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U.S. Department of State
Tanzania Country Commerical Guide
Office of the Coordinator for Business Affairs
COUNTRY COMMERCIAL GUIDE
FY 1996
CONTENTS
Chapter
I. Executive Summary
II. Economic Trends and Outlook
III. Political Environment
IV. Marketing U.S. Products and Services
V. Leading sectors for U.S. exports and investment
VI. Trade Regulations and Standards
VII. Investment Climate
VIII. Trade and Project Finance
IX. Business Travel
X. Appendices
Appendix A: Country Data
Appendix B: Domestic Economy
Appendix C: Trade Figures
Appendix D: Investment statistics
Appendix E: U.S. and country contacts
Appendix F: Trade Event Schedule
CHAPTER I
EXECUTIVE SUMMARY
As one of the world's least developed nations, Tanzania is still
striving to consolidate 10 years of economic and five years of political
restructuring. While Tanzania continues to make a concerted effort to
liberalize its underdeveloped economy, substantial barriers still exist
for those firms wishing to invest in Tanzania. Bureaucratic
intransigence, poor infrastructure and a spiraling inflation rate are
just some of the hurdles interested investors must overcome to establish
a permanent presence in Tanzania. In addition, regional setbacks beyond
the control of the Tanzanian government have hindered Tanzania's growth
over the last fiscal year.
On the positive side, the Tanzanian government is still eager to attract
foreign investors wishing to capitalize on the only stable country in
East Africa. Over the last 12 months, the Tanzanian government has
continued its efforts to rid itself of its unwieldy and unprofitable
parastatal corporations. In addition, the country continues to offer
attractive investment incentive to those individuals and firms wishing
to invest in Tanzania. Furthermore, Tanzanian efforts to liberalize its
foreign exchange control regime have allowed all sectors in the economy
to expand their horizons and attract foreign capital.
While Tanzania still relies heavily on agriculture for the bulk of its
GDP, other sectors have come to the forefront as investment
possibilities. Since 1994, the government has gone out of its way to
attract foreign investors in the telecommunications, tourism and mining
sectors. In addition, a number of highly visible international
businesses have settled in Tanzania with the aim of making Tanzania
their East African headquarters. These firms plan on expanding their
operation with an eye towards exporting manufactured goods to other East
and Southern African nations.
Historically, United States private investment has been limited in
Tanzania. Tanzania's major trading partners continue to be the United
Kingdom, Germany, India, Japan, China, Kenya and Italy (with the United
States lagging far behind). Recently however; as noted above, a number
of American firms have set up shop in Tanzania, including a large multi-
national manufacturing firm, a large U.S. based international bank, an
internationally recognized hotel chain, a large multi-national
communications firm and a large U.S.-based tobacco company. In
addition, over the last 24 months, Tanzania has increased its demand for
American manufactured goods, as well as U.S. grown food stuffs.
Sectors with the leading prospects for U.S. exports to Tanzania include:
- telecommunications equipment and services
- computer software
- agricultural machinery, equipment and inputs
- travel and tourism services
- construction equipment
- computers and computer peripherals.
Politically, Tanzania continues down the road toward multiparty
democracy. In 1992, the Tanzanian Constitution was amended to allow for
more than one political party. In addition, Tanzania is presently
preparing for its first multiparty national elections for both the
executive and legislative branches of government. Multiparty elections
are scheduled for 29 October 1995, at which time, the citizens of
Tanzania will choose a new President and a new parliament.
The Country Commercial Guide is available on the National Trade Data
Bank on CD-Rom or through the Internet. Please contact STAT-USA at 1-
800-STAT-USA for more information. To locate country Commercial Guides
via the Internet, please use the following World Wide WEB Address:
WWW.STAT-USA.GOV. CCGS can also be ordered in Hard Copy or on diskette
from the National Technical Information Service (NTIS) at 1-800-553-
NTIS.
CHAPTER II
I. ECONOMIC TRENDS AND OUTLOOK
According to official Tanzanian statistics, Tanzania's average economic
growth for FY 1994/95 was approximately 3.2 percent per annum. This
marks a 20 percent reduction in growth from FY 1993/94, when economic
growth figures indicated that the Tanzanian economy expanded by
approximately 4 percent per annum. Over the last eight years, Tanzania
has experienced positive economic growth averaging 3.5 to 5 per cent per
year since 1986.
Inflation, which has remained fairly constant over the last few years at
approximately 20 percent, has risen sharply during the first half of
1995 to approximately 60 percent.
Governmental budget performance over the last 12 months has been
disappointing due to low revenue collection, and the government's
inability to control expenditures. Total revenue collection between
July 1994 and March 1995 was approximately TShs.238.2 billion (USD 441
million), 4 per cent below target. However, this was offset by revenue
collection in March 1995, which coincided with the annual licensing
season. Revenue collection for this period was TShs 400 million (USD
74.1 million), surpassing the monthly target of TShs 270 million (USD 50
million) by almost 50 per cent. Many hope that this trend will continue
as a result of the governments decision to set up a new independent
revenue collection institution known as "The Revenue Authority". The
Revenue Authority will be controlled by a board of appointed members
from the private and public sectors, and will oversee government revenue
collection. This institution is scheduled to replace the existing
poorly functioning revenue departments which are already in the
Tanzanian government.
On the expenditure side, the government's recurrent expenditures reached
TShs.300 billion (USD 556 million) at the end of March 1995, surpassing
targets by 9 per cent. Much of this overspending is the result of lax
governmental controls, ad hoc extra-budget spending directed by high
level government officials outside the Ministry of Finance, and higher
debt service payments.
The external payment situation in Tanzania remains strained despite a
slight improvement in export earnings from non-traditional products. In
addition, the increase in world market prices for Tanzania's traditional
exports such as coffee, sisal, cashew nuts and cotton have helped
Tanzanian producers see a larger return on their initial investments.
Parastatal organizations performance during the year remained poor.
Concomitantly, The Presidential Parastatal Sector Reform Commission
(PPSRC) continues to scrutinize and privatise some of the nation's
parastatal corporations. Recently, a highly vocal group of citizens and
politicians, including former Tanzanian President, Julius K. Nyerere,
have expressed strong vocal views that the Commission should be retired
and that the privatization process should stop. However, as of early
July 1995, the Tanzanian government remains steadfastly in favor of
continuing the privatization process, although at a much slower rate
than most donors would like.
Regarding the money supply, the Tanzanian government has performed below
expectations. Unofficial estimates indicate that the money supply for
the year ending March 1995 increased by approximately 33.2 per cent as
compared with a rise of 30.9 per cent during FY 1994. This, combined
with the recent depreciation of the Tanzanian Shilling (Tsh), has had an
adverse effect on the economy. The Tanzanian Shilling has depreciated
by approximately 16 percent from Tsh 540/$1.00 in January, 1995 to Tsh
640/$1.00 in July, 1995.
The Tanzanian government has made some significant strides in opening up
the economy. One area in which the government seems to making some
headway is the liberalization of interest rates and the unification of
exchange rates. Both are positive moves which should help the economy
rebound in FY 1996.
Principal Growth Sectors
For the next ten years principal growth sectors will remain mining,
construction, and agriculture, as well as, trade, tourism,
infrastructure and technology development.
Agriculture
Tanzania's economy continues to be dominated by agricultural production
which accounted for approximately 49% of GDP in 1994. Output remains
predominantly based on small holder production. Estate cultivation was
centered on sisal, sugar, tea, and to a lesser extent coffee, tobacco,
rice, wheat and wattle. Traditional exports such as coffee, cotton,
sisal, cashew nuts, cloves, tea and tobacco remain the pillars of export
income generation. Recently, the Tanzanian government, at the urging of
the international donor community, has placed a great deal of emphasis
on agricultural export diversification, stressing the switch from
traditional to non-traditional exports such as horticultural products,
spices, fishery products and manufactured goods.
As a result of the government's efforts to enhance non-traditional
exports, a number of large scale irrigation and non-traditional
agricultural projects have been initiated over the last few years.
