New Delhi, September 03, 2021
Dr. Asif Iqbal
President, Indian Economic Trade Organization,
Your Excellency Mr. Puneet Roy Kundal,
The Joint Secretary (E&SA), MEA
Excellencies and My Dear Sisters
Jacqueline Mukangira & Grace Akello,
Other Distinguished Guests at the Dais,
Ladies and Gentlemen.
It gives me immense pleasure to speak before this auspicious audience. Thank you very much for this opportunity.
I am particularly happy that you could organize an onsite conference in the midst of the pandemic. It is such a bold attempt. So, I wish to join speakers before me to thank The Diplomatist and The Indian Economic Trade Organization for the excellent arrangements for this symposium.
Mister Director of Programme, I must admit that speaking after my two sisters have spoken so eloquently about the East African potentials on trade, business, investments, as well as tourist attractions is a bit tricky to me. Certainly, I may have to say things that have already been said here. I therefore seek your indulgence once I have to do so for purposes of emphasis.
1.1 Overview of East African Community (EAC)
The East African Community (EAC) is a regional intergovernmental organization of six Partner States namely, the Republics of Burundi, Kenya, Rwanda, South Sudan, the United Republic of Tanzania, and the Republic of Uganda, with its headquarters in Arusha, Tanzania. The East African Community was established on 7th July, 2000 by the Republic of Kenya, the United Republic of Tanzania and the Republic of Uganda. The republics of Rwanda and Burundi joined the community in July, 2007 while Republic of South Sudan joined the community in 2016. The East African Community has an area (including water) of 2.5 million sq.km while the surface area is 1.82 million sq.km, with population of 177 million (2019) and combined GDP (current market prices) of USD$193.7 billion (2019). With such a large population the EAC provides a notable market as well as an investment destination for India.
The overall objective of the Community is to develop policies and programmes of mutual benefits aimed at widening and deepening cooperation among the Partner States in the political, economic, social and cultural fields, as well as research and technology, defence, security, legal and judicial affairs of mutual benefits.
Considering the historical background of the EAC Partner States, the Parties adopted a progressive integration process starting from Customs Union to Common Market, a Monetary Union and ultimately a Political Federation.
The EAC Customs Union was established on 1st January, 2005 with a transition period of five years whereby in January, 2010 tariff for intra-regional trade were completely eliminated. Establishment of the Customs Union was a foundation for establishing the Common Market, which is the second stage of the EAC integration process. The EAC Common Market commenced on 1st July, 2010 while the Protocol for the establishment of a Monetary Union was signed on 30th November 2013. The EAC Partner States are in the preparation for the necessary prerequisites with the view of having East African Community Monetary Union with single currency by the year 2024.
1.2 Overview of Tanzania
The United Republic of Tanzania comprises of two Constituents namely the Tanzania Mainland and Zanzibar. Collectively, The United Republic of Tanzania has an area of 945,087 Square Kilometres, with the projection population of around 59.4 million (2020) and GDP estimated at 63.24 billion US dollars. Tanzania has the longest coastal strip in the East African Region and borders with eight countries namely, The Republic of Kenya, The Republic of Uganda, The Republic of Rwanda, The Republic of Burundi, The Democratic Republic of Congo, The Republic of Zambia, The Republic of Mozambique and The Republic of Malawi of which, six of these countries have no direct access to sea. Therefore, United Republic of Tanzania provides shortest, safest, convenient and most economical sea access to the land linked countries that are bordering it. Hence, The United Republic of Tanzania is the gateway to the East, Central and Southern Africa through the Indian Ocean.
The United Republic of Tanzania is endowed with vast number of resources such as arable land for agricultural, abundant tourist attractions, minerals of all sorts, ports and harbours, energy resources among others and wishes to utilize the same through blending of outsourcing from other partner countries such as India in sourcing in order to attain win-win economic prosperity.
2.0 OPPORTUNITIES IN TANZANIA
Tanzania has a lot of potential that can be utilized through her relationship with India. However, for purposes of this platform today, I will briefly focus on agriculture and industrial and infrastructure development.
2.1 Agriculture and Livestock Development
Tanzania has 44 million hectares of arable land of which, 10.1 million hectares are currently under cultivation. About 29.4 million hectares are suitable for irrigation; out of which, 2.3 million hectares are of high development potential and 4.8 million hectares are of medium development potential. There are many water bodies that are suitable for irrigation including, Lake Victoria, Lake Tanganyika, Lake Nyasa and permanent and seasonal rivers and underground water bodies that can enable irrigation activities.
