Transcript tic presentation to sweden - Embassy of The United Republic of

UNITED REPUBLIC OF TANZANIA
TANZANIA INVESTMENT CENTRE (TIC)
PRESENTATION ON
INVESTMENT CLIMATE AND OPPORTUNTIES IN TANZANIA
Presented by: Mr. Revocatus Arbogast,
On Behalf of Executive Director,
Tanzania Investment Centre
AGENDA
 Tanzania
Economy
 Why Tanzania
 Market Access
 Investment Facilitation Services
 Institutions which support investment
 Investment Incentives
 Trend of Investments
 Investment opportunities
 Conclusion
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T A N Z A N I A’S
ECONOMY
Population: 41.9 Million
(2010 est.)
GDP Per Capita $ 660
(2010 Est.)
Population Growth Rate
2.9 % (2010 est.)
Real GDP Growth Rate
6.4% (2011 )
Labour Force: 20.38
million (2010 est.)
Inflation
12.7% (2011)
Agriculture Employs
80% of the Workforce
Source: NBS/BOT
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WHY TANZANIA?
TANZANIA
1. Peace & Political Stability
Tanzania is politically stable, we have enjoyed political stability since
independence in 1961, it is free from tribal or religious confrontation.
We have elected National assembly and elected President who serve
for the maximum of two Presidential term.
2. Strategic Location of Tanzania
Tanzania’s strategic geographical
location
and easy
connectivity
business locations worldwide is a motivating
factor to investors. Has 3 major ports (Tanga, DSM and Mtwara –
providing service to neighboring landlocked countries)
3. Attractive Investment Fiscal Regime
Tanzania has Stable and Predictable Fiscal Investment Regime providing a Soft Landing to all investors. It recognizes that
investors need to recover their Investment Costs first before
paying corporation tax
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4.
Free Repatriation of Funds
.Transfer of funds is allowed through any authorized bank in freely
convertible currency of net profits, repayment of foreign loans, royalties,
fees charges in respect of foreign technology, remittance of proceeds
and payment of emoluments, etc
5.
Investment guarantee
Investors in Tanzania are guaranteed against nationalization and
expropriation. Tanzania is a signatory of several multilateral and bilateral
agreements on protection and promotion of investment. Among other
international agreements and membership, Tanzania is a member of
Multilateral Investment Guarantee Agency (MIGA) and Africa Trade
Insurance Agency (ATIA)
6. Settlement of Disputes
Tanzania is a member of International Center for Settlement of
Investment Disputes, A dispute which is not settled through negotiations
may be submitted to arbitration in accordance with the rules of
procedure for arbitration of the International Center for Settlement of
Investment Disputes
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6
7.
Access to credit from domestic sources
.Foreign investor may, in relation to the business enterprises which
he operates obtain credit from domestic bank and financial
institutions up to the limit established by the bank of Tanzania
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REGIONAL AND INTERNATIONAL
MARKETS
Tanzania enjoys Preferential Market Access with;
Negotiated EBA –
European Union
AGOA (USA)
Africa Growth and
Opportunity Act
Over 6,000 items
China
Over 4,000 Items
Japan, Canada etc
EAST AFRICA
About 130M People
SADC
300m People
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INVESTMENT FACILITATION SERVICES
Senior Government officials from the following
Ministries/Government Departments have been stationed
at TIC to assist investors to obtain various licenses and
permits they need in order to start business.
 Immigration
 Registrar
of Companies
 Business License
 Land
 Labour
 Tanzania Revenue Authority
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OUR COMMITMENT TO INVESTORS
Application
 Company
Maximum Time taken
Registration
 Industrial License
 Business license
 Certificate of incentives
 Resident Permit Class ‘A’
 Resident Permit Class ‘B’
 Special Pass
3days
1day
1day
7days
14days
14days
1day
OUR COMMITMENT TO INVESTORS
Application
Maximum Time taken

Meeting with TIC staff

Arranging appointments
Preparation and confirmation
of itinerary for Potential investors

Immediately
24hours
3days
NATIONAL INVESTMENT STEERING COMMITTEE (NISC)

In an effort to improve the business environment and foster
economic growth through increased investment the Government
formed a National Investment Steering Committee chaired by the
Hon. Prime Minister.

Other members of the committee are Minister of Finance, Minister of
Industries and Trade, Minister of Agriculture, Minister of Lands,
Attorney General, Governor of the Bank of Tanzania and the
Executive Director TIC (Secretary).

