Our comprehensive assessment of Tanzania's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Tanzania, as well as the latest industry developments that could impact Tanzania's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Tanzania before your competitors.

Country Risk

Tanzania Country Risk

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Core Views

  • We forecast real GDP growth of 7.0% in Tanzania in 2014, accelerating to 7.3% in 2015. Our 2014 forecast is a slight upwards revision from the 6.9% forecast we held last quarter, based largely on the fact that exports performed more strongly than we expected in the quarter ended June 30. The consumer will be the key driver of economic growth in the country, with purchasing power supported by contained inflation.

  • Tanzania's current account deficit will continue to widen given the expected poor performance of key export gold, and the growth of imports as the economy expands. Investment inflows will be sufficient to maintain reserves and keep the balance of payments positive, though this surplus will narrow.

  • We do not believe that the constitutional review process in Tanzania will be completed, as is planned, before the October...

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Tanzania Operational Risk Coverage (9)

Tanzania Operational Risk

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BMI View: Tanzania offers a generally low level of risk throughout the categories of trade and investment, crime and security, labour and logistics capabilities. Notable advantages include a large workforce with basic literacy and numeracy skills, a competitive port system that serves as a regional trade hub, a low likelihood of interstate conflict, and an increasingly liberalised trade, economic and financial environment that has facilitated significant inflows of foreign and portfolio investment.   However, pervasive corruption poses risk to businesses in forms as varied as an inefficient and unreliable legal system and a varying level of government accountability and transparency. As a result of these factors, BMI awards Tanzania a score of 37.4 out of 100 for Operational Risk...

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Tanzania Crime & Security

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BMI View: Tanzania's most significant security threat stems from its high crime rates and its corrupt and inadequate police force; while petty crime occurs most frequently, businesses face an increased risk of violent crime, as well as cybercrime and maritime piracy. The threat of domestic terrorism remains limited, however, regional terrorist groups have conducted a number of notable attacks in East Africa in the last few years, exposing businesses to the potential for significant property damage and injury to or loss of personnel. Tanzania's interstate security risks present the lowest level of risk, with a low likelihood of outright conflict and relatively good military capabilities, firms face limited potential for disruptions in their operating environment. As a result of these factors, Tanzania received a score of 39.3 out of 100 for its overall crime and security risk, placing 20 th regionally, between safer neighbours such...

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Tanzania Labour Market

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BMI View: With one of the most competitive labour markets in sub-Saharan Africa, Tanzania offers a low level of labour risk to investors and businesses. Benefits include competitive labour costs, flexibility in hiring foreign workers, a high percentage of working age citizens and women employed in the workforce, and one of the highest primary education net enrolment rates in Africa. However, businesses face a moderate level of risk in t he country's educational sector. D espite rapid growth in enrolment rates as well as educational facilities, a scarcity of state funding has constrained the development of s econdary and tertiary education resulting in a limited supply of high skilled and technical labourers. As a result of these factors, BMI has awarded Tanzania a score of 38....

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Tanzania Logistics

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BMI View: As one of BMI's ten African Lion's, Tanzania offers a vast number of growth opportunities for investors across a number of different industries. For some sectors however, the logistics risk associated with Tanzania will be too costly and impede expansion plans. An underperforming transport network, plagued by congestion, and water and electricity shortages, will deter some investors, but a competitive trade procedures system, coupled with the great rewards on offer, will ensure that some companies will be prepared to make the outlay required to mitigate risks. BMI therefore scores Tanzania 33.1 out of 100 in BMI's Logistics Risk Index, ranking Tanzania 28th out of 44 states in Sub-Saharan Africa (SSA) and 145 thglobally.

Tanzania offers investors a number of opportunities in terms of its developing oil and gas, mining and tourism sectors. Though the...

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Tanzania Trade & Investment

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BMI View: Tanzania offers a number of strategic advantages to investors and businesses, including a relatively low level of legal risks, a declining level of government intervention, and increasing economic openness. However, firms continue to face challenges in the form of non-tariff trade barriers, widespread corruption, and difficulty competing with public sector firms in key economic sectors. As a result, Tanzania received a score of 39. 2 out of 100 for its Trade And Investment Risk, ranking 13th regionally after neighbouring Zambia (8th), Rwanda (9th), and Mozambique (11th).

Despite Tanzania's high level of corruption, the country's legal environment offers the lowest level of risk to investors, having received a score of 39.6 out of 100 and a rank of 11 th regionally. Benefits include a relatively well-...

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Tanzania Industry Coverage (11)

Agribusiness

Tanzania Agribusiness

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BMI View: We continue to favour the Tanzanian sugar and coffee industries over the medium term owing to their potential for growth on the back of strong investment in capacity. The grain industry in Tanzania will remain less competitive than in other countries in the region, particularly South Africa and Zambia, and we see little potential for the country to become a major grain exporter.

Agribusiness Market Value
BMI Market Value By Commodity (% of total)

Key Forecasts

  • Sugar...