During the implementation of Five-Year Development Plan II, the Government constructed new irrigation infrastructure and repaired the old irrigation infrastructure. This led to an increase in the irrigation area, from 461,376 hectares in 2015 to 694,715 hectares in 2020. However, there is still much to do to modernize our farming in order to achieve the intended level of commercial farming. Considering these potentials in agriculture, investment from you can be made in the following areas:
Commercial farming and agro-processing
Tanzania’s economy has continued to be dominated by Agriculture. Agriculture employs about 66.3 percent of Tanzania’s workforce. As of 2019, Agriculture sector contributed 26.6 percent of the GDP. Tanzania has 29.4 million hectares of land suitable for irrigation. Currently, the total land developed for irrigation is only 694,715 hectares (as of 2020) which is approximately 2.4 per cent of total potential area. Most of the agricultural production lies in the private sector. However, while the private sector has sustained food security over a long period of time, it is still producing for subsistence. The country on different occasions developed a number of national policies and strategies that identify agricultural investments as essential. Among the Opportunities which India can partner with Tanzania to tap the potentials including, the following:
Establishment and modernization of value addition agro-processing industries especially, on cashew nuts which caters for 75% of livelihoods of over 700,000 households and is Tanzania’s most important export cash crop and its contribution grew to USD 353.1 million in 2019 from USD 201 million in 2016. India happens to be one of the top importers of the Tanzanian cashew nuts.
Opening and developing of new modern commercial farms or modernization and expansion of the existing farms (ex-state owned and private) through PPP by developing irrigation infrastructures and modernized mechanization
Engagement in large scale agricultural inputs supply chain (Agro inputs, machineries, etc)
2.1.2 Another potential area is the Livestock Development
Tanzania intends to improve Ranching and Livestock development sub- sectors. In doing this, Tanzania and India can partner in improving technology and in providing capital and technical competencies to blend with in-house availed opportunities by:
Establishing Joint venture projects with National Ranch Company (NARCO) to develop existing State-owned Ranches.
Establishing Joint Venture projects with local companies and entrepreneurs to develop private ranches.
Improvement of dairy herds within emergent and smallholder sectors through cross-breeding and introduction of specific breeds.
Establishing large scale commercial Ranching farms for animal feed stocks for the existing domestic, regional and export markets.
Investing in high value facilities such as hides and leather processing as well as storage, marketing and supply infrastructures.
2.2 Industrial Development is another potential area with a focus on Manufacturing industries
In a robust growing economy like Tanzania, global outsourcing through partnership with emerging economies such as India's crucial way to increase comprehensive economic strength of a country and to enhance the competitiveness. Global sourcing transfers technology as well as relevant knowledge to other countries, which can use them to develop local industries.
Friends, it behoves or rather it is appropriate for me to inform you that as for the EAC region - there are quite a good number of infrastructure development project to which you are welcome to venture into their execution through an open and competitive tenders. And because of time limitation, I have opted to put the list of these projects as annex to my presentation for your perusal and decision.
At this juncture let me assure you of one thing namely, when you think of investing in Sub–Saharan Africa, think of Tanzania. This is because once you have established yourself in Tanzania, you take advantage of abundance of in-house available raw materials and outsource few elements like technology or capital to increase efficiency in production in order to take advantage of a guaranteed EAC Market with population of about 177 million people and a combined GDP of USD$193.7 billion; SADC Market of population with about 345 million people and a combined GDP of USD$721.3 billion; and a new market of African Continental Free Trade Area of population of about 1.2 billion people and a combined GDP of USD$3 trillion.
Moreover, Tanzania has potential markets such as the Africa Growth and Opportunity Act (AGOA); Everything but Arms (EBA – European Union); over 4,000 items in China market and we continue to engage with various partners under the EAC bloc with the view to concluding more preferential trade arrangements. To take advantage of all these available markets, India can partner with Tanzania in the targeted manufacturing industries which use locally available raw materials such as:
Textiles and apparel parallel (from abundant cotton grown domestically)
Fertiliser (from discovery of proven reserves of gas and phosphate)
Leather and leather products like footwear
Friends, you may also to note that the EAC Industrialization Strategy which is currently being implemented has placed textile and apparel together with leather and footwear as priority sectors. Thus, apart from Tanzania own initiative to provide incentives to these sectors, EAC Partner States also have common incentives to promote such industries. Moreover, EAC Partner States are currently developing regional fertilizer policy and the bill to encourage distribution and establishment of more fertilizer industries in the region. Please take good note that Tanzania has a lot of these untapped raw materials to develop such industries within the EAC, SADC, and well beyond.
2.2.2 Extractive Industries is also another potential sector.
The realization of a competitive semi-industrialized economy depends on harnessing business linkages between incoming FDI and local business firms and MSMEs as part of promoting the maximization of local content inputs. This is necessary for deepening of domestic business and social entrepreneurs’ participation in sectors with a high potential for broad-based inclusive participation. As explained earlier, Tanzania is endowed with variety of mineral resources. With economic globalization, Tanzania and India can partner to take advantage to utilize these resources for mutual benefit.