These include Kipunga rice farming in Mbeya and Dakawa in Morogoro
region. Such projects offer definite opportunities for U.S. firms
interested in moving into the Tanzanian market place. These
opportunities have increased due to the after effects of the 1994-95
East African drought, which adversely affected a number of key food
production areas in Tanzania. These areas could benefit greatly from
outside investment and sustained private developmental projects.
Industry
During 1994/5, Tanzania's industrial sector remained weak, though small
gains were posted in the production of cement, soft drinks, corrugated
iron sheeting, food processing, chemicals, leather products and
textiles. Tanzania's industrial sector contributed approximately 9% to
the GDP of the nation; this in spite of the disruptive nature of
continuous power supply shortages from November 1994 to March 1995.
Liquidity problems, poor management, lack of spare parts, insufficient
capital to import raw materials and stiff outside competition from
imported goods contributed to the low performance of the industrial
sector.
Privatization and diversification of Tanzania's industrial sector is
progressing at a slow but steady pace. For instance, while no sale
agreements were signed during the month of April 1995, the Presidential
Parastatal Sector Reform Commission (PPSRC) was in the process of
completing 9 parastatal transactions during the month. The PPSRC has
listed 368 parastatal corporation for privatization.
Mining
Mining continues to emerge as an important sector in Tanzania's
developing economy and represents approximately 13% of the country's
GDP. Tanzania is endowed with an assortment of mineral deposits
including gold, diamonds, salt, gypsum, gemstones, iron ore, natural
gas, phosphates, coal, nickel, and cobalt. Effective exploitation of
these resources has been hampered by a lack of capital, poor
infrastructure, bureaucratic inefficiency and limited technology.
Over the last few years, the Tanzanian Government has relaxed its
regulatory control over this sector, removing a number of barriers which
previously limited foreign ownership of mineral exploitation
enterprises. Investor interest in exploiting Tanzania's mineral
deposits remains high with a number of internationally capitalized
projects moving forward at a steady pace. Mining is considered a
priority sector by the Tanzanian government and as such, Tanzania's
investment code provides for various incentives to induce investment in
this area.
Construction
The construction industry continues to grow at a rate of approximately
7.5% per annum. Growth in the construction industry offers increased
opportunities to U.S. products and services in this field.
Tourism and Other Services Sector
Tanzania's tourism sector continues to grow at an impressive rate.
During 1995, Tanzania saw a marked increase in the amount of
international investment in the tourism sector. A number of well known
internationally acclaimed hotels are under construction, and are
expected to be completed and operational during FY 1996. While most of
Tanzania's tourism sector investment remains in the northern part of the
country, in what is known as the Northern Safari Circuit (Ngorongoro
Crater, Serengeti Plains, Lake Manyara) a number of governmental
initiatives are trying to open up the Southern Circuit (Selous Game
Reserve, Ruaha National Park) to both small and large scale investors.
Unfortunately, service facilities for this sector are in poor shape, and
desperately need outside investment to bring them up to international
standards. Furthermore, while international interest in Tanzania's
wildlife remains ever expanding, Tanzania's under-developed
infrastructure has limited economic development in this area. As such,
firms wishing to invest in infrastructure improvements should consider
Tanzania a viable investment option. Contribution of various services
sectors to GDP in 1994 were as follows: trade--10.8 per cent; transport
and communication--6.25 per cent; business finance services--11.9 per
cent; and other services--10.8 per cent.
Government Role in the Economy
Tanzania's socialist economic policies pursued between 1967 and 1985
effectively barred or strongly discouraged private sector
growth. Credit rationing led to more than 80 per cent of the loanable
funds being allocated to public-sector firms. Equally damaging, was the
Tanzanian government's rationing of foreign exchange in favor of public
enterprises while maintaining an overvalued currency. Furthermore, high
inflation rates, large fiscal and trade deficits, and the
unpredictability and insecurity of the policy environment discouraged
many private investors from assuming the financial risks inherent in
long term investments. As a result, those individuals who did decide to
invest in Tanzania preferred to invest in commercial/trading activities
which limited their risk and provided immediate returns.
Recently, changes in the foreign exchange system (including the
introduction of foreign exchange shops and unification of the multiple
exchange rates in August 1993) have been accompanied by equally radical
reform of domestic monetary policy. Real interest rates, first turned
over to market forces in 1992, have positively affected the investment
climate, and are now market driven. Unfortunately, the poor economic
performance of the government over the last 12 months has had a
deleterious effect on these rates and a credit crisis has emerged in the
country. While this crisis is debilitating, experts do not expect that
it will affect Tanzania's long-term economic growth.
There were substantial structural reforms made to the financial sector
following the report of a presidential commission of inquiry into the
monetary and banking systems in July, 1990. Banks can now be
established as private sector institutions, and a number of foreign
banks have opened up in Tanzania, including: Citibank of New York,
Stanbank of South Africa, and Standard Charter Bank of Great Britain.
Taken together, the monetary and financial sector changes have created a
fairly stable macroeconomic framework for private sector development.
The incentive structures which existed (borrowers favored over savers,
importers over exporters) have been reversed, and demand pressures have
been contained. Unfortunately, the two key indicators of short-term
instability and excess demand -- the nominal exchange rate and domestic
inflation -- have risen beyond expectations. Most experts believe that
the rise in the exchange rate and the rise in inflation are both related
to recent international donor decisions to cut international aid to
Tanzania and the governments inability to curtail spending.
Under Tanzanian President Ali Hassan Mwinyi, the Tanzanian Government
has set out to reverse the socialist policies of Former President
Nyerere and limit government interference in the economy. As such, the
government has embarked on a policy of selling off government parastatal
corporations. This effort has continued over the last twelve months
with a number of large parastatal corporations going up for auction.
The largest and most notable parastatal corporation, on the auctioning
block,
the Tanzanian Cigarette Company, has been offered to RJR/Nabisco Corp.,
which is in the process of concluding the negotiations for the company.
The Tanzanian government continues to provide incentives to outside
investors wishing to invest substantial amounts of capital in Tanzania.
In 1990, the government created the Investment Promotion Center (IPC)
and charged it with promoting international investment in Tanzania,
assisting potential investors, and providing investment incentives to
individuals and companies wishing to set up shop in Tanzania.
Unfortunately, IPC tax exemptions were granted non-transparently and
excessively, leading to loss of government revenue. Concerted donor
pressure to reform the IPC resulted in modifications to the IPC. The
government introduced in 1995 a uniform tax of 5% on imported capital
goods, thereby rationalizing (and encouraging) investment across the
board while reducing the negative effect of excessive special
exemptions.
Balance of Payments (In million U.S. Dollars)
ITEM 1994 1995 1996
A. Trade Account -985.6 -991.5 -1,004.0
Exports 519.4 600.7 660.0
Imports 1,505.0 1,592.2 1,664.0
B. Service (Net) -150.9 -164.4 -209.4
Receipts 441.4 514.0 506.4
Payments 592.3 678.4 715.8
o/w Interest 153.4 146.0 120.5
C. Transfer (Net) 746.7 879.0 1,034.0
Inflows 779.2 909.0 1,059.0
o/w Govt 405.3 439.6 589.0
Outflows 32.5 30.0 25.0
Current Account (Net) -389.8 -276.9 -179.4
D. Capital Account (Net) -130.5 47.2 -22.7
E. Overall Balance -129.9 179.6 -152.0
* Figures for 1995 are estimates while those of 1996 are projections.
Infrastructure
Tanzania's reputation as having an extremely poor infrastructure is
unfortunately accurate. The road network is trying to recover from 25
years of neglect and decay. Since 1988, a massive multi-donor roads
program was established and is working to rehabilitate the trunk
regional roads. Funds allocated for road maintenance have steadily
increased in recent years. In rural areas, most roads remain in poor
condition, and seasonal washouts are commonplace in many parts of the
country. As of July 1995, it takes approximately three days to travel
by road from the capital, Dar es Salaam, to the second largest city,
Mwanza (a total road distance of 1202 kms or 751 miles).
