TANZANIA

REVIEW 2010
2nd edition
 Contents
Foreword ...........................................3

Introduction ........................................4
Published by
Trade & Investment .........................10

PO Box 22731 Business & Finance .........................15

Dar es Salaam
Telephone: +255 754314865
E-mail: brabys@brabys.com
Tourism ............................................24

MARKETING Agriculture & Fisheries ....................30

Marie Gibbons

PRODUCTION Manufacturing ..................................34

Creative Solutions - René Hartslief
Mining Industry ................................40
DESIGN
Creative Solutions - Michel Gribben
Physical Infrastructure .....................42
PHOTOGRAPHY
René Hartslief, Marie Gibbons, Tanzania Tourist
Board, ZIPA, Tanzania Government Flight Agency,
Social Infrastructure.........................52
Corporate Tanzania
Zanzibar...........................................56
EDITORIAL RESEARCH & CONTENT
Louella Morgan-Jarvis
Useful Information ...........................62
While 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 Map..................................................63
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. Index To Advertisers ........................64
1
 Foreword
local and foreign banks and non-bank institutions, and
the tax regime. Substantial progress has also been
made towards putting in place a general policy and legal
environment which is more favourable for private sector
expansion and sustainable economic development.

Notwithstanding its good economic performance over the

past decade, the global financial crisis and subsequent
recession has affected Tanzania through reduced
economic activities and financial flows in tourism, exports
and foreign direct investment. In order to mitigate the
adverse impact of the crisis, Government is taking steps
to strengthen the economy. This involves sustaining
efforts to create a conducive environment for attracting
local and foreign investment, promoting tourism and
improving and expanding essential infrastructure
services, namely roads, railways, harbours, airports and
rural electrification, while mobilising concessional loans
and support in order to enhance Government’s capacity
to finance big infrastructure development projects, which
includes engaging the private sector through Public-
Private Partnership (PPP).

Giving a comprehensive overview of the Tanzanian

economy as well as government policies and
programmes, the TANZANIA REVIEW is regarded by the
Ministry of Industry, Trade and Marketing as an important
The Government of the United Republic of Tanzania
tool for the local, regional and international business
has over the past several years made great strides
community to learn more about the country and identify
in achieving a series of economic reforms that have
opportunities for productive investment. I therefore
produced a favourable set of macro-economic
encourage investors, as well as business and industry
fundamentals, characterised by high economic growth,
leaders, to read this second edition of the TANZANIA
low inflation and an improved foreign reserve position.
REVIEW, which should prove to be both interesting and
Testament to this success is a growth rate that averaged
informative.
7 percent between 2005/06 and 2008/09.

This healthy economic backdrop, coupled with the

 
country’s political stability, abundant natural resource
base and wide market coverage due to its geographical
 
location and membership of regional economic blocks
with access to preferential trade agreements, makes
Dr Mary M Nagu (MP)
Tanzania a promising investment destination, particularly
Minister of Industry, Trade and Marketing
in areas such as agriculture, tourism, manufacturing,
mining and energy.

As part of the Investment Code, Tanzania offers a well-

balanced package of benefits and incentives that are
applied uniformly to domestic and foreign investors.
Investment opportunities are available through the
Tanzania Investment Centre, a one-stop shop for investor
facilitation, in collaboration with embassies and trade
centres abroad.

Among the major changes undertaken to create an

investment-friendly climate for foreign and local capital
has been the shift from its previous reliance on state
control to a predominantly market-oriented environment.
In the investment arena, almost all key players have been
liberalised, including monetary management, agricultural
marketing arrangements, the foreign exchange system,

3

A fascinating land of geographical and cultural diversity, the United Republic of Tanzania
was created through the union of two sovereign states, Tanganyika and Zanzibar.
From the snow-capped peak of Kilimanjaro, across the plains of
the Serengeti to the shores of the Indian Ocean and the exotic
island of Zanzibar, this vibrant and compelling country beckons
tourists from across the globe. Aside from its first class tourism
product, both mining and manufacturing have potential for
further development, and agriculture remains a mainstay of the
economy.
With a per capita income of some US$ 400 per annum,
Tanzania is one of the region’s poorer countries. Nevertheless,
far-reaching political, economic, financial and administrative
reforms, coupled with external financial assistance from both
bilateral donors and multilateral institutions, have resulted in
private-sector growth and increased levels of investment, with
economic growth averaging around 7 percent per annum for
close on a decade. Likewise, steady improvement has been
seen in many of the country’s social development indicators.
Around 30 percent of Tanzania’s surface area comprises
protected natural habitat, making it one of the most
naturally diverse countries in the world.
THE TANZANIAN ECONOMY
A series of economic reforms have transformed Tanzania’s
once command-based economy into a market economy,
with trade, exchange rates and interest rates having been
fully liberalised, the financial sector restructured and
many parastatals privatised. While this resulted in better
macroeconomic performance, characterised by relatively high
economic growth, low inflation and an improved foreign reserve
position for most of the past decade, the global financial crisis
and subsequent recession have seen reduced economic
activities and financial flows in tourism, exports and Foreign
Direct Investment.
The economy in 2008/09 and beyond
GDP growth for 2008 was 7.4 percent compared to 7.1 percent
in 2007. Agricultural activities recorded growth of 4.6 percent
in 2008, compared to 4 percent in 2007, while growth in the
4
Introduction
Fishing sector rose to 5 percent from 4.5 percent in the previous
year. Manufacturing activities continued to exhibit faster growth,
with 9.9 percent in 2008 – the highest growth rate recorded over
the preceding seven years – compared to 8.7 percent in 2007.
However, this favourable scenario has been curtailed in the
medium term by the ongoing global economic downturn.
Macroeconomic projections indicate GDP growth of 5 percent
in 2009 and a gradual rebound to 7.5 percent by 2012, owing
to the expected recovery in the world economy.
Although Tanzania had managed to subdue inflation to single
digit levels, inflationary pressures in 2008 due to the lagged
effects of rising world petroleum and food prices earlier in
the year saw annual inflation increasing to 13.5 percent in
December 2008. Following the decline in world commodity
prices, domestic inflation had eased to 12.1 percent by the end
of September 2009. The severe food shortage in the region
due to the prolonged drought has kept food prices high and
inflation in double digits.
During the year ending October 2009, the overall balance of
payments recorded a surplus of US$ 692.8 million, up from
a deficit of US$ 191.1 million reported during the previous
year. This performance is largely attributed to the narrowing
of the current account deficit from US$ 3 074.0 million in the
year ending October 2008 to US$ 2 000.4 million, following
an increase in exports of goods and services, surge in official
current transfers and inflows of balance of payment support.
Meanwhile, US$ 245.8 million balance of payment support
from the IMF under the Exogenous Shock Facility (ESF) and
US$ 249.0 million allocation of Special Drawing Rights (SDR)
contributed to a large increase in the gross foreign reserves
position. Gross official reserves increased to US$ 3 521.9
million in October 2009 from US$ 2,580.0 million recorded in
the corresponding month in 2008. This level of reserves was
enough to cover about 5.7 months of imports of goods and
services.

The Ngorongoro Crater - Photo Courtesy: Tanzania Tourist Board
Tanzania, just like other developing economies, has
been affected by the world financial crisis, particularly in
agriculture, mining and tourism activities.
Over the past decade, the annual average exchange rate
between the Tanzanian Shilling and the US Dollar has
continued to increase, while the rate of depreciation has
fluctuated. During 2009, the Tanzanian Shilling continued to
depreciate against the US Dollar, falling to TZS 1308.8 per US
Dollar in March 2009 from TZS 1185.1 per US Dollar in March
2008. The Shilling lost 10.4 percent of its value between March
2008 and March 2009.
TOPOGRAPHY
Lying just south of the equator, Tanzania is the largest of the
East African countries. Its total surface area of 945 000 square
kilometres (approximately four times the size of the United
Giraffe - Photo Courtesy: René Hartslief
6
Kingdom) includes the islands of the Zanzibar archipelago. The
country borders on Kenya and Uganda to the north, Rwanda,
Burundi and the Democratic Republic of Congo (DRC) to the
west, and Zambia, Malawi and Mozambique to the south.
Tanzania consists of three principal geographical regions,
comprising the highlands, the saucer-shaped plateau
(averaging about 1 222 metres) and the low-lying coastal plains
and islands to the east. There are isolated mountain groups
in the northeast and southwest, while the northern highlands
boasts Ngorongoro Crater as well as the highest mountain in
Africa – the 5 892-metre Mount Kilimanjaro.
Lake Victoria, on the border of Kenya and Uganda, is the
largest lake on the continent. The Great Rift Valley that runs
through central Tanzania is covered with numerous lakes,
including Rukwa, Nyasa, Kitangiri, Eyasi and Manyara. Lake
Tanganyika, which lies between Tanzania and the DRC, is the
second oldest and deepest lake in the world.
Situated some 32 kilometres to the east of the mainland, the
island of Zanzibar is the biggest coral island off the coast of
Africa at about 1 650 square kilometres. Pemba Island, lying
about 40 kilometres to the northwest, has a total area of
around 984 square kilometres.
CLIMATE
Tanzania’s equatorial climate results in pleasant weather
throughout the year, with the hottest months occurring from
November to February (25°C to 31°C) and the coolest period
between May and August (15°C to 20°C). In the highlands,
temperatures range between 10°C in the cold season and
20°C in the hot season, 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 & PRESENT
The history of mainland Tanzania, or Tanganyika as it was
once known, stretches back to prehistory, with the renowned
Olduvai Gorge having provided fossilised remains of some of
humanity’s earliest ancestors.
Zanzibar and the coastal area were exposed to Arab traders
as early as the 8th century, and by the 13th century the region
was attracting immigrants from as far afield as Persia and
India. In the 19th century the trade in slaves, ivory and cloves
flourished under the reign of Sultan Seyyid Said, attracting
commercial interest from both the United States and Britain.
Little is known of Tanganyika’s interior until the early 1800s,
when it was explored by slavers, European missionaries
and explorers. It is generally thought
that the area was once inhabited
by ethnic groups similar to
Southern Africa’s Bushmen
and Hottentots, who
were slowly displaced
by advancing
Bantu tribes from
the south
and Nilotic
peoples
from the north.

Wooden carving - Photo Courtesy: René Hartslief
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 a Sultan saw the political status quo in Zanzibar
remaining largely unchanged until after World War II, 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. 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 first president.
Zanzibar’s quest for political independence began to gather
momentum in the mid-1950s, and in December 1963 it
became an independent constitutional monarchy under the
sultan. However, less a month later the sultan was overthrown
by the African majority, and a new government was formed
with the Afro-Shirazi Party (ASP) leader Abeid Karume as
President.
United Republic of Tanzania
On 26 April 1964, the sovereign republics of Tanganyika and
Zanzibar united to form the United Republic of Tanganyika and
7
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.
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. Up until the mid-1980s, Tanzania was a one-party state
with a socialist economy.
Julius Nyerere was succeeded as president in 1985 by Ali
Hassan Mwinyi, whose administration undertook a number of
political and economic reforms. The first multiparty general
election was 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.
Under the terms of the union, Zanzibar retains considerable
local autonomy. Its political landscape has, however, been
marred by conflict between competing interests. Zanzibar’s first
multiparty elections were held in 1995. Amani Abeid Karume,
the son of Zanzibar’s first president, was elected president in
2000 and again in 2005. The next general elections for both
the mainland and Zanzibar are scheduled for October 2010.
THE PEOPLE
One of Tanzania’s greatest assets is its people, who are
courteous, warm and friendly. About nine-tenths of the
population comprises indigenous African tribes, mostly
speaking Bantu languages, although there are also Nilotic
groups such as the Masai, and a minority population of people
of Indian, Pakistani and Goan origin, as well as some Arab and
European communities.
One of the most ethnically diverse nations in Africa,
Tanzania has more than 128 different tribes.
Although Kiswahili is the official – and by far the most widely
used – language (93 percent), English is spoken by at least
one and a half million Tanzanians as their second language.
There are in total more than 135 other indigenous languages
spoken across the country.
Approximately 40 percent of mainland Tanzania is Christian
(mainly Roman Catholic, followed by Anglican and Lutheran).
Islam is the religion of more than a third of the people,
Masai dancers - Photo Courtesy: Tanzania Tourist Board
especially along the coast, and some 23 percent of Tanzanians
follow traditional beliefs. Zanzibar is 96 percent Muslim and 4
percent Hindu.

According to the World Bank’s World Development Indicators,

Tanzania’s estimated population in 2008 was 42.5 million, with
a population growth rate of 2.9 percent per annum. Around
97 percent of the population reside in Tanzania Mainland and
about 3 percent in Zanzibar. The majority of the country’s
inhabitants live in rural areas. Life expectancy is estimated at
56 years.

MAIN CENTRES
Tanzania is divided into 26 administrative regions – 21 on the
mainland, three on Zanzibar and two on Pemba. In addition to
this, there are 130 administrative districts, ten in Zanzibar and
120 on the mainland.

Dar es Salaam: Known by locals as ‘Dar’, this cosmopolitan

city is Tanzania’s commercial and industrial capital, and has
2 497 940 inhabitants according to the 2002 Census, although
2010 estimates put the population at around three million,
making it East Africa’s second-largest metropolis. The bustling
harbour is the country’s main port, and most government
offices are based here, as are diplomatic missions and non-
governmental organisations.

Founded in 1862 by Sultan Seyyid Majid, Dar es Salaam

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 Village Museum,
as well as the Kariakoo Market, Kivukoni Fish Market, city
centre and waterfront.
Grapes - Photo Courtesy: René Hartslief
Cotton - Photo Courtesy: René Hartslief

Dodoma: The administrative capital of Tanzania since

1973, Dodoma is centrally situated on the eastern edge of
the southern highlands some 309 kilometres west of Dar
es Salaam. This pleasant town is much smaller and less
developed than Dar es Salaam, with a population of around
155 000 (2003). Today the town is at the centre of Tanzania’s
wine industry, and there are lovely prehistoric rock paintings in
the vicinity of the Irangi Hills.

While Tanzania’s capital is Dodoma, Dar es Salaam remains

the country’s social and economic powerhouse.

Mwanza: Tanzania’s second largest city with around one and

a half million inhabitants, Mwanza is a regional economic hub
and major port located on the south-eastern shore of Lake
Victoria, which borders Uganda to the northwest and Kenya to
the northeast. The city is thus an important 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. Tourists will find the town a good
place from which to explore the surrounding attractions, such as
Rubondo Island National Park and the western Serengeti.

Mbeya: Located in the southern highlands, bounded by

the Poroto mountain range to the southeast and the Mbeya
mountain range to the north, the agricultural centre of Mbeya
is known for its pleasant climate and setting. Its close proximity
to the Zambian border, in addition to its position on the Great
North Road and the TAZARA railway, makes the town an
important link in the road and rail routes between Tanzania,
Zambia and Malawi.
8
 Mbeya was founded in the 1930s during Tanzania’s
gold rush, and the surrounding area has rich gold
fields which continue to provide a lucrative source of
income as well as attracting substantial international
investment. The region’s produce of tea, coffee,
cocoa and bananas is packaged here before
being transported either inland or to the
coast.
Arusha: the capital of the Northern
Circuit safaris and the country’s
third-largest city, Arusha is situated
in the northern highlands among
the foothills of Tanzania’s second-
highest mountain, the imposing
Mount Meru with its impressive
crater. The rich volcanic soils
produce abundant crops of
wheat, coffee, flowers and
pyrethrum, making this an
important agricultural zone.
Built in the early 1900s by the German
colonial government, this once quiet
agricultural backwater is currently among
Tanzania’s most prosperous centres. 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, the African Court on Human and Peoples’ Rights
and the offices of the East African Community.
Halfway from Cape Town to Cairo - Photo Courtesy: Marie Gibbons
9
Wheat- Photo Courtesy: René Hartslief
Bagamoyo: In days gone by, this sleepy harbour town with its
crumbling colonial architecture was a prominent trading hub
and slaving port on the East African coast. While Bagamoyo
is now known for the manufacturing of dhow sailboats, it was
once the last mainland stop for slave and ivory caravans
travelling from Lake Tanganyika to Zanzibar, and later became
an important centre for missionaries in their efforts to abolish
the slave trade.
Kigoma: The capital of western Tanzania, and Lake
Tanganyika’s busiest port, Kigoma is a significant centre
for foreign trade as well as being the main arrival point for
refugees coming from conflict-beset countries in central Africa.
It is also the final stop on the Central Line Railway from Dar es
Salaam, built in the early 20th century to transport agricultural
produce from the hinterland to the coast. Set amid spectacular
mountain scenery and forests rich in wildlife, Kigoma is a
convenient base from which to visit the Gombe Stream and
Mahale Mountains national parks.
Moshi: The central point of Tanzania’s coffee-producing region,
the lovely town of Moshi lies amid vast coffee plantations at the
foot of Mount Kilimanjaro. While the town’s 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.
Tanga: Tanzania’s chief seaport after Dar es Salaam, the
industrial, trading and export-import centre of Tanga with
its attractive and well-preserved colonial architecture has a
surprisingly tranquil atmosphere. Places worth visiting here
include the medieval Tongoni ruins and Amboni Caves.
Tabora: 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,
Tabora was also a well-known mission station during the 19th
century, being visited by both Stanley and Livingstone. The
town continued to flourish under German rule, when it became
one of the most busy and prosperous centres in East Africa.
With the Central Line Railway branching at Tabora to both
Kigoma and Mwanza, the town remains an important transit
point and stopover for visitors to Tanzania’s western hinterland
and beyond. The Livingstone Museum some 15 kilometres
away is also worth a visit.
Zanzibar Town: Situated along the waterfront, this is largest
urban centre on the island of Zanzibar. 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.

