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 its 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 in. 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!
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Why Should You Start a Business 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 growth opportunities.
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 is an 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.
Tanzania is a rapidly growing country, and many international investors recognize that there is enough money to be earned there. There are many opportunities in Tanzania that many investors and companies are unaware of, particularly given the continent’s tiny but underdeveloped economy.
This is not to say that Tanzania has not evolved, as several countries have undergone economic reforms and are one of the best places to invest when compared to other countries in other regions of the world, especially because the returns can be much higher than those found in the developed world.
Tanzania is not only rich in farmlands, but also people and natural resources, and as the world’s population grows, these resources will become more important.
Most Profitable Investment Opportunities In Tanzania
Here are the most lucrative investment opportunities in Tanzania:
1. Agriculture and Agribusiness
Tanzania is an excellent place to start an agricultural business because of its favorable environment and enough rainfall. Tanzania is well-known for its agricultural exports such as Maize, coffee, and tea. As a result, agriculture is one of Tanzania’s untapped business opportunities.
You may engage in chicken farming and either export or sell the eggs locally. You may also buy dairy or meat cattle. Having a milk processing plant will be advantageous since you will be able to process value-added dairy products such as yogurt and cheese.
Fish farming is also a profitable business venture in Tanzania.
Agriculture has a ready market, and Tanzania’s climate is favorable.
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 its population.
The 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 crop production (industrial & food crops), horticulture, livestock, fisheries, and forestry.
Production of crops and horticulture contributes 29% of Agriculture GDP.
There are many financial institutions including the ministry of finance in Tanzania offer special financial assistance to Agriculture focused businesses through the Tanzania Agricultural Development Bank. Agriculture is 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 is 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 complexes and so many more. There are many aspects you can invest in real estate and make a profit.
As the population continues to grow and the economy keeps growing, one of the biggest problems is housing.
The shelter is critical for human survival, but many Africans cannot afford the exorbitant costs of housing, particularly in urban areas.
Affordable housing, such as trailer homes, tiny houses, or houses built with non-traditional building materials, can go a long way toward alleviating housing shortages in Tanzanian cities.
This kind of business, which addresses life-threatening problems, is easily able to attract international investment or grants.
3. Oil and Gas
The Oil and Gas sector is what Tanzania has not taped on yet. Both foreign and local investors can key into 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 valves, pumps, shallow drilling equipment, drilling mud, bits fittings, drilling cement, 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 filling plants, retail distribution, and development of simple, flexible, and much less expensive gas burners 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 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.
4. Data Storage & Cybersecurity
Every year, hackers and cybersecurity breaches cost African companies more than $3.5 billion. Because of the potential damages and losses at stake, cybersecurity is quickly becoming one of Africa’s most important emerging business opportunities.
Individuals and organizations of all sizes are under attack. From basic email scams to large-scale data theft, fraud, ransomware, espionage, critical infrastructure sabotage, and other harmful actions, the assaults vary from simple to complex.
According to the Africa Centre for Strategic Studies, up to 96% of cybersecurity events in Africa go unreported or unsolved, implying that cyber dangers on the continent are likely far greater than government figures indicate.
5. Invest in Mining Industry
Apart from oil, Tanzania is blessed with very numerous natural resources that is been given much attention. An investment in these 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
6. 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 a need to produce so many things at home. The manpower is there.
An investment in Tanzania’s manufacturing sector will yield results. Create employment and boost the economy. Consecutive governments have constantly called for investment in the manufacturing sector.
Minor household items such as toothpicks are most important in Tanzania. There are many crucial things to manufacture: Food items, water (table and sachet), fiber cables, telecommunication equipment, tires, fashion, and the list is long
Tourism is one of Tanzania’s leading foreign exchange earners and the 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 a unique 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 freshwater 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 programs that have been earmarked by the government to attract investments into the industry such as the introduction of the Tanzania Unforgettable program, branding of premium parks, development of high-value niche products, and building of new high- end international hotels chains among others.
8. Infrastructure Development
The 32 regions in Tanzania have given rise to increased demand for housing facilities. Each region is now developing its structures, hotels, and residential quarters to cater to its increasing Population.
Lots of opportunities also exist in the development of industrial parks in Tanzania.
An 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.
