- TANZANIA PROFILE.
The united Republic of Tanzania is a union of two entities: the mainland of Tanzania, formerly known as Tanganyika, and Zanzibar, a group of islands off the indian ocean coast. Zanzibar is small, with around 2,600 square mile of territory in the two main islands of unguja and pemba. The mainland of Tanzania, on the other hand, is very large, about 945,000 square kilometres -or somewhat larger than France and Germany combined.
- BORDER COUNTRIES
Tanzania is bordered by Mozambique to the south and, moving clockwise, Malawi(partly across Lake Nyasa)and Zambia to the southwest, the Democratic Republic of the Congo(DRC, across lake Tanganyika) to the west, Burundi and Rwanda to the northwest, Uganda and Kenya(partly across lake Victoria) to the north, and the indian ocean to the east. Tanzania shares control over several large bodies of water with its neighbours. It has a 1,420km shoreline on Lake Victoria to the north, a 650km shoreline on Lake Tanganyika to the west, and a 305 km shoreline on Lake Nyasa to the southwest. Its indian ocean coastline is some 1,300 km long. The terrain comprises hot and humid plains along the coast, a plateau in the central area, and cooler highlands in the north and south.
The northeast border with Kenya is dominated by Mount Meru and Kilimanjaro. South- wards is the central plateau reaching elevations above 2000m. Annual rainfall varies from 500mm to 1000mm over most of the country. The highest rainfall of 1000mm to 3000mm occurs in the north east of Lake Tanganyika basin and in the southern Highlands.
- DIVISIONS OF REGIONS
Tanzania is divided into 31 regions, Five in Zanzibar and 26 in the Mainland. There were only 21 regions in the mainland until March 2012, When four new regions were announced; GEITA, KATAVI, NJOMBE, and SIMIYU. And very recently in 2016 , the new region of SONGWE was formed after being separated from MBEYA region. Physically, the largest of the regions is TABORA, with an area of just over 76,000 square Kilometres. Demographically, however, it ranks well below the top, with two of its neighboring regions- Mbeya and Shinyanga being larger. (Shinyanga is well over 60% more populous. Dar es- Salaam is by far the largest city, with a population projected to surpass three million in 2012. Other major cities (are very much smaller) are Mwanza, Arusha, Tanga and Mbeya. The city of Tabora is one of the smaller ones, with a 2012 estimated population of around 260,000.
- ETHNIC GROUPS IN TANZANIA AT LARGE:
There are over 130 ethnic groups in Tanzania. The largest of these is the Wasukuma, followed by the Wanyamwezi (The dominant group in the Tabora region) , and the Wachagga in Kilimanjaro region. In Zanzibar, the dominant group is Shirazi. Christianity, Islam, and traditional African faiths all have followers in the mainland, though the proportions appear to be in dispute. Zanzibar is predominantly Muslim.
- HISTORY IN BRIEF (TANGANYIKA AND ZANZIBAR)
For a little over 40 years, until the end of world war 1, Tanganyika was a German colony, at first controlled by the German East Africa Company and then by the Germany state. After the war, control passed to the British. The British also controlled Zanzibar, which had an Arab sultan but had become a British protectorate by 1890. The Germans launched the modernization and industrialization process, for example by beginning the construction of the railway line goes through Tabora, and the British continued. Tanganyika become autonomous in May 1961 and fully independent in December 1961, led by Prime Minister Julius Kambarage Nyerere. A year later, it became a republic, with Nyerere as president. Zanzibar became independent in 1963 and united with Tanganyika in 1964, to form the united Republic of Tanzania. President Nyerere governed with a one party state for most of his time in office until he stepped down in 1985. His policy of African socialism, called Ujamaa (after a Kiswahili word meaning brotherhood or Kinship ) had mixed success, with the economy suffering from the in efficiencies associated with collective farming, a large bureaucracy and poor incentives, Nonetheless, the party he founded in 1977, Chama cha Mapinduzi (Revolution party -CCM) has been in power continuously since-its founding and has won all four Multi-party elections since 1995. The CCM now exposes a more private-sector led approach to security economic growth. The present president, Jakaya Mrisho Kikwete, won a second term in office in 2010 and completed his term in power by the year 2015. And very recently, after the general election of October 2015, president- JOHN POMBE JOSEPH MAGUFULI was elected as the fifth president of the united republic of Tanzania, representing the ruling party- CCM( Chama Cha Mapinduzi).