During the past decade Tanzania has dramatically transformed its economy. This is reflected
in its strong macroeconomic fundamentals, with falling inflation, higher inflows of Foreign
Direct Investment (FDI) and consistently increasing GDP growth – an impressive annual rate
of 7.2 percent between 2002 and 2008.
Government programmes have focused on enhancing the
business environment and sustaining trade and investment
partnerships with China as well as other Asian countries
and the Middle East. This includes increasing the value of
goods produced and ensuring that in the medium term no
unprocessed products are exported; implementing the Exports
Strategic Plan; continuing to implement the Mini-Tiger Plan
2020 and the Business Environment Strengthening for Tanzania
(BEST) programme.
The emphasis on an ever more open and competitive market
economy and adherence to the principles of multilateral trade
resulted in real GDP growth of 7.4 percent in 2008, up from 7.1
percent in 2007. Notwithstanding the setbacks brought about by
the global economic downturn, government continues to pursue
economic and financial policies that are friendly to business,
favourable to the growth and development of the indigenous
private sector, and attractive to foreign capital. It is, however,
vital that the cost of doing business is reduced in order to
stimulate supply response at the micro-level to complement
macroeconomic and political stability.
The export market in 2009
At the beginning of 2009, prospects did not seem promising,
with Tanzania’s traditional export crops – notably cotton, cloves,
coffee and cashew nuts – and non-traditional exports, excluding
gold, experiencing an unprecedented decline in demand and
price due to the global economic slowdown. Earnings from
tourism and transportation (transit trade) as well as inflows of
FDI were impacted negatively too.
Nevertheless, during the year ending October 2009, the export
of goods rose by 8.4 percent to US$ 2 719.0 million, largely due
to a notable rise in exports of both traditional and non-traditional
goods. Much of the increase was recorded in tobacco,
horticultural products, re-exports and other exports. While
10
Trade & Investment
exports of gold and manufactured goods saw slower growth,
they continued to dominate, accounting for 35.2 percent and 21
percent of goods exports, respectively
Tanzania’s main markets include the East African
Community (EAC), Southern African Development
Community (SADC), China, the European Union (EU) and
United States (US).
THE INVESTMENT ENVIRONMENT
Tanzania is a stable and peaceful multiparty democracy,
promoting good governance and the rule of law. The country
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
financial 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.
Changes in Tanzania’s business environment have seen
it become better aligned with the practices of developed
economies, while a reduction in red tape has facilitated the
process of investing in the country as well as the procedures
involved in setting up and running a business. Furthermore,
there is increased transparency in matters such as taxation,
labour laws and other issues that are central to bringing in FDI.
The current Tanzanian administration has made tackling
corruption a priority. The National Anti-Corruption Strategy
(NACS) was launched in December 2006 and the Anti-
Corruption Act, also known as the Prevention and Combating
of Corruption Bureau (PCCB) Act, came into force the following
 Tel: +255 22 2850238 / 2850065
Fax: +255 22 2850539

PO Box 5402, Dar es Salaam

E-mail: betis@intafrica.com
Website: www.bet.co.tz

The Government of United Republic of Tanzania has established the Tanzania Trade Development Authority (TanTrade) as statutory
organ, vested with regulatory, executive, advisory and consultative powers in relation to development of Trade in Tanzania. The
Tanzania Trade Development Authority was enacted by the Parliament by Act No. 4 of 2009 and it replaces the Board of Internal
Trade that was established by Act of 1973 and the Board of External Trade established by Act of 1978. The transformation of
the Board of External Trade (BET) to Tanzania Trade Development Authority (TanTrade) is an eminent response to substantial
changes in trade landscape in Tanzania and worldwide as a whole. TanTrade is building from where BET had ended.

The Vision of TanTrade

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

The Mission of TanTrade

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

TanTrade’s Mission will be achieved through:-

a) Assisting Tanzania’s enterprises and other business operators to consolidate their competitiveness in domestic and
foreign markets;
b) Stimulating Tanzania’s trading capabilities through the integration of the domestic market; and
c) Spearheading Tanzania’s competitive integration in international trade and global economy by identifying trading
opportunities therein, and facilitating their utilization.

The Core Values

TanTrade’s service delivery is guided by the following set of core values:
a) Professionalism
TanTrade to observe professional ethics and standards in developing and delivering services to her clients.

b) Team Work Spirit

TanTrade believes that this is an age of cooperation. To overcome challenges of business community rests upon
partnerships with others.

c) Competitiveness
TanTrade to inculcate trading culture, innovativeness, efficiency and productivity among Tanzania enterprises and other
business operators to meet market demands.

d) Transparency and Accountability

TanTrade to uphold the principal of integrity, good governance and accountability, zero tolerance to corruption and
discrimination of any kind in her service delivery.

e) Corporate Social Responsibility

TanTrade understands that it is part of the community and therefore values her active participation in community initiatives.

f) Public-Private Partnership (PPP)

TanTrade endeavours to promote and sustain public private collaboration in offering her services.
year. According to Transparency International’s Corruption
Perceptions Index (CPI) as well as the Mo Ibrahim Foundation
Index on Governance, the country tops the East African region in
the fight against corruption.
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). Furthermore, there exist double taxation treaties with
Kenya, Uganda, Zambia, Denmark, India, Italy, Norway, Sweden
and Finland, among other countries.
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. Improvements to the country’s transport
networks are a top priority, and a national policy on Public-
Private Partnerships is being developed in order to enable the
private sector to participate in infrastructure projects.
There is a sustained programme for building good quality roads.
Two railway networks connect 14 out of 21 cities and the
neighbouring country of Zambia. There are also international
and domestic airports linking Tanzania to the world. The three
major ports of Dar es Salaam, Tanga and Mtwara function as
hubs for traffic emanating from, and destined to, the
neighbouring countries of Uganda, Burundi, Rwanda, Zambia,
Malawi and Democratic Republic of Congo (DRC).
Tanzania is not troubled by labour disputes and there is
abundant unskilled labour. Following government’s commitment
to develop a pool of well-trained and educated specialists, the
number of university graduates, especially in business
management and IT, is growing rapidly, and management and
administrative positions are increasingly being filled by locals.
Another area currently receiving attention is infrastructure,
particularly in the development of competitive public utilities.
Current challenges
As a result of the current recession, global investment flows have
declined and capital is no longer as easily accessible. Tanzania is
thus determined to do more internally to attract investment, and
is continuing with economic reforms as well as taking steps to
improve its business environment. As such, a government task
force has been set up to review business and investment support
policies, regulations and administrative procedures.
Furthermore, government is:
• Compensating cooperatives and private companies which sold
cotton and coffee at a loss
• Guaranteeing the rescheduling of outstanding loans
• Providing working capital on concessional terms
• Strengthening the export credit guarantee scheme (ECGS)
and Small and Medium Enterprises (SMEs) guarantee
scheme
• Soliciting additional resources from development partners
FOREIGN DIRECT INVESTMENT
Significant efforts have been made to encourage investment,
and Tanzania continues to attract the highest inflows of Foreign
Direct Investment (FDI) in the East African region. However,
the current prognosis is not particularly promising, with the
economic situation in developed countries having reduced the
ability of foreign investors to invest abroad.
Manufacturing, tourism, construction, commercial buildings,
telecommunications, economic infrastructure, transportation,
agriculture, financial institutions, energy, natural resources and
12
Zanzibar Investment Promotion Agency - Photo Courtesy: ZIPA
mining & petroleum received the largest share of investments
for the period 1990 to 2008. Out of the many countries which
invest in Tanzania, the United Kingdom continues to dominate,
followed by Kenya, India and the Netherlands, the US, China
and South Africa.
Between 2004 and 2009, Tanzania received an annual
average of US$ 554.1 million in Foreign Direct Investment.
Investment promotion agencies
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 and has worked with United Nations
Industrial Development Organization (UNIDO) to attract positive
growth, FDI and local capital formation into the economy. In
2007, the TIC was named the Best Investment Promotion
Agency in the World by the World Association of Investment
Promotion Agencies (WAIPA).
The centre is actively involved in advising investors on the
correct procedures for setting up business 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 officers, an Assistant Registrar of
Companies and Licensing, Land, Labour and Tanzania Revenue
Authority liaison officers.
The Zanzibar Investment Promotion Agency (ZIPA) and
the Zanzibar Free Economic Zones Authority (ZAFREZA)
provide roughly equivalent incentives as those offered by the
Mainland’s policies, and are discussed in greater detail in the
chapter on Zanzibar.
The Export Processing Zones Authority (EPZA) is an
autonomous government agency operating under the Ministry
of Industry, Trade and Marketing. The authority coordinates,
facilitates, promotes and licenses export-led manufacturing
investments in Tanzania.
Incentives for investment
The Tanzanian government uses Trade-related Investment
Measures (TRIMs) to promote development objectives and
encourage investment in line with national priorities. Investor
incentives are both fiscal and non-fiscal, and are provided for
under the Tanzania Investment Act, Export Processing Zone
(EPZ) Act, Mining Act and Special Economic Zone (SEZ) Act.
As part of the Investment Code, Tanzania offers a well-
balanced package of benefits and incentives that are applied
uniformly to domestic and foreign investors:
• Zero Custom Duty and deferred VAT on capital goods for
investments in sectors such as mining, EPZs, infrastructure,
road construction, bridges, railways, airports, generation of
electricity, telecommunications and water services.
 Tel: +255 22 2601913
Fax: +255 22 2602368
PO Box 11313, Dar es Salaam
E-mail: info@tpsftz.org
Website: www.tpsftz.org

TANZANIA PRIVATE SECTOR FOUNDATION

Dedicated to Promote Private Sector Development
and Enterprise Competitiveness
Introduction
The Tanzania Private Sector Foundation (TPSF) was established on 4th November 1998 as a result of multi-folded efforts by various stakeholders of
the Private Sector. The TPSF was established as a company limited by guarantee to promote private sector-led social and economic development
in Tanzania by:
i) providing member organizations with services they value;
ii) understanding and representing their common interest; and
iii) engaging in effective advocacy with the Government.

Since its founding, TPSF has served as a focal point for private sector advocacy and lobbying on behalf of the private sector.

Vision Statement
“An 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 Statement
“To 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.”

What is our Core Activity?

The Foundation’s core activity is Policy-Advocacy and Lobbying which seeks to raise issues, participate in and influence Government policy
formulation and implementation in favour of the private sector. This activity is organized around the following themes:
i) Policy Research - to conduct independent and evidence-based research on policy matters affecting the private sector and engage with the
Government during the policy formulation and implementation processes and to ensure that the private sector inputs are taken on board;
ii) Private Public Dialogue - covering policy and advocacy/lobbying initiatives on issues enabling the business investment environment such as
taxation, infrastructure and sector-specific 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 evidence-
based researched policy issues are raised by the Private Sector and are considered by the Government to reform. After, impact assessment is
conducted to assess the impact of the dialogue and advocacy efforts with the Government.

TSPS is making differences

to Tanzania Small &
Medium Enterprises
Business Development Gate
This is an exciting programme
where people compete against
each other on the quality of their
business plan. When they are
successful they are awarded a
grant to execute their business
plan.
The picture depicts the grand prize
winners in the Mtwara region.
• 100 percent capital allowance deduction in the years of
income for the abovementioned types of investments.
• No remittance restrictions on the repatriation of returns from
investments.
• Investments are guaranteed against nationalisation and
expropriation.
• Interest deduction on capital loans is allowed and the five-year
limit for carrying forward losses has been removed.
• Five percent customs duty and VAT tax deferral on capital
goods for priority sectors, including livestock, aviation,
commercial buildings, commercial development and
microfinance, export oriented projects, geographical special
development areas, human resources development,
manufacturing, natural resources, tourism and tour operators,
transport, radio and television broadcasting.
Established by the EPZ Act of 2002, Export Processing Zones
attract investments in agribusiness, textiles, electronics and
Spatial Development Initiatives (SDIs). Licensed EPZ investors
enjoy fiscal incentives coupled with simplified operating
procedures and superior infrastructure for faster set-up and
smoother operations. Additionally, the EPZA provides facilitation
and after-care service to new and existing investors. Further
information on export processing zones may be found in the
‘Business & Finance’ chapter.
Special Economic Zones were established in 2006 to expand
investment in light industry, agro-processing and agriculture.
Green field FDIs are allowed through SEZ legislation. The
Tanzania Mini-Tiger Plan is seeing the construction of the
Benjamin William Mkapa SEZ at Mabibo, Dar es Salaam, with
infrastructure including roads, pavements, water and electricity.
INVESTMENT OPPORTUNITIES
Potential investors are encouraged to set up enterprises in
areas that will be beneficial to further economic development,
promoting growth as well as stimulating social upliftment. The
priority sectors for investment include:
• AGRIBUSINESS – Traditional crops, horticulture, floriculture,
oil palm, Jatropha, sugar ethanol, organic cotton, pyrethrum,
Artemisia, fish and aquaculture.
• EXTRACTIVE – Minerals, including base metals and
gemstones, gold and tanzanite, as well as hydrocarbons
such as oil, natural gas and coal for the energy sector. There
is also the prospect of refining, processing, smelting, cutting or
polishing these materials.
• INFRASTRUCTURE – Power, roads, seaports and airports.
Furthermore, the Export Process Zones Authority welcomes
export-oriented investments in textiles and garments, leather
processing and manufacturing, wood products, electrical and
electronic appliances and Information and Communications
Technology (ICT).
There are also significant opportunities for investment in
Tanzania’s many natural resources, in particular tourism and
wildlife. A quarter of the country is set aside for game reserves,
and world-famous tourist attractions include, among others,
Mount Kilimanjaro, the Serengeti, Ngorongoro conservation
area and the spice islands of Zanzibar.
In the transport sector there are opportunities in Build, Operate
and Transfer (BOT) projects, and a concession system aimed
at attracting foreign investors to build infrastructure has been
launched. Industry, which currently comprises the processing
of agricultural products and light consumer goods, has the
potential for further development, as do the services and
financial sectors.
TRADE AGREEMENTS
Tanzania’s geographical advantage and trade agreements have
created vast market opportunities for investors. These include
14
attractive Preferential Trade Agreements with the United States
(US), European Union (EU) and Japan – such as the US’s
African Growth and Opportunity Act (AGOA) and the EU’s
Everything But Arms (EBA) – as well as other regional trade
agreements with neighbouring countries.
AGOA offers countries enhanced trade preferences, 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 Africa. Many of
Tanzania’s exports enjoy duty-free treatment under AGOA.
EBA grants duty-free access to imports of all products from least
developed countries without any quantitative restrictions, except
to arms and munitions. The provisions of the EBA Regulation
have been incorporated into the GSP Regulation. For products
that do not fulfil the GSP’s rules of origin requirements, the
normal third country duty rates apply, or any preferential duty
rate agreed by a separate agreement with the EU.
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. The
group comprises a market of over 126.6 million people with a
combined GDP of US$ 73 billion. Economic development and
regional integration have been enhanced through the removal
of all non-tariff barriers on cross border trade, harmonising of
standards and specifications of goods and services, adoption of
an East African Single Tourist Visa and East African Passport,
establishment of the EAC Tourist Council and the launch of a
civil aviation agency.
Being a member of the East African Community has had
many positive benefits for Tanzania, which has witnessed a
phenomenal increase in regional trade to the extent that it
enjoys a trade surplus with Kenya.
The EAC is focused on widening and deepening the integration
process among the five partner states. In this regard, the
community is working towards the implementation of a Common
Market Protocol in 2010 and a Monetary Union in 2012.
Tanzania is a member of the Southern African Development
Community (SADC), a grouping of 14 countries with a
combined population of over 247 million and a cumulative GDP
of US$ 431 billion. Other members of SADC include South
Africa, Zimbabwe, Zambia, Malawi, Botswana, Mauritius,
Angola, Democratic Republic of Congo, Namibia, Lesotho,
Swaziland, Seychelles and Mozambique.
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, considered to be sensitive products, is expected to be
completed in 2012. Outstanding issues in the implementation
of the SADC FTA, such as the review of the rules of origin and
elimination of non-tariff barriers, are also being addressed. This
is one of the first milestones of the SADC Regional Indicative
Strategic Development Plan, and is to be followed by a
Customs Union and Common Market.
Provisions under the Cotonou Agreement for trade between the
EU and African, Caribbean and Pacific (ACP) countries came to
an end on 31 December 2007. Thereafter, eight SADC countries
(Angola, Botswana, Lesotho, Mozambique, Namibia, Swaziland,
Tanzania and South Africa) embarked on negotiations with the
EU. The subsequent Interim Economic Partnership Agreement
(IEPA) that was signed during 2009 replaces the Goods Chapter
of the Cotonou Agreement and provides the country’s private
sector with a wider choice of imported goods, possibly at lower
prices. Negotiations have begun on trade in services and
investment that will lead to a full EPA.
Business & Finance
The private sector in Tanzania has grown significantly in the past decade, with the support of
an ever more investor-friendly business climate and institutions as well as a rapidly evolving
financial sector which has facilitated credit extension to business.
BUSINESS & THE PRIVATE SECTOR
Various steps have been taken to reform the business
environment by simplifying and speeding up the investment
process and procedures involved in setting up a business, as
well as enhancing transparency and encouraging stakeholder
participation. This is being achieved through continued
implementation of the Private Sector Development Strategy and
the Business Environment Strengthening for Tanzania (BEST)
programme.
A number of institutions and forums have been put in place
to ensure broader participation in decision making, including
representatives 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 Officers’ 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.
The 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
15
improved business licensing, other areas that have benefited
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 firms 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.
Specific interventions by government to mitigate the impact
of the financial crisis and subsequent economic slowdown
include 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.
Furthermore, the Export Credit Guarantee Scheme (ECGS) and
Small and Medium Enterprises (SMEs) Guarantee Scheme are
being strengthened.
Privatisation
The 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 financial burden on government.
The Privatisation Programme was launched the same year, with
the intention of:
• Enhancing the efficiency of state enterprises and their
contribution to the economy

