Current business situation
Over the past decade, Tanzania’s economy has become significantly more open after 30 years of socialism. Tanzania recently completed the rebasing of its national accounts which showed that the country appears to be close to achieving middle income status. The total value of the country’s economic output is approximately one-third larger than was previously estimated, with the current average per capita income at $948.
The main drivers of Tanzania’s rapid economic growth continue to be a small number of fast growing, capital intensive sectors, particularly the mining, communications, financial services, construction, manufacturing and retail trade sectors. The rebased series shows that the annual rate of growth of gross domestic product (GDP) fluctuated between 8.8 per cent in 2007 and 5.1 per cent in 2012. With the rebasing it now appears that agriculture’s contribution to the current GDP increased from 27 per cent – 32 per cent in the period from 2007 to 2013. However, much of this increase is the result of a price effect, as the constant price contribution of the agricultural sector to GDP declined from 26.8 per cent in 2007 to 23.8 per cent in 2013.
The overall value of exports increased by 9.4 per cent in the period from 2012/13 to 2013/14, as increases in the total value of manufactured exports and service exports compensated for the decline in the value of traditional agricultural exports.
(Source: World Bank, Tanzania Overview, 9 Apr 2015)
With 947 300 square kilometres of land, Tanzania is the 31st largest country in the world and the 14th largest in Africa. The estimated 2014 population of Tanzania is about 50.8 million, ranking 26th in the world. About 80 per cent of the population lives in rural areas. (Source: World Population Review Tanzania-Population, 19 Oct 2014)
Access to education has improved significantly, although the quality of education remains a concern. The country also has an incredibly diverse population with more than 120 ethnic groups and a very low median age with more than:
- 44 per cent of the population under 15
- 52 per cent between 15 and 64
- 3.1 per cent over the age of 64.
The Tanzanian Government has taken serious steps to liberalise the economy and encourage both domestic sector private and foreign investments with opportunities existing in mining, oil and gas, agribusiness and manufacturing. The rapid development of the communications and financial services sectors have also contributed to acceleration in overall economic growth.
The most significant transformative factor on the economy is the large natural gas reserves that were recently discovered in the Mtwara region. If managed well, these gas reserves have the potential to transform Tanzania’s economic future.
An accelerated drive for the development of social and physical infrastructure is underway. The ‘Big Results, Now’ initiative (BRN) is aimed at facilitating the achievement of Tanzania’s Development Vision 2025, through the identification of a series of priority areas for expenditure.
Tanzania is a member of the Southern Africa Development Community (SADC), East African Community (EAC) and the Common Market for Eastern and Southern Africa (Comesa).
Tanzania is a multicultural and multi-ethnic country. Kiswahili is the most widely spoken local language, but English is the medium of instruction in primary and secondary schools and universities and is the language used for business.
When introduced to someone for the first time, a short handshake is sufficient, but longer among people with a personal relationship. When greeting an elder, political leader or someone of higher status, it is a sign of respect to lower your eyes and grasp the right wrist with the left hand while shaking hands. After the hand shake it is the norm to ask questions about the general well-being of the other person, their family or business in general. Rushing or skipping this part of the greeting process is poor etiquette.
Titles are very important. People are generally addressed by their academic, professional or honorific title followed by their surname. Once a personal relationship has been developed, the person can then be address by their title and first name, first name alone or nickname. Wait for the Tanzanian to determine that the friendship has reached this level of intimacy.
Tanzanians often use metaphors, analogies and stories to make a point and are uncomfortable with blunt statements. It is important to be alert in order to decipher the message between the lines. With this in mind, criticism should be delivered in private and given in a circumspect manner.
Setting up in Market
Tanzanian businesses can be registered as a business name, a local company or a foreign company. A company incorporated outside Tanzania may do business in Tanzania through a registered branch. The process of registration requires the company to submit registration documents to the Business Registration and Licensing Authority (BRELA) and once the process of registration is complete, a Certificate of Compliance will be issued.
Companies that may want to have representative or liaison offices are required to register using the same process. Every company must display its name (including the word ‘Limited’) outside the office or place of business.
The Tanzania Investment Centre is a Government agency that offers a one-stop-shop for investors, providing advice and registration services.
Banking and finance
There are 34 licenced commercial banks, local and international in Tanzania, as well as a number of licensed non-bank financial institutions that offer financial related services.
The Bank of Tanzania regulates the financial sector. With the liberalisation and consequent increase in the number of banks and financial institutions an increase has been seen in credit supported by the growth in deposits held by the banks.
Although credit to the private sector has increased and interest rates fallen, they are still considered to be high, albeit reasonable by regional standards. Companies with low risk ratings are able to borrow at rates significantly lower than the average.
Foreigners can open accounts with any commercial bank. Different banks offer different types of accounts to suit various needs and requirements. Most ATMs accept Visa cards.
Links and resources
Government, business and trade
Tanzania Investment Centre
Bank of Tanzania
Tanzania Revenue Authority
DFAT country page: Tanzania
CIA World Factbook: Tanzania
World Bank Doing Business Index: Tanzania
East African Community
News and media
Tanzania Daily News
Tanzania Daima (Kiswahili)
Please note: This list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.