- THE REGION
Tanzania is a member of two major regional organizations. One of these is the southern African Development community (SADC). Although it is now primarily an economic organization, SADC began in 1980 with an objective that was as much political as economic; to reduce dependence on then apartheid South Africa. It has evolved considerably since then and hopes one day soon to achieve a customs union. Negotiations were also launched in June 2011 in Johannesburg, South Africa, to create a Tripartite Free Trade Area with two other regional organizations- the common market for eastern and southern Africa (COMESA) and the East African Community (EAC) . The current membership of SADC stands at 15 minus one, as Madagascar has been suspended since it suffered a coup d’état in March 2009. The other Members are Angola, Botswana, the Democratic Republic of the Congo (DRC), Lesotho, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Zambia and Zimbabwe. The second regional organization to which Tanzania belongs is the East African Community (EAC). The EAC is one of the oldest regional co-operation arrangements in Africa. There was a custom union among Kenya, Uganda and Tanzania, then Tanganyika, by 1927. It was followed by the East African High commission (1948-1961), the East African common services organization (1961-1967), and the (first) East African community (1967-1977). Even after the collapse of the first EAC, the member states continued their search for areas of co-operation and the eventual result was the rebirth of the EAC in July 2000. The EAC has set very ambitious goals for itself. It intends to be far more than a free (or preferential) trade area. The idea is to move from a customs union to a common market to a monetary union to, finally, political federation. The EAC customs union became operational on 1 January 2005. Burundi and Rwanda became full members of the EAC on July 2007 and joined the customs union two years later. By 2010, intra- EAC Trade had grown to USD 4.1 billion from USD 2.2 billion in 2005. The rationale for a monetary union is to deepen economic integration by reducing the costs of transacting business in different currencies and risk of adverse exchange-rate movements for both trade and travellers. In 2007, the EAC Heads of state decided to fast-track the establishment of the East African Monetary union (EAMU) so that it would be in place by 2012. The European central Bank (ECB) was engaged to act as consultant and produce a comprehensive report on the prospects of the EAMU. Since then, however there have been reports suggesting that the private sector in concerned about the tight schedule and some European economists have also expressed worries about a possible crisis following the rushed adoption of a common currency. The recent difficulties in the Euro Zone are the backdrop to these reservations. Against this background, on 30November 2012, the EAC Heads of state decided to postpone the establishment of the EAMU until November 2013.
- THE ECONOMY
The Tanzanian economy has been doing quite well lately. Real GDP has grown at 6 to 7 percent for the past several years and is expected by the IMF to continue growing strongly in the next few years to come. However, inflation has picked up as well. According to the Bank of Tanzania, headline inflation (including food and fuel) has been just over 4% in october 2010 but had risen to nearly 18% be october 2011). The energy and fuels rate in October 2011 was over 37%. The IMF expects economic performance to strengthen further in 2012 and over the medium term, benefitting from the implementation of the five-years development plan and initiatives under the Southern Agricultural corridor of Tanzania (SAGGOT). One new factor is the strong prospect of substantial new factor is the strong prospect of substantial new foreign direct investment in Tanzania’s natural gas sector in the near future. According to some reports, the confirmation of some 1.7 trillion cubic metres of natural gas reserves may be forthcoming over the next five years. Discussions have been underway in Tanzania on how to make the most of this potential natural resource wealth and a natural gas master plan is being developed. The economy depends heavily on agriculture, which accounts for more than a quarter of GDP, provides 85% of exports, and employs about 80% of the work force. In composition by sector in 2011, services accounted for about half, with the rest divided more or less equally between agriculture and industry.
- MARKETS FOR INVESTORS
There are mainly three markets of interest to investors.
- The domestic market in Tanzania.