Central Bank of Tanzania - Photo Courtesy: Marie Gibbons
• Reducing the financial 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 Parastatal Sector Reform Commission (PSRC) set up in
1993 began with the privatisation of manufacturing, agricultural,
trade and mining enterprises, and had by 2007 reduced the
number of parastatals in Tanzania from 400 to less than 140,
concluding a total of 920 divesture transactions. This included
the sale of 319 units and the disposal of 601 non-core units to
Tanzanians, foreigners or joint venture companies through the
sale of shares and assets, leases or liquidations.
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 efficiency in areas such
as telecommunications. Privatisation has also enabled more
than 10 000 Tanzanians to acquire shares in these companies
through the stock exchange.
EXPORT PROCESSING ZONES
Physical and procedural incentives in Export Processing Zones
(EPZs) 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.
The minimum amount of capital required to establish a company
in an EPZ is US$ 500 000 or more for foreign investors and
US$ 100 000 for local investors. The business should be a new
investment and produce or process at least 80 percent of its
goods.
Fiscal incentives include:
• Exemption from all taxes and levies imposed by Local
Government Authorities on products produced in EPZs.
• Exemption from corporate tax for ten years.
• Exemption from Value Added Tax (VAT) on utility and wharf
charges.
• Exemption from withholding tax on rent, dividends and
interests for ten years.
• Remission of Custom Duty, VAT and other taxes on raw
materials and goods of a capital nature related to production in
EPZs.
• Remission of customs duty, VAT and any other tax payable
in respect of importation of one administrative vehicle,
ambulances, fire fighting equipment vehicles and up to two
buses.
16
• Treatment of goods destined to EPZs as transit cargo.
Non-Fiscal incentives comprise:
• Access to competitive, modern and reliable services available
within the EPZs.
• Allowance to sell up to 20 percent of goods to the domestic
market.
• Entitlement to an initial automatic immigrant quota of up to five
persons during the start-up period and subsequent processing
of additional applications by the EPZA.
• Exemption from pre-shipment or destination inspection
requirements.
• Provision of temporary visas at point of entry to key technical,
management and training staff for a maximum of 60 days.
• Accessing the ECGS, subject to compliance with applicable
conditions and procedures.
• Unconditional transferability of profits, dividends and loyalties.
EPZ enterprises must be situated in specific areas that are
treated as being outside the customs territory for VAT, customs
tariff and exchange control purposes. There are currently
three available EPZ industrial sites, which include: Millennium
Business Park at Ubungo (Dar es Salaam), Hifadhi EPZ at
Ubungo (Dar es Salaam) and Vector Health EPZ at Kisongo
(Arusha). Furthermore, there is one Special Economic Zone
(SEZ), namely the Benjamin William Mkapa SEZ.
In addition, there are other sites in 13 regions which have been
set aside for EPZ development. Each site is approximately
2 000 hectares. Investors are invited to develop satellite towns,
factory buildings and warehouses for lease or their own
operation. Development can be done privately or under Public-
Private Partnership in the form of BOT, BOOT or Concession
Agreement.
All EPZ areas are integrated with international trade
gateways such as air, sea and lake ports, as well as border
areas.
JOB CREATION
The Integrated Labour Force Survey of 2005/06 recorded an
increase of 2.8 million jobs in the five years since the 2000/01
survey, with a total of 20.6 million people active in the labour
force of Tanzania Mainland compared to 17.8 million people
in 2000/01. Based on the national definition of unemployment,
this translates to 1.0 million male and 1.3 million female
unemployed, equivalent to 11.0 percent in 2005/06 compared to
12.9 percent in 2000/01.
The National Employment Creation Programme launched in
2006 aims to create over one million jobs by 2010. By 2007,
unemployment had dropped to 10.4 percent, according to 2009
East African Community Facts and Figures.
An employment bureau was established in 2009 as part of the
National Policy for Employment and its strategy. Furthermore,
nine district councils benefited from a training programme to
help citizens create self-employment for poverty reduction.
An employment centre was launched in Mwanza to cater for
employment services in the Lake Zone.
Government continues to implement the National Economic
Empowerment Policy of 2004, with current initiatives including:
• National Economic Empowerment and Job Creation
Programme
• Mwananchi Empowerment Fund
• Small Entrepreneurs Loan Facility (SELF)
• National Income Generation Programme (NIGP)
The empowerment policy aims to create a favourable
environment for investment and economic growth; improve
17
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.
Other areas of focus intend to raise skills and knowledge
levels; strengthen economic infrastructure; promote the
establishment and development of cooperatives; improve the
capacity to produce goods of high quality; create better and
more reliable public services; support the establishment of
appropriate marketing systems and identification of markets;
improve and simplify licensing procedures; create a favourable
environment for Tanzanians to participate more effectively in the
privatisation of state enterprises; and use land as a springboard
to accelerate empowerment.
In 2007 the second phase of the National Economic
Empowerment and Job Creation Programme was officially
launched. The Bank of Tanzania approved 13 financial
institutions to participate in the scheme and extend credit to
eligible applicants. Under the first phase, government provided
TZS 10.5 billion in cash guarantees to the National Microfinance
Bank Limited (NMB) and the CRDB Bank Limited. The banks,
in turn, agreed to leverage this sum and lend three times the
amount issued by the government, extending loans amounting
to TZS 32.3 billion.
Government continues to sensitise the general public to form
and join Savings and Credit Cooperative Societies (SACCOS)
in order to increase opportunities for accessing credit from
financial institutions and government programmes. This resulted
in a remarkable increase in the number of SACCOS from 1 875
in 2005 to 4 780 in 2008.
During the period July 2008 to March 2009, loans amounting
to TZS 68.58 billion were extended to 131 640 entrepreneurs
18
(members of 210 SACCOS and 86 economic groups). Out
of these beneficiaries, 58 907 were women and 72 633 men.
Loans were also provided through the Women’s Development
Fund, Youth Development Fund and the Tanzania Social Action
Fund (TASAF).
The business environment is being enhanced for informal
sector entrepreneurs, with the construction of business
centres in Dar es Salaam and the implementation of the
Informal Sector Activities Formalisation Programme during
2009.
During 2009/10, the main areas of focus include the following:
• Facilitating the availability of capital for economic activities
• Implementing the resolutions of the National Dialogue on
Economic Empowerment held in November 2008
• Conducting dissemination and sensitisation seminars for
district and regional leaders so that they can sensitise other
stakeholders on the National Economic Empowerment Policy
and Act No. 16 of 2004
• Coordinating and evaluating empowerment activities and
initiatives in various sectors of the economy
BANKING & FINANCIAL SERVICES
Banking was a state monopoly led by the Bank of Tanzania
(BoT) and the National Bank of Commerce (NBC) until 1991,
when the sector was opened to private and foreign capital.
The first private banks opened in 1993, and in 1997 the
former NBC (which once accounted for over three quarters of
local transactions), was split into NBC-1997 and the National
Microfinance Bank (NMB).
Tanzania has a relatively small yet vibrant banking and financial
services sector, which has expanded significantly in the past
decade. Financial markets consist of markets for money,
bonds, equities, foreign exchange and collective investment
schemes. By February 2010 there were a total of 28 registered
commercial banks operating in the sector. The National
Microfinance Bank (NMB) is the largest bank in Tanzania, by
customer base as well as branch network, with 120 branches
located in more than 80 percent of Tanzania’s districts.
The microfinance subsector services Small and Medium
Enterprises (SMEs) in the domestic market as well as other
sectors historically ignored by commercial banks. By the end of
2008, there were 157 registered bureaux de change operators
in Tanzania, operating under the Foreign Exchange Act of 1992
and Foreign Exchange (Bureaux de Change) Regulations of
1999.
While multinational banks once catered only for larger
corporations, the role of SMEs has become increasingly
important to economic growth. Expansion in the banking
industry saw credit extension to the private sector growing at
above 35 percent per annum by 2008, reflecting government
efforts to reduce domestic borrowing for financing the budget
and the promotion of a conducive environment for private sector
participation in the economy.
The private sector has access to a variety of commercial credit
instruments, including letters of credit, overdrafts, term loans
and guarantees. Foreign investors can open accounts and
make deposits in registered commercial banks. In accordance
with the Income Tax Act of 2004, interest earned by non-
residents from deposits in banks registered by the central bank
is exempt from income tax. Profits, dividends and capital can be
readily repatriated, and venture capital has been set up to meet
the need for equity injections into businesses.
The Banking and Financial Institutions Act of 2006 consolidated
laws relating to banking so as to harmonise the operations of all
financial institutions in Tanzania, foster sound banking activities
and regulate credit operations. The Act also established
a Credit Reference Bureau, enabling banks and financial
institutions to release information to licensed reference bureaus,
which are in turn allowed to provide a credit report in the event
of a legitimate business request.
The Finance Leasing law facilitates improved access to credit
through leasing. Moreover, various legal amendments are being
made in order to facilitate the provision of mortgage financing
products by financial institutions.
19
The Bank of Tanzania Act of 2006 specifies functions and
objectives as to the regulation and supervision of banks and
financial institutions. The process of privatising or streamlining
the remaining government-owned banks and other financial
service providers continues.
To help mitigate the impact of the global economic downturn,
government has adopted a strategy that includes daily
surveillance and supervision of banks by the Central Bank
in order to detect potential problems in the banking system
and take immediate action. Other measures are aimed at
removing bottlenecks in the financial sector in order to improve
the availability of credit to the private sector, increasing the
minimum pension, re-capitalising the Tanzania Investment Bank
to enable it to operate a special window for lending to investors
in agriculture, and establishing an Agricultural Development
Bank. Improving productivity in the agricultural sector will help
increase domestic food supply and thereby reduce inflationary
pressures.
Financial intermediation grew by 11.9 percent in the
2008/09 financial year.
Monetary and financial developments in 2009
According to the Bank of Tanzania’s Monthly Economic Review
of November 2009, the growth of monetary aggregates in the
year ending October 2009 remained moderate, mainly on
account of continued slow growth of banks’ credit to the
private sector. In particular, the growth rate of extended broad
money supply (M3) slowed to 14.6 percent, which was

Photo Courtesy: Marie Gibbons
significantly lower than the 24.8 percent recorded in October
2008. Likewise, broad money supply (M2) grew by 17 percent
in the year ending October 2009, compared with 30.2 percent
recorded in October 2008. During 2010, government aims to
contain the growth rate of money supply (M2) consistent with
GDP growth, inflation targets and foreign reserve levels.
The change in money supply in the year ending October 2009
occurred mostly in non-transferable deposits (savings and time
deposits) which accounted for 54.7 percent of total change in
M3 and 63.7 percent of M2. The introduction of new financial
products by banks may have contributed to the observed
increase in non-transferable deposits.
Growth of credit to the private sector decelerated to 17.8
percent in October 2009 from 39.5 percent recorded in the
corresponding month in 2008. The rate of growth registered
in October 2009 was the lowest since 2001 as well as being
below the programme target of 23.7 percent for the year ending
December 2009. The sustained slower growth rate is attributed
to the cautious stance taken by banks in providing credit to the
private sector in the wake of the global financial crisis.
Credit flows from banks decreased in most areas, except for
personal loans, which continued to hold the largest share and
accounted for 21.8 percent of the total stock of outstanding
loans in October 2009. Banks have preferred to invest in
treasury securities, repos and foreign assets, while lending
more carefully to private enterprise.
20
Businesses that make VAT-exempt supplies, such as
banks, insurance companies and fuel retailers, will benefit
from the reduction in VAT on Mainland Tanzania from 20
percent to 18 percent in 2009, as it is a real reduction in
their costs.
Insurance, investment and social security
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,
and the sector currently comprises 18 insurers, 44 brokers and
one reinsurance company.
The insurance industry is administered by the Insurance
Supervisory Department in the Ministry of Finance. The new
Insurance Act of 2009 provides for the establishment of the
Tanzania Insurance Regulatory Authority, which is to regulate
and supervise the insurance industry. It also proposes to
expand coverage of the insurance sector so as to increase
revenues to government and ensure that insurance business
in Tanzania is administered and operated in an orderly manner
and in compliance with international best practice.
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, flexibility, 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 first year of operations, Momentum Tanzania had written
a gross premium income of TZS 8 billion and built up a strong
client base.
Momentum Tanzania offers a wide range of general and health
insurance products to suit the specific 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 benefits. 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 diversification as well as
benefits from economies of scale and low transaction costs.
The National Social Security Fund (NSSF) provides a wide
range of short and long term benefits to Tanzanians through:
old age pension; disability pension; survivors’ pension;
employment injury benefit; social health insurance benefit;
maternity benefit and funeral grants benefit.
TAXATION
Tax administration in Tanzania has a three-tier structure. Central
Government tax is administered by the Tanzania Revenue
Authority (TRA), a semi-autonomous government agency,
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, efficient 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
21
excises, replaced Sales Tax with VAT, and the two-tier corporate
tax with a single rate.
Income tax contributes around 32 percent of total domestic
revenue, while VAT contributes some 28 percent and excise
duty approximately 20 percent. These three categories account
for 80 percent of the total tax revenue projected in 2009/10.
Tanzania’s corporate tax rate is 30 percent, 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.
While personal income tax remained unchanged in 2009/10,
the budget proposed a reduction in the corporate tax rate
from 30 percent to 25 percent for companies listed on the
Dar es Salaam Stock Exchange.
During the period July 2008 to March 2009, domestic revenue
collection reached TZS 3 199 134 million (3.2 trillion), equivalent
to 91 percent of the estimated amount of TZS 3 529 214 million
(3.5 trillion). This is a shortfall of TZS 330 080 million compared
to the target for the period. Excise duty collection amounted to
TZS 222 737 million, compared to the target of TZS 262 460
million, while income tax collection was TZS 940 675 million,
equivalent to 89 percent of the target. Government targeted
to collect TZS 435 225 million on import duty; actual collection
amounted to TZS 343 331. An area that performed well was
VAT, which was TZS 490 662 million compared to the target of
TZS 488 461 million.
Domestic revenue accounted for 15.9 percent of the GDP
for the year 2008/09. Measures currently being taken to
build sustainable capacity for increased domestic revenue
mobilisation include:
• Broadening the tax base by registering new taxpayers and
improving the business and investment climate
• Implementing the TRA’s Third Five-Year Corporate Plan
2008/09-2012/13, which aims to strengthen accountability
among taxpayers and tax collectors
• Strengthening the capacity of the Customs and Excise Tax
Department in the supervision and collection of revenue
• Improving the procedures for collection of non-tax revenue
• Improving the tax structure, fees, levies and other revenue
measures
The aim is to increase domestic revenue collection to 16.4
percent of GDP in 2009/10, 17.2 percent in 2010/11 and 18.3
percent by 2011/12.
THE STOCK EXCHANGE
Governed by the Capital Markets and Securities Authority
(CMSA) Act of 1994, the CMSA was established in 1996 in
order to facilitate the creation of a stock exchange for mobilising
and allocating savings for medium and long-term investments.
Trading activities at the Dar es Salaam Stock Exchange (DSE)
commenced in April 1998, and in May 2003 trading was opened
to foreign investors. The DSE launched its Automated Trading
System during 2007.
Market capitalisation during the 1st quarter ending 30
September 2009 decreased by 0.86 percent from TZS 5 181.46
billion as at 30 June 2009 to TZS 5 136.76 billion. The decrease
is attributed to falling share prices of several securities during
the period under review. However, on an annual basis, it
has risen from TZS 3 392.75 billion in October 2008. The
composition of market capitalisation as at 30 September 2009
was 38.30 percent and 61.70 percent for local and cross-listed
companies respectively.
During the quarter under review, the market experienced a fall
in prices for most equities. The DSE All Share Index declined
by 0.8 percent from 1 231.09 (30 June 2009) to 1 221.26 (30
September 2009).
Total market turnover increased by 228 percent between the
4th and 1st quarters, from TZS 7.04 billion to TZS 23.07 billion.
The increase in turnover was to a large extent due to the trading
of CRDB shares on the exchange, which accounted for 50.3
percent of total turnover generated during the quarter.
The equity market currently consists of 15 companies listed on
the DSE. Participation by non-residents is limited to 60 percent
of the shares. The listed companies are TOL Gases Ltd,
Tanzania Breweries Ltd, Tanzania Tea Packers Ltd, Tanzania
Cigarette Company, Tanga Cement Company Ltd, Swissport
Tanzania Ltd, Tanzania Portland Cement Ltd, Kenya Airways
Ltd (cross-listed), East Africa Breweries Ltd (cross-listed),
Jubilee Holdings Ltd (cross-listed), Dar es Salaam Community
Bank (DCB), National Investment Company Limited (NICOL),
Kenya Commercial Bank Ltd, CRDB Bank Plc and National
Microfinance Bank (NMB).
The Treasury bonds market has four maturities of two, five,
seven and ten years that are issued in the primary market by
the Central Bank on behalf of the government, and are listed on
the DSE. The secondary market trading of government bonds
needs further stimulus.
Seven corporate bonds have been issued and listed on the
DSE. These are: East African Development Bank (TZS 15
billion), East, Central and Southern African Trade Development
Bank (TZS 15 billion), Barclays Bank Tanzania Ltd (tranches
A, B and C for TZS 10 billion, 10 billion and 4.6 billion,
respectively), Standard Chartered Bank Tanzania Ltd (TZS 8
billion) and ALAF Ltd (TZS 15.07 billion).

