TANZANIA – An introduction on Africa and its resources; Country Sheet and Opportunities in Tanzania
Africa is generally a huge natural resources basin, and it enjoys a varied climate that allows a rich agricultural production diversity, typical of a temperate climate. Rich harvests of vegetables, corn, and grapevine are made; there is also a big variety of fruits typical of a tropical and equatorial climate. The geographical position of the African continent, which is surrounded by the sea, is a huge advantage for communication with other continents and countries. Fishing is allowed everywhere and it is very abundant, and it represents a significant additional resource. Nonetheless, differences in the level of development among African countries are very great; still a few number of African countries can communicate and establish a connection with the Western countries. Harsh economical, religious, health and cultural conflicts are slowing down the chances of these countries and of its citizen to grow. Unlikely as it seems, countries such as Libya, Kenya and South Africa, which have the potential required, are constantly in turmoil for political, racial or religious causes.
AN EXCEPTION: TANZANIA
After examining the French-speaking countries in Africa (Morocco, Ghana, Guinea, Senegal) the focus is on an English-speaking country: la Tanzania.
- Population in Tanzania: about 47 million people.
- Capital: Dodoma.
- Government: Unitary presidential constitutional republic LINK GOVERNMENT SITE
- Currency: Tanzanian shilling.
- Official languages: Swahili, English.
- GDP: $79.29 billion USD.
- GDP (PPP): $1713 USD.
- Requirements and conditions that grant a loan by SACE.
- Tanzania is among the founding member of WTO.
- Togheter with Kenya and Uganda, Tanzania is a member of the East African Community, established on 30/11/1999.
- Through “Africa Growth and Opportunity Act” Tanzania has trade agreements and a special treatment for exporting to the United States.
- Tanzania is part of “Convention Establishing the Multilateral Investment Guarantee Agency” (MIGA), and it is a member of “International Centre for the Settlement of Investment Disputes”; Tanzania also signed an agreement for the promotion and protection of foreign investments with Italy in 2001.
TANZANIA’S STRONG POINTS
PRESIDENTIALISM AND PEACEFUL COEXISTANCE
Ex-Commonwealth colony, Tanzania benefits from the German colonisation after the First World War and from the English dominion starting in 1964; Tanzania’s independence followed, as the country became a Presidential Republic. A key-figure was the charismatic “Father Nyerere”, who is still remembered as “The man who showed the way to follow”: he managed to offer an example of brotherliness and peace, setting the conditions for the harmonious coexistence of Islamism and Christianism, the two main religions.
ECONOMICAL AND E POLITICAL STRATEGIES TO ATTRACT FOREIGN INVESTMENTS IN TANZANIA
His followers followed that same path, including the President in charge. He has to be credited for creating the economic and political conditions to foster and increase foreign investments and assets.
The Tanzania Investment Act (1997), through Tanzania Investment Centre, regulates all foreign investments. This governmental agency coordinates and promotes investments through assistance to firms and foreign investors. Moreover, the Certificate of Incentives attests the status of investors in Tanzania. The “Mining Act” (1998) regulates authorizations as regards mining and oil concessions. The minimum capital in equity to invest in projects completely controlled by foreign investors is $300.000 USD, whereas to establish a company with a majority of Tanzanian investors, or under Tanzanian control, the minimum capital required is $100.000 USD. There are several different incentives and tax breaks according to the field and to the effect of the foreign investment on local economy.
ADVANTAGES FOR FOREIGN INVESTORS
- Being Tanzania a member of the “Multilateral Investment Guarantee Agency” and of the “International Centre for Settlement of Investment Disputes” in this country there is full recognition of the private property and protection of foreign investments; furthermore, it is possible to transfer abroad all of the profits and some capital in currency.
- After the establishment of the “Special Economic Zones”, Tanzania has had tax advantages on investments, in areas in 25 parts of the Country.
- Cancellation or high reduction of duties on goods imported in the country linked to the established company.
- Complete deductions of the expenses for machinery, plants, buildings and structures linked to agriculture.
- Extension of VAT payment on real estate.
