Tanzania, widely regarded as the most peaceful black nation in the world and also known as the giant of Africa is very rich in natural resources and human resources with many of it’s potentials unexplored or under-explored.
From the South which is blessed with oil and other natural resources to the north which is blessed with gold and other resources to the West, Tanzania is full of opportunities for anyone willing to invest. This article reveals the most profitable investment opportunities in Tanzania.
No matter your budget, there are opportunities you can invest. From as little as Tsh. 100,00 to the big billions of shillings, you can invest in Tanzania and expect a good return on your investment. This article covers investment opportunities in Tanzania for middle income and high-income earners. For foreign investors too. There is something for everyone!
Why should you invest in Tanzania?
There are many reasons why you should consider investing in Tanzania. Tanzania is the largest economy in Africa ahead of Angola, Tunisia and the rest. With so many opportunities for growth.
With over 60 million people, Tanzania has the people, manpower, workforce that will help any business thrive. The minimum wage in Tanzania is low compared to other nations. This means, you can spend less and get more done.
There are numerous government incentives including tax holidays, duty drawbacks, investment allowances, tax exemptions, export development funds, double taxation reliefs and many more.
There are influx of investors from China, The West (Dangote Cement is a good example), South Africa into Tanzania. Tanzanians are also waking up to invest in their country.
Most lucrative investment Sectors In Tanzania
Here are the most lucrative investment opportunities in Tanzania:
Tanzania’s population is estimated to be over 60 million. And one of the biggest challenges is feeding this large population. Tanzania has been unable to produce enough food for it’s population.
Agricultural sector is not only the driver of Tanzania’s economy but also the means of livelihood for the majority of Tanzanian people. The sector comprises of crop production (industrial & food crops), horticulture, livestock, fisheries and forestry. Production of crops and horticulture contributes 29% of Agriculture GDP.
There are many finance institution including the ministry of finance in Tanzania who offer special financial assistance to Agriculture focused businesses through Tanzania Agricultural Development Bank. Agriculture is definitely one of the most important investment opportunities in Tanzania.
Investing in the Agriculture sector will be a very lucrative venture if well planned and executed. Areas of major interest include crops, livestock, transportation, farm equipment and many more
2. Real Estate
Real Estate in one of the most profitable investment opportunities in Tanzania. This is because of the booming population. And large migration to major cities such as Dar es Salaam, Mwanza, Arusha , Zanzibar and the rest. Investment in real estate in major cities can be very lucrative for investors.
The opportunities include low cost housing, supplies of building materials, hotels, shopping complex and so many more. There are many aspect you can invest in real estate and make profit.
As the population continues to grow and the economic keeps growing, one of the biggest problem is housing.
3. Oil and Gas
The Oil and Gas sector is what Tanzania has not taped on yet. Both foreign and local investors can key in to the Oil and gas sector in Tanzania and watch their investments grow.
Here are some areas investors can key into in the oil and gas sector
- Exploration and Exploitation
- Products Marketing
- Well Services
- Petroleum transportation
- Development of local alternatives for imported items such as medium pressure valve, pumps, shallow drilling equipment, drilling mud, bits fittings, drilling cements, detonators, steel castings, magnetic tapes and more.
- Construction and Installation
- Domestic Production and marketing of Liquefied Petroleum Gas (LPG)
- Manufacturing of LPG cylinders, valves and regulators, installation of filing plants, Retail distribution and development of simple, flexible and much less expensive gas burner to encourage the use of gas instead of wood and other fuels
- Establishing industries to produce chemicals and Solvents from natural gas, such as Chlorinated methane, Formaldehyde and others
- Establishing plant to for the production of refined mineral oil, petroleum jelly and grease and others
There are many investment opportunities in the Oil and Gas sector in Tanzania.
Apart from oil, Tanzania is blessed with very numerous natural resources that is been given much attention. An investment in this areas can be very lucrative for a determined investor. The mining sector in Tanzania is way under explored. Not much has been done. This leaves a lot of opening for potential investors who will want to have a look.
Many of the resources in Tanzania are untapped and the government has continued to show signs it is willing to cooperate with investors who want to get in.
Some of the resources include:
- Iron metal
5. Manufacturing Industry
Tanzania is a country that is over dependent on importation for the smallest of things that you may never think of. This is is not good enough for the largest economy in Africa. As the economy continues to grow, there is need to produce so many things at home. The man power is there.
An investment in Tanzania’s manufacturing sector will yield result. Create employment and boost the economy. Consecutive governments have constantly call for investment in the manufacturing sector.