UNIT TRUST OF TANZANIA (UTT)

(Dhamana ya Uwekezaji Tanzania)
Pioneer of Unit Trust Schemes in Tanzania; Brings You Knowledge, Foresight & Analysis
Save to Invest - It’s Your Money, It’s Your Investment, It’s Your Profit, We Just Facilitate the Process

� IPO of 90.5bn Shillings � Unit Linked Insurance Plan

� Historical average annual returns 15% � 99% Investment
� No monthly fees � Life Insurance
� Open end scheme � Permanent disability insurance
� Balanced return from equity and debt � Accident insurance
� No assurance, yet high visibility and predictable � 500 000 Funeral expenses
� Units can be used as collateral � Loyalty bonus of 5% or 7%
Wekeza Uwezeshwe � Only a monthly minimum of 8 340
Kamilisha Ndoto Yako
Sukari House, 2nd Floor, Sokoine Drive / Ohio Street • PO Box 14825, Dar es Salaam, Tanzania
Tel: +255 22 2128460 / 2122501 • Fax: +255 22 2137593
Call Centre (toll free): +255 754 800 544 / +255 754 800 455
0715 800 544 / 0715 800 455 (TIGO) • 0754 800 544 / 0754 800 455 (VODA)
E-mail: uwekezaji@utt.tz.org • Website: www.utt.tz.org

22
 H O L DI N G C
ED
CONSOLIDATED HOLDING CORPORATION
O
T
NSOLIDA

RP
(CHC)
ORATION
CO

Established under the National Bank of Commerce

(Reorganisation and Vesting of Assets and Liabilities Act, Cap 404 R.E.)

OUR VISION
CHC aspires to becoming a strong organisation, capable of effectively and efficiently accomplishing its
functions for the national interest.

OUR MISSION
CHC is committed to apply the best commercial perspectives in the disposal of residual assets, collection
of charged off loans, liquidation and divestiture of public enterprises, coordination of the establishment
of Regulatory Authorities, monitoring and evaluation of parastatals that have been privatised and
finalisation of cases tranferred to the Corporation by virtue of the establishment Act.

OUR CONTACTS
1st Floor, Consolidated Holding Corporation Investment House, Samora Avenue / Zanaki Street
PO Box 21195, Dar es Salaam, Tanzania
Tel: 255 22 2110531 • Fax: 255 22 2114782
E-mail: chc@iwyafrica.com • Website: www.chc.co.tz

Consolidated Holding Corporation House

220/50 Mirambo Street • PO Box 9252, Dar es Salaam, Tanzania
Tel: 255 22 2117988/9 • Fax: 255 22 2119778 / 2122870

Government has deliberately provided several incentives in

order to encourage active participation in capital markets by
issuers as well as investors.

Incentives 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 profits, and therefore are taken into consideration when
determining profit for tax purposes.
• Withholding tax on investment income made by a Collective
Investment Scheme (CIS) is final tax. Investors in a CIS are
not charged tax on the income distributed by the CIS after the
scheme’s income taxation.

Bank of Tanzania, Twin Towers - Photo Courtesy - Corporate Tanzania

Photo Courtesy - Corporate Tanzania

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 fidelity
funds maintained by the DSE for investor protection.
• Income received by Collective Investment Scheme (CIS)
investors is tax-exempt.
23

Tanzania is rich in both natural and cultural attractions, boasting a total of eight world heritage
sites and over a quarter of its total landmass set aside for conservation.
A sought-after tourism destination, Tanzania encompasses
the vast plains of the Great Rift Valley, the heights of Mount
Kilimanjaro, the largest freshwater lakes in Africa, and the
pristine beaches and fascinating history of the Zanzibar
archipelago. 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.
Between 1990 and 2008, tourism attracted the second most
investment of any sector in Tanzania – some
US$ 4 819.7 million – and the sector presently contributes
around 16 percent to Tanzania’s Gross Domestic Product
(GDP). While 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,
the industry is nonetheless projected to register positive growth
during 2010, with many of its potential markets on the road to
recovery. As such, the World Tourism Organisation forecasts
growth of between 3 and 4 percent in international tourist
arrivals for the year.
Tourism
Promotional efforts include media advertisements and
participation in local travel and tourism fairs such as Karibu
Travel Fair, Nane Nane and Saba Saba, as well as the
emerging markets of China, Japan, Singapore, India and
Russia. As a result, Tanzania has seen the number of tourists
from China double, from 4 798 in 2006 to 8 982 in 2008. There
has also been a significant increase in Indian tourists, from
13 020 in 2006 to 17 530 in 2008.
The US remains Tanzania’s top source market, with the number
of American tourist arrivals between 2007 and 2008 rising from
58 341 to a record high of 66 953. In 2009, using the slogan
‘The Land of Kilimanjaro, Zanzibar and the Serengeti’, the
country showcased its expanding luxury tourism product at the
Luxury Travel Expo in Las Vegas.
During 2008/09, promotional campaigns for Tanzania’s tourist
attractions were conducted in institutions of learning in Dar
es Salaam and Lindi. TTB, in collaboration with the Ministry
of Tourism and Natural Resources, is also concentrating on
Zanzibar - Photo Courtesy: Tanzania Tourist Board

The Ministry for Tourism and Natural Resources predicts

that the tourism industry will expand between 8 and 9
percent during 2010.

TOURISM PROMOTION
The 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).

24
It is a land of superlatives and contrasts, something for everyone: from the
majestic Mount Kilimanjaro to the fabled Islands of Zanzibar. The largest
and most diverse wildlife concentrations on Earth including the matchless
Serengeti plains, Ngorongoro Crater, Katavi and the mighty Selous Game
Reserve. The Legacy of the ancient Swahili civilisations, such as Kilwa Ruins
once a city of the Arabian Nights.Wonderful places for swimming, snorkelling,
scuba diving, fishing off thousands of kilometres of Indian Ocean coastline
and around the Africa’s Great Lakes. And then there is Tanzania’s greatest
asset: its friendly people and cuisines. The country is among the world’s
leaders in Cultural tourism. This is indeed AUTHENTIC AFRICA.
promoting
cultural
tourism, as well as
implementing a campaign
to attract travellers coming
to the continent for the
Football World Cup in South
Africa. Palace Museum, previously called the Sultan’s Palace - Photo Courtesy: Marie Gibbons

2008 Tanzania Tourism
Sector Survey
The 2008 Tanzania Tourism
Sector Survey, involving 4 265 respondents on behalf of 6
388 international tourists, was carried out at five entry/exit
points; namely, Julius Nyerere International Airport, Kilimanjaro
International Airport, Namanga, Zanzibar Airport and Tunduma.
According to the findings of the survey, the average length of
stay in Tanzania mainland was nine nights as compared to ten
in Zanzibar, and the overall average expenditure per visitor was
US$ 209 per person per night for tourists on a package tour
and US$ 186 per night for non-package tour visitors. Survey
respondents remarked on infrastructure, particularly the roads
leading to Serengeti and Tarangire national parks, as well as
conditions in airports and their facilities, as areas requiring the
most improvement. The survey also indicated that more tourists
now prefer non-package tours.
POLICIES & PROGRAMMES
The first 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. 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.
watching, hunting, fishing 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 significance – began in April
2009.
TOURISM ASSETS
Tanzania boasts an unmatched variety of fauna and flora as
Zebra and Impala - Photo Courtesy: René Hartslief

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

House of Wonder (Maritime Museum) - Photo Courtesy: Marie Gibbons

26
Porcupine - Photo Courtesy: René Hartslief

well as history, heritage and spectacular scenic beauty. The

diversity of its tourism product encompasses pristine sandy
beaches, coral reefs and marine parks; sites rich in history,
from early hominid remains to artefacts and architecture; not
to mention the many opportunities for cultural tourism. It is
therefore little wonder that the country contains a total of eight
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 Masai coexists in harmony
with natural resources conservation and tourism.

During July 2009, Tanzania celebrated the Golden

Jubilee of the milestone discovery by Mary Leakey of the
fossilised cranium of Paranthropus boisei – the oldest
known hominin – at Olduvai Gorge in the Ngorongoro
Conservation Area.

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, filled 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 unidentified civilisation some 500 years
ago.
Old Fort in Kilwa - Photo Courtesy: Tanzania Tourist Board

27
• The towns of Lindi and Mikindani, which were both central
ports in the network of Indian Ocean trade.
• Tendunguru, which is a significant site for palaeontology,
as the remains of the largest known dinosaur species were
discovered here.
• 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 reflecting the religion and rituals of their early
inhabitants.
• Zanzibar’s historic Stone Town, with a rich architectural
resource reflecting its part in the seaborne trade between Asia
and Africa.

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 fishing 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 fishing 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 Experience
Located 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 finite, 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.
Elephant - Photo Courtesy: Tanzania Tourist Board
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.
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
Crocodiles - Photo Courtesy: René Hartslief

NATIONAL PARKS & GAME RESERVES

The 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 of 1974, which allows government to establish
protected areas and outlines how these are to be organised
and managed. TANAPA now encompasses a total of 16 national
parks.

Cheetah - Photo Courtesy: René Hartslief

28
 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 wild chimpanzees of Mahale Mountains National Park;
the popular and easily accessible Mikumi National Park, with
its flood plain, open grasslands and wide variety 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 magnificent wildflowers to

be found on the Kitulo Plateau and an untouched wilderness
in Ruaha 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
Chimpanzee - Photo Courtesy: René Hartslief
with Kenya and east of the Pare
Mountains, Mkomazi National Park
are widely distributed to prevent harassment of animals and is the focus of an intensive breeding
to minimise the human impact on the environment. Even in programme to save the endangered black
Tanzania’s most popular park, the Serengeti, more than 7 000 rhino.
square kilometres – almost half the park’s area – remains a
wilderness zone with no roads.

Lying in northern Tanzania along the Kenyan border, where

it is contiguous with the Masai Mara National Reserve, the
Serengeti National Park is the country’s oldest reserve. It
encompasses 14 763 square kilometres of grassland plains and
savannah as well as riverine forest and woodlands. 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.

At 5 895 metres high, Mount Kilimanjaro is covered with snow

and ice throughout the year, despite its position just three
degrees south of the equator. At Kilimanjaro National Park,
this dormant volcano with its twin peaks of Kibo and Mawenzi,
draws climbers from around the world. A journey up the
mountain’s slopes takes 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 UNESCO World Heritage Site
in 1982 because of its pristine environment and diversity of
fauna, Selous is characterised by grassy plains, seasonally
flooded 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.
29

Agriculture plays a major role in Tanzania’s economy, and is a substantial source of revenue
and jobs, employing nearly 80 percent of the workforce.
Agricultural activities, which comprise crops, livestock, forestry
and hunting, continue to make up a significant portion of
Tanzania’s Gross Domestic Product (GDP), and have been
growing at an average of 4 percent per annum for the past
decade. Nevertheless, the contribution of agriculture to GDP
has exhibited a modestly declining trend over this period,
reflecting the gradual modernisation of the economy and
expanding output in other sectors. Agriculture made up 25.8
percent of Tanzania’s GDP in 2008 compared to 29 percent in
2001.
The sector expanded by 4.6 percent in 2008; an improvement
over the 4 percent recorded in the previous year. This good
performance was mainly due to better weather conditions
(particularly during the first quarter), improved infrastructure for
irrigation and rural roads, distribution of subsidised fertilisers
targeting the main production regions, availability of quality
seeds and other agricultural inputs, and sensitisation of
commercial livestock farming.
However, the large degree of dependency on the agricultural
sector means that the economy is especially vulnerable
to adverse weather conditions and unfavourable prices in
Tropical fruit - Photo Courtesy: René Hartslief
Agriculture & Fisheries
international primary commodity markets. For this reason,
agriculture was particularly affected by the global financial and
economic crisis, which brought about a decline in both demand
and prices for commercial agricultural products, mainly from
the third quarter of 2008. This, together with the subsequent
drought, saw government revise anticipated growth in the sector
to just 3 percent for 2009.
In the short term, government is focusing on distributing food
from surplus regions to those with shortages, and the European
Union and World Bank have pledged to provide additional
financing to support food production and ensure sustainable
food supply in the country. In the medium term, a number of
strategies are being initiated to increase agricultural output
and ensure food sufficiency in the context of ‘Agriculture First’,
which is the theme of the 2009/10 national budget. A rebound in
growth is anticipated over the next few years as these initiatives
are implemented.
CROP PRODUCTION
Tanzania’s ecological diversity contributes to its success – and
potential for growth – in the agricultural sector. The country
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, Ufipa 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. In the

30
 healthy increase of 31.8 percent in traditional exports from the
level recorded during the corresponding period in 2008. This
good performance may be attributed to favourable weather
conditions and timely accessibility of agricultural inputs, which
boosted output notwithstanding the fact that export unit prices
for these commodities decreased.

Also in the year up to October 2009, notable increases were

recorded in horticultural products – US$ 42.3 million compared
to US$ 29.8 million during the year ending October 2008.
Similarly, other exports rose by 19 percent to US$ 325.4 million,
mainly as a result of increased exports of oil seeds and wood
products.

