Tanzania has attracted a number of our clients, having had relative political stability since introducing multi-party politics in 1992. Tanzania’s tourism and natural gas sectors are looking hot for investment opportunities over the coming years. The country’s business environment could become significantly more attractive, with more deregulation of state-controlled sectors, along with a reduction in red tape.

We ensure our clients make sound business decisions in Tanzania, using our risk-assessed total analysis model. Our research teams keep our clients abreast of the latest market moves and political developments as part of our 'top-down' and 'bottom-up' perspective. Our expert views are supported by our interactive data and forecasting. We also provide in-depth analysis on 11 of Tanzania’s most important industries. Our expert insight will help you to tackle Tanzania with ease.

Country Risk

Tanzania Country Risk

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Core Views

  • Tanzania's economy will see real growth of 6.9% in 2015 and 7.3% in 2016. Our 2015 forecast has been revised down in the wake of the power scandal troubling the country's government, which has led to funds being withheld by international donors.

  • Rising uncertainty over future energy policy in Tanzania runs the risk of pushing back crucial investment into the offshore gas sector. Although we believe that CCM will win the October 2015 elections, a united opposition will lead to increasing resource nationalism in campaigning.

  • Monetary policy in Tanzania, executed primarily through open market operations and sales of foreign exchange, will continue to be relatively tight in 2015 as the Bank of Tanzania looks to bring in inflation. It will be aided in this aim by falling global oil prices.

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Tanzania Operational Risk Coverage (9)

Tanzania Operational Risk

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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 39.6 out of 100 for Operational Risk.

Tanzania offers investors and businesses a variety of advantages and disadvantages within its logistics capabilities. Due to its strategic location,...

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Tanzania Crime & Security

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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 receives a score of 39.6 out of 100 for Crime & Security Risk, placing 20th in Sub-Saharan Africa regionally, between safer neighbours such as Zambia (seventh) and Malawi (...

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Tanzania Labour Market

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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 flexibility in hiring and firing 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 the country's educational sector. Despite rapid growth in enrolment rates as well as educational facilities, a scarcity of state funding has constrained the development of secondary 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 46.5 out of 100 for Labour Risk, ranking the country eighth regionally.

Although Tanzania has experienced significant growth in the country's secondary and tertiary educational...

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Tanzania Logistics

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As one of BMI's 10 African Lions, 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 will thus impede expansion plans. An underperforming transport network that is plagued by congestion, as well as water and electricity shortages, will deter some investors, but a competitive trade procedures system, coupled with the 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 our Logistics Risk Index, ranking Tanzania 28th out of 44 states in Sub-Saharan Africa (SSA) and 145th globally.

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

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Tanzania Trade & Investment

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Tanzania offers a number of strategic advantages to investors and businesses, including a relatively low level of legal risk, 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 receives a score of 39.2 out of 100 for Trade and Investment Risk, ranking 13th regionally after neighbouring Zambia (eighth), Rwanda (ninth) and Mozambique (11th).

Despite Tanzania's high level of corruption, the country's legal environment offers the lowest level of risk to investors, and it receives a Legal score of 39.6 out of 100 and a rank of 11th regionally. Benefits include a relatively well-developed regulatory framework for ICT-related issues and sophisticated e-governance capabilities by regional standards, as well as a strong...

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Tanzania Industry Coverage (11)

Agribusiness

Tanzania Agribusiness

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Agribusiness Market Value
BMI Market Value By Commodity (2010-2018)

BMI View:   We continue to favour the Tanzanian sugar and coffee industries over the medium term owing to the 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.

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Autos

Tanzania Autos

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We are revising our forecast for 2014 up to 80% due to new data availability.  However,  despite the latest data from Renault indicating that sales of brand new Renault's increased 83% in the first nine months of 2014 , BMI continues to predict steady growth (in the order of 3% a year) in new vehicle sales from 2015 onwards in Tanzania up to 2018. This owing to the markets erratic growth and low numbers of total sales. Even with this growth, we believe that only 8,063 new vehicles will be sold in the country that year.

