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U.S. Department of State 
Tanzania Country Commerical Guide 
Office of the Coordinator for Business Affairs 
 
 
 
                     COUNTRY COMMERCIAL GUIDE 
                             FY 1996 
 
 
     CONTENTS 
 
Chapter 
 
I.          Executive Summary 
II.         Economic Trends and Outlook 
III.        Political Environment 
IV.         Marketing U.S. Products and Services 
V.          Leading sectors for U.S. exports and investment 
VI.         Trade Regulations and Standards 
VII.        Investment Climate 
VIII.       Trade and Project Finance 
IX.         Business Travel 
X.          Appendices 
Appendix A:    Country Data 
        Appendix B:    Domestic Economy 
        Appendix C:    Trade Figures 
        Appendix D:    Investment statistics 
        Appendix E:    U.S. and country contacts 
        Appendix F:    Trade Event Schedule 


 
CHAPTER I 
 
 
EXECUTIVE SUMMARY 
 
As one of the world's least developed nations, Tanzania is still 
striving to consolidate 10 years of economic and five years of political 
restructuring.  While Tanzania continues to make a concerted effort to 
liberalize its underdeveloped economy, substantial barriers still exist 
for those firms wishing to invest in Tanzania.  Bureaucratic 
intransigence, poor infrastructure and a spiraling inflation rate are 
just some of the hurdles interested investors must overcome to establish 
a permanent presence in Tanzania.  In addition, regional setbacks beyond 
the control of the Tanzanian government have hindered Tanzania's growth 
over the last fiscal year. 
 
On the positive side, the Tanzanian government is still eager to attract 
foreign investors wishing to capitalize on the only stable country in 
East Africa.  Over the last 12 months, the Tanzanian government has 
continued its efforts to rid itself of its unwieldy and unprofitable 
parastatal corporations.   In addition, the country continues to offer 
attractive investment incentive to those individuals and firms wishing 
to invest in Tanzania.  Furthermore, Tanzanian efforts to liberalize its 
foreign exchange control regime have allowed all sectors in the economy 
to expand their horizons and attract foreign capital. 
 
While Tanzania still relies heavily on agriculture for the bulk of its 
GDP, other sectors have come to the forefront as investment 
possibilities.  Since 1994, the government has gone out of its way to 
attract foreign investors in the telecommunications, tourism and mining 
sectors.  In addition, a number of highly visible international 
businesses have settled in Tanzania with the aim of making Tanzania 
their East African headquarters.  These firms plan on expanding their 
operation with an eye towards exporting manufactured goods to other East 
and Southern African nations. 
 
Historically, United States private investment has been limited in 
Tanzania.  Tanzania's major trading partners continue to be the United 
Kingdom, Germany, India, Japan, China, Kenya and Italy (with the United 
States lagging far behind).  Recently however; as noted above, a number 
of American firms have set up shop in Tanzania, including a large multi-
national manufacturing firm, a large U.S. based international bank, an 
internationally recognized hotel chain, a large multi-national 
communications firm and a large U.S.-based tobacco company.  In 
addition, over the last 24 months, Tanzania has increased its demand for 
American manufactured goods, as well as U.S. grown food stuffs.   
Sectors with the leading prospects for U.S. exports to Tanzania include:
 
-        telecommunications equipment and services 
-        computer software 
-        agricultural machinery, equipment and inputs 
-        travel and tourism services 
-        construction equipment 
-        computers and computer peripherals. 
 
Politically, Tanzania continues down the road toward multiparty 
democracy.  In 1992, the Tanzanian Constitution was amended to allow for 
more than one political party.  In addition, Tanzania is presently 
preparing for its first multiparty national elections for both the 
executive and legislative branches of government.  Multiparty elections 
are scheduled for 29 October 1995, at which time, the citizens of 
Tanzania will choose a new President and a new parliament. 
 