LIVESTOCK
The livestock subsector contributes almost 16 percent to
agricultural GDP, and grew by 2.6 percent in 2008 compared to
2.4 percent in 2008. Between 2007 and 2008, slight decreases
were noted in the herd sizes of cattle, sheep and goats; cattle
from 19.1 million to 18.8 million, sheep from 3.6 million to 3.56
million, and goats from 13.6 million to 13.1 million. However, the
number of pigs grew from 1.2 million to 1.6 million and poultry
from 30.0 million to 33.3 million over the same period.

Coffee plants - Photo Courtesy: René Hartslief Current challenges facing the sector include animal diseases,
poor infrastructure and lack of reliable markets, investments and
first quarter of 2009 (January-March), the sector registered a
slight increase in output of the major staple food crops, namely: Cattle - Photo Courtesy: René Hartslief

maize (2 percent), paddy (4 percent) and sorghum/millet

(1 percent).

The arable subsector grew by 5.1 percent in 2008

compared to 4.5 percent in 2007, and presently constitutes
just over three-quarters of the country’s agricultural GDP.

Principal export crops include coffee, cashews, tobacco,

tea, cloves and other spices, horticultural crops, oil seeds
(groundnuts, sesame, and sunflower) and fresh cut flowers.
Between 2007 and 2008, coffee production rose from 34 000
tonnes to 58 000 tonnes, while sugar cane output increased
from 2.0 million tonnes to 3.5 million tonnes. However, over the
same period the output of tea declined dramatically, from
159 000 tonnes to 35 000 tonnes.

Export volumes of coffee, tobacco and cloves also rose

substantially in the year up to October 2009, contributing to the
Tobacco - Photo Courtesy: René Hartslief

31
 Pineapples cultivated by hand - Photo Courtesy: René Hartslief

While government projected that growth would decline to 3.7

percent in 2009 in response to the ongoing global economic
crisis, according to the National Bureau of Statistics’ quarterly
GDP estimate report, increased demand for fish in foreign
markets saw fishing activities growing by 7.9 percent for the
January to March 2009 period. It is predicted that fishing
activities will continue to recover as global economic activities
pick up in the medium term.

AGRICULTURAL POTENTIAL
Despite its remarkable potential, Tanzania’s agricultural sector
remains surprisingly underdeveloped. According to East African
Community Facts & Figures (2009), the country has 48.1 million
hectares of agricultural land. Of this, just 9.5 million hectares is
cultivated. Unlike several other countries in the region, the vast
majority of land available for cultivation is neither virgin forest
nor environmentally sensitive.

Fish - Photo Courtesy: René Hartslief

One reason for such underutilisation is the fact that agriculture
in Tanzania remains largely un-mechanised. According to
processing industries. Nearly all animal products – such as meat, government figures, nearly three quarters of the country’s crops
dairy and skins – are absorbed by the domestic market, and
Large scale vegetable farming - Photo Courtesy: René Hartslief
while the Tanzanian government recognises the need for private
investment in this sector to finance the export industry, it believes
that for the time being developing the domestic market in order to
meet local demands for meat and dairy is the main goal.

FISHERIES
Tanzania is rich in fishery resources. Marine waters cover
40 000 square miles and fresh water lakes some 36 000 square
miles. Major fish catches include sardines, catfish, tilapia, Nile
perch, dagaa and, to a lesser extent, prawn fishing in coastal
areas. The country’s inland fishing industry – in particular the
‘Great Lakes’ of Victoria, Tanganyika and Nyasa – has been the
focus of much activity in recent years.

Nile perch is the primary fishing catch in Lake Victoria, and

there is also potential for developing fishing resources in Lake
Nyasa and Tanzania’s coastal areas – especially deep sea
fishing and commercial prawn fishing. Efforts to develop and
expand the fishing industry have been hampered by territorial
disputes (in the case of Lake Nyasa) and illegal fishing
activities, as well as the need for investment to upgrade the
local fishing fleet and other infrastructure. There has been
modest growth in fishing activities since 2000.

The sector expanded by 5 percent in 2008 compared to 4.5

percent in 2007; mainly on account of government efforts
to combat illegal fishing practices and trafficking of fish
and fisheries products across the borders, as well as the
strengthening of aquaculture production and promotion of
environmental conservation. Over the same period, the fishing
catch rose from 328 000 tonnes to 350 000 tonnes. However,
the overall contribution of fishing to total GDP decreased to 1.2
percent in 2008 compared to 1.3 percent in 2007.
32

Sugar cane - Photo Courtesy: René Hartslief
are cultivated by hand hoe; a further 20 percent are cultivated
by ox plough and only 10 percent by tractor. Agricultural
production is also adversely affected by gender disparities
(with women forming the bulk of the agricultural labour
force), periodic droughts and poor weather conditions, limited
capital investment, lack of agricultural technology (especially
with respect to irrigation technology), and inadequate and
inappropriate use of fertilisers.
Agricultural production and development are also limited by
the fact that most farms in Tanzania are organised around
smallholder subsistence models, with the average farm size of
0.5 to 3.0 hectares. For instance, only 1 percent of the livestock
industry is run by large-scale ranches and dairies, with the rest
of the industry in the hands of small-scale subsistence farmers.
Investment opportunities
The 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. This has enabled foreign
companies such as the UK’s Brooke Bond and South Africa’s
Illovo to invest in planting tea and sugar cane.
There are several crops that show specific potential for
investment. Sisal is already an important and versatile crop,
which has undergone significant expansion in the past few
years with large-scale plantations having been built in a number
of sites, including Dodoma, Shinyanga, Kigoma and some
coastal areas. With the Tanzanian government having identified
biofuel as a priority sector, the further cultivation of crops such
as sugar cane (to produce ethanol), oil palm trees and Jatropha
(curcas) seeds holds promise.
Tanzania also has a large potential market for honey, producing
5 600 tonnes per year of which only 477 tonnes (11 percent) is
currently exported. Annually, some 138 000 tonnes is available
for harvesting, which could contribute a total of TZS 184 billion
to the national income every year.
EXPANDING PRODUCTION
A strong and supportive policy environment is key to further
growth in the agricultural sector. The Agriculture and Livestock
Policy (1997) is currently under review, while the Agricultural
Sector Development Strategy (2001) and the seven-year
Agricultural Sector Development Programme (ASDP) aim
to revamp agriculture for increased productivity, profitability
and farm income. These pieces of legislation emphasise
enabling farmers’ access to and use of agricultural knowledge,
technologies, marketing systems and infrastructure, and the
promotion of private sector investment.
The Tanzanian government recognises the importance and
potential of agriculture as a contributor to wealth creation. As
33
such, the motto for the 2009/10 national budget is ‘Agriculture
First’, which underlines the renewed focus on fostering
agricultural development. In the 2009/10 fiscal year agriculture
received 7 percent of the national budget allocation – some
TZS 666.9 billion, which is an increase of 30 percent over the
TZS 513.0 billion allocated in 2008/09.
A number of measures were proposed in the 2009/10 budget
to redress the adverse impacts of the global economic crisis on
the sector. These include:
• Guaranteeing of loans intended for investment in the sector.
• Compensation of losses incurred by cooperatives and private
companies which sold cotton and coffee at a loss.
• Establishment of an Agricultural Development Bank.
• VAT and customs duty changes to promote the dairy sector,
and VAT exemption on land preparation, cultivation, planting
and harvesting in order to reduce production costs.
Currently agricultural implements and fertilizers are VAT
exempt.
• Improving access to credit and fast-tracking the setting up
of a special window for lending to agricultural ventures at the
Tanzania Investment Bank (TIB).
In addition, productivity and growth in agriculture is to be
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
to buy and store sufficient grains consistent with national food
requirements.
• Ensuring the timely availability of inputs for arable agriculture
and livestock farming, including improved seeds, fertilisers,
agro-chemicals and veterinary medicines, and that the
Agricultural Input Fund is sufficiently funded.
• 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.
• Supporting research institutions to develop improved seeds
and encouraging other institutions to scale-up seed
production.
• Reduction of unsustainable forest harvesting.
• Establishing and reviving agro-processing industries, with
private sector participation.
Storage facilities - Photo Courtesy: René Hartslief

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.
Growth in the manufacturing sector has risen from 1.5
percent in 1995 to 8.7 percent in 2007 and 9.9 percent in
2008.
Presently, manufacturing activities make up 9.4 percent of
Tanzania’s Gross Domestic Product (GDP) and the sector is the
country’s largest urban employer. Employment in the industry
rose from 91 112 in 2007 to 92 015 in 2008.
Growth in 2008 was the highest recorded in the past seven
years, and may be attributed to sustainability in industrial
production, particularly for food and dairy products, industrial
chemicals, printing, and an overall increase in manufactured
exports. Nonetheless, the global financial and economic crisis is
challenging further expansion by reducing private sector
participation in manufacturing activities as well as inflows of
Foreign Direct Investment (FDI). It is expected that growth will
slow to 5.7 percent in 2009 before rebounding to 9.5 percent by
2012.
Current priorities include the enhancement of local
manufacturing capacity, value addition, and decreasing exports
of raw materials in favour of processed good. Export processing
zones remain in the spotlight, and government continues to
concentrate on sustaining trade and investment partnerships
with China, other Asian countries and the Middle East. A
number of programmes are also underway to increase the
contribution of small and medium enterprises (SMEs), which are
seen as vital for stimulating local manufacturing.
The reduction in the standard VAT rate from 20 percent to 18
percent during 2009 aids manufacturers targeting the domestic
34
Manufacturing
market. Furthermore, a number of manufacturers stand to
benefit from reductions in customs duties on various inputs, as
announced in the 2009/10 national budget.
MANUFACTURING ACTIVITIES
Most 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. The main
markets for Tanzania’s manufactured goods are the Democratic
Republic of Congo (DRC), Rwanda, Burundi and Uganda.
Principal manufacturing activities comprise food, beverage and
tobacco processing; textiles and clothing; paper and paper
products; leather and footwear manufacturing; chemicals,
rubber and plastics. The priority sectors for investment include
the following export-oriented manufacturing operations:
• Textiles and garments
• Leather processing and leather products
• Lapidary, including gold, diamonds and gemstones such as
tanzanite
• Agro-processing
• Fish processing
• Wood and wood products
• Electrical and electronic appliances
• Information and Communications Technology (ICT) industries
Manufacturing received a larger share of investment than
any other sector for the period 1990 to 2008 – some
US$ 6 151.8 million.
Food processing and refining covers both large and small-
scale industries, and includes dairy products, canning and
preserving of fruits and vegetables, canning of fish 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
Coca-Cola (Zanzibar Bottlers) - Photo Courtesy: Marie Gibbons

drinks and carbonated water; and the bottling of natural spring

and mineral water.

The world’s second largest brewer of beer, SAB Miller, currently

owns 52.83 percent of Tanzania Breweries, with factories
located in Dar es Salaam, Arusha and Mwanza. The introduction
of a fourth factory will boost its overall beer production by
approximately 22 percent.

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 finished commodities. The current
low investment in agro-processing is being addressed by
government through the continued promotion of private sector
investment in the subsector as well as the building of local
fertiliser manufacturing factories.

Both horticulture and floriculture have grown significantly Roses are the main export flower - Photo Courtesy: René Hartslief

over the past two decades. The flower industry was established
in 1987, and intensive commercial production of roses began
five years later. Today, roses are the main export flower, making
up some three quarters of exports. Other flowers include
lisianthus, carnations and chrysanthemums. Some 90 percent

Nampak
of Tanzania’s cut flowers are exported to the Netherlands.

Horticultural exports, consisting principally of cut flowers, were

Tanzania valued at US$ 42.3 million during the year ending October
2009 compared to US$ 29.8 million during the corresponding

Packaging Excellence period in 2008. This 41.7 percent increase was largely due
to expansion in horticultural production coupled with new
investments in the southern part of Tanzania.

The tobacco subsector comprises the manufacturing of

cigarettes and tobacco. Export volumes of manufactured
tobacco rose by 78.5 percent between October 2008 and
October 2009, on an annual basis. Furthermore, the value of
manufactured tobacco exported rose by 128.7 percent over this
period, from US$ 1.6 million to US$ 3.8 million.

Swedish ethanol producer and distributor SEKAB is planning

to produce sustainable bio-energy in Tanzania from sugar
cane and sorghum, which is to be processed into ethanol and
electric power. This is expected to have a positive effect on
local farming and lead to out-grower possibilities as well as
reduced poverty due to a much more productive, commercial
and profitable agricultural sector.

Tel: +255 22 2864251/2/3/4 There are also indications that fish processing could gain
Fax: +255 22 2863853 momentum, and there has been extensive development of
industrial processing plants for the export trade in Nile perch,
PO Box 618, Dar es Salaam with Lake Nyasa showing the most potential for development.
www.nampak.com
The textiles and garments subsector comprises spinning,
weaving and finishing of textiles as well as garments
36
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, and remains constrained by weak
institutional infrastructure. The export market consists mainly of
cotton yarns and home linens. In the year ending October 2009,
the volume of cotton yarn exported dropped by 77.1 percent
and the value by 58.5 percent compared to the same period in
the previous year.
Tanzania has three main cement producers: Tanzania Portland
Cement Company (TPCC), Tanga Cement Company and
Mbeya Cement Company. Domestic demand currently stands at
1.9 million tonnes, with the capacity of local producers around
1.8 million tonnes.
Operating under the Twiga brand, TPCC is the country’s largest
producer, currently supplying over 40 percent of Tanzania’s
cement needs. 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, Tanzania’s cement
industry has grown rapidly over the past few years, with
modernisation and expansion programmes having seen
the installation of state-of-the-art technologies to help boost
production even further. During 2009, TPCC was involved in an
expansion project to raise its production capacity to over 1.6
million tonnes, while Tanga Cement has commissioned a new
mill and packer, which will see output at the factory rise from
750 000 tonnes to 1 250 000 tonnes of cement per annum – an
increase of 67 percent. Despite these positive developments,
the industry is also facing the challenge of cheap cement
imports flooding the region.
38
EXPORT DEVELOPMENT
The export market for manufactured goods comprises cotton
yarn, manufactured coffee, manufactured tobacco, sisal
products (yarn and twine), plastics, textiles and apparel and iron/
steel. During 2008, exports of manufactured goods rose, partly
due to government’s efforts to attract FDI and a strengthened
business environment. In the year ending October 2009, the
export value of manufactured goods rose slightly to US$ 571.8
million from US$ 564.3 million over the corresponding timeframe
in 2008. Manufactured goods accounted for a healthy 21 percent
of all goods exports over this period.
Export Processing Zones
The Export Processing Zones (EPZ) Programme promotes
export-oriented investment within designated zones aimed at
creating international competitiveness for export-led economic
growth. The programme offers a range of attractive fiscal,
physical and procedural incentives to ensure lower cost
operations, faster set-up and smoother operations.
The Export Processing Zones Authority (EPZA) is an
autonomous government agency operating under the Ministry
of Industry, Trade and Marketing. The Authority coordinates,
facilitates, promotes and licenses export-led manufacturing
investments in Tanzania, both local and foreign. Additionally, the
EPZA provides facilitation and after care services to new and
existing investors.
Projects operating under the EPZA earned the country more
than US$ 250 million in exports between 2007 and the beginning
of 2010. This trend is likely to improve as investments continue
to be made in various sectors. The authority has so far
registered 33 companies involved in textiles and garments, agro-
processing, processing and manufacturing of leather products,
as well as activities related to fishing processing, lapidary, wood
products, electrical and electronic appliances, and ICT. Over
US$ 210 million has been invested in these projects and more
than 9 000 jobs created.
39

