Tanzania, formerly known as Tanganyika, boasts a rich history and diverse geography that make it a unique destination for business expansion. Despite being one of the largest countries in East Africa, Tanzania faces economic challenges, yet it offers immense potential for growth and development. Here’s everything you need to know about tapping into this market.
Market Overview
With a population of over 68 million people, Tanzania presents an attractive market for exporters and businesses looking to expand. The country has sustained a growth rate of 6-7% since 2000, driven by sectors such as agriculture, mining, tourism, and manufacturing. The Tanzanian government’s focus on economic growth and foreign investment has created a conducive environment for business.
Export/Import Volumes
Tanzania’s trade relations span across the globe, with China, India, and the European Union being its major trading partners. The United States also holds a significant position in Tanzania’s trade, with key exports including liquid propane gas, aircraft parts, and agricultural machinery. Tanzanian exports mainly consist of precious/semi-precious stones, apparel, and raw agricultural products.
Market Challenges
Doing business in Tanzania comes with its set of challenges, including bureaucracy, corruption, and underdeveloped infrastructure. However, the government is actively addressing these issues by implementing IT systems for faster service delivery and investing in infrastructure projects such as railways, roads, and airports.
Market Opportunities
Despite the challenges, Tanzania offers promising opportunities across various sectors. ICT, infrastructure, and agribusiness are among the top sectors with great potential. Mobile applications, technologies for infrastructure projects, and agricultural innovations are areas ripe for investment. Additionally, the growing middle class in Tanzania presents a demand for American consumer products.
Market Entry Strategy
To enter the Tanzanian market successfully, understanding the country’s culture and consumer behavior is crucial. Collaborating with local agents/distributors, exploring government tenders, and forming joint ventures/franchises are effective entry strategies. Additionally, complying with Tanzania Revenue Authority regulations and seeking investment incentives from the Tanzania Investment Center can streamline the process.
Investment in Tanzania
Investors are drawn to Tanzania’s abundant natural resources, developing infrastructure, and investment incentives. The country’s strategic location within the East African Community (EAC) offers access to a potential consumer base of 150 million people. Investment opportunities span various sectors, including tourism, agriculture, and mining.
Trending Businesses
Small business ideas in Tanzania range from teaching/training and commercial farming to app development and food processing. The top cities to start a business include Arusha, Dar Es Salaam, and Mwanza, each offering unique advantages for entrepreneurs.
Tourism in Tanzania
Tanzania’s tourism sector is thriving, thanks to its diverse wildlife reserves, national parks, and natural wonders such as Mount Kilimanjaro. Tour operators like G Adventures and Intrepid Travel cater to travelers seeking adventure and cultural experiences.
Transportation in Tanzania
Tanzania’s transportation infrastructure comprises road, rail, air, and maritime networks, facilitating domestic and international trade. With extensive road and air connectivity, businesses can efficiently transport goods and services across the country and beyond.
Expanding your business to Tanzania offers exciting opportunities for growth and development. By navigating the market landscape effectively and leveraging the country’s resources, you can establish a successful presence in this dynamic East African nation.