The Country Commercial Guide is available on the National Trade Data 
Bank on CD-Rom or through the Internet.  Please contact STAT-USA at 1-
800-STAT-USA for more information.  To locate country Commercial Guides 
via the Internet, please use the following World Wide WEB Address:  
WWW.STAT-USA.GOV.  CCGS can also be ordered in Hard Copy or on diskette 
from the National Technical Information Service (NTIS) at 1-800-553-
NTIS. 


 
CHAPTER II 
 
I. ECONOMIC TRENDS AND OUTLOOK 
 
According to official Tanzanian statistics, Tanzania's average economic 
growth for FY 1994/95 was approximately 3.2 percent per annum.  This 
marks a 20 percent reduction in growth from FY 1993/94, when economic 
growth figures indicated that the Tanzanian economy expanded by 
approximately 4 percent per annum.  Over the last eight years, Tanzania 
has experienced positive economic growth averaging 3.5 to 5 per cent per 
year since 1986. 
 
Inflation, which has remained fairly constant over the last few years at 
approximately 20 percent, has risen sharply during the first half of 
1995 to approximately 60 percent. 
 
Governmental budget performance over the last 12 months has been 
disappointing due to low revenue collection, and the government's 
inability to control expenditures.  Total revenue collection between 
July 1994 and March 1995 was approximately TShs.238.2 billion (USD 441 
million),  4 per cent below target.  However, this was offset by revenue 
collection in March 1995, which coincided with the annual licensing 
season.  Revenue collection for this period was TShs 400 million (USD 
74.1 million), surpassing the monthly target of TShs 270 million (USD 50 
million) by almost 50 per cent.  Many hope that this trend will continue 
as a result of the governments decision to set up  a new independent 
revenue collection institution known as  "The Revenue Authority".  The 
Revenue Authority will be controlled by a board of appointed members 
from the private and public sectors, and will oversee government revenue 
collection.  This institution is scheduled to replace the existing 
poorly functioning revenue departments which are already in the 
Tanzanian government. 
 
On the expenditure side, the government's recurrent expenditures reached 
TShs.300 billion (USD 556 million) at the end of March 1995, surpassing 
targets by 9 per cent.  Much of this overspending is the result of lax 
governmental controls, ad hoc extra-budget spending directed by high 
level government officials outside the Ministry of Finance, and higher 
debt service payments. 
 
The external payment situation in Tanzania remains strained despite a 
slight improvement in export earnings from non-traditional products.  In 
addition, the increase in world market prices for Tanzania's traditional 
exports such as coffee, sisal, cashew nuts and cotton have helped 
Tanzanian producers see a larger return on their initial investments. 
Parastatal organizations performance during the year remained poor.  
Concomitantly, The Presidential Parastatal Sector Reform Commission 
(PPSRC) continues to scrutinize and privatise some of the nation's 
parastatal corporations.  Recently, a highly vocal group of citizens and 
politicians, including former Tanzanian President, Julius K. Nyerere, 
have expressed strong vocal views that the Commission should be retired 
and that the privatization process should stop.  However, as of early 
July 1995,  the Tanzanian government remains steadfastly in favor of 
continuing the privatization process, although at a much slower rate 
than most donors would like. 
 
Regarding the money supply, the Tanzanian government has performed below 
expectations.  Unofficial estimates indicate that the money supply for 
the year ending March 1995 increased by  approximately 33.2 per cent as 
compared with a rise of 30.9 per cent during FY 1994.  This, combined 
with the recent depreciation of the Tanzanian Shilling (Tsh), has had an 
adverse effect on the economy.  The Tanzanian Shilling has depreciated 
by approximately 16 percent from Tsh 540/$1.00 in January, 1995 to Tsh 
640/$1.00 in July, 1995. 
 
The Tanzanian government has made some significant strides in opening up 
the economy.  One area in which the government seems to making some 
headway is the liberalization of interest rates and the unification of 
exchange rates.  Both are positive moves which should help the economy 
rebound in FY 1996. 
 