So far, in order to utilize locally available raw materials and take advantage of milestone of the EAC Regional Integration (the EAC Customs Union and common market), it is imperative to develop semi -processing and processing facilities in the country which will make the final products meet the requirement of originating criteria. Therefore, the potential for industrial development revolves around balancing out-sourcing and in-sourcing which will promote processing of agricultural products, and exploitation of natural resources for mutual benefits. You may wish to note that Tanzania has huge deposits of natural gas and phosphate which is a good combination for manufacturing fertilizer.
Needless to say, Tanzania is the only country in the world with huge deposits of Tanzanite gemstones. Among the efforts and actions taken by the Government included, the construction of a wall at Mererani (24 km long) to curb rampant smuggling of Tanzanite and establishment of mineral trading centres (39 centres) to enable orderly sales of minerals. This has created a big opportunity for value addition within the country. India being one of good processors of minerals can therefore, take advantage of this opportunity to establish Tanzanite processing industry in Tanzania in order to add value on the same before exportation.
Before I conclude I feel I should explain why you should invest in Tanzania.
3.0 WHY INVEST IN TANZANIA?
Tanzania has a long history of stability, which is one of the major factors for safeguarding investments. The country is free of ideological confrontations, ethnic problems as well as labour disputes. It is a centre of economic and political stability in Sub Saharan Africa. There has been peaceful political climate in the country since the adoption of Multi party democracy in 1992 and the political scene is characterized by parliamentary democracy and public consensus on key social and economic priorities. You may wish to note that even during the trying times in March this when we lost our Dear President John Pombe Joseph Magufuli we were able to transition smoothly into new leadership of President Samia Suluhu Hassan who is spearheading the same agenda as the late President Magufuli.
Legal and Institutional Framework Conducive for International Outsourcing
As a step towards improving investment climate, Tanzania in 2018 adopted a Blue Print for regulating reforms to improve the business environment. The Blue Print aims at among others, at reviewing the existing legal and regulatory procedures prevailing in Government service delivery to the business community in order to reduce costs in doing business in the country.
Equally important, investments in Tanzania are guaranteed against nationalization and expropriation. Tanzania is a signatory of several multilateral and bilateral agreements on protection and promotion of foreign investment. Among other international agreements and membership, Tanzania is a member of Multilateral Investment Guarantee Agency (MIGA) and International Centre for Settlement of Investment Disputes (ICSID).
Similarly, Tanzania offers a well-balanced and competitive package of fiscal incentives in comparison with other African countries.
Moreover, Tanzania has signed double taxation agreement with India aiming at providing competitive fiscal regime on foreign trade.
Generally, Tanzania is endowed with a lot of potential to prosper within and outside the EAC region. However, as one of developing countries, we are faced with common challenges of infrastructure development, technology and capital necessary to effectively boost our productive capacities in the fields of agricultural, industries and services to effectively utilize our resources to enhance economy. Hence, partnering with friends like India, Tanzania would utilize in-house opportunities for prosperity of both parties. Investing in Tanzania will guarantee an investor Access to Growing Domestic, Regional, and Continental and beyond markets. The only important thing is to have a win-win spirit where Tanzania will avail her resources and outsource what is necessary to tap the availed resources to make it cope with the quick changing international market.
So friends, please come all to Tanzania to invest, do trade/business and more importantly for leisure, owing to all the tourist attractions that abound in Tanzania.
I thank you for your kind attention.
There are about 17 infrastructure flagship projects championed by the EAC Heads of State are:
Construction to standard gauge of the Mombasa – Nairobi – Malaba – Kampala-Kigali line with Malaba – Nimule – Juba spur;
Construction to standard gauge railway of the Dar es Salaam – Isaka – Mwanza and Isaka –Kigali/ Keza – Gitega – Musongati;
Construction to standard gauge of Uvinza – Musongati Railway line;
Phase II construction of the 2nd Container Terminal – Kipevu West at Mombasa port;
Construction of Rusizi Hydro power Project;
Construction of Dar es Salaam to Chalinze Expressway (144km);
Construction of the Kampala – Jinja Expressway / Southern Bypass (96 Km);
LAPSSET Corridor Development: various projects including construction of Lamu Port, roads, railways, oil pipeline, three airports and three resort cities;
Mombasa – Nairobi – Malaba - Jinja Expressway;
Construction of a new crude oil pipeline from Hoima (Uganda) to Tanga (Tanzania) (1,443km);
Development of Eight EAC-based Airports and EAC Upper Flight Information Region (Seamless Operations);
Hoima Oil Refinery;
Development of Zanzibar Ports;
Phase II of Dar es Salaam Maritime Gateway Program (2nd Container Terminal at Dar es Salaam Port, Berths 12 to 14);
Construction of Rufiji Hydropower Project at Stiegler’s Gorge along the Rufiji River, 2100 MW (Tendering Stage);
Upgrading of Handeni-Kiberashi-Kwamtoro-Singida road (434 km); and
Lake Victoria Transport Program (LVTP).