- The regional market provided chiefly by the East African Community.
- The export markets abroad, in the European Union and the United states, in the growing Asian economies of China and India, and in the Middle East, to mention only the leading ones.
The domestic market is significant, given Tanzania’s population of nearly 46 million people, growing at a rate of nearly 3% per annum, even if it is limited by the low purchasing power is growing, and it is quite ample to furnish a market for a product like edible oil. Then there is the regional market offered by the East African community (EAC). As noted above, this is a regional entity with a long history and deep roots. And it has actually put in place some of the things that other trading blocs have only talked about it, such as a customer union and visa- free travel. The EAC market is not without its challenges, such as poor physical infrastructure, but efforts are being made to overcome these. As these difficulties diminish, Tanzania’s trade with the EAC may be expected to grow. According to the last trade report published by the EAC secretariat in 2010, Tanzania’s total trade volume (exports plus imports) with the EAC in 2008 was around 7% of its total trade volume with the world; USD 735 million out of more than USD 10 billion. Finally, there are the markets abroad, two schemes of preferential trade arrangements are of special interest. One is the African growth and opportunity Act (AGOA) of the United States and the other is the everything but Arms (EBA) iniative of the Europeans Union.
Tanzania’s merchandise exports have grown steadily for some years, although there was a dip in 2009, when they dropped by a little over4%. Still, 2010 was the best year ever, with exports exceeding USD 4 billion for the first time. This was a jump of over 2009. The main part of this was Manganese ore exports of over USD 350million – there had been none in 2008 and 2009. Other factors were an 18% increase in gold exports-Tanzania is Africas- fourth largest gold producer and small increases in the exports of a number of agricultural products. Imports grew as well but not as much; nearly 23% over 2009 to cross the USD 8 billion mark. But this amount, double that of exports, was not unprecedented, since imports had actually been even higher in 2008. Petroleum oil was the largest item, accounting for over a quarter of the total imports all by itself. The trade deficit for 2010 was thus almost USD4billion . Tanzania’s trade was in deficit with all regions other than sub- Saharan Africa, with which Tanzania had a surplus of around USD 200 million. According to a report by the Embassy of Switzerland in Tanzania, Swiss imports from Tanzania in 2010 were worth only CHF 23 Million (about USD 23.6 million). The Embassy believes the much higher figure may be obtained by counting as exports items (like gold) that are only traded through but not physically moved through Switzerland . Tanzania actually has a trade surplus in services. Its receipts from international tourism have been around USD 1.2 billion for a number of years. Tanzania has been a member of the world Trade organization (WTO) since 1 January 1995.
- FOREIGN DIRECT INVESTMENT (FDI)
In the earlier decades of socialism and self-reliance, there had been very little foreign direct investment in Tanzania. But FDI has been on a path of fairly steady growth since the early 1990s. in the new millennium, it has never fallen below USD 300million. In 2010, FDI inflows reached a record USD700million and inward stock stood at nearly USD 8 billion.
To date, foreign investment inflows have been concentrated in mining and Tourism, according to the Government poverty and Human Development Report 2011, although there is great potential to attract FDI in other sectors, such as agriculture, infrastructure, communications and natural resources other than mining.
According to a presentation in July 2011 by Raymond Mbilinyi, The Tanzania investment center’s Acting Executive Director, this has already been happening, with manufacturing, commercial building and agriculture driving the recent growth of FDI into Tanzania, along with mining. Substantial FDI flows are also expected in natural gas in the near future, as noted earlier.
- AID, DEBT AND RESERVES,
Tanzanias external debt stood at just over USD 10 billion in November 2011, according to the Bank of Tanzania, or about 43% of GDP. Actual external debt service in the same month amounted to USD 6.4 million or about USD77 million on an annualized basis. The countrys gross official reserves were nearly USD 3.5 billion in November 2011, enough to cover about four months of projected imports of goods and services. Its net international reserves were USD 3.1 billion. Net official development assistance and official aid received in 2010 were nearly USD 3 billion. Something like 30% of the state budget is dependent on donor assistance.