Tanzania has two railway systems which operate independently of one
another. The Tanzania Railways Corporation (TRC) operates the internal
rail network that connects most of the major Tanzanian cities and
agricultural areas. In addition, they operate the rail system that
connects Tanzania with Uganda, Burundi and Rwanda. The
Tanzanian/Zambian Railway Authority (TAZARA) connects the port of Dar es
Salaam with Zambia, and was constructed by the Chinese during the cold
war. With the end of apartheid in South Africa, TAZARA and the port of
Dar es Salaam have been forced to compete with the South African Railway
system and the ports of Durban and Port Elizabeth. While this
competition has improved the quality and service of both the port and
TAZARA, it has drastically reduced the amount of income generated by
both operations.
Tanzania's telecommunications infrastructure remains underdeveloped.
Communication facilities are limited, and telephone service highly
unpredictable, especially during the rainy seasons. International
service is difficult to obtain, and calls remain very expensive.
Tanzania's communications facilities are not capable of handling high
speed data transmissions for computers or modems; however, fax
transmissions are received on a regular basis throughout the country.
It should be noted that telephone service outside of major metropolitan
areas is virtually non-existent.
For the past four years Tanzania has been experiencing a series of power
(electricity) shortages in its main gridlines. These shortages are a
result of the continuing effects of the regional drought of 1994/95. As
Tanzania remains 95% dependent on hydro-electric power, the 1994/94
drought seriously hampered the Tanzania Electric Supply Company's
(TANESCO) ability to generate enough power to meet the demands of the
economy. Starting in November 1994, Tanzania was forced to endure six
months of rationing, which meant that most Tanzanian factories,
businesses and homes were without power from 0600 hrs to 2000 hrs, seven
days a week. While the situation has improved over the last few months,
power rationing continues as a result of the nation's failure to
maintain the hydro-electric facilities that generate the majority of the
countries power.
In the medium term, an emergency program funded by the international
donor community to augment Tanzania's thermal power generation capacity
will come on line in late 1995. In addition, small hydroelectric power
generating increases are expected to come on line as well. Over the
long term, development of the Songo Songo Natural gas reserve and
Mchachuma coal fields will help alleviate Tanzania's dependence on
hydro-electric power generation.
CHAPTER III
POLITICAL ENVIRONMENT
Political System and Schedule for Election
Under President Mwinyi, The United Republic of Tanzania embarked on a
path of political and economic transformation after 30-plus years of
Julius Nyerere's socialist economic policies and single-party rule. The
pace of reform in both spheres has been slow, but the momentum is in the
right direction. Tanzania remains an island of stability, especially
relative to its neighbors, a situation which augurs well for a largely
peaceful transition.
The most dramatic political change occurred in 1992, when the
constitution was amended to permit opposition to the ruling Chama cha
Mapinduzi (CCM) party. Currently, twelve new political parties have
permanent registration for a total of 13 national recognized political
parties. Multiparty elections for the Union President, Union
parliament, Zanzibari President and the Zanzibari House of
representatives are scheduled for October 1995.
The United Republic of Tanzania is composed of the Zanzibar Islands
(Zanzibar, Pemba and Mafia islands) and Tanganyika. The two sovereign
states united in 1964. Zanzibar continues to maintain a semi-
independent government within the Union which maintains jurisdiction
over most governmental areas including foreign and defense policy. In
recent years, tensions between Zanzibar and Tanganyika have been on the
rise over the issue of Zanzibari sovereignty. While these tensions
still exist, most experts believe that they will be resolved peacefully
and through dialogue and cooperation.
Nature of Bilateral Relations with the U.S.
The U.S. and Tanzania maintain increasingly cordial relations. While
our bilateral aid program in Tanzania, approximately US$ 30 million
annually, is not insignificant, the United States is ranked 13th among
major donors.
U.S. assistance to Tanzania is likely to decline in the future, partly
as a result of overall aid cuts in foreign aid funding, and partly due
to the problems of corruption and fiscal mismanagment in Tanzania.
These circumstances could change, should a new democratically-elected
government, committed to sound fiscal management and market-oriented
economic policies assume leadership in the October 1995 elections.
Major Political Issues Affecting Business Climate
The Tanzania political atmosphere remains stable and the government is
undertaking a measured, but steady program towards multiparty democracy.
Tanzania has been blessed with relative peace since independence, and
the economic decline in Tanzania was a result of its centralized
socialist economic policies rather than political or military turmoil.
The nature of the current political changes in Tanzania show all of the
signs of a peaceful transition to a new political order and thus pose no
significant threat to economic development. With the advent of multi-
partism and calls for a review of the current union constitution, the
future status of the union of Tanganyika and Zanzibar remains unclear.
The economic consequences of any potential split in the union would
depend upon the nature of the decision to end the union. The
environment in Tanzania is becoming increasingly politicized with the
advent of multi-partyism. However, given the nature of the people and
Tanzanian politics, civil disturbances are unlikely. However, at least
one new activist in the move toward multi-partyism is attempting to gain
political support through exploitation of popular discontent associated
with economic superiority exercised by the minority non-indigenous Asian
portion of society.
Additionally, with an increasingly independent press, the following
issues are among those being most vigorously debated: corruption in
government ranks; the wisdom of pursuing privatization; and divestiture
of parastatals.
CHAPTER IV
MARKETING U.S. PRODUCTS AND SERVICES
The best and most effective way of marketing in Tanzania is through an
agent/distributor, a local representative or an existing local
suppliers. This mode has three distinct advantages:
a) it enables firms to maintain continuity.;
b) it places the task of ensuring payment on the local partner and
as such, reduces risk and costs; and
C) it provides protection to American suppliers who may be less
than knowledgeable about Tanzanian business practices.
Distribution and Sales Channels
The following types of distribution and sales channels exist in
Tanzania:
- a) an agent/distributor;
- b) a wholesaler;
- c) retailers; most of whom have small retail shops which
specialize in one type of product; and,
- d) importers with bonded warehouses who import (mostly cars and
heavy duty vehicles and buses) to bonded houses until items are
purchased by convertible currencies (Dollar, Pound sterling, D-Mark,
Yen).
Use of Agents/Distributors; Finding a Partner
This is increasingly the preferred method of doing business in Tanzania.
The Embassy will assist where possible in finding agents/distributors
for U.S. firms interested in a relationship with a local partner.
Franchising
There are a number of local firms with franchising arrangements with
U.S. firms. With the change currently underway in Tanzania, this
trading arrangement is expected to increase significantly.
Direct Marketing
Direct marketing in Tanzania must be conducted with caution,
particularly when it comes to the question of payment. The agreement
must have built in protection to ensure payment. Tanzania has a poor
track record when it comes to direct marketing and U.S. firms interested
in pursuing this type of venture should do so with extreme caution.
Joint Ventures/Licensing
With the advent of privatization and commercialization of parastatals,
opportunities abound for joint ventures/licensing arrangements. As
Tanzania is possibly the most stable nation in East Africa and has
access to Kenya, Uganda, Rwanda, Burundi, Zaire, Zambia, Malawi and
Mozambique markets, through its membership in the Preferential Trade
Area (PTA), The Southern African Development Community (SADC), and the
Common Market for East & Southern Africa (COMESA), Tanzania remains a
viable option for firms interested in establishing a physical presence
in East Africa.
Steps to Establish an Office
U.S. firms wishing to establish offices in Tanzania have two choices,
namely, establishing a joint venture company or a wholly-owned U.S.
subsidiary.
A joint venture operation offers unique advantages and disadvantages. A
firm wishing to establish a joint venture in Tanzania can benefit from
the advice and knowledge of a local partner who can provide unique and
often critical information on the best way to navigate the confusing mix
of governmental regulations and Tanzanian business customs. Corporate
tax for joint ventures and wholly owned foreign firms operation solely
in Tanzania are subject to a 35 percent corporate tax. International
firms which have branch operations in Tanzania will also be accountable
for a 20 percent withholding tax.