Minor household items such as toothpick is mostly important into Tanzania. There are many crucial things to manufacture: Food items, water (table and sachet), fibre cables, telecommunication equipment, tires, fashion and the list is long
Tourism is one of Tanzania’s leading foreign exchange earner and third largest contributor to the GDP. The sector has been growing fast as a result of various factors such as liberalization, diversification of tourist markets and continued Government support and commitment to providing an enabling environment, coupled with successful tourism promotion and political stability.
Investors can take advantage of Tanzania’s endowment of unique and combination of tourist attractions such as beautiful coastal beaches, coral reefs, caves and river deltas, abundant wildlife including the ‘big five’ in their natural habitats, national parks and game reserves, good climate, beautiful geographical landscapes, savannah grasslands, forests, salt and fresh water lakes. Others include hot springs, mountains, botany and zoology, world heritage sites, and rich cultural history.
Investors can also take advantage of several strategies and programmes that have been earmarked by the government to attract investments into the industry such as introduction of Tanzania Unforgettable programme, branding of premium parks, development of high value niche products, and building of new high- end international hotels chains among others.
7. Infrastructure Development
The 32 regions in Tanzania have given rise to increased demand for housing facilities. Each region is now developing its own structures, hotels and residential quarters to cater for its increasing Population. Lots of opportunity also exist in the development of industrial parks in Tanzania.
Investor can also participate in major infrastructure projects such as Road construction and rehabilitation; Development of the Tsh 7 trillion SGR and associated infrastructure within the Bagamoyo Port – Rwanda – Burundi – DRC Transport corridor Project, Rehabilitation of airports.
Construction of power generation plants, construction of the multi-billion shilling Mwalimu Nyerere Hydroelectric Power Plant and construction of resort cities in Zanzibar.
8. Money, Banking & Finance
Tanzanian financial sector comprises of Banking, Insurance, Capital markets, Pension Schemes and Quasi-banking institutions such as: Savings and Credit Cooperative Societies (SACCOs); Microfinance Institutions (MFIs); Building Societies, Tanzania Post Bank (TPB); Development Finance Institutions; (DFIs) and informal financial services such as Village Community Banking (VICOBA).
Financial intermediation in Tanzania has continued to record high growth rates due to increased lending as reflected by the rise in domestic credit backed by significant financial innovation.
There are more than 40 banks in the banking sector is dominated by five large banks which account for the bulk of deposits. The remaining banks are small and have limited outreach. This has reduced competition and resulted in high cost of credit.
Further given the low penetration of the formal financial services, investing in Microfinance institutions, banks and SACCO’s would have a considerable potential to address the large remaining demand for financial services by the large section of population that is unbanked.
Tanzania is under-insured with penetration level of about 1 % of GDP. This signifies the necessity of having an insurance sector that can add more to the economic development of the country therefore a huge potential for the insurance business in Tanzania.
9. Fixed deposit
This is a good way to invest money with peace of mind. If you have a large money that you might not need for a period of time, you can fix that money in a bank or other financial institution and make big profit on it. Politicians take advantage of this a lot.
Usually, the longer you fix the money, the bigger the profit. Just approach a bank and tell them you want to open a fixed deposit account. You will be put through the process.
Just go home, relax and go about your normal duty while your money is literally growing.
In Tanzania, energy is identified as one of the infrastructural enablers of the pillars of Vision 2025, with an expected surge in energy use within the commercial sector on the road to 2025. As a result, the government has identified the need for generation of additional energy and efficiency in energy consumption as priorities in Vision 2025.
Investment opportunities exist in provision of solar energy, Wind Energy, generation of Geothermal power, Hydroelectric generation, Development of diesel plants etc. The discovery of oil in Zanzibar and coal deposits in Mchuchuma, Liganga and Ngaka provides more opportunities in meeting Tanzania’s energy needs.
11. Information & Communications Technology
The information Communication Technology sector is expanding every day in Tanzania. Investors can tap on the growing population to provide communication outlets and modern technology such as mobile phone services. Provision of Internet connectivity will enhance economic growth in Tanzania. The size of the local ICT market is estimated at US$ 500 million.
We are home a large number of highly educated and innovative talent – We are known for innovation as demonstrated by the all very well-known M-Pesa Software for some of the best banks in the world. All the above factors coupled with the friendly business environment and an innovative culture have made Tanzania a premier outsourcing destination.
12. Transportation and Haulage services (logistics)
Tanzania has a problem. Especially in big cities such as Dar es Salaam. The population is so concentrated in these areas that transportation becomes a big challenge. It is a very common thing to see large crowd of people at different bus stops in Dar at the close of work helplessly waiting for buses.
An investment in the transportation sector is a good investment. With the number of major traffic in Tanzania, there is need for alternative transportation such as water transportation and trains.
In places where motorcycle and tricycle are allowed, it can make a good investment.
Haulage services is very lucrative. There is constant need to transport various items from petroleum products to edible products, textile and more.