISCAL INCENTIVES

Exemption on Project Capital goods

Manufacturing of pharmaceuticals, Textile or leather products

Capital Allowance

Depreciation Allowance

Zero Import Duty on capital goods. Zero Import Duty on raw materials

37.5% - 5% depending on the class of the depreciable asset

Reduced corporate tax to 20% for the first 5 consecutive years

Import Duty exempted by 75%

1.Agriculture – 100%2.Mining - 20% (first 5 years)3.Hotels - 50%4.Fish farming - 50% 5.Tourist services – 50%

Tax Relief on Deemed Capital Goods

Reduced corporate tax to 10% for the First 5consecutive years

Assembly of motor vehicles, tractors, fishing boats or out boat engine

Automatic Immigration Quota: Initially 5 expatriates during project implementation

Unconditional (Free repatriation) transferability of funds• Transfer of funds is allowed through any authorized bank in freely convertible

currency of:- Net profits, - Repayment of foreign loans, - Royalties, - Fees charges in respect of foreign technology, - Remittance of proceeds and - Payment of emoluments, etc.

OTHER NON FISCAL INCENTIVES

Assembly plants for Motor vehicles, tractors, passenger cars, light commercial vehicles, heavy trucks, buses, vans, and motor cycles.

Installation of manufacturing facilities for spare parts.

Commercialization of Tanzania Automotive Technology

Centre (Nyumbu).

Revamping General Tyre Company-Arusha

INVESTMENT OPPORTUNITIES IN TANZANIA

AUTOMOTIVE INDUSTRY

Population 52,557,365 (Est. 2017) with growth rate of 3% 46.8% of the population <15 years 49.1% between 15-64 years old 4.1% of the population is aged 65 years and above.

Pharmaceutical & Medical devices Imports: more than 85% Foreign currency spent Annually: US $0.8bn – 1bn

PHARMACEUTICALS AND MEDICAL EQUIPMENT

Potential market for the domestic pharmaceutical products;

Local Market (Through MSD as well as directly to private health facilities)

EAC Population : 162 mil. (Est. 2017)

SADC Population : 450mil (Est. 2017)

Key facts

Imports: US$ 294 million (2016)

Annual Demand: 570,000 tonnes

Annual Supply: 180,000 tonnes

Current Gap: 390,000 tonnes

Demand forecast: 700,000 tonnes (2030)

Key facts

Large scale farming of oil seeds to address supply gap

Establishment of oil seeds processing facilities

Establishment of refineries.

Opportunities

INVESTMENT OPPORTUNITIESEDIBLE OILS

COTTON AND TEXTILE

Key facts

Seed cotton yield: 283,600 (five years average).

80% of produced cotton exported in raw form.

Low cost labour.

Value addition from field to factory

Ginning, spinning and weaving

Textile

Garments

Opportunities

Per capita consumption to increase High increase in demand relative to supply capacity Current production could peak to 400,000 tons by

2020

Source: Sugar Board of Tanzania, Illovo, Mtibwa, TPC, FAO

0

200

400

600

800

1000

1200

2001 2004 2007 2010 2013 2016 2019

More than 300,000 tons sugar deficit in Tanzania

>300,000 tons

Current Supply Gap

Projected gap: 6% pa

>800,000 tons

Supply Gap by 2020

Current production is 320,000 tons (full capacity).

Highest average cane yields in the world, at 120 tons/ha(good soils and climate).

Rainfall and generous rivers and best irrigation potential.

Suitable Soil and topography.

CANE SUGAR PRODUCTION

Key facts

Retailing & Marketing

Leather Processing

Meat Processing

Slaughtering

Live animal Trading

Raising & Fattening

Opportunities Projected Demand for Local Meat (,000Tons)

LIVESTOCK AND LEATHER INDUSTRY

3rd largest livestock population inAfrica (2017)

Potential for 4.0Mil hides and 6.1Milskins, annually. (2.8m hides, 4.8mskin)

About 50 Mil Ha of Ranch land

S/N ANIMAL AMOUNT

1 Cattle 33.4 Mil

2 Goat 21.14 Mil

3 Sheep 5.65 Mil

4 Chicken 83.28 Mil

5 Pig 2.14 Mil

Fishing ports and fishing in the EEZ.

Fish processing and fishing boat building yards.

Commercial fish farms in marine and freshwater areas.

Key facts

Freshwater coverage: 54,337sq.km (6.1 % of surface area)

Territorial Sea: 64,000 sq.km.

Exclusive Economic Zone (EEZ): 242,000sq.km

Coastline: 1,424 km along Indian Ocean.

.