The drawback to joint venture operations are that Tanzanian business
practices are radically different from those of the United States. This
on occasion has led various joint venture operations into trouble as
partners sometimes have difficulty bridging the cultural gap. In
addition, while joint venture partners can assist in navigating the
sometimes confusing business waters of Tanzania, they can also create
problems as Tanzanian businessmen have a reputation for less than
ethical business practices.
At present there are no major wholly owned subsidiary operations in
Tanzania; however one major U.S. manufacture is in the process of
setting up such an operation.
For both types of operations, the firms would need the services of an
attorney to draw up the articles and memorandum of associations, a
necessary document for registration by the Registrar of Companies.
Trading licenses have to be obtained separately through entirely
different procedures. American companies which have been most
successful at establishing themselves in Tanzania have used expatriate
managers to oversee their operations and to help move the start-up
process along.
Selling Factors/Techniques
Selling factors/techniques in Tanzania depend on the customers as
follows:
- Government/parastatal: These are dependent on issuance of tenders
either annually or for specific goods and services. The procurement
under this arrangement is by central tender boards. On certain
unspecified occasions, procurement could be on direct solicitation.
- Private companies/firms: Selling factors/techniques would be by
direct solicitation or traditional sources of supplies.
- Private organizations/NGO's: They tend to utilize foreign
institutions which are either associated with or are based in their
countries of origin.
Advertising and Trade Promotion (Including Listing of Major Newspapers
and Business Journals)
Advertising
The following media can be utilized for advertising:
Media Advertising Company Limited, P.O. Box 6905, Dar es Salaam,
Tanzania, (Phone 255-51-36150/46339).
The Advertising Manager, Daily and Sunday News, P.O. Box 9033, Dar es
Salaam, Tanzania, (Phone 255-51-29881/2/3/4, Fax 255-51-46227 Telex
41071 NEWSTA-TZ).
The Managing Editor, Business Times, P.O. Box 7125, Dar es Salaam,
Tanzania.
The Managing Editor, Change, P.O. Box 7125, Dar es Salaam, Tanzania.
The Executive Director, Tanzania Chamber of Commerce, Industry and
Agriculture, P.O. Box 9713, Dar es Salaam, Tanzania, (Phone: 255-51-
31421/31947 Fax 255-51-30898 Telex 41424 MICONSULT-TZ). Their Commercial
Newsletter.
Radio Tanzania Dar es Salaam, P.O. Box 9191, Dar es Salaam, Tanzania.
Radio Tumaini, P.O. Box 167, Dar es Salaam, Tanzania.
The Board of External Trade, P.O. Box 5402 Dar es Salaam, Tanzania,
(Phone: 255-51-35609; Fax: 255-51-46240)--Their "Trade Currents"
Journal.
Radio One, P.O. Box 163, Dar es Salaam, Tanzania, (Telex 41133 IPP-TZ,
Fax 255-51-44460).
Coastal Television Network (CTN), P.O. Box 8983, Dar es Salaam,
Tanzania, (Phone 255-51-26063/31799/44047).
Independent Television (ITV), P.O. Box 163, Dar es Salaan, Tanzania,
(Telex 41133 IPP-TZ, Fax 255-51-44460).
Dar es Salaam Television Network, P.O. Box 2122, Dar es Salaam,
Tanzania, (Telex 41499).
Trade Promotion
Their are two trade fairs held annually in Tanzania:
A) The Dar es Salaam International Trade Fair, P.O. Box 5402, Dar
es Salaam, Tanzania, (Telex 41408 Fax 255-51-46240), which is organized
by Board of External Trade every July. This trade fair attracts local
and foreign participants and is considered the largest and most
important trade fair in the country.
B) The Arusha Agricultural Show, P.O. Box 3010, Arusha, Tanzania,
(Telex 42141 TFAAR-T) which is organized by Tanganyika Farmers
Association Limited in September. This trade fair caters to the
agricultural sector and attracts local and foreign participants.
Pricing Product
In most cases, pricing is determined by market forces. The Tanzanian
government has eliminated most price control; however, the government
still regulates the price of gasoline, diesel fuel and kerosene.
Sales Service/Customer Support
Sales service and customer support are considered crucial to marketing
success in Tanzania. These include advertising, training key personnel
in the product, keeping them abreast of all changes, providing them with
calendars, diaries, key rings for free distribution to customers and
maintaining a fairly well trained cadre of servicing technicians capable
of advising customers, servicing their equipment and repairing it. Most
firms in Tanzania do not consider customer support and sales service as
important and as such, suffer from the lack of customer loyalty.
Selling to the Government
Selling goods and services to the Tanzanian government is through
tenders which are called or issued annually at the beginning of each
calendar year.
Protecting Your Product From IPR Infringement
Although trade marks, copyright and patent laws are in the statute
books, the machinery for its enforcement is nonexistent, and as such,
depends largely on the aggrieved party pursuing the issue in the courts.
This process has been known to take years to complete.
Need for a Local Attorney
A local attorney is essential for the preparation of all the necessary
legal documents required for registration of company.
CHAPTER V
LEADING SECTORS FOR U.S. EXPORTS AND INVESTMENT
Best prospects for non-agricultural goods and services are as follows:
- Telecommunication equipment
- Agricultural machinery and equipment
- Computer software
- Construction equipment
- Mining industry equipment
- Travel/tourism service
- Computers/peripherals
Telecommunication Sector in Tanzania Acquires Financing for Improvement
Part 1
Rank of Sector: 1st
Name of Sector: Telecommunication equipment
ITA Industry Code: TEL
Part 2
Rehabilitation of the telecommunication sector is being financed by the
international donor community through the the Tanzania Telecommunication
Company, Limited (TTCL). In addition to international financing, the
Tanzanian government is interested in attracting private investment in
certain areas of the telecommunications sector, such as the cellular
communications sub-sector. This interest will allow for substantial
investment opportunities. A number of U.S. companies have already
invested in Tanzania while a number of others are investigating the
possibility of moving into the market. Major U.S. competitors for
supplying the facilities include Japan, Germany and Great Britain.
Cellular telephones have already been introduced in one of the four
zones in Tanzania by Millicom Int, a joint venture project based in the
United States and Europe. This venture has met with outstanding success
and as a result the Tanzanian government is looking to expand outside
investment in this sub-sector. A joint venture company between Malaysia
and Tanzania has been licensed to provide similar services for the
coastal zone. In addition to private sector development, the
international donor community is sponsoring a five year, U.S.$ 250
program to rehabilitate and expand the existing telephone network.
Part 3
(Figures are in Million U.S. Dollars and are unofficial estimates)
Data Table 1994 1995 1996
Total market size n/a n/a n/a
Total local production -0 -0 -0
Total exports -0 -0 -0
Total imports 3.061 3.034* n/a
Imports from the U.S. 1.2 0.88* n/a
* Figures are for the first quarter (Jan-Mar) 1995
Tanzania Encourages Importation of Agricultural Equipment
Part 1
Rank of Sector: 2nd
Name of sector: Agricultural machinery and equipment
ITA Industry Code: AGM
Part 2
The agriculture sector is considered the backbone of Tanzania's economy.
Although the sector's growth has remained constant over the past ten
years, the government places special emphasis in its development and
modernization. This is demonstrated by levying low import duties for
agricultural equipment compared to other sectors. Major suppliers of
agricultural equipment to Tanzania include the U.K., Canada and the
Netherlands.
Part 3
(Figures are in Million U.S. Dollars and are unofficial estimates)
Data Table 1994 1995 1996
Total market size n/a n/a n/a
Total local production -0 -0 -0
Total exports -0 -0 -0
Total imports 14.4 31.2 38
Imports from the U.S. 0.52 0.65 0.8
Software Demand to Rise
Part 1
Rank of sector: 3th
Name of sector: Computer software
ITA Industry code: CSF
Part 2
The software and computer consultantcy service sector in Tanzania is
expected to grow substantially over the next few years. Private
investment in this area has been limited; however it is expected to grow
over the next few years as Tanzanian parastatal corporations are
privatized and computers are introduced to the market place.