Principal Growth Sectors 
 
For the next ten years principal growth sectors will remain mining, 
construction, and agriculture, as well as, trade, tourism, 
infrastructure and technology development. 
 
Agriculture 
 
Tanzania's economy continues to be dominated by agricultural production 
which accounted for approximately 49% of GDP in 1994.  Output remains 
predominantly based on small holder production.  Estate cultivation was 
centered on sisal, sugar, tea, and to a lesser extent coffee, tobacco, 
rice, wheat and wattle.  Traditional exports such as coffee, cotton, 
sisal, cashew nuts, cloves, tea and tobacco remain the pillars of export 
income generation.  Recently, the Tanzanian government, at the urging of 
the international donor community, has placed a great deal of emphasis 
on agricultural export diversification, stressing the switch from 
traditional to non-traditional exports such as horticultural products, 
spices, fishery products and manufactured goods. 
 
As a result of the government's efforts to enhance non-traditional 
exports, a number of large scale irrigation and non-traditional 
agricultural projects have been initiated over the last few years.  
These include Kipunga rice farming in Mbeya and Dakawa in Morogoro 
region.  Such projects offer definite opportunities for U.S. firms 
interested in moving into the Tanzanian market place.  These 
opportunities have increased due to the after effects of the 1994-95 
East African drought, which adversely affected a number of key food 
production areas in Tanzania.  These areas could benefit greatly from 
outside investment and sustained private developmental projects. 
 
Industry 
 
During 1994/5, Tanzania's industrial sector remained weak, though small 
gains were posted in the production of cement, soft drinks, corrugated 
iron sheeting, food processing, chemicals, leather products and 
textiles.  Tanzania's industrial sector contributed approximately 9% to 
the GDP of the nation; this in spite of the disruptive nature of 
continuous power supply shortages from November 1994 to March 1995.  
Liquidity problems, poor management, lack of spare parts, insufficient 
capital to import raw materials and stiff outside competition from 
imported goods contributed to the low performance of the industrial 
sector. 
 
Privatization and diversification of Tanzania's industrial sector is 
progressing at a slow but steady pace.  For instance, while no sale 
agreements were signed during the month of April 1995, the Presidential 
Parastatal Sector Reform Commission (PPSRC) was in the process of 
completing 9 parastatal transactions during the month.  The PPSRC has 
listed 368 parastatal corporation for privatization. 
 
Mining 
 
Mining continues to emerge as an important sector in Tanzania's  
developing economy and represents approximately 13% of the country's 
GDP.  Tanzania is endowed with an assortment of mineral deposits 
including gold, diamonds, salt, gypsum, gemstones, iron ore, natural 
gas, phosphates, coal, nickel, and cobalt.  Effective exploitation of 
these resources has been hampered by a lack of capital, poor 
infrastructure, bureaucratic inefficiency and limited technology. 
 
Over the last few years, the Tanzanian Government has relaxed its 
regulatory control over this sector, removing a number of barriers which 
previously limited foreign ownership of mineral exploitation 
enterprises.  Investor interest in exploiting Tanzania's mineral 
deposits remains high with a number of internationally capitalized 
projects moving forward at a steady pace.  Mining is considered a 
priority sector by the Tanzanian government and as such, Tanzania's 
investment code provides for various incentives to induce investment in 
this area. 
 
Construction 
 
The construction industry continues to grow at a rate of approximately 
7.5% per annum.  Growth in the construction industry offers increased 
opportunities to U.S. products and services in this field. 
 
