UNITED REPUBLIC OF TANZANIAUNITED REPUBLIC OF TANZANIATANZANIA INVESTMENT CENTRE (TIC)TANZANIA INVESTMENT CENTRE (TIC)

AGENDAAGENDA

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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Labour Force: 20.38 million (2010 est.)

T A N Z A N I A’S E C O N O M Y

Population: 41.9 Million (2010 est.)

Population Growth Rate 2.9 % (2010 est.)

GDP Per Capita $ 660

(2010 Est.)

Real GDP Growth Rate 6.4% (2011 )

Source: NBS/BOT 3

Inflation12.7% (2011)

Agriculture Employs 80% of the Workforce

WHY TANZANIA?WHY TANZANIA?

TANZANIA

1. Peace & Political 1. Peace & Political StabilityStability 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.

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2. Strategic Location of TanzaniaTanzania’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 RegimeTanzania 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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.

6. Settlement of Disputes

4. Free Repatriation of FundsTransfer 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

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5. Investment guaranteeInvestors 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)

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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. 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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EAST AFRICA

About 130M People

AGOA (USA)Africa Growth and Opportunity Act Over 6,000 items

ChinaOver 4,000 Items

Negotiated EBA – European Union

SADC300m People

Japan, Canada etc

REGIONAL AND INTERNATIONAL MARKETSTanzania enjoys Preferential Market Access Tanzania enjoys Preferential Market Access

with;with;

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INVESTMENT FACILITATION INVESTMENT FACILITATION SERVICESSERVICES

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 INVESTORSOUR COMMITMENT TO INVESTORS

Application Maximum Time taken

Company Registration 3days Industrial License 1day Business license

1day Certificate of incentives 7days Resident Permit Class ‘A’ 14days Resident Permit Class ‘B’ 14days Special Pass 1day

OUR COMMITMENT TO INVESTORSOUR COMMITMENT TO INVESTORS

Application Maximum Time taken

Meeting with TIC staff Immediately

Arranging appointments 24hours

Preparation and confirmation 3days of itinerary for Potential investors

NATIONAL INVESTMENT STEERING COMMITTEE NATIONAL INVESTMENT STEERING COMMITTEE (NISC)(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 COUNCILNATIONAL 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 INCENTIVES UNDER THE TIA, 1997TIA, 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 incentives14

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TREND OF REGISTERED INVESTMENT

TREND OF PROJECTS REGISTERED WITH TIC FROM 2005 TO 2011

Number of Projects

Source: TIC data16

OWNERSHIP OF PROJECTS REGISTERED BY OWNERSHIP OF PROJECTS REGISTERED BY TIC 1990 - 2011TIC 1990 - 2011

27%

25%

48%

Local JV Foreign

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Source; Tanzania Investment Centre, 2011

UK23%

India15%

Kenya15%

Netherlands10%

China10%

USA10%

S. Africa7%

Canada5%

Germany3% Oman

2%

TEN LEADING COUNTRIES THAT HAVE INVESTED IN TANZANIA

(BY VALUE IN MILLION US$ ) 1990 –2011

Source: TIC Database18

FDI INFLOWS TO TANZANIA FDI INFLOWS TO TANZANIA FROM 2006 - 2011FROM 2006 - 2011

Source: UNCTAD - World Investment Report – 2012

INVESTMENT PROJECTS FROM SWEDEN IN INVESTMENT PROJECTS FROM SWEDEN IN TANZANIA, 1990 -2012TANZANIA, 1990 -2012

Tourism - 16Transportation-Cargo - 15 Manufacturing - 14Agriculture - 4Construction - 4Telecommunication - 2Natural resources - 1Services - 1Human Resources - 1Energy - 1Finance - 1TOTAL Projects 60 TOTAL Investment US$

494 M

Swedish ProjectsSwedish ProjectsTANELEC-Manufactures of Electrical EquipBagamoyo 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)

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INVESTMENT OPPORTUNITIES (Agriculture & Agribusiness)

GOVERNMENT AND THE INTERNATIONAL COMMUNITY GOVERNMENT AND THE INTERNATIONAL COMMUNITY HAVE JOINED FORCES TO PROMOTE SAGCOTHAVE 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 TANZANIA OFFERS IDEAL AGRO-CLIMATIC CONDITIONS FOR RICE CULTIVATION AND A READILY AVAILABLE FOR RICE CULTIVATION AND A READILY AVAILABLE