Part 3
Figures for this sector are included in the computer/peripherals sector.
It has been difficult to separate the two for the current data system in
Tanzania.
Expansion in Construction Industry to Continue
Rank of sector: 4th
Name of sector: Construction equipment
ITA Industry Code: CON
Part 2
The construction industry in Tanzania is expected to grow as
International donors continue to finance major infrastructure renovation
projects. Historically, U.S. manufactured equipment has dominated the
construction market; however, over the last few years, Japanese and
Swedish manufactured equipment have made significant inroads.
Part 3
(Figures are in Million U.S. Dollars and are unofficial estimates)
Data Table 1994 1995 1996
Total market size n/a n/a n/a
Total local production -0 -0 -0
Total exports -0 -0 -0
Total imports 59 66 74
Imports from the U.S. 0.3 0.45 0.5
Contribution of Mining Sector Rises
Part 1
Rank of sector: 5th
Name of sector: Mining industry equipment
ITA Industry Code: MIN
Part 2
Policy liberalization in the mining sector has created a great many
opportunities for interested investors. Steady growth in the mining
sector has been noted over the past eight years. Fast expanding sub-
sectors are gemstones and gold mining. Major U.S. competitors for
supplying mining equipment to Tanzania include South Africa and the
United Kingdom.
Part 3
(Figures are in Million U.S. Dollars and are unofficial estimates)
Data Table 1994 1995 1996
Total market size n/a n/a n/a
Total local production -0 -0 -0
Total exports -0 -0 -0
Total imports 5.1 4.9 5.5
Imports from the U.S. 0.02 0.025 0.03
The Tourist Board Aims at Revitalizing the Industry
Part 1
Rank of sector: 6th
Name of sector: Travel/tourism service
ITA Industry Code: TRA
Part 2
Despite the fact that Tanzania already has a well developed tourism
sector, the potential for continued growth remains high. While
Tanzania's northern safari circuit is rather well developed, the
Tanzanian government is interest in developing the southern circuit,
too. Historically, the southern circuit has remained underdeveloped
because of the lack of infrastructure; however, international donor
financing of infrastructure rehabilitation projects has breathed new
life in the Tanzanian governments initiative to develop the southern
circuit. In addition, over the last few years the Tanzanian government
has renounced its previous position that the government should control
the tourist market. As such, the tourism sector remains an open and
viable option for serious investors.
Part 3
Statistics for this sector are unavailable. Ranking has been done on
estimation of the sector's potential.
Computerization Grows in Tanzania
Part I
Rank of Sector: 7th
Name of Sector: Computers/peripherals
ITA industry code: CPT
Part II
Most institutions in Tanzania are just starting to use computers. While
U.S. manufactured computers have already been introduced to the market,
room for expansion is increasing. Major supplying competitors are from
the U.K. and Japan.
Part III
(Figures are in Million U.S. Dollars and are unofficial estimates)
Data Table 1994 1995 1996
Total market size n/a n/a n/a
Total local production -0 -0 -0
Total exports -0 -0 -0
Total imports 15 17 20
Imports from the U.S. 0.5 0.8 1.2
Significant Investment Opportunities
Three main sectors are noted to have significant investment
opportunities:
1.
A) Mining. Establishing U.S. company or joint venture concerns
with Tanzania companies in the gemstones, gold, ferrous metals and
petroleum gas mining has been identified by the international investment
community as having good potential.
B) Tourism: Over the last few years, outside investment in the
tourism sectors seems to have increased greatly as a result of a
concerted effort by the Tanzanian government to lure potential
investors. Returns on investment remain high and Tanzania's reputation
as an outstanding vacation spot for European vacationers remains strong.
C) Fishing. Shrimp farming along the coastal zone is one of
several promising export oriented projects. Deep sea tuna fishing is
also another area of investment with high export potentials.
The Government of the United States acknowledges the contribution that
foreign direct investment makes to the U.S. economy. U.S. Foreign
Direct Investment is increasingly viewed as a complement or even a
necessary component of trade. For example, roughly 60 per cent of U.S.
exports are sold by American firms that have operations abroad.
Recognizing the benefits that American outward investment brings to the
U.S. economy, the Government of the United States undertakes
initiatives, such as Overseas Private Investment Corporation (OPIC)
programs, investment treaty negotiations and business facilitation
programs, that support U.S. investors.
CHAPTER VI
TRADE REGULATIONS AND STANDARDS
Trade regulations in force include the requirement for pre-shipment
inspections for goods whose value exceeds U.S. dollar 5,000.00 at the
point of origin to determine value and the payable duty and tax.
Recent trade reforms have abolished import and export licenses except
for goods deemed sensitive for health and security reasons.
There are no specific standard requirements other than those normally
expected of different types of products.
Tariff and Import Taxes
All imports into mainland Tanzania are liable to payment of import duty
and sales tax. Imports for members of diplomatic corps and specified
U.N. agencies are exempted.
For Zanzibar, only commercial imports are subjected to duty and tax.
For the purposes of determining payable duty and tax, the value of goods
exceeding U.S. dollar 5,000.00 will be assessed by either SGS or ITS.
On the mainland, pre-shipment inspection companies determine the value
of goods for purposes of duty and tax assessment. On Zanzibar, the
government is proposing that a post-shipment inspection be performed to
determine tax and tariff rates; however, this proposal has yet to be
finalized and implemented.
Effective January 1995, custom duty and sales tax base was changed as
follows:
Customs: Old base: 0, 10, 20 and 40 percent
New base: 5, 25, 30 and 50 percent
Sales tax: Old base: 0, 10, 20 and 30 percent
New base: 0, 25 and 30 percent
Trade barriers
Previously, Tanzania used non-tariff trade barriers to protect local
industries and its internal market. However, after liberalization of
trade, tariff barriers have been adjusted to serve this purpose.
Exceptions are on explosives, army goods, and other articles deemed to
be sensitive to the security and health of Tanzania citizens.
Despite the existence of regulations and laws, the customs department is
the greatest hindrance to importers throughout Tanzania. Clearance
delays and extra-legal levies are commonplace when dealing with the
Tanzanian Customs Department. These hindrances can cause undetermined
delays when importing goods into the country and should be considered
when deciding how best to bring products into the country.
Customs Valuation
Effective April 1, 1994, customs valuation is based on the findings of
the inspecting firm which is required to undertake pre-shipment
inspections on all imported goods whose value exceeds U.S. dollar
5,000.00. The Tanzanian government has contracted the Swiss firm SGS
and ITS, to perform its pre-shipment inspections.
Import Licenses
Import licenses have been abolished except for goods which have to be
monitored for health and security reasons.
Export Controls
There are no export controls other than for protected wild animals.
Import/Export Documentation
The documentation for imports is specified, Import Declaration Forms
(IDF) while CD3 forms are the documentation for exports.
Temporary Entry
The Customs Department permits entry of machinery, equipment and
vehicles on temporary entry. Prior permission must, however be obtained
upon providing customs with a written request and a proof that the
product in question will be taken out or duty and tax paid in case it is
sold. Bonds and bank guarantees are required for most transit trade.
Labelling, Marking Requirement
Standard labeling and marking currently in force are acceptable.
Prohibited Imports
There are none.
Standards (e.g. ISO 9000 Usage)
There are none.
Free Trade Zones/WareHouses:
A) Free Trade Zones. Zanzibar, a part or the United Republic of
Tanzania, has established a Free Trade Zone.
B) Warehouses. A number of warehouses are available in Dar es Salaam
and these are used as transit depots for the land-locked countries of
Uganda, Rwanda, Burundi, eastern Zaire, Zambia, Malawi and Mozambique.
Bonded warehouses are also available and are currently in use by
importers who want to hold products and goods until duty and tax is paid
by the buyers.