Tourism and Other Services Sector 
 
Tanzania's tourism sector continues to grow at an impressive rate.  
During 1995, Tanzania saw a marked increase in the amount of 
international investment in the tourism sector.  A number of well known 
internationally acclaimed hotels are under construction, and are 
expected to be completed and operational during FY 1996.  While most of 
Tanzania's tourism sector investment remains in the northern part of the 
country, in what is known as the Northern Safari Circuit (Ngorongoro 
Crater, Serengeti Plains, Lake Manyara) a number of governmental 
initiatives are trying to open up the Southern Circuit (Selous Game 
Reserve, Ruaha National Park) to both small and large scale investors.  
Unfortunately, service facilities for this sector are in poor shape, and 
desperately need outside investment to bring them up to international 
standards.  Furthermore, while international interest in Tanzania's 
wildlife remains ever expanding, Tanzania's under-developed 
infrastructure has limited economic development in this area.  As such, 
firms wishing to invest in infrastructure improvements should consider 
Tanzania a viable investment option.  Contribution of various services 
sectors to GDP in 1994 were as follows:  trade--10.8 per cent; transport 
and communication--6.25 per cent; business finance services--11.9 per 
cent; and other services--10.8 per cent. 
 
Government Role in the Economy 
 
Tanzania's socialist economic policies pursued between 1967 and 1985 
effectively barred or strongly discouraged private sector 
 
growth.  Credit rationing led to more than 80 per cent of the loanable 
funds being allocated to public-sector firms.  Equally damaging, was the 
Tanzanian government's rationing of foreign exchange in favor of public 
enterprises while maintaining an overvalued currency.  Furthermore, high 
inflation rates, large fiscal and trade deficits, and the 
unpredictability and insecurity of the policy environment discouraged 
many private investors from assuming the financial risks inherent in 
long term investments.  As a result, those individuals who did decide to 
invest in Tanzania preferred to invest in commercial/trading activities 
which limited their risk and provided immediate returns. 
 
Recently, changes in the foreign exchange system (including the 
introduction of foreign exchange shops and unification of the multiple 
exchange rates in August 1993) have been accompanied by equally radical 
reform of domestic monetary policy.  Real interest rates, first turned 
over to market forces in 1992, have positively affected the investment 
climate, and are now market driven.    Unfortunately, the poor economic 
performance of the government over the last 12 months has had a 
deleterious effect on these rates and a credit crisis has emerged in the 
country.  While this crisis is debilitating, experts do not expect that 
it will affect Tanzania's long-term economic growth. 
 
There were substantial structural reforms made to the financial sector 
following the report of a presidential commission of inquiry into the 
monetary and banking systems in July, 1990.  Banks can now be 
established as private sector institutions, and a number of foreign 
banks have opened up in Tanzania, including: Citibank of New York, 
Stanbank of South Africa, and Standard Charter Bank of Great Britain. 
 
Taken together, the monetary and financial sector changes have created a 
fairly stable macroeconomic framework for private sector development.  
The incentive structures which existed (borrowers favored over savers, 
importers over exporters) have been reversed, and demand pressures have 
been contained.  Unfortunately, the two key indicators of short-term 
instability and excess demand -- the nominal exchange rate and domestic 
inflation -- have risen beyond expectations.  Most experts believe that 
the rise in the exchange rate and the rise in inflation are both related 
to recent international donor decisions to cut international aid to 
Tanzania and the governments inability to curtail spending. 
 
Under Tanzanian President Ali Hassan Mwinyi, the Tanzanian Government 
has set out to reverse the socialist policies of Former President 
Nyerere and limit government interference in the economy.  As such, the 
government has embarked on a policy of selling off government parastatal 
corporations.   This effort has continued over the last twelve months 
with a number of large parastatal corporations going up for auction.  
The largest and most notable parastatal corporation, on the auctioning 
block, 
 
the Tanzanian Cigarette Company, has been offered to RJR/Nabisco Corp., 
which is in the process of concluding the negotiations for the company. 
 