- Complete refund of DUTIES on imported raw materials.
- Removal of VAT on exported manufactured goods.
- Possible deductions, with favourable treatments, on depreciation of capital goods.
- As regards mining sector, there is no recovery of the annual reassessment in capital.
- Loss-making in company management can be deducted for tax purposes also the following year for a period of 5 years; for mining sector, that applies for an indefinite period, too.
- Tax breaks and quicker procedures for permissions and authorizations.
- Authorization to have expatriates in company management.
- Other facilitations according to the sector and the typology of the project.
LEADING SECTORS IN TANZANIA
Tanzania’s economy is being affected by the country’s agricultural vocation, which represents about 50 % of the GDP; nonetheless, due to the climate and the geography, cultivated areas are only 4% of the territory. The main products are tea, coffee, cotton, pyrethrum (extract from chrysanthemum, a natural insecticide), sisal, tobacco, cashew, corn, clove, wheat, tapioca, banana, and fruit. Another developing sector is cattle and goat rearing, and it employs 80% of the working population. Tuna and sardine fishing in inland waters for export is another relevant sector in Tanzania. Extractive industry, gold, diamonds and salt especially, is and expanding sector. There are also modest quantities Iron ore, coal, tungsten, lead, kaolin, magnesium, phosphate.
We would like to point out that in the last 20 years the extractive industry has carried on a stunning growth, which has attracted several multinational companies and the Small Scale Miners, a network of more than 2 million small miners. LINK OPPORTUNITY FOR INVESTORS IN MINING, GOLD, DIAMONDS
Tanzania has always cared about schooling, carrying on several welfare political actions since German and English colonization, all aimed to reach not only the biggest urban centres, but also the most isolated villages. However, education still does not cover efficiently all of the territory, and that should gradually change.
Religion in Middle and Far East and Africa is usually a delicate theme, and it is often a cause for conflicts and troubled coexistence. In this sense, Tanzania is a one of a kind: since its independence in 1964, it has been an actual religious oasis. Here, Catholics and Muslims live together and collaborate, following the indications of the various Presidents that have followed in the United Republic of Tanzania. Strangely enough, this happens also in small villages, where there are people who practice different religions. Even though Muslims usually get more resources, there still are other donations for building places of worship for different religious communities.
SOME OF TANZANIA’S WEAKNESS
HEALTH AND HEALTH SERVICE
Child mortality in Tanzania is caused by water, which is often not drinkable or unavailable; this increases the spread of diseases like typhus, diarrhoea and respiratory diseases.
Other causes of the chronic growth of mortality are the scarceness of food in quantity, quality, and energy input; the absence of basic measures of protection like mosquito nets against malaria, a disease sleep-related. Another alarming fact linked to health, rather recurring, is the condition of local miners: they risk serious diseases, including cancer caused by barehanded mixing of the gold sludge, which contain mercury. Considering that hospitals are mainly located in big and very far residential areas, healthcare is generally lacking; hopefully foreign investments can help building new efficient structures with time, or at least creating local structures like small pharmacies, provided with pharmaceutical products and vaccines, along with the help of some medical and paramedical staff all week long.
WATER AND WATER RESOURCES
Water is a precious and vital resource for any village or community, for survival and for foreign direct investments. Thus, it is essential to intervene by creating stable, permanent natural deposits and drinking water plants; and for increasing necessities, by building artesian aquifers. The favourable weather conditions, which allow some harvests during the year, encourage the creation of suitable irrigation systems near lakes or rivers.
FOOD AND FOOD DISTRIBUTION IN TANZANIA
According to the last ten years’ experience, heads of the family worry every day to maintain their beloveds, despite salaries are often meagre and the habit of spending in alcoholics and beverages large parts of those salaries. It is therefore desirable that foreign investors should give higher salaries, as people deserve, and to educate them to restrain themselves from alcohol, reassuring them that they will get what they need for support their families. Moreover, the creation of small local shops away from the big cities supplied with products such as corn flour, wheat flour, rice, milk, vegetables and non-alcoholic beverages would also reassure those who earn an income about constantly supporting their families.