Mining resources in Tanzania are plentiful, and include precious and base metals, diamonds
and gemstones, fossil fuels and agricultural, chemical and industrial minerals.
Tanzania is the fourth-largest gold producer in Africa, after South
Africa, Ghana and Mali, and ranks among the top producers
of diamonds world-wide. Coloured gemstones, including
Tanzanite, are also mined extensively, while uranium has great
potential. Between 1999 and 2007, Tanzania’s annual gold
output increased from five to 50 tonnes, with an average annual
growth rate of 38 percent.
While the Tanzanian mining industry is relatively small,
contributing just 2.6 percent to the country’s GDP in 2008,
it is a key sector in terms of foreign exchange earnings.
However, in the wake of the global financial crisis, the mining
sector registered a significant fall in growth: from 10.7 percent
in 2007 to a record low of 2.5 percent in 2008. During this
period, prices of major metals (excluding gold) also continued to
decline, and a number of major projects were cancelled or put
on hold, including a US$ 3.5 billion aluminium smelting project
in Mtwara. The export value of minerals amounted to US$ 992.7
million in the year ending October 2009, which was somewhat
lower than US$ 1 001.0 million recorded in the year ending
October 2008. Nevertheless the value of gold exports rose over
this period.
Industry forecasts suggest that Tanzania’s minerals sector –
gold mining in particular – will resume an upward trend in the
near future, as production capacity increases. Other areas with
potential include coal and uranium, with a number of projects
likely to come on-stream in the next few years.
REGULATORY FRAMEWORK
The Mining Act (1998) is the principal legislation that governs
mineral rights and mineral trading, although this is currently
under review to align it more closely to the needs and
development of local communities.
In the 2009/10 budget, a number of new fiscal measures were
proposed for the mining sector. These include:
• Limiting the VAT special relief given to mining companies to
cover only prospecting and exploration activities.
• Abolishing the excise duty exemption granted to mining
40
Mining Industry
companies.
• Abolishing the partial fuel levy exemption granted to mining
companies by revoking Government Notice No. 99 of 2005.
These changes will affect mining companies entering into a
Mining Development Agreement (MDA) from 1 July 2009.
GOLD
Tanzania boasts a gold reserve of about 45 million ounces.
Gold output rose from 39.8 tonnes in 2008 to around 50
tonnes in 2009. Gold exports rose by 2.4 percent to US$ 958.3
million during the year ending October 2009 compared to
the corresponding period in 2008. This increase in value was
largely due to higher gold prices in world markets, as export
volumes were slightly lower.
The Geita Mine, AngloGold Ashanti’s only operation in
Tanzania, produced 264 000 ounces of gold in 2008 compared
to 327 000 ounces in 2007, and record production of 618 571
ounces in 2005. In the third quarter of 2009, Geita continued
its recovery under a new management team, delivering a 32
percent rise in production to 83 000 ounces for the quarter.
Barrick Gold Corporation’s Buzwagi Mine is the country’s
second-largest mining operation and largest single open pit.
The deposit has proven and probable reserves of 3.6 million
ounces of gold and 175 million pounds of copper. The first gold
was poured at Buzwagi during May 2009. The mine is expected
to produce about 200 000 ounces of gold in 2009 at total cash
costs of between US$ 320 per ounce and US$ 335 per ounce.
The Tulawaka Mine is a joint venture between MDN Inc (30
percent) and Pangea Goldfields Inc (70 percent), a wholly
owned indirect subsidiary of Barrick Gold Corporation and
project operator through its Tanzanian subsidiary, Pangea
Minerals Ltd. Tulawaka produced 94 180 ounces of gold for
the year ending 31 December 2009, with total sales amounting
to US$ 90.2 million. Since beginning operations in March
2005, the Tulawaka mine has produced 748 549 ounces of
gold. For the 2010 fiscal year, the mine operator is forecasting
production of 76 736 ounces of gold. Extensive exploration and
underground development work will be carried out in 2010 and
2011 to define more reserves and to extend the mine life.
In 2008, gold production at Barrick Gold’s North Mara Mine
totalled around 197 000 ounces at a total cash cost of
US$ 757 per ounce. Proven and probable mineral reserves as
of 31 December 2008 were estimated at 3.0 million ounces.
DIAMONDS
The Williamson Mine is an open pit diamond mine at Mwadui
in northern Tanzania. At 146 hectares, Williamson is the largest
kimberlite pipe ever to be mined economically, having been
operated continuously as an open pit mine for almost 70 years.
During this time it has produced over 20 million carats, and
there remains a major resource of some 40 million carats. The
mine 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. Between November 2008
and June 2009, 1.5 million tonnes of ore was extracted from
the pit and 84 486 carats recovered. The value of the parcels
sold thus far has averaged US$ 126 per carat, which is an
exceptional achievement and almost equivalent to company
expectations before the fall in the diamond market towards the
end of 2008. Petra’s expansion plan for the Williamson Mine
includes increasing throughput to between 7.5 and 10 metric
tonnes per annum, yielding an estimated annual production of
some 500 000 to 600 000 carats and a mine life of 19 years,
whilst targeting unit operating costs of US$ 9 per tonne.
GEMSTONES
Tanzania has an abundance of coloured gemstones, including
minerals such as ruby, sapphire and emerald, and remains the
only source of the sought after gemstone tanzanite. In 2008, the
output of gemstones was approximately 1 858 000 kilograms,
compared to a total of 2 063 272 kilograms in 2007.
41
Tanzanite
Tanzanite is found in the Simanjiro district south-east of Arusha.
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. Production exceeded targets in 2009,
with some 1.91 million carats produced at a grade of 51 carats
per tonne and sales recorded of US$ 12.2 million, helping to
move the company back towards profitability. TanzaniteOne
has also signed a memorandum of understanding with Japan’s
Hohoemi Brains Inc for the cutting and distribution of its
gemstones.
NICKEL
The Kabanga Nickel Project, located in north-western
Tanzania, south of Lake Victoria and near the Burundi border, is
a 50:50 joint venture between Barrick Gold and Xstrata Nickel.
One of the world’s few undeveloped large-scale nickel sulphide
projects, 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. In 2009, the project received a retention license
for a period of five years from the Tanzanian government.
Completion of the feasibility study is scheduled for 2010, and
plans for the execution phase are under review to align the
project’s development with market conditions.
URANIUM
Tanzania has strong uranium potential, with numerous
occurrences of surface uranium mineralisation having been
identified. 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 two to three years.

Further economic expansion rests upon improving infrastructure in key sectors such as
power, transportation and communications.
Reliable and affordable utilities as well as modern and efficient
communications and transport systems are essential for future
economic and social development. Recognising the importance
of infrastructure for economic growth, the government has
continued to place considerable focus on infrastructure
development. As such, some 11.5 percent of the 2009/10
national budget has been set aside for:
• Improving and expanding essential infrastructure services,
including roads, railways, harbours, airports and rural
electrification
• Implementing ongoing infrastructure projects, focusing on
roads, electricity and water
• Strengthening the operational capacity of underperforming
parastatals with a view to increase their efficiency
• Finalising the preparation of a national policy on Public Private
Partnership (PPP) in order to enable the private sector to
participate in infrastructure projects
CONSTRUCTION
The construction sector currently contributes between 6 and 7
percent to Tanzania’s Gross Domestic Product (GDP). In 2008,
activities in the sector grew at a rate of 10.5 percent compared
to 9.5 percent in 2007. This was driven by the construction of
roads and bridges, residential and non-residential buildings and
improvements to water infrastructure.
In the period 1990 to 2008, construction received the third
largest share of investment, followed by commercial buildings.
By the end of 2009, additional investment in the sector had
boosted performance even further, with construction activities
growing at between 12 and 15 percent.
Commercial real estate is a current focus in the construction
industry. Projects include a US$ 20 million state-of-the-art ten-
storey office block, which opened in Dar es Salaam’s central
business district in early 2010, the 18-storey Viva Complex
being developed by the Tanzania Red Cross Society and a local
private property developer, and the country’s tallest building –
the 25-storey Uhuru Heights, being undertaken by Nida Textile
Mills and Indian property giant Cosmos.
42
Physical Infrastructure
TRANSPORTATION
Tanzania’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 refinery 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 Regulatory Framework
is presently being set up. The ten-year Transport Sector
Investment Programme (TSIP) presents Tanzania’s strategy
for achieving future transport-related goals. TSIP is being
implemented in two five-year phases, from 2007/08 to 2016/17.
Transport services grew by 6.9 percent in 2008 compared to
6.5 percent during the previous year. The increased growth rate
was attributed to larger volumes of road transport cargo and
greater numbers of international air passengers.
Transport corridors
Tanzania 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

The Tanzania
Government Flight Agency (TGFA) under
the PSRP and EA Act No. 30 of 1997 was
established on 17th May 2002 taking over the
functions of carrying VIPs and top government
officials from a unit dating back to the British
Trusteeship period.
The agency has 4 aircraft: A Piper Navajo,
a Fokker 50, a Fokker 28 and the recently
acquired Gulfstream G550 Business jet which
has enabled expansion of flight operations
from territorial Africa to the rest of the world.
This gives TGFA a world-wide capability.
Apart from its traditional role of providing
air transport to the government and its top
leadership, it used its spare capacity to provide
air service to the general public at large.
THE VISION
Strong, competitive and responsive Government
Flight Agency, able to provide high quality and
safe air services.
THE MISSION
To provide executive air service to government
VIPs, the strategic public and private clientele
in a sound business-like manner.
THE BUSINESS
The Tanzania Government Flight Agency has
three departments, namely: Flight Operations,
Technical Services and Business Support.
Fokker 28
FLIGHT OPERATIONS
This department is manned by well trained
and experienced pilots, cabin crew and flight
dispatchers. For years these personnel have
had the task of planning and executing the
transporting of the President of the United
Republic of Tanzania, and all other VIPs in the
Government. The new ultra long range jet has
enhanced the ability to meet VIP worldwide
travel needs.
TECHNICAL SERVICES
For the planes to fly safely there are experts who
maintain these machines in a very professional
manner. Well trained engineers and technicians
have taken the daunting task of making sure
that every dispatched plane is airworthy to
maintain customer satisfaction and on time
performance. Most of the maintenance is done
by these qualified personnel except for major
overhauls and checks which are done abroad.
Projections are made so that in future all the
major checks are done at our own maintenance
base.
BUSINESS SUPPORT
This department deals with Finance and
Administration. The agency has changed from
government accounting to commercial based
accounting system so as to enhance financial
discipline and accountability.
 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 traffic
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 network
The 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 Office 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. The overall road condition assessment at
the end of December 2008 indicates that 73 percent were good,
23 percent fair and 4 percent poor, compared to 25 percent
good, 40 percent fair and 35 percent poor in December 2001.
All regional headquarters except four – Rukwa, Tabora, Kigoma
and Manyara – have been connected with tarmac roads.
Other notable developments include a decrease in overloaded
vehicles from 40 percent in 2000 to 6 percent in 2009.
Furthermore, between June 2007 and June 2009, a total of
912 kilometres of trunk and regional roads were upgraded
to bitumen standard. Collections for the Road Fund have
increased from TZS 73 billion in 2005/06 to TZS 218.4 billion in
2008/09.
Current roads sector projects and studies taking place under
the auspices of the East African Community include:
• Arusha – Namanga – Athi River Construction Project
• Feasibility Studies and Detailed Design of the Arusha – Holili –
Taveta Road
• Feasibility Studies and Detailed Design of the Malindi – Lunga
Lunga and Tanga – Bagamoyo Road
• Scoping Study on the Civil Engineering Contracting Capacity
in East Africa
• Study on the East African Transport Strategy and Regional
Road Sector Development Programme
• Study on the East African Transport Facilitation Project
• The East African Road Network Project (EARNP)
Air transport
Tanzania has around 125 aerodromes, including the four
international airports of Julius Nyerere, Kilimanjaro, Zanzibar
and Mwanza. There are 58 domestic airports, the main ones
being Arusha and Mtwara.
Established in 1999, the Tanzania Airports Authority
(TAA) is a semi-autonomous agency under the Ministry of
Infrastructure Development. It 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).
44
Photo Courtesy: Tanzania Government Flight Agency
According to EAC Facts & Figures (2009), the number of flights
increased from 160 766 to 179 455 between 2006 and 2007,
and climbed to 181 434 in 2008. Also in 2008, international
passenger numbers rose to 1.288 million, domestic passengers
to 1.622 million and transit passengers to 0.327 million, while
some 32 872 tonnes of cargo was transported.
The national carrier Air Tanzania Company Ltd (ATCL) is
currently being restructured in order to strengthen its capacity
to compete in the aviation market. At present ATCL has just two
Dash 8 Q-300 planes, with a carrying capacity of 50 passengers
each. By early 2010, government was actively engaged in
finding a suitable company to invest in and run ATCL under a
Public-Private Partnership. The new investor is also expected
to implement ATCL’s long-term strategic plan, which includes
procuring nine planes for domestic and international flights,
training pilots and engineers and changing the operating
technology system.
Airport infrastructure and services are currently being
upgraded to international standards, in particular JNIA, KIA and
Zanzibar International Airport. Domestic airports earmarked
for infrastructure improvements include Mwanza, Bukoba,
Dodoma, Kigoma, Mafia and Songwe.
Marine and lake transport
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.
Tanzania has a total of 63 ports, nine along the coast and
54 on the lakes.
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.
In the past two years, Tanzania has seen huge improvements
in its capacity to efficiently move goods and handle other trade
logistics. This follows investment by the Tanzania Revenue
Authority (TRA) of US$ 19 million and the Tanzania Ports
Authority (TPA) of some €12 million. Furthermore, government
has officially ended the TICTS monopoly in an effort to increase
efficiency by allowing competition in the provision of services.
During 2009, port operations in Dar es Salaam improved by
between 35 and 45 percent, with a tremendous reduction in
the container dwell time (the time that cargo remains in the
port terminal storage area before clearance) and improved
productivity of the container terminal. Between January and
December 2009, dwell time dropped from an average of 20
days to between 11 and 13 days for transit and domestic goods
respectively. Furthermore, a ship now waits for only 3.8 days at
the outer anchorage compared to an average of 12.7 days in
January 2009. The turnaround time needed to prepare a ship
for a return trip improved to 6.7 days from 18.9 days over the
same period.
In addition 37 765 containers were transferred to Inland
Container Depots (ICDs) without additional costs between
January and December 2009, creating extra space at the port’s
container terminal. This is in contrast to 10 504 containers in
2008. Customs clearance procedures have also improved due
to extended working hours at the customs department.
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. During
2008, the inland ports saw some 137 938 tonnes of cargo and
487 201 passengers. There are presently 16 operating vessels
on the lakes.
Rail transport
Tanzania’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.
Tanzania Railways was privatised in 2007, whereafter it was
jointly owned by the Rail Indian Technical and Economic
Services Limited (RITES) Company of India (51 percent) and
the Tanzanian government (49 percent). At the beginning
of 2010, government decided to terminate its contract with
RITES on the running of Tanzania Railways Limited (TRL).
Government will either take over TRL activities or look for a
private investor.
Rail transport is the second most important mode of transport
after road, and is critical for long distance freight along the
main transport corridors. However, due to the poor conditions
of tracks and ageing rolling stock and locomotives, tonnage
freight volumes and passenger numbers have continued to fall
every year (from 60 percent of port cargo in the 70s and 80s to 6
percent in 2009). With the poor performance and falling service
levels of the railway transport system, road transport has taken a
large proportion of freight and passenger services in the region.
During 2009/10 the Chinese government is injecting US$ 39.3
million to recapitalise TAZARA, which will include offering
technical support.
COMMUNICATIONS
Following a series of policy reforms, Tanzania’s fast-expanding
Information and Communications Technology (ICT) industry is
today characterised by a liberalised market, healthy competition
and continually improving technology and infrastructure.
Deregulation, privatisation and new technologies are opening
up new areas of potential investment.
The splitting of the parastatal Tanzania Posts and
Telecommunications Corporation (TPTC) in 1993 saw the
emergence of the Tanzania Posts Corporation (TPC), Tanzania
Telecommunications Company Limited (TTCL) and the industry
regulator, the Tanzania Communication Commission (TCC). In
46
Railway network - Photo Courtesy: René Hartslief
2003, TCC merged with the Tanzania Broadcasting Commission
(TBC) to form the Tanzania Communications Regulatory
Authority (TCRA), which regulates telecommunications,
broadcasting and postal services.
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. The government has embarked on a
national fibre optic backbone rollout to connect population
centres around the country, and while penetration remains low,
the advent of services such as Seacom’s submarine fibre optic
cable (launched in July 2009), and the East African Submarine
Cable System (EASSy) and O3b Networks satellite system
(both due for completion in 2010), should further invigorate the
market, offering lower running costs for higher capacity services.
Tanzania has two fixed-line operators – TTCL and Zantel – and
eight mobile networks. While the country’s fixed line sector has
remained stagnant since 2000, the mobile sector has in the
past decade grown at over 40 percent per year, with subscriber
numbers estimated at 15 million at the beginning of 2010. With
mobile penetration standing at less than 40 percent there is still
a great deal of room for expansion.
Many Internet Service Providers (ISPs) offer wireless services
to increase connectivity and range while decreasing outlay.
According to the International Telecommunication Union (ITU),
the country had 520 000 Internet users as of June 2009, which
represents around 1.3 percent of the population. However,
while only a small percentage of people have their own Internet
subscription, it is estimated that more than a quarter of the
population has access to the Internet through subscriptions,
institutions or Internet cafés.
The communications sector grew by 20.5 percent in 2008
compared to 20.1 percent in 2007, outpacing all other
economic sectors. This was due to an overall increase
in subscription rates, particularly with regard to mobile
phones.
Optic Fibre Cable Infrastructure Backbone Network
Tanzania’s National ICT Policy focuses on developing a reliable
and state-of-the-art ICT Infrastructure Network of adequate
capacity, high-speed and country-wide coverage, encompassing
backbone level as well as the last-mile broadband access
connectivity. Work on the US$ 170 million 10 000-kilometre
optic fibre cable (OFC) network began early in 2009 and is due
to be operational by the end of 2010.
WATER & SANITATION
One third of Tanzania receives less than 800 millimetres of
rainfall and is thus arid or semi-arid, while a third of the rest
 Ministry of Communications, Science
& Technology
Introduction
The Ministry of Communications, Science and Technology was established in February 2008 as per the Government Notice No. 20 of February 2008. The
mandates of the new Ministry include: communication, science and technology which were formerly under the then Ministries of Infrastructure and Ministry
of Higher Education, Science and Technology.