The Tanzanian government continues to provide incentives to outside 
investors wishing to invest substantial amounts of capital in Tanzania.  
In 1990, the government created the Investment Promotion Center (IPC) 
and charged it with promoting international investment in Tanzania, 
assisting potential investors, and providing investment incentives to 
individuals and companies wishing to set up shop in Tanzania.  
Unfortunately, IPC tax exemptions were granted non-transparently and 
excessively, leading to loss of government revenue.  Concerted donor 
pressure to reform the IPC resulted in modifications to the IPC.  The 
government introduced in 1995 a uniform tax of 5% on imported capital 
goods, thereby rationalizing (and encouraging) investment across the 
board while reducing the negative effect of excessive special 
exemptions. 
 
Balance of Payments (In million U.S. Dollars) 
 
ITEM                        1994          1995         1996 
 
A. Trade Account          -985.6        -991.5     -1,004.0 
   Exports                 519.4         600.7        660.0 
   Imports               1,505.0       1,592.2      1,664.0 
 
B. Service (Net)          -150.9        -164.4       -209.4 
   Receipts                441.4         514.0        506.4 
   Payments                592.3         678.4        715.8 
   o/w Interest            153.4         146.0        120.5 
 
C. Transfer (Net)          746.7         879.0       1,034.0 
   Inflows                 779.2         909.0       1,059.0 
   o/w Govt                405.3         439.6         589.0 
   Outflows                 32.5          30.0          25.0 
Current Account (Net)     -389.8        -276.9        -179.4 
 
D. Capital Account (Net)  -130.5          47.2         -22.7 
 
E. Overall Balance        -129.9         179.6        -152.0 
 
* Figures for 1995 are estimates while those of 1996 are projections. 
 
Infrastructure 
 
Tanzania's reputation as having an extremely poor infrastructure is 
unfortunately accurate.  The road network is trying to recover from 25 
years of neglect and decay.  Since 1988, a massive multi-donor roads 
program was established and is working to rehabilitate the trunk 
regional roads.  Funds allocated for road maintenance have steadily 
increased in recent years.  In rural areas, most roads remain in poor 
condition, and seasonal washouts are commonplace in many parts of the 
country.  As of July 1995, it takes approximately three days to travel 
by road from the capital, Dar es Salaam, to the second largest city, 
Mwanza (a total road distance of 1202 kms or 751 miles). 
 
Tanzania has two railway systems which operate independently of one 
another.  The Tanzania Railways Corporation (TRC) operates the internal 
rail network that connects most of the major Tanzanian cities and 
agricultural areas.  In addition, they operate the rail system that 
connects Tanzania with Uganda, Burundi and Rwanda.  The 
Tanzanian/Zambian Railway Authority (TAZARA) connects the port of Dar es 
Salaam with Zambia, and was constructed by the Chinese during the cold 
war.  With the end of apartheid in South Africa, TAZARA and the port of 
Dar es Salaam have been forced to compete with the South African Railway 
system and the ports of Durban and Port Elizabeth.  While this 
competition has improved the quality and service of both the port and 
TAZARA, it has drastically reduced the amount of income generated by 
both operations. 
 
Tanzania's telecommunications infrastructure remains underdeveloped.  
Communication facilities are limited, and telephone service highly 
unpredictable, especially during the rainy seasons.  International 
service is difficult to obtain, and calls remain very expensive.  
Tanzania's communications facilities are not capable of handling high 
speed data transmissions for computers or modems; however, fax 
transmissions are received on a regular basis throughout the country.  
It should be noted that telephone service outside of major metropolitan 
areas is virtually non-existent. 
 
For the past four years Tanzania has been experiencing a series of power 
(electricity) shortages in its main gridlines.  These shortages are a 
result of the continuing effects of the regional drought of 1994/95.  As 
Tanzania remains 95% dependent on hydro-electric power, the 1994/94 
drought seriously hampered the Tanzania Electric Supply Company's 
(TANESCO) ability to generate enough power to meet the demands of the 
economy.  Starting in November 1994, Tanzania was forced to endure six 
months of rationing, which meant that most Tanzanian factories, 
businesses and homes were without power from 0600 hrs to 2000 hrs, seven 
days a week.  While the situation has improved over the last few months, 
power rationing continues as a result of the nation's failure to 
maintain the hydro-electric facilities that generate the majority of the 
countries power. 
 