Special Import Provisions
Zanzibar allows specified imports onto the island duty free. Importers
interested in doing business on Zanzibar should
contact the Zanzibar Customs department for further details. Diplomats,
diplomatic missions and certain NGO's are allowed duty free import
provisions.
Membership in Free Trade Arrangements
Tanzania is a member of SADC and PTA/COMESA.
CHAPTER VII
INVESTMENT CLIMATE
Tanzania enjoys the reputation of welcoming foreign and local
investments and in August 1990, it promulgated the National Investment
Promotion and Protection Act (NIPPA), which established the Investment
Promotion Center (IPC). The IPC was designed to seek out, direct,
assist, monitor and regulate foreign investment in Tanzania. NIPPA
provided for priority investment areas, conferred qualified investors
with generous incentives and attractive benefits and spelled out
guarantees against nationalization, as well as, provided assurances for
disputes settlement.
During 1985-1991 Tanzania underwent an intensive structural adjustment
program initiated by IMF and World Bank. This program was largely
successful in bringing about a real gross domestic product growth of
about 5 per cent. Unfortunately, four years of successive drought have
dampened the GDP growth rate, which during 1993 was estimated to grow at
3.2 per cent. Hardest hit has been the agricultural sector, from which
over 83 per cent of Tanzania's 28 million people derive employment,
sustenance, and is responsible for nearly 48% of foreign exchange
earnings.
Openness to Foreign Investment
Tanzania is formally open to all foreign investment; however, many
procedural barriers must be overcome by the successful investor. The
IPC plays a role in promoting and supporting outside investment. A
recent policy decision to tax imported capital equipment at a uniform,
low rate of 5 percent is calculated to enhance Tanzania's attractiveness
to investors.
Conversion and Transfer Policies
Although Tanzania continues to be plagued by intermittent shortages of
foreign exchange, the advent of Bureau de Change shops in 1993, was
designed to help facilitate the conversion and transfer of profits,
dividends and other investment returns. Repatriations and
externalizations which were held up for years, can now, in principal
take place in weeks. Unfortunately, bureaucratic infighting and
corruption can adversely affect the amount of time it takes to obtain
official permission to transfer/remit funds.
Expropriation and Compensation
Expropriation
Tanzania's history of expropriation culminated in 1973 with the
nationalization of European firms in the Arusha and Kilimanjaro regions.
That expropriatory action took place under then President Julius
Nyerere, a long time advocate of socialism, who believed it was the
government's responsibility to manage the market place. Under Tanzanian
President Ali Hassan Mwinyi, Tanzania has committed itself to free
market reforms. During President Mwinyi's 10 year tenure, the
government has taken no action that leads the international community to
believe that Tanzania will return to its policies of expropriating
foreign interests.
Compensation
While there have been no recent cases of expropriation by the Tanzanian
Government, the government does have a record of dealing fairly with
compensation issues. It also has a reputation of being extremely slow
and ponderous when it comes to these issues.
Disputes Settlement
There have been no recent disputes for settlement involving U.S. firms
in Tanzania.
Tanzania is a member of both ICSID and MIGA.
Political Violence
Under one-party democracy, Tanzania has enjoyed political peace and
tranquility for nearly 30 years. With the introduction of political
pluralism in 1991, the question of religious and ethnic conflict has
been raised. Most political observers believe that the chance for
internecine conflict in Tanzania is minimal.
Performance Requirements/Incentives
The Tanzanian Government has not instituted business, work, or
investments incentives or performance requirements.
Right to Private Ownership and Establishment
The right to private ownership and establishment in Tanzania, is
guaranteed by law and the Union Constitution. This right includes
freedom to establish a company, to own property both movable and
immovable, acquire property and dispose of property including business
enterprises and intellectual property. However, access to land is
difficult to obtain, costly, and with few exceptions, will be on the
basis of leasehold rather than freehold.
Protection of Property Rights
The laws in Tanzania protect property rights, and facilitate the
acquisition and disposal of property, including intellectual property.
However, it is very difficult to obtain affective protection under these
laws.
Regulatory System: Laws and Procedures
Tanzania has in place an extensive set of policies, regulations and
procedures that greatly influence trade, commerce, employment and
resource utilization. Many of these provisions are outdated and reflect
conditions in the colonial era; many others reflect socialist-era
circumstances and have yet to be adjusted to serve the needs of a
liberal market based economy. Also, the justice system functions slowly
and imperfectly and is easily influenced or manipulated by unscrupulous
individuals. These factors increase the cost and difficulty of doing
business in Tanzania, but can be overcome by diligence and on the ground
knowledge.
Bilateral Investment Agreements
According to the Ministry of Justice and Constitutional Affairs,
Tanzania has a bilateral investment agreement with the United Kingdom.
OPIC and Other Investment Insurance Programs
OPIC Insurance Program is available to Tanzania and currently several
projects are under consideration for OPIC Insurance. The biggest OPIC
insured project is the Dar es Salaam Sheraton Hotel project, where
construction is scheduled for completion in October, 1995. OPIC is
currently trying to revive and update an incentive agreement with the
Tanzania government on foreign government approvals.
Labor
Although labor is plentiful in Tanzania, it is unskilled and there is a
dearth of people with management skills.
Foreign Trade Zones/Free Ports
A free port is in the process of being established in Zanzibar. Free
economic zones have been established in three places in Zanzibar and
Pemba islands.
Capital Outflow Policy
Tanzania, a third world country and according to the World Bank the
second poorest county in the world, does not encourage capital outflow.
Major Foreign Investors
Since the establishment of the Investment Promotion Center in 1990, the
institution has approved about 600 projects worth approximately U.S.$
1.5 billion. Investors from the United Kingdom, Thailand, India and
Pakistan constitute more than 80 per cent of the total new investments
in Tanzania. Sectors which have attracted foreign investors are
manufacturing, tourism, agriculture, transport, mining and construction.
CHAPTER VIII
TRADE AND PROJECT FINANCING
Trade and Project Financing is provided by the following financial
institutions:
Tanganyika Development and Finance Company Limited (TDFL)
Tlx: 41153 DEVFIN-TZ
Fax: 255-51-46145
P.O. Box 2478
Dar es Salaam, Tanzania
(Project financing)
Tanzania Investment Bank (TIB)
Tlx: 41259
Fax: 255-51-46235
P.O. Box 9373
Dar es Salaam, Tanzania
(Project financing)
National Bank of Commerce (NBC)
Tlx: 41581 NATCMD-TZ
Fax: 255-51-46235
P.O. Box 1255
Dar es Salaam, Tanzania
(Trade and project financing)
Tanzania Venture Capital Company
P.O. Box 2535
Dar es Salaam, Tanzania
(Project financing)
The Co-operative and Rural Development Bank
Phone: 255 51 46614/46239
Fax: 255 51 26518
P.O. Box 268
Dar es Salaam
Private Banks
Stanbic Bank
Fax: 255-51-44553
P.O. Box 72647
Dar es Salaam, Tanzania
(Trade financing)
Standard Chartered Bank
Tlx: 41079
Fax: 255-51-44594
P.O. Box 9011
Dar es Salaam, Tanzania
(Trade financing)
Citibank
Phone: 255-51-36222/44763
NIC Life House
7th Floor
P.O. Box 71625
Dar es Salaam, Tanzania
Trust Bank
Phone: 255-51-29185/44969
Fax: 255-51-44062
P.O. Box 9302
Dar es Salaam, Tanzania
Brief Description of Banking System
After nearly 25 years of government monopoly, the Tanzanian government
passed legislation in August 1991 which allowed private banks back into
Tanzania. As of June 1995, 5 private banks have registered with the
Tanzanian government, three are fully operational; Standard Charter
Bank, Stanbic bank and Citibank. Three more private banks are expected
to be operational by the end of the year-Trust Bank, First Adili Bank,
and Akiba Bank.
Foreign Exchange Controls Affecting Trading
There are no foreign exchange controls affecting trade. Export and
import trade have been streamlined, import and export licenses have been
abolished and exporters are now allowed to utilize all of their export
earnings.