Vision
“To have 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.”

Mission
“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.”

The National ICT OFC (Optic Fibre Cable) Infrastructure Backbone Network
As one of the specified focus area in the National ICT (Information Communication Technology) policy, the government is committed towards the development
of reliable state-of-the-art ICT Infrastructure Network of adequate capacity, high-speed and country-wide coverage. The infrastructure will cover Backbone
level as well as the last-mile broadband access connectivity. The national ICT infrastructure will be commensurate with grass-root needs, and compliant with
regional and international standards. The National Backbone Infrastructure network is intended to provide affordable bandwidth to citizens, businesses and
government entities thus increasing the Tanzania networked readiness, an environment necessary for Tanzania to become a regional Hub of ICT infrastructure
and ICT solutions.

Objective of Infrastructure Development in Tanzania

Development of the National ICT OFC Infrastructure Backbone Network in Tanzania is being perused in order to foster the achievement of goals and
objectives of poverty reduction and building of the Information/Knowledge Society as outlined in various strategies including:
• The National Development Vision 2015
• National Strategy for Growth and Reduction of Poverty as known in Kiswahili MKUKUTA, and
• United Nations Millennium Development Goals (MGDs) of 2015
• The World Summit on the Information Society (WSIS) Plan of Action

Implementation of National ICT OFC Backbone

The Ministry of Communications, Science and Technology is collaborating with a contractor from China to build the 10,000 km OFC network. Officially, the
project started on 01/02/2009, and is expected to cost US $170m and become operational by the end of 2010. The OFC Backbone will be connected to the
submarine fibre-optic cables to offer lower tariffs for international connectivity, thus meeting Tanzania’s demand for large bandwidth and higher data speeds.
These advantages will allow Tanzania to handle a larger volume of communication for voice, data, video and high speed internet, including media services.

Benefits of the National ICT Backbone Network

The Backbone network will offer a number of benefits to the Government, Users, Service Providers and Operators and the rest of the community. These
include:
• Easy Access of Information to all citizens for enhanced and smooth communication between the people
• Efficient connectivity within Tanzania, and between Tanzania and other landlocked neighbouring countries and to the rest of the world
• Low and affordable costs of communication services to the customers
• Fast narrowing of the Digital Divide among the people, the haves and the have nots, institutions, countries and continents
• Accelerated achievement of goals and objectives of National Vision 2025, MKUKUTA, MGDs of 2015, and WSIS Plan of Action
• Promoted use and application of ICT for development through online learning (e-education,
e-schools), e-medicine, internet services, e-mail services, e-leadership, e-business,
e-agriculture, e-governance, e-voting, e-culture, e-transport, e-communications, e-ticketing,
e-commerce
• Facilitated establishment of a Special Economic Zone (SEZ) and Digital (Smart) Village
• Optimal use of the envisaged Universal Communications Access Fund for supporting really
in places (rural and underserved areas) where the National ICT Backbone Network did not
pass through
• Facilitate establishment of Community Information where people can access information and
other important issues regarding social and economic development
• Enhancement of building of local human capacity by expanding local training and research and
development institutions on ICT for development
• Facilitates on-line and distant learning to ensure for increased number of adequately trained
and skilled professionals in ICT industry for sustainable development

Contacts
Ministry of Communications, Science and Technology
Jamhuri Street, Plot No. 1168/19 • PO Box 2645, Dar es Salaam
Tel: +255 22 2111254-7 • Fax; +255 22 2112533
E-mail: mst@mst.go.tz • Website: www.mst.go.tz
REGULATING THE COMMUNICATIONS
SECTOR IN TANZANIA
John S Nkoma, Director General,TCRA
Email: dg@tcra.go.tz, Website: www.tcra.go.tz
PO Box 474, Dar es Salaam • Tel: +255 22 211 8947 • Fax: +255 22 211 6664

TANZANIA has experienced unprecedented growth in the communications sector (mobile and fixed telephony, radio, television, internet, postal)
in the past few years. This is in terms of number of operators, products, services, number of subscribers (See Figure 1) and applications. To get an
insight into this growth, this article will briefly highlight what is behind regulating the communications sector, a function performed by the Tanzania
Communications Regulatory Authority (TCRA). TCRA is a quasi independent government body established under the Tanzania Communications
Regulatory Authority Act No.12 of 2003 which merged the then Tanzania Communications Commission and the Tanzania Broadcasting Commission.
The core functions of TCRA are: Promotion of effective competition and economic efficiency; Protecting the interests of consumers; Promoting the
availability of regulated services; Licensing and enforcing license conditions of broadcasting, postal and telecommunications operators; Establishing
standards for regulated goods and services; Regulating rates and charges (tariffs); Managing the radio frequency spectrum; Monitoring the performance
of the regulated sectors; Monitoring the implementation of ICT applications; Managing numbering resources.

Figure 1: Growth of subscriber base in telecommunications for the period 2000 – 2008.

What are the reasons for the success of the communications sector in Tanzania? There are several reasons, but these are underpinned by four major
reasons: Excellent Policies, Excellent Legal and Regulatory environment for the Investors, Excellent regulatory Framework, which we summarise
below.

First, the communications policies. These are articulated in the following communication policies: National Telecommunications Policy of 1997,
National ICT Policy of 2003, National Information and Broadcasting Policy of 2003 and National Postal Policy of 2003, which can be downloaded
from the TCRA website.

Secondly, the legal framework can be found in the following legislations: Tanzania Broadcasting Services Act No 6 of 1993, Tanzania
Communications Act No 18 of 1993, Tanzania Communications Regulatory Authority Act No 12 of 2003 and the Universal Communications
Service Access Fund Act of 2006. Again, these can be downloaded from the TCRA website.

Thirdly, there are fourteen regulations governing the communications sector. These are: The Tanzania Communications (Broadband Service)
Regulations 2005,The Tanzania Communications (Consumer Protection) Regulations 2005,The Tanzania Broadcasting Services (Content ) Regulations
2005,The Tanzania Communications (Licensing) Regulations 2005,The Tanzania Communications (Importation and Distribution) Regulations 2005,
The Tanzania Communications (Installations and Maintenance) Regulations 2005,The Tanzania Communications (Interconnection) Regulations 2005,
The Tanzania Communications (Telecommunication Numbering and Electronic address) Regulations 2005, The Tanzania Postal Regulations 2005,
The Tanzania Communications (RadioCommunications and Frequency Spectrum ) Regulations 2005, The Tanzania Communications (Tariff)
Regulations 2005, The Tanzania Communications (Type Approval of Electronic Communications Equipment) Regulations 2005, The Tanzania
Communications (Quality of Service) Regulations 2005, The Tanzania Communications (Access and Facilities) Regulations 2005.

Fourthly, there is licensing framework which includes the Converged Licensing framework and other licenses. The Converged Licensing
Framework (CLF) was introduced on 23rd February 2005 and consists of four licenses, namely: Network Facilities License (NFL), Network Services
License (NSL), Applications Service License (ASL) and Contents Services License (CSL). The Converged Licensing Framework is Technology
Neutral and Service Neutral.There are four market segments; International, National, Regional and District.There are currently approximately 156
licensees comprising 13 NFL, 12 NSL, 59 ASL, 45 CSL (Radio) and 27 CSL (TV).

Other licenses include Public Postal License, Courier Service License, Frequency User License, Installation and Maintenance License, Importation
and Distribution License, Type Approval, Numbering Resources.

In conclusion, one can say that there have been lot growths in the communication sector. However, there is more to come with the advent of the
coming of submarine cables and impending growth in the use of the internet and broadband services, over and above voice and SMS. TCRA is well
placed to face the future regulatory challenges.

Zanzibar Chief Minister H.E. Shamsi Vuai Nahodha (left) in a light moment with Members
of the TCRA Board at the opening ceremony of Tanzania Communications Regulatory Au- Mpwapwa residents in Dodoma Region surf at a community owned Telecentre. The centre
thority (TCRA) Office building in Zanzibar. On the Chief Minister’s left, is the Union Deputy is jointly supported by ITU and TCRA under rural connectivity project offering ICT education
Minister for Communications, Science and Technology Hon. Dr Maua Daftari (MP). to the local populations targeting the underserved rural societies.

The Director General of Tanzania Communications Regulatory Authority (TCRA) Prof. John
Nkoma (right) presents a license to Dovetel (T) Ltd in Dar-Es-Salaam. More investors are
joining the communications sector since the introduction of Converged Licensing Framework
which was introduced in 2005.
The Minister for Communications, Science and Technology Prof. Peter Msolla presents a
cheque worth TShs.10m/- to the Headmaster of Uhuru co-education Primary School at
the climax of the World Communications and Information Society Day in Dar-Es-Salaam
on 17th May 2008. Standing on the Minister’s left is the TCRA Director General Prof. John
Nkoma. Others are Hon. Margareth Sitta (MP), Minister for Community Development,
Gender and Children; Eng. Augusto Kowero, Ag. Director of Communications in the Ministry
Communications, Science and Technology and Eng. James Kilaba Deputy Director for Infor-
mation and Communication Technologies (Standards) of the TCRA.

The Minister for Information, Culture and Sports Hon. George Mkuchika (second left)
Head of the Tanzanian delegation to the 7th Conference of the Ministers of Information
of the Non-aligned Countries (COMINAC) at Saint Margarita Island, Venezuela. Left,
TCRA’s Deputy Director, Broadcasting Affairs Mr. Frederick Ntobi and the Managing Editor
of Tanzania Standard Newspapers Ltd Mr. Issac Mruma (third right)
Tanzanian Delegation to the 24th Universal Postal Union Congress (UPU) held in Geneva
in July/August 2008 led by Hon. Peter Msolla, Minister of Communications, Science and
Technology in a group photo after successfully representing at the country in the general
elections where Tanzania was elected Member of the Council of Administration for 4 years
term.
 of the country has precipitation of above 1 000 millimetres.
However, about 7 percent of the country’s land surface is
covered by lakes, including Lake Victoria (the second largest
fresh water lake in the world), Lake Tanganyika (second deepest
lake in the world) and Lake Nyasa, and there are a number of
large rivers as well as important groundwater reserves.

Development 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) – one

of the largest water sector programmes in Africa, with a US$
1 billion budget over a five-year period (2007-2012) – has
been initiated to strengthen institutions for integrated water
resources management and 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.

During 2008/09 the implementation of the Lake Victoria-

Shinyanga-Kahama water supply project was completed at a
cost of TZS 250 billion, and distribution of water to Shinyanga
and Kahama towns and surrounding villages is in progress.
50
Works to construct rural water supply schemes in 1 320 villages
will begin during the 2009/10 fiscal year, with investment of
around US$ 400 million over a period of two years. Upon
successful implementation, four million people – over 10 percent
of the country’s population – should benefit from the endeavour.
Rural water services coverage rose from 57.1 percent in
2007 to 58.3 percent in 2008.
The sanitation and hygiene sub-component of the WSDP
focuses on promoting sanitation and hygiene and making
use of existing and promising approaches for household and
community sanitation as well as school-based activities. During
the first two years of implementation a total of 1 531 909 people
were sensitised on sanitation and hygiene issues, resulting in
the construction of 1 762 improved latrines. Current priorities
include strengthening the rehabilitation and construction of
sewage water infrastructure in urban centres for environmental
protection.
ENERGY
Most of Tanzania’s electricity is generated through hydropower,
although the country has a wide variety of potential energy
sources, ranging from solar power and wind to coal and natural
gas, as well as possible oil reserves. Electricity is currently only
available to a little over one-fifth of the population, and almost
exclusively in urban centres.
Fuelwood continues to be a major source of energy generation
for much of Tanzania’s population, especially those in rural
areas. Measures are being undertaken to improve access to
sustainable energy, including promoting the use of alternative
sources of power.
The Tanzania Electric Supply Company (TANESCO) is
responsible for the generation, transmission, distribution and
51
sale of electricity across Tanzania Mainland, and also provides
bulk power supply to the State Fuel and Power Corporation
(SFPC) of Zanzibar. The company’s power generation system
comprises mainly hydro (90 percent) and thermal generation,
with the latter coming from two gas-fired power plants in Dar
es Salaam, which contribute a total of 145 MW. TANESCO
also imports some power from Uganda and Zambia, and has a
number of diesel-based generators.
Other sources of generation are from independent power
producers (IPPs), which feed the national grid and some
isolated areas. These include Independent Power Tanzania
Ltd (IPTL) with 100 MW (diesel-based) installed capacity and
SONGAS (Songo-Songo gas to electricity project), which by the
end of 2007 had 182 MW capacity. IPPs supplied 33 percent of
Tanzania’s total energy demands in 2008.
In 2008, Tanzania had installed capacity of 561 MW of
hydropower and 121 MW of thermal power. The growth rate
of electricity and gas activities dropped by 5.4 percent in
2008 from 10.9 percent in 2007. This came about because
of the decline in electricity and gas generation, as well as the
expiration of key contracts such as Dowans, APR and Aggreko.
The country’s reduced growth rate notwithstanding, present
energy generation capacity falls short of that required to
meet the demands of the economy. Medium-term strategies
include increasing power generation, particularly with regard
to distribution and increased access in rural areas. In addition,
government will intensify efforts to establish national oil reserve
facilities and the expansion of gas production facilities at
Songo-Songo and Mnazi Bay.
Natural gas was discovered in 1977 at Songo-Songo Island.
The field now actively produces gas that is used for power
generation as well as serving several industries.