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Autos

Tanzania Autos

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BMI View: BMI   continues to predict steady growth (in the order of 3% a year ) in new vehicle sales in Tanzania over the forecast period to 2018. However, even with this growth, we forecast that only 4,479 new vehicles will be sold that year . When compared to a population of some 49.3mn, it is clear that new cars will remain unaffordable to the vast majority of Tanzanians for many years and that used cars will continue to be the more significant market . In light of this, potential gains for investors are weighted towards the commercial vehicles markets , owing to the growth of Tanzania's...

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Commercial Banking

Tanzania Commercial Banking

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...
Commercial Banking Sector Indicators
Date Total assets Client loans Bond portfolio Other Liabilities and capital Capital Client deposits

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Food & Drink

Tanzania Food & Drink

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BMI View:   We hold a positive view on the growth in Tanzania's consumer sector. The economy is growing rapidly while investment into a number of fast-moving consumer good sectors continues to pick up as spending at the middle class level rises. Tanzania's size (population of more than 45mn) and bright economic outloo k make it one of the most promising opportunities for consumer goods companies in East and Southern Africa over the next few years.

Headline Industry Data

  • Per capita food consumption in local currency terms is forecast to increase by 9.6% in 2014. Between 2013 and 2018, compound annual growth of 9.6% is forecast.

  • Food consumption in local currency terms is forecast to increase by 13.0% in 2014. Between 2013 and 2018, compound annual growth...

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Infrastructure

Tanzania Infrastructure

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BMI View : We maintain our forecasts for Tanzania's construction sector . While we note the downside risks of the government over extending their budgeta r y reach , which could threaten financing for infrastructure, there is growing interest in the market. Chinese investment and investment surrounding the country's gas industry will continue to support growth. B uoyed by impressive investment in new ports, railways and, above all, power infrastructure , we expect average real growth of average 8.3% per annum during 2015-2019 .

Tanzania continues...

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Insurance

Tanzania Insurance

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BMI View: Tanzania's non-life sector is set to impress with annual growth rates of over 9% from 2014 to 2018. Longer-term prospects are also good in the sector, with health insurance and property cover the two lines with the greatest growth potential in the next five years. Life insurance is far smaller and growth rates will be less impressive at less than 6% year-on-year. At just USD0.61 per capita, the life sector is one of the least developed in the world and suffers from a lack of competition. 

Life insurance in Tanzania is small by any standards, with premiums in 2013 of just USD30mn, only USD0.61 per capita. This also equates to insurance penetration of under 0.1% of GDP, a figure that is set to decline to around 0.7% of GDP by 2018 as overall...

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Mining

Tanzania Mining

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BMI View: Tanzania's mining industry will experience stagnation over our forecast period to 2018 . This will largely be a result of minimal gold production growth. Although gold is the current mainstay of the sector , there are plans to diversify into nickel , coal and uranium production in the long term . The mining industry is relatively small in terms of value, but its importance is highlighted by the fact that mining earns a significant share of the country's export revenues. Majo r foreign investors in Tanzania's mining sector include...

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Oil & Gas

Tanzania Oil & Gas

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BMI View : Tanzania has substantial potential, with major offshore gas discoveries supporting the development of its nascent oil and gas sector. However, despite the strength of its prospectivity below ground, above-ground factors are beginning to weigh on the outlook. An uncertain regulatory environment threatens to drive away future investment, whereas fears over resource nationalism and heavy tax burdens are already driving major project delays. 

Headline Forecasts (Tanzania 2012-2018)
  2012e 2013e 2014f...

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Pharmaceuticals & Healthcare

Tanzania Pharmaceuticals & Healthcare

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BMI View:   The government's healthcare sector development plans could be seriously derailed. This is due to expenditure figures laid out in Tanzania's 2014/2015 budget being   unrealistically optimistic, especially given spending levels in the previous fiscal year, and the fact that government expenditure tends to come in under budget , in addition to the government's heavy reliance on aid. T he country's rising population and increasing urbanisation will increase spending on medicines over the forecast period. Nevertheless, due to currently low purchasing power, generic drugs comprise the majority of Tanzania's pharmaceuticals market. We also do not expect Tanzania's reliance on imported drugs to decrease in...

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Power

Tanzania Power

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BMI View:   The outlook for Tanzania's power sector is good. The government has responded to a massive increase in the demand for electricity by opening up the power sector to private investment and allowing foreign companies to develop the generation, transmission and distribution of electricity. Accordingly, both thermal and renewable energy will enjoy strong growth over the forecast period. In the meantime, the government is rapidly expanding the transmission network and access to the grid. However , macroeconomic stability, as well as a hostile commercial environment limit market opportunities. 

The outlook for Tanzania's power sector is good. After decades of underinvestment by the state-owned Tanzania Electric Supply Company, the government has responded to a massive...

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Telecommunications

Tanzania Telecommunications

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BMI View: Despite a mobile penetration rate of just 55.2%, growth in Tanzania's mobile market has slowed down considerably, due to the discounting of inactive SIMs throughout 2013 and weak network coverage and take-up of services in rural areas, where around 70% of the population lives . However, the market has shown signs of improvement in the final quarter of 2013 and beginning of 2014 and BMI forecasts positive subscriptions growth throughout the five years to 2018. We believe government investment in network expansion through the Universal Access Fund as well as operators' sale of their mobile towers to dedicated infrastructure firms will encourage ongoing expansion of networks to underserved areas....

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