When compared with 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...

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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 : After a slowdown in the mining sector in early 2014, Tanzania's construction industry will mildly slow over 2015 and this will have an impact upon investment in the wider economy. There are downside risks of the government over extending their budgetary reach, one of which is the potential negative impact it could have on infrastructure financing. Investment surrounding the country's gas industry and Chinese investment will continue to support growth over the long-term. Buoyed by impressive investment in new ports, railways and, above all, power infrastructure, we expect average real growth of 8.3% per annum during 2015-2019.

Tanzania continues to attract international investment into its infrastructure sector, mainly Chinese, as well as a growing number of private investors. The country's economic growth is set to keep growth in the residential and non-...

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Insurance

Tanzania Insurance

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BMI View: The non-life sector dominates Tanzania's insurance industry and will continue to do so, accounting for almost 90% of total premiums. Within this, motor insurance will remain strong, but key growth will come from health insurance business. The underdeveloped life sector, with per capita premiums of USD0.78 in 2014 will grow rapidly, although by 2018 will still be worth just 0.13% of GDP, a startlingly low level, particularly contrasted with the relative development of the non-life sector.  

Life insurance in Tanzania is small by any standards, with premiums in 2014 of just USD39mn, only USD0.78 per capita. This also equates to insurance penetration of under 0.1% of GDP, a figure that will grow only slowly to 2018, reaching 0.13%. By 2018, premiums will have only reached USD64mn, or TZS124bn. This represents strong growth of around 17% annually, albeit from a...

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Mining

Tanzania Mining

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BMI View: Tanzania's mining industry will come under pressure over our forecast period to 2018 . This will largely be a result of weakness in global gold prices disincentivizing 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...

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Oil & Gas

Tanzania Oil & Gas

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BMI View : An unsettled regulatory environment continues to weigh on development of Tanzania's substantial gas resources . A muted response to the latest licensing round signals market sentiment has begun to weaken, in spite of a string of major discoveries. Failure to pass the Natural Gas Policy in 2015 will threaten delay to FID on the Lindi LNG project, with downside risk to first production by 2022.

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Headline Forecasts (Tanzania 2012-2018)
  2012 2013e

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Pharmaceuticals & Healthcare

Tanzania Pharmaceuticals & Healthcare

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BMI View:   We expect the continuing depreciation of the Tanzanian shilling to make imports of raw materials increasingly expensive for the few remaining domestic pharmaceutical manufacturers. A tax regime that favours imports of finished pharmaceuticals and a lack of skilled labour will be detrimental to local manufacturers, and will see the country remain reliant on imported pharmaceuticals for the foreseeable future.

Headline Expenditure Projections

  • Pharmaceuticals: TZS693.86bn (USD429mn) in 2013 to an expected TZS794.60bn (USD488mn) in 2014; +14.5% growth in local currency terms and +13.6% in US dollar terms.  Forecast downgraded slightly in local currency terms and upgraded slightly in US dollar terms.

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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 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 ,   will limit market opportunities. 

The outlook for Tanzania's power sector is good. After decades of under-investment by the state-owned...

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Telecommunications

Tanzania Telecommunications

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BMI View: Growth in Tanzania's mobile market has rebounded impressively in 2014 following a contraction in 2013, prompted by the discounting inactive SIMs and slow expansion of networks to rural areas. We believe renewed growth has been triggered by increased investment in network expansion, as demonstrated by Zantel 's launch of 3G services on mainland Tanzania and the deployment of the government's Universal Access Fund, as well as intensifying price competition between the country's six mobile operators. We expect positive growth to continue throughout our forecast period to 2018, as Viettel 's planned entry into the market in 2015 will ensure expansion to underserved areas as it seeks to build up a subscriber base.

Key Data

  • The mobile...

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