Among of the 17 flagship projects, nine (9) projects are from Tanzania and the remaining eight (8) are from the other EAC Partner States; this is because of her geographical proximity which is endowed with the longest coastline in the region with natural harbours and ports. Tanzania position is logistical hub for not only for EAC countries but also for SADC and some Central Africa countries rely on it for access to the Indian Ocean. This is an enormous opportunity for Tanzania cross-border investment within and beyond the region.
The nine (9) Tanzania’ flagship projects are still under different stages of implementation and funds mobilization is still ongoing to support their implementation. The nine (9) projects are:
Construction to standard gauge railway of the Dar es Salaam – Isaka – Mwanza and Isaka –Kigali/ Keza – Gitega – Musongati. The Tanzania’s sections of Dar es Salaam – Makutupora (505 km) and Mwanza – Isaka (341 Km) are currently funded and contractors are at site. The two remaining lots ie Lot III: Makutupora – Tabora (km 367.5) and Lot IV: Tabora – Isaka (km 162.5) require funds for construction of estimated costs 1268.5 million USD and 571.9 million USD respectively.
Construction to standard gauge of Uvinza – Musongati Railway line; It will connect with the Tabora – Kigoma – Uvinza line in Tanzania and will have an extension to DRC from Gitega. Feasibility study and preliminary study for SGR line from Tabora – Kigoma (Route Km 411) and Uvinza –Musongati (Route Km 254) is completed in 2021. Mobilising for Funds for construction (estimated 860 USD million) is still ongoing.
Construction of Dar es Salaam to Chalinze Expressway (144km); Priority has shifted to the Chalinze – Morogoro Expressway (100km) that also need funds for construction. Project cost will be determined after completion of the feasibility study.
Construction of a new crude oil pipeline from Hoima (Uganda) to Tanga (Tanzania) (1,443km); All key project agreements have been agreed and signed by parties. Land compensation and Financing negotiation processes are going on. Procurement of main contractors completed.
Development of Eight EAC-based Airports and EAC Upper Flight Information Region (Seamless Operations): It includes rehabilitation, construction and expansion of several airports in the region including Rehabilitation and Extension of Pemba Airport which costs 148 USD Million. Funding for feasibility study and detailed engineering design secured (AfDB). Funding for construction not yet secured.
Development of Zanzibar Ports; includes development of Maruhubi, Mangapwani, Wete and Mkoani Ports. Feasibility Study for Maruhubi Fishing Port is underway and Master Plan Study for Integrated Ports at Mangapwani is underway. Expansion Study for Wete and Mkoani Ports and Establishment of Mpumbuu Port will start on Budget Year 2021 – 2022. Still looking for Potential Development Partner to fund development of Mangapwani (100million USD), Wete (100million USD) and Mkoani (100million USD) ports.
Phase II of Dar es Salaam Maritime Gateway Program (2nd Container Terminal at Dar es Salaam Port, Berths 12 to 14); Contract Document is currently under preparation for consultant to undertake Feasibility Study and design and preparation of tender documents. Cost of the project will be determined after completion of the feasibility study.
Construction of Rufiji Hydropower Project at Stiegler’s Gorge along the Rufiji River, 2100 MW; Construction is underway by Government of Tanzania financing.
Upgrading of Handeni - Kiberashi - Kwamtoro - Singida road (460 km): the road supports the Hoima – Tanga crude oil pipeline project. Procurement of contractor for 20 KM section is ongoing under URT financing; the remaining section requires funding for construction.
On the Health sector, the EAC Heads of State considered and approved the following investment priorities in the region:
Expansion of access to specialized health care and cross border health services;
Strengthening the network of medical reference laboratories and the regional rapid response mechanism to protect the region from health security threats including pandemics, bio-terrorism and common agents;
Expansion of capacity to produce skilled and professional work force for health in the region based on harmonized regional training and practice standards and guidelines;
Increase access to safe, efficacious and affordable medicines, vaccines, and other health technologies focusing on prevalent diseases such as malaria, tb, hiv/aids, non-communicable diseases (ncds) and other high burden conditions;
Upgrading of health infrastructure and equipment in priority national and sub national health facilities/hospitals;
Establishment of strong primary and community health services as a basis for health promotion and diseases prevention and control;
Expansion of health insurance coverage and social health protection;
Improvement of quality of healthcare, health sector efficiency and health statistics; and
Strengthening of health research and development.