Opportunities in Africa featuring Tanzania

As part of Sassda’s drive to highlight business opportunities for its members and promote exports, each month we highlight a growth ‘hot spot’ in Africa and provide exclusive market intelligence, including the latest key data and in-depth analysis on a particular African country.


Shortly after achieving independence from the UK in the early 1960s, Tanganyika and Zanzibar merged to form the United Republic of Tanzania in 1964.  In 1965 the country held its first democratic elections since the 1970s.  Zanzibar maintains semi-autonomy and participates in national elections; popular political opposition on the isles led to four contentious elections since 1995, in which the ruling party claimed victory despite international observer’ claims of voting irregularities.

South African and Tanzania have a long history going back to the liberation struggle, so our ties to Tanzania are very good.  In terms of bilateral trade:

  • SA Exports to Tanzania are currently R6.5-billion;
  • Tanzania Export to SA are currently R377-million, and consist of gold, coffee and cotton predominantly.

The Tanzanians are not worried about the trade imbalance as they do not have the quality of goods that would allow them to export.

There are 170 South African companies operating in Tanzania and South Africa is one of the top ten investors in the country.  Some of these companies are Game, Vodacom, Stanbic, Multichoice, Anglo Gold and Southern Sun.

The Tanzanian economy is dependent on its agricultural sector which contributes a quarter of its GDP and employs 80% of the work force.   All land in Tanzania is owned by the Government but they will lease it out for a maximum of 30 years.

GDP is currently at 7%. Tanzania has an abundance of natural resources and is the third largest gold producer in African, after Ghana and South Africa. There is a lot of investment in Rail and Road infrastructure, which is sorely needed, from the Chinese and the Turkish, but there are still many more opportunities in the sector.


The economy depends on agriculture, which accounts for slightly less than one-quarter of GDP and employs about 65% of the work force, although gold production in recent years has increase to about 35% of exports.  All land in Tanzania is owned by government, which can lease land for up to 99 years.  Proposed reforms to allow for land ownership, particularly foreign land ownership, remain unpopular.Tanzania has achieved high growth rates based on its vast natural resource wealth and tourism with GDP growth in 2009-17 averaging 6-7% per annum.  Dar es Salaam used fiscal stimulus measures and easier monetary policy to lessen the impact of the global recession and in general, benefited from low oil prices.  Tanzania has largely completed its transition to a market economy, though the government retains a presence in sectors such as telecommunications, banking, energy and mining.

The financial sector in Tanzania has expanded in recent years and foreign-owned banks account for about 48% of the banking industry’s total assets.  Competition among foreign commercial banks has resulted in significant improvements in the efficiency and quality of the banking services, though interest rates are still relatively high, reflecting high fraud risk.  Banking reforms have helped increase private-sector growth and investment.

The Work Bank, the IMF, and bilateral donors have provided funds to rehabilitate Tanzania’s aging infrastructure, including rail and port, which provide important trade links for inland countries.  In 2013, Tanzania completed the world’s largest Millennium Challenge Compact (MCC) grant, worth $698 million, but in late 2015, the MCC Board of Directors deferred a decision to renew Tanzania’s eligibility because of irregularities in voting in Zanzibar and concerns over the government’s use of a controversial cybercrime bill.

The new government elected in 2015 has developed an ambitious development agenda focused on creating a better business environment through improved infrastructure, access to financing and education progress, but implementing budgets remains challenging for the government.  Recent policy moves by President Magufuli are aimed at protecting domestic industry and have caused concern among foreign investors.

Tanzania Growth and Development Plan (available in pdf on request)


The LTPP is some kind of a road map for ensuring that the country moves in the direction of realising Tanzania Development Plan 2025.  It was observed that significant structural transformation was required in order to reach the desired middle income status with US$ 3,000 per capita income in the remaining years.

Specifically, the following were seen as important interventions:

  1. Reduction of share of the agricultural sector in GDP from 27.8% to 20.7%.
  2. Increase in manufacturing sector’s contribution from 9.3% to 18%.
  3. Increase of share of services sector from 47.9% to 48.6%
  4. Significant changes in sectoral growth trajectories were needed:
    Agriculture sector to grow at an annual average of 6.0 % instead of 4.4%;
    Industrial sector to grow by 8.2% instead of 7.0%.
    The services sector to grow by 7.5 % instead of 7.0%.



Tanzania is a land rich in minerals.  Mining makes up more than 50% of the country’s total exports, of which a large part come from gold.  The country has gold reserves of 45 million ounces, generating revenue of over a billion USD.  Diamonds are also found in significant amounts.  Since it was opened in 1940, the Williamson diamond mine has produced
19 million carats (3,800 kgs) of diamonds.  Gemstones, nickel, copper, uranium, kaolin, titanium, cobalt and platinum are also mined in Tanzania.

Mining was strictly controlled and operated by the government during the 1970s and 1980s.  Mining claims were then opened up to individuals, which sparked the small scale mining industry of Tanzania.  In the 1990s, the laws were further relaxed to encourage the introduction of companies which opened up large scale mining operation.  Notable legislation for the mining industry includes the 1997 Mineral Policy, the 1998 Mineral Act and the 2010 Mineral Act.  The latest piece of legislation granted the mining company a higher percentage of royalties on gold and base metals, rough diamonds, coloured gemstones, uranium and other minerals; made it mandatory for mining companies to be listed on the stock exchange and gave the government a stake in all new mining projects.  Tanzania has accepted the Kimberley Process Certification Scheme.

Tanzania’s president, John Magufuli, imposed new laws on the mining industry in 2017, including higher taxes on mineral exports and allowing the government to have a higher stake in some mining operations.  These laws have been slowing investment in the sector.


Agriculture is a critical economic sector, representing 29.1% of Tanzania’s GDP and almost three quarters of the productive workforce.  Moreover, it is the main source of food, industrial raw materials and foreign exchange earnings.  Since Tanzania is endowed with a diversity of climatic and geographical zones, farmers grow a wide variety of annual and permanent crops.  This includes food and cash crops as well as fruits, vegetables and some farmers raise livestock including cattle, goats, sheep, pigs and chickens as well as small numbers of turkeys, ducks, rabbits, donkeys and horses.

Investment in agro-processing industries entails adding value, and improvement of standards of quality.  The following are key areas:

  • Fruit / Vegetable processing
    Tanzania produces 2.75 million tons of fruits and vegetable per year but only 4 percent is processed.There is a significant potential for the provision of heavy equipment for commercial farming and processing of fruits and vegetables for the locals as well as export markets.
  • Cashew nut processing
    This is a major cash crop and 120,000 tons are produced annually.There is an opportunity in rehabilitating old plants or establishing medium-scale processing plants.
  • Oil seeds
    Tanzania still imports a lot of edible oil.Processing of oil seeds locally is now on the rise, therefore there is potential in supplying oil pressing and processing equipment.
  • Meat and Dairy sector
    Given the large livestock population, the country is ideal for meat processing, packaging and processing of diary products.
  • Chemicals sector
    Opportunities exist in the chemical sector also as there is a local demand for fertilizer
    s and pesticides.

Click here to download report from Bureau Veritas on doing business with Tanzania.