Investment Opportunities

FISHING AND AQUACULTURE

Key Facts and Figures

Contribute to exports for 24%(2015).

Gold exports: 90% of all mineralexports.

Sector growth rate: 6.9%

Sector share to GDP: 3.4%

Exports in raw form.

Geological Map of Tanzania

MINING AND METALS

Tanzania Railway Limited (TRL) with 2,706km and Tanzania-Zambia Railway Authority (TAZARA) with 970 km.

Power generation grows at 10–15% per year, with only 24% coverage and total installed capacity of 1,300 MW.

The Government plans to generate more than 10,000 MW in 2025. Medium Target is 5,000MW by 2020.

Key Facts

86,472KM Road Network

3,676KM Railway Lines

58Airports

3 International

3Major Ocean

Ports

Airport, Rail and Port construction/rehabilitation projects in PPP model.

Power generation sector using hydro, natural gas, coal, uranium and renewable resources.

Inland container depots and extended railway lines.

Opportunities

INFRASTRUCTURE NETWORK

Population: 55 million (growth rate 2.7% pa).

Demand for modern housing is increasing.

Opportunities; Housing estates

Residential apartments

Office buildings

Conference and banquet facilities

Shopping malls

Movie theatres and entertainment facilities

Real estate properties

Key facts;

REAL ESTATE

16 National Parks,

31 Game Reserves,

44 Game Controlled Areas,

4 Ramsar/Wetland Sites,

33 Wildlife Management Areas,

6 Nature Reserves

Key facts

Average length of stay: 10-11 days

Average Expenditure per tourist: US$355 (package tours) and US$247 (non package tours)

Tourist Hotels, Beach tourism, cultural and historical sites

Golf courses and eco-tourism facilities

Leisure parks

Conference tourism facilities

Air/ground transport

Tour operations and trophy hunting

Opportunities

TOURISM AND LEISURE INDUSTRY

KILIMANJARO MOUNTAIN – 5,895 Meters High

Mount Kilimanjaro (with 5,895 Metres high) is the highest free standing mountain in the World and highest in Africa

NGORONGORO CRATER

Ngorongoro Crater is among the World Heritage Sites

SERENGETI NATIONAL PARK WITH ANIMAL MIGRATION

HOW DO VISITORS TRAVEL TO TANZANIA? INTERNATIONAL CARRIERS

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HOW DO VISITORS TRAVEL IN TANZANIA?DOMESTIC CARRIERS

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Agro – Processing

Agriculture (Fruits & Vegetable, Tea, Cashew nut,Floriculture, Pulses, Cassava, farming &processing)

Financial Institutions

Specialized hospitals, diagnosis centres andinternational colleges and Hi-Tech Schools

Marine and cargo transport

OTHER OPPORTUNITIES

EXPORT PROCESSING ZONES /SPECIAL ECONOMIC ZONES

Developing EPZ or SEZ infrastructure

- Industrial & Commercial Parks.

- Utility Plants & Systems

Establishing Manufacturing Project

- EPZA owned zones

- Stand alone EPZ factory

For EPZ

(i) New investment

(ii) Export at least 80% of goods produced

(iii) Annual exports from US$ 500,000

For SEZ

(i) New investment

(ii) Minimum capital of US$ 500,000

INVESTMENT OPPORTUNITIES EPZ & SEZ ELIGIBILITY

Aims at promoting selected key promising sector/regions

SEZs and EPZs offer special incentives to investors

Earmarked promising sectors are Light Industry, Garments and Textiles;

Tourism; Agriculture; Forestry; Mining and Fishing

SEZ/EPZ PROGRAMME

INVESTMENT OPPORTUNITIES IN ZANZIBAR

Zanzibar Investment Promotion Authority (ZIPA)

1. DEEP SEA FISHING

2. FISH FARMING

3. AGRICULTURE

4. FISH PROCESSING & CANING

INVESTMENT OPPORTUNITIES IN ZANZIBAR

5. ESSENTIAL OILS

6. HORTICULTURE

7. SPICES

POTENTIAL INVESTORS ARE CORDIALLY WELCOME

TO

INVEST IN TANZANIA.

CONCLUSION

THANK YOU FOR YOURATTENTION!

CONTACTS :Executive Director

TANZANIA INVESTMENT CENTRE (TIC)P.O. Box 938

DAR ES SALAAMTel: +255 22 2116328-32 / Fax: +255 22 2118253

Email: information@tic.go.tz

Websites: www.tic.go.tz (TIC)www.tanzaniatourism.go.tz (TTB)www.epza.go.tz (EPZA)www.zanzibarinvest.org (ZIPA)www.tantrade.or.tz (TANTRADE)