General Financing Availability
While NBC, CRDB, Stanbic and Standard Chartered Banks will provide
financial resources for exports to qualified firms. Donor agencies also
provide funding for imports. Availability of local financing is limited
due to high interest rates and lower producer prices.
How to Finance Exports/Methods of Payment
While NBC, CRDB, Stanbic and Standard Chartered Banks provide export
financing, high interest rates have impeded export businesses.
Normally, NBC, CRDB, Stanbic and Standard Chartered provide overdraft
facilities to exporters to be repaid in 30 to 90 days and the interest
rates (ranging from 13-39 per cent) depend on the number of days and
the extent of the risk involved.
Types of Available Export Financing and Insurance
Local banks provide overdraft facilities to local exporters which are
repayable between 30 to 90 days. OPIC insurance is available to
Tanzania. EXIMBANK has suspended its activities in Tanzania. A
parastatal insurance company provides cover against loss, damage and
destruction. It does not provide financing for exports or imports.
Project Financing Available, Including Lending from Multilateral
Institutions and Types of Projects Supported
Project financing is available from TDFL, TIB, NBC, Tanzania Venture
Capital, East African Development Bank, African Development Bank and
International Finance Corporation
Multilateral Development Banks
1. The International Bank for Reconstruction and Development (IBRD), a
member of the World Bank group makes long-term loans at market-related
rates primarily to developing nations. The International Development
Agency (IDA), the soft loan window of the World Bank, lends to the
poorest of the developing countries. Both the IBRD and IDA work to
promote broadly based economic growth and frequently focus on structural
adjustment, sectoral reform and individual project lending. Typically
the World Bank does not finance the entire cost of a project. Rather,
it finances the components of a project purchased with foreign exchange,
which on average is about 40 per cent of the total project cost. Each
project may cover a wide variety of sectors and can involve anywhere
from one to hundreds of separate contracts providing export business
opportunities for suppliers world wide.
Contacts
U.S. Department of Commerce
Liaison to the U.S. Executive Director's Office
International Bank for Reconstruction and Development
1818 H. St., NW
Washington D.C. 20433
Telephone: (202) 458-0118
Fax: (202) 477-2967
Office of Multilateral Development Banks
U.S. Foreign Commercial Service
U.S. Department of Commerce
Room H-1107
Washington D.C. 20230
Telephone: (202) 482-3399
2. The African Development Bank (AFDB), headquartered in Abidjan, Cote
d'Ivoire, is an international financial institution created by Africans
in 1963 to promote the economic and social development of its member
African countries. Founded with initial capital resources of USD 250
million, it has authorized capital today of over USD 22.3 billion. The
bank belongs to the African Development Fund (ADF) and the Nigerian
Trust Fund (NTF). The AFDB makes loans to development projects in 51
countries in Africa. The ADB provides development
financing on concessionary terms to the poorer African member countries.
The NTF was established by the Government of Nigeria in 1976 to assist
in the development efforts of the poorer ADB members. The ADFB has 21
non-regional members. The United States joined in 1982.
Contacts
U.S. Department of Commerce
Liaison Office to the U.S. Executive Director's Office
African Development Bank
Ave. Joseph Anoma
01 B.P. 1387 Abidjan 01
Acote D'Ivoire
Telephone: (225) 21-46-16
Fax: (225) 22-24-37
Office of Multilateral Development Banks
U.S. & Foreign Commercial Service
U.S. Department of Commerce
Room H-1107
Washington, D.C. 20230
Telephone: (202) 482-3399
Fax: (202) 273-0927
List of Banks with Correspondent U.S. Banking Arrangements
The National Bank of Commerce (NBC) has correspondent arrangements with
Chase Manhattan Bank, Morgan Trust Guarantee and Citibank. Foreign
banks like Trust Bank (T) Ltd. and Citibank have similar correspondent
arrangements with U.S. banks.
CHAPTER IX
BUSINESS TRAVEL
Business Customs
Tanzanians are generally polite, helpful and warm-hearted. The private
sector is slowly growing and maturing. Patience, specificity and
flexibility are essential for success.
Travel Advisory and Visas
The Department of State's consular information sheet on Tanzania
reflects current information on Tanzania entry requirements, areas of
instability, medical facilities, crime, photography restrictions, air
transport, drug penalties and information concerning the U.S. Embassy ;
including telephone, telex and fax numbers. Airport visas are not
issued routinely. All visitors should obtain visas in advance.
Holidays
In 1996, Tanzania will observe the following official holidays:
January 1 (New Year), January 12 (Zanzibar Revolutionary Day), January
20 and 21 (Idd-El-Fitr*), April 05 (Good Friday), April 08 (Easter
Monday) April 10 (Idd El Hajj*) April 26 (Union Day) May 1
(International Worker's Day), July 29 (Maulid Day*), August 8 (Peasants
Day), December 9 (Independence Day), December 25 (Christmas Day) and
December 26 (Boxing Day).
Those days marked with an asterisk are subject to the sighting of the
moon.
Business Infrastructure
Transportation. Many of Tanzania's urban centers are accessible by road
transportation except during the rainy season (October to December in
Western parts of Tanzania, and March to May for the rest of the
country). Many of the primary roads are in poor condition. The roads
from Dar es Salaam to Tunduma, Dodoma, Tanga and Arusha are paved.
Dodoma to Iringa, Dodoma to Mwanza, Mwanza to Bukoba and Arusha to
Dodoma are not paved. The road from Dar es Salaam to Lindi and Mtwara
is not paved making it extremely difficult to reach those areas by
vehicle during the rainy seasons. Rural and feeder roads are virtually
impassable during the rainy season.
Rental cars are available in all of Tanzania's urban centers including,
Arusha, Dar es Salaam, Dodoma, Morogoro, Mwanza, Moshi, Mbeya, Tabora
and Tanga.
Railway transport links Dar es Salaam to Kigoma (Central Line), Dar es
Salaam to Mwanza via Morogoro, Dodoma, Tabora, Shinyanga (Central Line),
Dar es Salaam to Tanga (Tanga Line) and Dar es Salaam to Arusha via
Mombo, Same and Moshi (Tanga Line). Tanzania Zambia Railway Authority
(TAZARA) links Dar es Salaam to Kapiri Mposhi (Zambia) via Iringa and
Mbeya.
Dar es Salaam International Airport, Kilimanjaro International Airport
and the Zanzibar Airport handle international air traffic. Current
international carriers are KLM, Swiss Air, British Airways, Air France,
Alitalia, Egypt Air, Ethiopian Airways, Royal Swazi, Kenya Airways, Air
Zimbabwe, Gulf Air, Air India, Air Malawi, and Uganda Airways.
Air Tanzania has international routes to Djibouti and Saudi Arabia. Its
regional routes include Kenya, Burundi, Malawi, Zambia, Zimbabwe and
recently, South Africa. Domestic routes include Kilimanjaro, Mwanza,
Mtwara, Songea, Tabora, Kigoma, Tanga and Zanzibar. Ferry boats from
Dar es Salaam to Zanzibar operate daily.
Boat Transportation. Lake Victoria has services between Mwanza, Bukoba
and Musoma. Lake Tanganyika has services to Bujumbura, Eastern Zaire
and Zambia. Lake Nyasa has services to Malawi.
Freight is carried largely by trains and heavy duty vehicles between
most of Tanzania's towns and Malawi and Zambia, and by heavy duty
vehicles to Burundi and Rwanda.
Language. The official languages in Tanzania are Kiswahili and English.
Virtually all major businessmen speak English, though once outside the
business community, English is spoken less frequently.
Communication. Tanzania's telecommunications infrastructure within the
country is poor and overburdened. International communications by
phones, fax and telex are generally reliable, though they can be
difficult to get hold of.
Housing. There are critical shortages of housing in all urban centers
of Tanzania. Most visitors to urban centers stay in tourist hotels,
although the amenities and comfort levels fall below U.S. standards.