This committee is entrusted with the role of investment policy
formulation and solving problems of investors on a fast track basis.
NATIONAL BUSINESS COUNCIL

The Government has established the National
Business Council to enhance Govt./Private sector
“smart partnership”.

The Business Council is chaired by the President
and the Executive Director of Tanzania Private
Sector Foundation is the secretary.

The business council through Investors round
table discussion advise the Government areas that
need improvement
INCENTIVES UNDER THE
TIA, 1997
A) Tax incentives
 Exemption of import duty on projects capital/deemed capital goods
by 90%

Reduced Value Added Tax (VAT) on projects capital goods including deemed
capital goods to 10%
B) Non Tax incentives
 Automatic immigration quota of up to 5 expatriates at the initial stage of the
projects
 Unconditional transferability through any authorized dealer bank
in freely
convertible currency of ; net profit, loan payment (servicing a foreign loan)
royalties , fees and charges in respect of any technology transfer agreement,
payment of emoluments and other benefits to foreign personnel.
C) Strategic investor status
In addition to existing investment incentives a potential investor may apply for
a strategic investor status to seek additional investment incentives
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TREND OF REGISTERED
INVESTMENT
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TREND OF PROJECTS REGISTERED WITH TIC
FROM 2005 TO 2011
Number of Projects
Source: TIC data
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OWNERSHIP OF PROJECTS REGISTERED BY
TIC 1990 - 2011
25%
48%
27%
Local
JV
Foreign
Source; Tanzania Investment Centre, 2011
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TEN LEADING COUNTRIES THAT HAVE INVESTED IN
TANZANIA
(BY VALUE IN MILLION US$ ) 1990 –2011
Canada
5%
S. Africa
7%
USA
10%
Germany
3% Oman
2%
India
15%
China
10%
Netherlands
10%
UK
23%
Kenya
15%
Source: TIC Database
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FDI INFLOWS TO TANZANIA
FROM 2006 - 2011
Source: UNCTAD - World Investment Report – 2012
INVESTMENT PROJECTS FROM SWEDEN IN
TANZANIA, 1990 -2012
Tourism
 Transportation-Cargo
 Manufacturing
 Agriculture
 Construction
 Telecommunication
 Natural resources
 Services
 Human Resources
 Energy
 Finance
 TOTAL Projects 60

16
15
14
4
4
2
1
1
1
1
1
TOTAL Investment US$ 494 M
Swedish Projects
TANELEC-Manufactures of Electrical Equip
 Bagamoyo Eco Energy-Under Establishment for
Sugar, Power and Bio fuels (PPP)
 Tanzania Portland Cement-Largest Cement
 Scania (Tanzania) Ltd-Workshop and Show room
 Basic Transmission Ltd-Digital TV transmission
(From Analogue to Digital)

INVESTMENT OPPORTUNITIES
(Agriculture & Agribusiness)
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GOVERNMENT AND THE INTERNATIONAL COMMUNITY HAVE
JOINED FORCES TO PROMOTE SAGCOT

The Southern Agricultural Growth Corridor
of Tanzania (SAGCOT) is an international
public private partnership which aims to
transform the area’s agricultural productivity

It was launched at the World Economic
Forum on Africa in May 2010

Members of the partnership represent
government, global business, the Tanzanian
private sector, farmers, foundations and
donor institutions

By catalysing large volumes of responsible
private investment, the initiative aims to
deliver rapid and sustainable agricultural
growth

Investors in SAGCOT will benefit as public,
private and donor organisations focus their
investments, infrastructure developments and
outgrower training on the corridor
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Opportunities for Investors in
the
Rice Sector
TANZANIA OFFERS IDEAL AGRO-CLIMATIC CONDITIONS FOR
RICE CULTIVATION AND A READILY AVAILABLE MARKET
Tanzania’s rice competitive advantage
• Tanzania is slightly more than twice the size of California
ABUNDANT
UNUSED LAND & • Tanzania has 44 million ha of arable land
• Only 9.5 million ha of the arable land is under cultivation
RICH SOILS
• Rich alluvial clay soils, suitable for rice
• Rainfall ranges from 200mm and 1600mm of rain per annum
AMPLE WATER &
IDEAL CLIMATE
LOCAL &
REGIONAL
MARKET
POTENTIAL
Source: FAO, Trade Map
• Large river systems permanently fed by the highlands of the Great Lakes
region
• Tanzania has predominantly tropical climate
• Local market of approximately 42 million people and regional markets with
approximately 370 million people
• Local rice imports of $16 million in 2011
• EAC rice imports of $180 million in 2011
• SADC rice imports of $660 million in 2011
Opportunities for Investors in the
Sugar Sector
MORE THAN 300,000 TONS OF SUGAR SUPPLY GAP IN TANZANIA,
SET TO INCREASE EXPONENTIALLY