9. E-Commerce Business Opportunity
In the E-Commerce sector, there is still plenty of opportunity for new ideas and niches. Even though E-Commerce behemoths like Amazon and eBay seemed to have the whole industry in their clutches at the time, Shopify created a new kind of E-commerce business that was a tremendous success.
E-commerce is one of the most lucrative companies in the world today since many people like to shop from the comfort of their own homes. Create a one-of-a-kind concept, such as Shopify, and you can be certain that international investors will be eager to collaborate with you.
10. The Green Revolution
Green and eco-friendly goods and services are becoming more popular throughout the globe. Because of the challenges posed by climate change, every solution that protects the natural environment minimizes waste and pollution and encourages reuse and recycling has become a major business opportunity.
Several Tanzanian entrepreneurs and companies are already capitalizing on this potential and enjoying tremendous success.
EcoAct Tanzania has become the country’s first fully eco-friendly plastic lumbers company in Tanzania.
This highly successful business manufactures plastic lumber from recycled trash and sells it to consumers in Kenya, Uganda, Rwanda, and Sudan
The Green Revolution will undoubtedly be a fascinating topic to follow!
11. Low-Cost Private Schools
The quality of education in public schools in Tanzania is rapidly deteriorating. This is due to corruption, a lack of knowledge, an inadequate budget, and a rise in population.
As a consequence, most Tanzanian parents choose private schools to guarantee their children get superior education.
Establishing a private school is one of the business ideas in Tanzania that some entrepreneurs have already implemented, and they are seeing a decent return on their investment.
“Education is the most potent weapon you can use to alter the world” (Nelson Mandela).
Many Tanzanian nations will not be able to achieve the Millennium Development Goal (MDG) of universal primary school enrollment by 2015.
Even after years of adopting the Sustainable Development Goal 4, there has been little progress in decreasing the worldwide population of out-of-school children (SDG 4).
According to the UNESCO Institute for Statistics, overall primary enrolment in Sub-Saharan Africa was about 101 million pupils, with the private sector accounting for 10% (or almost 10 million kids).
12. Payment Alternatives
Over $100 billion in transactions are still conducted in cash in Africa each year. For astute businesses, this represents a massive and profitable financial services potential.
Since its introduction in East Africa, M-Pesa has proven to be a remarkable mobile-based money transfer and payment service in Kenya and Tanzania, where the platform processes over 200 million person-to-person transactions each year.
There is a tremendous rush in other areas of Africa for Africa’s next major money transfer and payment business. It’s a big gamble with a big chance of paying off. Payment solutions will be an important topic to monitor in the future years.
Business Process Outsourcing (BPO) is currently a multibillion-dollar multinational business that is projected to reach $52 billion in market size by 2023, increasing at an annual pace of 11%.
The growing dominance of e-commerce and the digital economy is driving a need for greater data, real-time services, and a presence across various platforms among businesses.
As a consequence, more businesses are outsourcing their accounting, data processing, customer service, human resources, and supply chain requirements.
While India and the Philippines have benefited from the surge in IT outsourcing demand in the United States and the United Kingdom, Africa has emerged as a major participant in BPO for the worldwide Francophone market.
The number of BPO firms in Morocco, Tunisia, Senegal, Mauritius, and Madagascar is growing rapidly. Morocco, Africa’s BPO market leader, employs approximately 70,000 people in the sector. In Madagascar, the number of BPOs has increased from a few in 2005 to 233 in 2018.
14. Urban logistics
Tanzanians are increasingly migrating to cities and metropolitan regions. Africa is presently the world’s fastest urbanizing region, with up to 1 billion people expected to live in urban settings by 2050.
By 2030, Africa will have 17 cities with populations of more than five million people, as well as 90 cities with populations of at least one million. The UN predicts that by 2050, the continent would have 14 megacities.
While large cities provide enormous economic opportunities, they also pose major logistical difficulties in terms of finding people and providing products and services.
A prominent example is the absence of a formal address system in many of Tanzania’s metropolitan regions.
Doing business in certain areas of Tanzania may be very difficult without precise and confirmed addresses. Identity verification, fulfilling consumer orders, and monitoring location data pose major difficulties for e-commerce firms, banks, energy providers, and a variety of local businesses.
Another major logistical headache is the last-mile delivery of products.