MARKETMARKET

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ABUNDANT UNUSED LAND &

RICH SOILS

AMPLE WATER & IDEAL CLIMATE

LOCAL & REGIONAL MARKET

POTENTIAL

• Tanzania is slightly more than twice the size of California• Tanzania has 44 million ha of arable land• Only 9.5 million ha of the arable land is under cultivation• Rich alluvial clay soils, suitable for rice

• Rainfall ranges from 200mm and 1600mm of rain per annum• 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

Tanzania’s rice competitive advantage

Source: FAO, Trade Map

Opportunities for Investors in the

Sugar Sector

MORE THAN 300,000 TONS OF SUGAR SUPPLY GAP IN MORE THAN 300,000 TONS OF SUGAR SUPPLY GAP IN TANZANIA, SET TO INCREASE EXPONENTIALLYTANZANIA, 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

27Source: Sugar Board of Tanzania, Illovo, Mtibwa, TPC, FAO

300,000 tons sugar deficit in Tanzania (1000 tons)

Demand incl. industrial

Estimated sugar demand

Production

>300,000 tons current supply gap

>600,000 tons supply gap by

2020

World average per capita sugar consumption+18 kg/yr

Per capita sugar consumption 2010/11 est.

TARGET SUGAR ZONES HAVE BEEN EARMARKED TARGET SUGAR ZONES HAVE BEEN EARMARKED FOR SUGAR PRODUCTION BY THE GOVERNMENTFOR 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

28Source: Sugar Board of Tanzania

New target sugar zones

Established mill

Map of existing and proposed new sugar estates

Opportunities for Investors in the

Livestock Sector

SIGNIFICANT GROWTH AND INVESTMENT OPPORTUNITIES SIGNIFICANT GROWTH AND INVESTMENT OPPORTUNITIES EXIST ACROSS THE LIVESTOCK PRODUCTION CHAINEXIST ACROSS THE LIVESTOCK PRODUCTION CHAIN

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Raising & fattening

Live animal trading

Slaughtering

Meat processing

Retailing & marketing

Currently only 2% of all livestock are raised on commercial farms

Few animals are fattened before being slaughtered

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 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

The training of local traders can create a useful network for buying livestock from rural areas

Leather processing

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) 31

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INVESTMENT OPPORTUNITIES

(Energy)

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.

Power Generation and DistributionPower Generation and Distribution

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WIND ENERGYWIND 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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Rehabilitation and expansion projects request a total of US Dollar 130,228,630 for 6 regions of Mbeya, Kagera, Singida, Manyara, Ruvuma, and Rukwa.

TANESCO PROJECTS

SCOPE OF WORK

REHABILITATION EXPANSION TOTAL

[USD] [USD] [USD]

SUBSTATIONS 1,310,806 7,325,201 8,636,007

33kV LINES 18,772,801 41,735,552 60,508,35311kV LINES 2,874,890 6,715,437 9,590,327

LT LINES 21,683,954 29,809,990 51,493,944TOTAL 44,642,451 85,586,179 130,228,630

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INVESTMENT OPPORTUNITIES

(Extractive industry)

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MININGMining Investment is now the second contributor to GDP after Tourism.

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

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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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DOWN STREAM INVESTMENT DOWN STREAM INVESTMENT OPPORTUNITIES IN THE GAS SUBSECTOROPPORTUNITIES 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 Petroleum Gas (LPG) Production

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INVESTMENT OPPORTUNITIES

(Ports)

Strengthening and Deepening of Berths 1-7,

Dar es Salaam PortDevelopment of Mbegani Port at BagamoyoDevelopment of Mwambani Port in Tanga

Development of Kisarawe Cargo Freight

Station (KCFS)

Expansion and Modernization of Mtwara PortDevelopment of Dar Harbour Water Front

PORT PROJECTS AVAILABLE FOR INVESTMENT

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R A I L W A Y S

Investment Opportunities exists in

Rehabilitation of existing railway lines

Construct new railway lines

Upgrade & construct strategic line

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AIRPORT

PROJECTS

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AIRPORTS PROJECTSAIRPORTS 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 PROJECTSEPZA PROJECTS1. Establishment of EPZ and SEZ

Industrial Parks 2. Establishment of Tourism Park3. Establishment of Free Port Facilities4. Establishment of Free Trade Zone5. Science and technological Parks6. International Business Centre7. Construction of Industrial Sheds at

the BWM-SEZ

C O N C L U S I O N

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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.

THANK YOU FOR YOUR THANK YOU FOR YOUR ATTENTIONATTENTION

Contacts

Executive DirectorTanzania Investment CentreP.O.Box 938Dar es SalaamTel: +255 22 2116328-32Fax: +255 22 2118253Email: information@tic.co.tz Website: www.tic.co.tz

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