The primary market opportunity for sugar producers in Tanzania is local: as existing
sugar estates reach peak production, the supply gap is set to increase at an estimated
6% per annum from the current 300,000 tons / year, driven by economic and population
growth
 As incomes rise, sugar consumption in Tanzania is
300,000 tons sugar deficit in Tanzania
(1000 tons)

1200
>600,000 tons
supply gap by
2020
1000
800


628
600
expected to increase rapidly from the current low levels
of per capita consumption
Despite rapid production growth of existing estates
following privatizations in the late 1990’s, supply could
not keep up with demand over the last decade
The supply gap is set to increase as existing estates
reach their full capacity: the Sugar Board of Tanzania
estimates that current producers could peak at 400,000
tons by 2020
Regional Markets-East Africa
Per capita sugar consumption
2010/11 est.
508
400
304
200
>300,000 tons
current supply
gap
Production
World average
per capita sugar
+18 kg/yr consumption
0
2001
2004
2007
2010
2013
Source: Sugar Board of Tanzania, Illovo, Mtibwa, TPC, FAO
2016
2019
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TARGET SUGAR ZONES HAVE BEEN EARMARKED FOR
SUGAR PRODUCTION BY THE GOVERNMENT



There are 4 existing estates in Tanzania,
producing a total of 300,000 tons of
sugar per year and reaching their full
capacity
In order to fill the local and regional
sugar gap, the Government of Tanzania is
looking to develop an additional 3 – 5
large sugar projects and working to
prepare additional sites for sugar
investments
2 immediate site opportunities are
described in annex, namely Ruipa and
Mkulazi
Map of existing and proposed new sugar
estates
TPC sugar mill
Kagera sugar mill
Wami site
Mtibwa sugar mill
Mkulazi site
Ruipa site
Kilombero sugar
mill
New target sugar zones
Established mill
Source: Sugar Board of Tanzania
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Opportunities for Investors in the
Livestock Sector
SIGNIFICANT GROWTH AND INVESTMENT OPPORTUNITIES
EXIST ACROSS THE LIVESTOCK PRODUCTION CHAIN
Raising &
fattening
Live animal
trading
Slaughtering
Meat
processing
Leather
processing
 Currently only 2% of all livestock are raised on
commercial farms
 Few animals are fattened before being
slaughtered
 The training of local traders can create a useful
network for buying livestock from rural areas
 Only four abattoirs operate in Tanzania –
insufficient to meet growing demand for hygienic
& quality meat
 Approximately 4mil steers at age 2-4years may
be available for fattening/slaughtering at any one
 time
Less than 1% of all meat is processed locally, at



Retailing &
marketing

the same time vast quantities of processed meat
are imported from Kenya
Less than 5% of all hides are processed to
leather
A 40% export levy on unprocessed skins creates
a significant competitive advantage for local firms
More than 700MT of quality meat are imported to
Tanzania every year
Local, regional and global meat demand is rising
Significant
investment
opportunities
across the
production
chain
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NARCO is a parastatal organization with the responsibility of producing
beef cattle for Domestic and Export markets.
National Ranching Company (NARCO) has eight (8) existing core ranches
comprising of an area of 230,384 hectares with nearly 45,000 heads of
cattle, 3,025 sheep and 2,000 goats.
National Ranching Company ranches have the total capacity of 92,500
animals. NARCO cattle are raised on natural pastures and mineral water.
The company has a total of 124 non core ranches with total area of
289,069 hectares which are sub-leased to private livestock keepers.
Investment opportunities are in Kongwa Ranch (Dodoma), Misenyi Ranch
(Kagera), Mabare (Kagera), Kagoma (Kagera) and Kalumbo (Rukwa)
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INVESTMENT
OPPORTUNITIES
(Energy)
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Power Generation and Distribution
The Government plan is to increase generation of
electricity to 2,780 MW by 2015.
An enabling legislation and Institutional framework is now in
place to allow the private sector to engage in the Electricity
Generation, Transmission and Distribution sector.
33
WIND ENERGY

Wind energy resources provide a renewable energy,
which is friendly to the environment. There exist
adequate wind energy resources in Tanzania.