Despite the challenges posed by the global recession, government continues to prioritise the
development of social infrastructure and the scaling up of investment in the education and
health sectors.
HEALTH CARE
Tanzanian health statistics present a mixed picture. 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. Survey 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 profile 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.
Health services expanded at 9 percent in 2008 compared
to 8.8 percent in 2007. This growth arose from the
implementation of vaccination, malaria, tuberculosis and
HIV/AIDS programmes.
Between 2008 and 2009 there was an increase in the number
of health facilities, while modest improvements were made in
the rates of maternal and child mortality. Furthermore, improved
availability of clean and safe water in urban and rural areas has
contributed to advances in the general health of the population,
especially women and children.
At present, 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
52
Social Infrastructure
Health Sector Performance Profile Report (2009)
A number of positive developments have taken place in
Tanzania’s health sector. These include confirmed gains in child
survival, with progressive and significant declines in under five
and infant mortality. However, for more than ten years there has
been little or no improvement in neonatal mortality. Newborn
deaths are still a challenge, and account for almost 30 percent
of all deaths in children younger than five years in Tanzania.
Noteworthy improvements may be seen in higher levels of
public spending on health, with a slightly greater share for the
district level, as well as further decentralisation of planning
and budgeting to lower-level facilities. Integrated Management
of Childhood Illness (IMCI) coverage has increased, as has
vaccination coverage. Additionally, scaling up of proven
interventions, including malaria prevention and case
management, have taken place and should further contribute
to positive and sustained improvements in the child survival
indicators.
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.
HIV/AIDS remains a significant public health concern in
Tanzania. While estimates vary due to sampling strategies
used, current HIV prevalence in the adult (15 to 49 years)
population is estimated at 6.8 percent for females and 4.7
percent for males (Tanzania HIV/AIDS and Malaria Indicators
Survey 2007/08).
About 34 percent of HIV positive pregnant women were
receiving Anti Retroviral drugs (ARVs) for the Prevention of
Mother-to-Child-Transmission (PMTCT) of HIV/AIDS in 2007.
This had increased to 55 percent by 2008. A total of 80 628
persons with advanced HIV infection were receiving ARV
combination treatment by the end of 2007; by the end of May

2009 a total of 248 280 people were receiving Anti Retroviral
Therapy (ART).
The implementation of MMAM is ongoing, with increased
student enrolment in health training institutions, posting of
trained staff to councils and building of more dispensaries and
health centres to increase access to services.
Vaccination against measles remains high (88 percent) and is
set to rise towards the target of 90 percent by 2010. Year 2008
shows a reversal of the DPT-HB3 vaccination downward trend,
with a 3 percentage point increase in coverage from 83 percent
in 2007 to 86 percent in 2008.
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. Antenatal care attendance among pregnant
women before 16 weeks of gestation has improved (48
percent); however, reaching a target of 60 percent by 2010
remains a challenge. 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 such services. Continued
implementation of MMAM is also vital, particularly the human
resource component.
EDUCATION & TRAINING
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, which represents 18.3 percent of the total budget and
is a 22 percent increase over the TZS 1 430.4 received in
2008/09.
Education is also identified as a main area of focus in the
government’s National Strategy for Growth and Reduction of
Poverty (MKUKUTA). Furthermore, in recent years the
government has concentrated on implementing its Primary
and Secondary Education Development Programmes (PEDP
and SEDP). The continued focus on these two programmes,
together with increased recruitment of teachers, is credited with
having been the main reason for the 6.9 percent growth in the
sector in 2008 over 5.5 percent in 2007.
For the 2009/10 fiscal year, government is putting the emphasis
on protecting achievements already attained and strengthening
areas of weakness. The priority is to recruit qualified teachers
at all levels, as well as to provide teaching materials and
infrastructure. In the long term, a national programme for
teachers’ residential housing is being prepared, with its
implementation to start in peripheral, underserved areas.
54
Education infrastructure
In Tanzania, bilingual 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.
For pre-primary education, the Gross Enrolment Ratio (GER)
increased to 38 percent in 2008 from 35.2 percent in 2007, and
the Net Enrolment Ratio (NER) to 36 percent from 33.1 percent
over the corresponing period. At the same time, however, the
teacher-pupil ratio at the pre-primary level rose to 1:53 from
1:43.
In the education sector, one of the main achievements in
the past few years is a higher enrolment rate at all levels of
education.
For primary education, the GER dropped from 114 percent in
2007 to 112 percent in 2008, while the NER remained steady
at around 97 percent. There were a total of 8 316 925 pupils in
primary school during 2007. Quality enhancement indicators
show that the number of pupils per desk remained at four during
2007 and 2008. Over the same period, the pupil to teacher
ratio increased marginally – from 53:1 to 54:1 – and the pupil
to classroom ratio dropped slightly from 78:1 to 77:1, while
the pupil to textbook ratio remained at 5:1. The primary school
completion rate in 2008 was 65 percent, while transition rates
from primary to secondary school stood at 52 percent in 2008
from 57 percent in 2007.
The secondary school GER for Forms I-IV increased to
26 percent in 2008 from 22 percent in 2007, while the NER
increased to 24 percent from 21 percent. By the end of 2007,
448 448 pupils were enrolled in 3 485 secondary schools. The
average student to teacher ratio was 37:1 in 2008 compared to
34:1 in 2007. The secondary to tertiary transition rate was 26
percent in 2008 compared to 30 percent in 2007.
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
number of registered students in universities increased by 82.2
percent to 64 878 in 2007 from 35 606 in 2006. The number of
students in government technical colleges increased from
2 466 in 2006 to 3 544 in 2007.
The number of government teachers’ colleges increased to 32
in 2007 from 31 in 2006. Over the same period, the number of
private teachers’ colleges increased to 55 from 53.
Zanzibar University Library - Photo Courtesy: Marie Gibbons
 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 Mission

Vision: 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
findings, capacity development and by advocating good development management practices.

ESRF Objectives
The 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.
ESRF Headquarters
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 Unit

Capacity 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 dialogues

Commission Studies - Demand-driven studies

Knowledge 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

For more information please contact:

The Executive Director, Economic and Social Research Foundation (ESRF)
Tel: +255 22 2790260
E-mail: esrf@esrf.or.tz • Website:

Part of the United Republic of Tanzania, Zanzibar has an autonomous government, complete
with its own president, cabinet, legislature and judiciary.
Zanzibar is an archipelago situated about 35 kilometres off the
coast of mainland Tanzania. It is made up of over 50 small islets
and two main islands (Unguja and Pemba), which are the focus
of most economic activity and are home to the vast majority of
Zanzibar’s population. 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 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 figures, the population for 2010 is estimated at
1 257 014.
Present-day Zanzibar has been shaped by its early history
of trade links with the East. The capital city and centre of
commercial and political activities is Zanzibar Town, located on
the western side of Unguja. Zanzibar Town also contains the
UNESCO World Heritage Site of Stone Town.
TOURISM
Zanzibar 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. If luxury and pampering
is the aim of one’s holiday, Zanzibar can accommodate this
through a variety of upmarket hotels and resorts on both the
east and west coasts of Unguja Island, and an easy drive from
the airport and Zanzibar Town. Many of these establishments
are situated right on the coast with private beaches, spa
services and marine activities.
Such stays can be combined with day-trip spice tours to Stone
Town or one of Zanzibar’s spice plantations. Other day trips
include a boat ride to Prison Island. Once a prison for renegade
slaves, Prison Island now boasts excellent coral formations,
good diving, and an opportunity to see its giant land tortoises,
some of which are thought to be over a century old.
The tourism industry is regulated by the Zanzibar
Commission for Tourism (ZCT), which was established in
1992.
56
Zanzibar
For lovers of culture and history, Stone Town is an ideal place
to start. 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 diversity. 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 wooden doors.
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 species of birds. It is also an example of some of the
last indigenous forest ecosystems on the islands.
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 first
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 fish,
turtles, dolphins and the giant coconut crab.
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.
Of Tanzania’s US$ 1 288.7 million in tourism earnings
during 2008, Zanzibar received approximately US$ 160.3
million.
SUSTAINABLE TOURISM CHALLENGES ZANZIBAR INVESTMENT OPPORTUNITIES
Since last decade, where Zanzibar encourages investments in Zanzibar,Tourism Investments has been growing and stimulate Zanzibar Economy.This sector
has been promoting source of development for Zanzibar.

Zanzibar has alternatively illustrated its efforts to promote tourism where this challenges, based on the strengthening and expansion of tourism investments.
Now where reforms have taken and continue to take place, opportunities exist in high income ecotourism investments, expansion of existing facilities, buy
out existing local small hotels for upgrading, environmental friendly water sports, linking with tourism services such as classic international restaurants,
health and spa services, recreation/theme parks.

Tourism Investments impact local employment opportunities and local business development. Creation of linkages through tourism challenges to strengthen
Zanzibar’s economy. Since, this will stimulate local communities to take part in the economic development. Zanzibar has to stay natural beautiful by
promoting environmental sustainable tourism that adapt to the demand of the world crisis and epidemics customers.

TOURISM ATTRACTIONS
Zanzibar boasts a wide variety of tourism attractions, from the historical and cultural sites of Stone Town, a UNESCO declared Heritage Site, to the beach
and leisure activities, to eco and adventure holidays. If luxury and pampering is the aim of one’s holiday, Zanzibar can accommodate this through a variety of
up market hotels and resorts. Zanzibar tourism attractions include the lovely beaches that the island is famous for, places of history (the stone town, Beit el
Ajaab, old fort and the like), culture and plenty of marine sports and activities to keep one occupied. Some of the famous tours and excursions include:
• The stone town tour
• The spice plantations
• Jozani Forest reserve
• Dhow cruise and small island adventure
• Scuba diving
• A tour of the north and east coasts
• Kizimkazi tour
• A boat ride to Prison Island (Once a prison for renegade slaves, Prison Island now boasts excellent coral formations, good diving, and an opportunity
to see its giant land tortoises, some of which are thought to be over a century old.)

TOURISM
Zanzibar boasts as a rare playground for exciting tourism activities and attractions. With more emphasis on ecotourism, investment opportunities exist
in:
• Up market hotels/resorts, especially chain hotels
• Tourism supporting services such as first class restaurants, diving and sea sports
• Exhibition and conference centres
• Theme parks

WHY ZANZIBAR?
There are many reasons to support your decision to choose Zanzibar as a destination for your investment, including:
• Minimum political risk: Zanzibar is stable politically, socially and economically. Private investments are welcomed and protected both constitutionally
and through international conventions to which Zanzibar, being part of the United Republic of Tanzania, is a signatory
• Strategic location: Zanzibar is placed within the trade routes of the region and offers an effective spring board for entry into the region
• Availability of skilled, trainable English speaking labour
• Free repatriation of profit
• 100% foreign ownership allowed
• Opportunity to employ expatriates in key positions
• Constantly improving business environment
• Regional and International market concessions
• Utilize the East African and SADC market by using Zanzibar as a hub for regional trade

All correspondences should be addressed to:

EXECUTIVE DIRECTOR
P.O.BOX 2286 – ZANZIBAR
TEL: 255-24-2233026/2237353 •FAX: 255-24-2232737
Email: zipa@zanzinet.com • zipaznz@zanzinet.com
Website: www.zanzibarinvest.org
INVESTMENT POTENTIAL
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 profits 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 advantages.
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 is
adequate water for industrial and household use.
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 flown
in through Zanzibar International Airport, which is capable
of handling a variety of different aircraft sizes. The airport is
presently undergoing rehabilitation.
There are various local, regional and international financial
institutions offering a wide range of services, and while land
is government-owned, it can be acquired by lease for up to
BACKGROUND
Social Security is a basic right for every citizen wherever he/she resides in accordance with the United
Nation Human Right Declaration of 1948. Its implementation was followed with the ILO convention
No.102 of 1952. Bearing in mind, paramount importance of this right, both Republic of Tanzania and
that of Zanzibar have recognized in their respective constitution its existence and is now fully
implemented in their respective countries.
STRUCTURE OF ZSSF
ZSSF is an autonomous institution established by its own Act and it is administered by the
Managing Director and governed by the Board of Trustees which shall be composed by members
from Government, Worker/employees and employer’s associations. ZSSF is under the
auspices of the Minister responsible for Finance and Economic Affairs.
MEMBERS REGISTRATION LIABILITY
Every employer shall be liable to register in the prescribed manner as a contributing employer to
the Fund within 14 days from the date of announcement of the Act. They are also liable to register
their employees as beneficiaries within 14 days after commencement of employment. Failure for the
employer to comply with registration’s provisions stipulated shall be guilty of a legal offence.
MEMBERS’ CONTRIBUTIONS
It is the legal obligation of the employer to contribute to Fund 15 percent of the employee’s salary.
In this amount, the employer shall deduct 5 percent of its employee salary and the employer shall
contribute 10 percent of the employee’s monthly salary which is liable for the ZSSF member’s
contribution.
ZSSF INCOME AND INVESTMENT
Source of ZSSF income shall be from members’ contribution, income from investment, aid and other
sources which shall be directed by the Board. ZSSF income shall be utilized on the following:
• To pay members’ benefits
• To meet administrative cost of ZSSF
• To promote investment in order to boost ZSSF income so as to meet the above mentioned
objectives together with the improvement of social well-being and country’s economy.
ZSSF PROJECT INVESTMENT STANDARDS
• Safety • Liquidity • Yield
• Social and Economic Utility
All investment related activities shall be governed by the Board of Trustees and by following advice of
the Minister responsible for Finance and Economic Affairs.
Based on the above four standard, the Fund reserve power to invest the member’s contribution to the
different investment portfolio.
ZSSF BENEFITS TO MEMBERS
ZSSF Act offers the following benefits:
• Old Age Benefit • Invalidity Benefit • Survivors Benefit.
Tel: +255 24 2230242, +255 777 459323 – Fax: +255 24 2232820
PO Box 2716, Zanzibar, Tanzania
E-mail: info@zssf.org
58
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
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 financial services, and information and
communications technology.
• Opportunities in agriculture include the export of fresh tropical
fruits, horticulture and floriculture, fruit processing and
canning, poultry production, production of ornamental fish,
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 fishing industry has almost limitless potential
for development. Various types of fish, shrimps, lobsters,
seaweed and other marine resources are plentiful, and
investors may choose suitable areas for deep sea fishing,
processing and canning, or aqua culture (fish farming and
seaweed production).
Free Economic Zones
Free Economic Zones, otherwise known as Export Processing
Zones, comprise geographical areas specialising in
manufacturing, processing, warehousing or assembling goods
or services for export. Managed by ZIPA, these zones offer
firm free trade conditions and a liberal regulatory environment.
Potential investors must carry out an industrial or processing
activity and export not less than 80 percent of their product
Three sites have so far been declared Export Processing
Zones, and allow duty free import of raw and intermediate
materials and capital goods to manufacturers for export:
• 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.
• 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.
• Offering untouched land ready to host potential investors,
Micheweni Free Zone on the north-eastern tip of Pemba
covers an area of 808.8 hectares and is 75 kilometres from
the seaport and 45 kilometres from the airport.
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 5 kilometres
from the seaport and has all basic facilities, while the recently
declared Air Port Zone is intended to cater for air cargo based
operations.
ZANZIBAR PORTS CORPORATION

Comprising two main islands, Unguja and A central part of the government’s
Pemba, Zanzibar is located in the Indian Vision 2020 plan is the development of
Ocean, about 22 miles off the coast of the islands as a springboard for export-
mainland Tanzania. oriented industrial products. Port activities
are regarded as one of the main areas of
There are five ports in Zanzibar and Pemba economic potential.
Islands. Zanzibar Ports Corporation (ZPC)
is a public entity, which has full autonomy A process of development and renovation
for operation and development of ports. of facilities is under way at the Zanzibar
port with the aim of turning it into a
The Zanzibar Ports Corporation (ZPC) transshipment hub for East, Central
plays a major role in the island’s fortune. It and Southern Africa, and the rest of the
now handles over 1,000 ferry passengers world.
daily and a substantial percentage of all
goods consumed on the island. It has The Zanzibar Ports Corporation (ZPC)
over 2,500 employees. is currently undergoing a US $60 million
reconstruction plan. The works are to
At present, the port has the capacity for rebuild the current port and dedicate it
handling cargo in an area of 420,000 solely to passenger traffic including cruise
square feet, with four covered sheds, each ships and to build an entire new port which
capable of holding 3,000 tons of cargo. will handle only cargo.

PO Box 263, Zanzibar

Tel: +255 24 223 2017 • Fax: +255 24 223 2859
E-mail: zanzibar-port@zanzinet.com

Official 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 Mrisho
Kikwete (since 21 December 2005); Zanzibar is semi-
autonomous and has its own parliament and president
(President Amani Karume, since 2000).
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: 42.5 million – Tanzania Mainland 41.3 million;
Zanzibar 1.2 million (2008 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.
62
Useful Information
Languages: There are two official 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 officially 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.
63
 Index to Advertisers
A to Z Textile Mills .....................................................................37
African Life Assurance ..............................................................17
Atlas Copco ..............................................................................51
Business Connexion (Tanzania) ...............................................17
Capricorn Hotels .......................................................................29
CFAO DT Dobie Tanzania ........................................................45
Consolidated Holding Corporation............................................23
Department of Fisheries ...........................................................60
Drilling and Dam Construction ..................................................50
Economic and Social Research Foundation.............................55
Mantra Resources Limited........................................................41
Mbeya Cement Company Limited ............................................38
Ministry of Communications, Science and Technology ............47
Mollel Electrical Contractors .....................................................50
Momentum Tanzania Insurance Company .......inside back cover
Nampak Tanzania Limited ........................................................36
National Bank of Commerce.......................................................2
National Social Security Fund ..................................................19
Southern Sun Hotels (T) Limited ................................................5
Strategis ...................................................................................53
Tanelec Limited.........................................................................35
Tantrade....................................................................................11
Tanzania Communications Regulatory Authority ......................48
Tanzania Distilleries ..................................................................39
Tanzania Government Flight Agency ........................................43
Tanzania National Reinsurance ................................................18
Tanzania Portland Cement Company ............... inside front cover
Tanzania Private Sector Foundation.........................................13
Tanzania Revenue Authority .....................................................21
Tanzania Tourist Board .............................................................25
The Jubilee Insurance Company ..............................................20
The Tanzanite Experience ........................................................27
Unit Trust of Tanzania ...............................................................22
Zanzibar Investment Promotion Authority.................................57
Zanzibar Ports Corporation ......................................................59
Zanzibar Social Security Fund..................................................58
64
TANZANIA
REVIEW 2010
2nd edition