The expatriate communities in Arusha, Dodoma, Mwanza, Morogoro, Tanga
and Dar es Salaam live in modern housing. Water and power is generally
available but liable to frequent interruptions.
Health. The health services in Tanzania are inadequate. Tropical
diseases and HIV are prevalent in the country. Malaria prophylaxis is
strongly recommended.
Food. Food is available and plentiful in all the urban centers of
Tanzania including an assortment of fresh fruits and vegetables.
Certain urban centers, such as Arusha, Moshi, Dar es Salaam and Tanga,
carry imported goods from Kenya, Europe, South Africa and the United
States.
CHAPTER X
APPENDICES
APPENDIX A
COUNTRY DATA
Country Profile
1994 1995 1996
Population: 27.3 28.1 28.9
(millions)
Growth Rate: 2.8 2.8 2.8
(Percentage)
Religions: Christianity, Islam, Animist.
Government System: Multiparty Democracy with Executive Presidency.
Language: Kiswahili and English (Official Languages.)
Work Week: Monday to Friday.
Sources: Central Statistics.
APPENDIX B
DOMESTIC ECONOMY
1994 1995 1996
GDP Growth 3,326.0 3,419.0 3,521.6
GDP Growth Rate 4.1 3.0 3.5
GDP per capita (USD) 135.4 138.7 140.0
Gov. Spending % as of GDP 31.5 31.5 30.0
Inflation 20.0 50.0 40.0
Foreign Exch. Reserves 220.2 216.5 205.0
Average Exch. Rate $ 1.00 400.0 600.0 800.0
Foreign Debt 7,415.6 8,618.2 9,817.0
Debt Service Ratio 281.3 290.1 300.0
U.S. Economic Assistance 28.0 22.0 30.0
U.S. Military Assistance - - -
Note: Figures for 1995 are estimates.
Figures for 1996 are projections.
Sources: Planning Commission
Bank of Tanzania
U.S. AID
Figures for 1994 are estimates.
Figures for 1995 are projections.
APPENDIX C
TRADE FIGURES
1994 1995 1996
(In Million of U.S. Dollars)
Exports (fob) 519.0 600.7 669.0
Imports (cif) 1,500.2 1,592.0 1,800.0
U.S. Exports (fas) 39.2 42.8 45.0
U.S. Imports (cif) 32.2 38.6 40.0
U.S. Share of Tz Emports (%) 6.9 7.2 6.7
U.S. Share of Tz Imports (%) 2.5 2.9 2.2
Figures for 1995 are estimates.
Figures for 1996 are projections.
Principal U.S. Exports (in thousands of U.S. dollars)
Commodity 1992 Jan-Jun 1993
Corn 2,138 3,957
Used merchandise 7,325 3,122
Manufacturer commodity 4,269 1,458
Construction equipment 847 1,038
Farm machinery & equips 525 944
Petroleum refinery prod 1,115 903
Aircraft equipment 654 408
Internal Combus. engine 161 307
Radio, TV, B/cast. equip 738 250
Fabricated rubber prods. 793 191
Aircraft 3,805 81
Railroad equipment 91 91
Principal U.S. Imports (in thousands of U.S. dollars)
Commodity 1992 Jan-Jun 1993
Cordage 3,014 1,728
Fruits and tree nuts 797 1,484
Forestry products 1,249 560
Jewelry & Lapidary Work 239
Broad woven fab. cotton 156
Salted and roasted nuts 3,327 82
Source: U.S. Department of Commerce.
APPENDIX D
INVESTMENT STATISTICS
The following investment information covers the period between
September, 1990 to February, 1994;
Sector Approved New Exp/Reh Local
Agric. & Livestock 58 38 27 14
Natural Resources 43 34 9 17
Tourism 93 75 18 35
Manufacturing 229 142 84 145
Petroleum & Mining 21 17 4 3
Construction 15 14 1 5
Transport 41 28 13 14
Services 6 3 3 3
Computers 2 1 1 -
Decontrolled areas
(financial) 4 4 - -
Grand Total 512 352 160 236
Sector Foreign Joint Total Total
Venture Employment Investment
Agric. & Livestock 15 29 22656 43282.3
Natural Resources 7 19 5790 16692.2
Tourism 19 39 10353 105670.3
Manufacturing 21 63 24291 178415.9
Petroleum & Mining 2 16 2157 24349.2
Construction 1 9 754 6677.2
Transport 6 21 2901 27702.1
Services 1 1319 2824.0
Computers 1 1 20 281.0
Decontrolled areas
(financial) 2 2 158 7789.0
Grand Total 76 200 70399 413683.7
APPENDIX E
U.S. AND COUNTRY CONTACTS
Country Government Agencies
Organization: Investment Promotion Center
Contact name: Mr. C. G. Kahama
Title: Director General
Address: P.O. Box 938
Dar es Salaam, Tanzania
Phone: 255-51-46848/46850
Fax: 255-51-46851
Country Trade Associations/Chamber of Commerce
Organization: Dar es Salaam Merchants Chamber
Contact: The Chairman
Address: P.O. Box 12
Dar es Salaam, Tanzania
Phone: 255-51-22267
Organization: Dar es Salaam Chamber of Commerce
Contact name: Mr. Emilio Mzena
Title: Chairman
Address: P.O. Box 14
Dar es Salaam, Tanzania
Phone: 255-51-21893/23759
Telex: 41628 CHEMCO-TZ
Organization: Tanzania Chamber of Commerce, Industry and Agriculture
Contact name: Mr. M.M. Kalanje
Title: Executive Director
Address: P.O. Box 9713
Dar es Salaam, Tanzania
Phone: 255-51-46624/46625
Fax: 255-51-37371
Telex: 41424 MKONSULT
Organization: Confederation of Tanzania Industries
Contact name: Mr. Iddi Simba
Title: Chairman
Address: P.O. Box 7125
Dar es Salaam, Tanzania
Phone: 255-51-30292/30844
Telex: 41587 INTERF-TZ
Country Market Research Firms
Organization: Tanzania Industrial Studies and
Consulting Organization (TISCO)
Contact Title: Director General
Address: P.O. Box 2650
Dar es Salaam, Tanzania
Phone: 255-51-46164/46933
Fax: 255-51-46164
Telex: 41182 TISCO-TZ
Country Commercial Banks
Bank Name: National Bank of Commerce
Address: P.O. Box 1255
Dar es Salaam, Tanzania
Phone: 255-51-46100
Fax: 255-51-46235
Telex: 41581-NATCMD-TZ
Bank Name: Cooperative and Rural Development Bank
Address: P.O. Box 268
Dar es Salaam, Tanzania
Phone: 255-51-46614/46239
Fax: 255-51-26518
Bank Name: Standard Chartered Bank
Address: P.O. Box 9011
Dar es Salaam, Tanzania
Phone: 255-51-44593
Fax: 255-51-44594
Telex: 41079
Bank Name: Stanbic Bank Tanzania Limited
Address: P.O. Box 72647
Dar es Salaam, Tanzania
Phone: 255-51-26251/4 44573/44574
Fax: 255-51-44553
Telex: 41415
U.S. Embassy Trade Personnel
Contact: Commercial Officer
Address: P.O. Box 9123
255-51-66010/1/2/3/4/5
Fax: 255-51-66701
Telex: 41250 USA-TZ
Washington-Based USG Country Contacts
Contact: Tanzania Desk Officer
Address: U.S. Department of Commerce
Washington, D.C. 20008
Phone: 202-939-6125
Contact: Finn Holm-Olsen
Address: Desk Officer for Southern Africa
U.S. Department of Commerce
International Trade Administration
Washington, D.C. 20230
Phone: (202) 482-4228
Fax: (202) 482-5198
APPENDIX F
TRADE EVENT SCHEDULE
Dar es Salaam Annual International Trade Fair: July, 1996.
Arusha Agricultural Show: September, 1995.
Probable 1996 Trade Events
i) Textile and Apparel Exhibition.
ii) Information Management Technology.
iii) Arts and Crafts Exhibition.
iv) Tourism Exhibition.
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