The analysed wind speed data revealed that the wind
energy potential in Tanzania is fairly high.
ENERGY
PROJECTS
Tanzania has extensive unexploited hydroelectric resources.
These include identified sites that have been studied to feasibility
study namely:• Ruhudji (358MW),
• Rumakali (222MW) and
• Songwe River (>300 MW) which forms part of the physical
boundary between the United Republic of Tanzania and the
Republic of Malawi.
The total unexploited hydroelectric power potential is estimated to
be at least 4500 MW.
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TANESCO
PROJECTS
Rehabilitation and expansion projects request a total of US Dollar 130,228,630
for 6 regions of Mbeya, Kagera, Singida, Manyara, Ruvuma, and Rukwa.
REHABILITAT
ION
EXPANSION
TOTAL
[USD]
[USD]
[USD]
SUBSTATIONS
1,310,806
7,325,201
8,636,007
33kV LINES
18,772,801
41,735,552
60,508,353
11kV LINES
2,874,890
6,715,437
9,590,327
LT LINES
21,683,954
29,809,990
51,493,944
TOTAL
44,642,451
85,586,179
130,228,630
SCOPE
OF WORK
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INVESTMENT
OPPORTUNITIES
(Extractive industry)
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MINING
Mining Investment is now
the second contributor to
GDP after Tourism.
38
OPPORTUNITIES
IN MINING
•To develop open cast and underground
mining
• To extract Precious / Base Metals, Industrial
Minerals and Hydro Carbon Minerals etc
• Cutting and Polishing of minerals
•Refining, Processing and Smelting of
minerals
OIL AND GAS OPPORTUNITIES IN
TANZANIA
Hydrocarbon exploration in Tanzania, a number of available blocks in
sedimentary basin both onshore and offshore Currently, open acreage
include the Rufiji basin, inland rift basins of L. Rukwa, L. Tanganyika, L.
Nyasa, and the Ruhuhu Karoo Basin.
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40
DOWN STREAM INVESTMENT OPPORTUNITIES
IN THE GAS SUBSECTOR
 Fertilizers
and Petrochemicals production
 Compressed
Natural Gas (CNG) for vehicles
 Piped
Natural Gas (PNG)/CNG for
households (Millions of forest hectors are
burnt every year)
 Liquefied
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Petroleum Gas (LPG) Production
INVESTMENT
OPPORTUNITIES
(Ports)
42
PORT PROJECTS AVAILABLE
FOR INVESTMENT
Strengthening and Deepening of Berths 1-7,
Dar es Salaam Port
Development of Mbegani Port at Bagamoyo
Development of Mwambani Port in Tanga
Development of Kisarawe Cargo Freight
Station (KCFS)
Expansion and Modernization of Mtwara Port
Development of Dar Harbour Water Front
43
RAILWAYS
Investment Opportunities exists in
 Rehabilitation of existing railway lines
 Construct new railway lines
 Upgrade & construct strategic line
44
AIRPORT
PROJECTS
45
AIRPORTS PROJECTS






Rehabilitation and Extension of Existing Terminal II Building
as a short term measure and
Construction of a complete new Terminal III Building to cater
as medium and long terms measure at JK Nyerere International
Airport
Rehabilitation and construction of pavements [runway, apron,
taxiways and access road] and
construction of terminal building and security improvements at
Arusha Airport.
Construction of Airport pavements on access roads, passenger
apron, cargo apron, taxiways and
Construction of new PAX. Terminal and Cargo Building at
Mwanza Airport.
EXPORT PROCESSING
ZONES PROJECTS
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EPZA PROJECTS
1.
2.
3.
4.
5.
6.
7.
Establishment of EPZ and SEZ Industrial
Parks
Establishment of Tourism Park
Establishment of Free Port Facilities
Establishment of Free Trade Zone
Science and technological Parks
International Business Centre
Construction of Industrial Sheds at the
BWM-SEZ
CONCLUSION
Welcome to invest in Tanzania.
Tanzania Investment Centre and Zanzibar Investment
Promotion Authority will take you step by step to conform
with the legal and regulatory requirement, until your
investment project is fully established as per your plans.
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THANK YOU FOR YOUR ATTENTION
Contacts
Executive Director
Tanzania Investment Centre
P.O.Box 938
Dar es Salaam
Tel: +255 22 2116328-32
Fax: +255 22 2118253
Email: [email protected]
Website: www.tic.co.tz
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