As the population of Tanzania’s metropolitan center increases, it places significant pressure on the country’s inadequate transportation infrastructure, making it harder to transfer products.
Road traffic in most Tanzanian major cities is already a nightmare – and it’s only going to get worse!
The good news is that throughout Tanzania, a rising number of companies are attempting to address urban last-mile delivery issues by combining technology with a network of agents on motorbikes, automobiles, and trucks.
15. Building & Construction Materials
Tanzania is experiencing a building boom, which will undoubtedly generate a lot of money for Tanzanian businesses.
It’s no surprise that Aliko Dangote, Africa’s wealthiest man, is heavily engaged in the cement business. Cement is one of the most significant materials used in the construction of workhouses, buildings, highways, and bridges, among other things.
Tanzania used to pay billions of dollars on cement imports. But not anymore. Dangote and other cement manufacturers, such as Twiga Cement, are rapidly expanding throughout the country.
Cement is only one of many building and construction materials that are in high demand across Tanzania. Steel demand is another multibillion-dollar business potential, perhaps larger than cement.
Timber (wood), roofing materials, glass, paints, plumbing, and electrical supplies are among the other goods in high demand as a result of the country’s building boom.
16. 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 SACCOs would have a considerable potential to address the large remaining demand for financial services by the large section of the population that is unbanked.
Tanzania is underinsured with a 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.
17. Low-Cost Healthcare
Tanzania is confronting a major healthcare crisis. Public hospitals are underfunded, and the majority of physicians from the country relocate to other developed countries and private hospitals.
As Tanzania’s population grows, it will reach 150 million by 2050. The area is facing a crucial challenge: laying the groundwork for long-term inclusive development. The Country continues to face high rates of infant and maternal mortality.
Malnutrition is much too prevalent, and most healthcare systems are ill-equipped to cope with outbreaks and the increasing load of chronic illnesses such as diabetes.
As a result, Tanzania’s healthcare facilities are in disrepair. With Africa’s fast-increasing population and substantial illness cases, entrepreneurs have a chance to offer cheap health care to Tanzanians.
18. Fashion and Beauty
The Tanzania fashion and cosmetics industry is expanding at a rapid pace. The country’s youthful population offers a ready market for fashionable clothes. Across Tanzania’s rapidly expanding metropolitan regions, various types of clothes, including locally-made textiles and imported designer brands, have become hot-selling items.
Hundreds of emerging stars in Africa are establishing profitable companies in the fashion and cosmetics industries. I’ll give you a few intriguing instances.
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 the generation of additional energy and efficiency in energy consumption as priorities in Vision 2025.
Investment opportunities exist in the 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.
20. Internet Access and Communication Technology
The internet market in Tanzania is worth billions of dollars. It comes as no surprise that digital behemoths like Google and Facebook are working hard to enhance internet access for millions of Africans. Google’s Project Loon and Facebook’s Free Basics are just two of many audacious efforts to link Africa.
However, some astute Tanzanian entrepreneurs are already making significant inroads into the internet access industry.
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.
The 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 to 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.
21. 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 a 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 a need for alternative transportation such as water transport and trains.
In places where motorcycles and tricycles are allowed, it can make a good investment.
Haulage services are very lucrative. There is a constant need to transport various items from petroleum products to edible products, textile, and more.
22. Off-Grid Solar Installation and Power Supply
While politicians in Europe and North America argue the best energy transition plan for their respective nations, Tanzania offers a clean and open slate for renewable energy, particularly solar.
The battle to distribute solar electricity throughout Tanzania has grown into a multibillion-dollar business that attracts entrepreneurs and investors from both inside and beyond the continent.
The enormous potential for off-grid solar solutions makes solar one of the most appealing business opportunities in Africa right now.
And there is a lot of demand.
Over 600 million Africans are fed up with waiting for electricity from centrally controlled power networks that are sluggish to install, inefficient, and unresponsive to the continent’s increasing power demands.
Solar companies such as M-Kopa, Offgrid Electric, Azuri, Mobisol, Lumos, GLP, and others are strategically entering Tanzania’s off-grid solar energy industry and have garnered about $1 billion in funding so far.
This will undoubtedly be an interesting sector to follow as more money and companies compete to meet Africa’s huge need for off-grid solar solutions.