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 informed 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

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 38.7 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 (...

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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...

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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 30.9 out of 100 in our Logistics Risk Index, ranking Tanzania 28th out of 44 states in Sub-Saharan Africa (SSA).

Tanzania's utilities sector still reflects its status as a developing country, with water shortages, blackouts and slow internet download speeds representing...

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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 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 37.8 out of 100 for Trade and Investment Risk, ranking 15th regionally after neighbouring Zambia (sixth), Rwanda (ninth) and Uganda (12th).

Businesses face the highest degree of trade and investment risk from the Government Intervention pillar, which highlights the limitations of the country's banking and financial development. Tanzania ranks moderately well for its level of taxes, offering investors a total tax rate of 44.3% of profit, versus a regional...

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Tanzania Industry Coverage (13)

Agribusiness

Tanzania Agribusiness

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BMI View: We continue to favour the Tanzanian coffee industry 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. The country's sugar sector will see limited production growth over the next few years, due to low sugar prices and Tanzania's lower productivity than many of its regional neighbours.

Agribusiness Market Value
BMI Market Value By Commodity (2011-2019)
...

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Autos

Tanzania Autos

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We are revising our forecast for 2015 up to 15% after a strong sales performance in 2014. The latest data available for 2014 indicates that sales of brand new light vehicles increased 82.2% in 2014 . BMI attributes this growth to improvements in dealership networks and steady growth in private consumption in the country. We predict steady growth in new light vehicle sales from 2016 to 2019, averaging 7.6%.

However, we stress that owing to the markets erratic growth, low numbers of total sales, and limited availability of data these numbers may be subject to revision over 2015. Even with this growth, we believe that only 10,833 new light vehicles will be sold in the country annually by 2019.

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. Instead, used cars will continue to be the more significant...

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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 the middle class population rises. Tanzania's population (more than 45mn) and bright economic outlook 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 8.4% in 2015. Between 2014 and 2019, compound annual growth of 9.4% is forecast.

  • Food consumption in...

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Freight Transport

Tanzania Freight Transport

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BMI View: At present, although we expect continued expansion in the country's overall freight tonnage, the rate of growth will slow due to the rising level of risks emanating from the various transport infrastructure plans involving Tanzania's neighbours - such as the proposed railway connecting Kenya, Rwanda and Uganda, which threatens Tanzania's throughput levels as trade to and from these landlocked hinterland states will be diverted to Kenyan ports. This will negatively affect Tanzanian efforts to become the EAC gateway and regional transport hub.

Tanzania, along with its East African peers, will reap the benefits of lower oil prices over...

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Infrastructure

Tanzania Infrastructure

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BMI View : We have slightly downgraded our 2015 real growth forecasts for Tanzania's construction industry in light of a corruption scandal in the power sector damaging investor confidence and restricting the government's budget. Major infrastructure plans in the rail, and port sectors are overoptimistic but will provide opportunities nonetheless. The fall in oil prices may threaten the major investments into Tanzania's offshore gas sector, which supported our long-term infrastructure forecasts.

There are number of key developments, which underpin our upbeat medium-term forecast scenario:

  • The Tanzanian government plans to float a USD1bn eurobond for FY15/16. The proceeds will be used to finance the country's mega infrastructure projects....

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Insurance

Tanzania Insurance

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BMI View: Non-life business dominates the Tanzanian insurance industry landscape, capturing almost 90% of total industry premiums. Motor insurance is the largest part of this and will remain so, but health insurance shows the greatest promise over the next five to ten years, growing by around 16% annually. The underdeveloped life sector will grow rapidly, but from a very low base; per capita premiums in 2015 will reach just USD0.80.

Life insurance in Tanzania is small by any standards, with premiums in 2015 of just USD42mn, only USD0.80 per capita. This also equates to insurance penetration of under 0.11% of GDP, a figure that will grow only slowly to 2019, reaching 0.13%. By 2019, premiums will have only reached USD68mn, or TZS139bn. This represents strong growth of around 17% annually, in local currency terms, albeit from a low base. The sector...

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Mining

Tanzania Mining

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BMI View: Tanzania's mining industry will see further contraction over the coming five years, largely due to weak global gold prices which will discourage production growth. Over the longer term, various miners are looking to invest in the country's nickel, coal, and uranium resources.

Despite Tanzania's significant deposits of coal, cobalt, copper, diamonds, gold, nickel, silver and uranium, we forecast the country's mining sector will contract to 2019 on the back of lower average annual gold prices. Over our forecast period to 2019, weak...

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Oil & Gas

Tanzania Oil & Gas

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BMI View: Continued regulatory uncertainty and a bearish outlook on the global LNG market pose a growing threat of delay to FID on the Tanzania LNG project. Further delay to FID could see the country's first gas exports driven outside our 10-year forecast period.

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Headline Forecasts (Tanzania 2013-2019)
2013 2014e 2015f 2016f

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Pharmaceuticals & Healthcare

Tanzania Pharmaceuticals & Healthcare

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BMI View: The introduction of compulsory health insurance in Tanzania will increase uptake of the scheme among some sectors of the population. Despite the impressive employment rate, contributions from those employed in the informal and agriculture sectors will be less likely, limiting its uptake.

Headline Expenditure Projections

  • Pharmaceuticals: TZS797bn (USD479mn) in 2014 to an expected TZS909bn (USD496mn) in 2015; +14.0% growth in local currency terms and +3.5% in US dollar terms. Forecast downgraded slightly in both local currency and US dollar terms from Q215.

  • Healthcare: TZS4,403bn (USD2.65bn) in 2014 to TZ4,845bn (USD2.65bn) in 2015; +10.1% growth in local...

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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, thermal and renewable energy will enjoy strong growth over the forecast period. Meanwhile, 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 focus of modernisation is broad and both thermal...

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Shipping

Tanzania Shipping

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BMI View: Tanzania will continue to benefit from its location as a gateway for the East Africa Community (EAC). The merits of its location can be seen in the consistent upwards trajectory of container and bulk throughput at the port of Dar es Salaam. At present we have kept our GDP growth forecasts beyond 2015 unchanged, projecting growth of 7.3% in 2016 and average yearly growth of 7.6% from 2016 to 2019. This will be driven increasingly by investment, which we expect will overtake private consumption as the greatest growth generator over the next decade.

Tanzania, along with its East African peers, will reap the benefits of lower oil prices over the coming months. The latest inflation data confirm that the collapse in Brent crude prices is already being reflected in lower pump prices, easing inflationary pressures and more disposable income for consumers. Consumers will...

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Telecommunications

Tanzania Telecommunications

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BMI View: The Tanzanian mobile rebounded in 2014, as its 2013 performance was impacted by SIM registration and the removal of inactive accounts. Penetration remains low so there is still room for growth, especially in rural areas which account for the majority of the population. Viettel's market entry, and its focus on rural areas, will drive further competition as the current operators will need to match the new entrant, and they will look to differentiate themselves with new services. MFS (mobile financial services) will be one, as Tanzania becomes the first fully interoperable country. Mobile data will continue to grow through the development of 3G and 4G networks, and this will impact the fixed market, especially on the voice side. The fixed broadband market will see some growth but will continue to remain a minor player compared to mobile access.

Key Data...

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