In the medium term, an emergency program funded by the international 
donor community to augment Tanzania's thermal power generation capacity 
will come on line in late 1995.  In addition, small hydroelectric power 
generating increases are expected to come on line as well.  Over the 
long term, development of the Songo Songo Natural gas reserve and 
Mchachuma  coal fields will help alleviate Tanzania's dependence on 
hydro-electric power generation. 


 
CHAPTER III 
 
POLITICAL ENVIRONMENT 
 
Political System and Schedule for Election 
 
Under President Mwinyi, The United Republic of Tanzania embarked on a 
path of political and economic transformation after 30-plus years of 
Julius Nyerere's socialist economic policies and single-party rule.  The 
pace of reform in both spheres has been slow, but the momentum is in the 
right direction.  Tanzania remains an island of stability, especially 
relative to its neighbors, a situation which augurs well for a largely 
peaceful transition. 
 
The most dramatic political change occurred in 1992, when the 
constitution was amended to permit opposition to the ruling Chama cha 
Mapinduzi (CCM) party.  Currently, twelve new political parties have 
permanent registration for a total of 13 national recognized political 
parties.  Multiparty elections for the Union President, Union 
parliament, Zanzibari President and the Zanzibari House of 
representatives are scheduled for October 1995. 
 
The United Republic of Tanzania is composed of the Zanzibar Islands 
(Zanzibar, Pemba and Mafia islands) and Tanganyika.    The two sovereign 
states united in 1964.  Zanzibar continues to maintain a semi-
independent government within the Union which maintains jurisdiction 
over most governmental areas including foreign and defense policy.  In 
recent years, tensions between Zanzibar and Tanganyika have been on the 
rise over the issue of Zanzibari sovereignty.  While these tensions 
still exist, most experts believe that they will be resolved peacefully 
and through dialogue and cooperation. 
 
Nature of Bilateral Relations with the U.S. 
 
The U.S. and Tanzania maintain increasingly cordial relations.  While 
our bilateral aid program in Tanzania, approximately US$ 30 million 
annually, is not insignificant, the United States is ranked 13th among 
major donors. 
 
U.S. assistance to Tanzania is likely to decline in the future, partly 
as a result of overall aid cuts in foreign aid funding, and partly due 
to the problems of corruption and fiscal mismanagment in Tanzania.  
These circumstances could change, should a new democratically-elected 
government, committed to sound fiscal management and market-oriented 
economic policies assume leadership in the October 1995 elections. 
 
Major Political Issues Affecting Business Climate 
 
The Tanzania political atmosphere remains stable and the government is 
undertaking a measured, but steady program towards multiparty democracy.  
Tanzania has been blessed with relative peace since independence, and 
the economic decline in Tanzania was a result of its centralized 
socialist economic policies rather than political or military turmoil. 
 
The nature of the current political changes in Tanzania show all of the 
signs of a peaceful transition to a new political order and thus pose no 
significant threat to economic development.  With the advent of multi-
partism and calls for a review of the current union constitution, the 
future status of the union of Tanganyika and Zanzibar remains unclear.  
The economic consequences of any potential split in the union would 
depend upon the nature of the decision to end the union.  The 
environment in Tanzania is becoming increasingly politicized with the 
advent of multi-partyism.  However, given the nature of the people and 
Tanzanian politics, civil disturbances are unlikely. However, at least 
one new activist in the move toward multi-partyism is attempting to gain 
political support through exploitation of popular discontent associated 
with economic superiority exercised by the minority non-indigenous Asian 
portion of society. 
 
Additionally, with an increasingly independent press, the following 
issues are among those being most vigorously debated:  corruption in 
government ranks; the wisdom of pursuing privatization; and divestiture 
of parastatals. 
 


CHAPTER IV 
 
MARKETING U.S. PRODUCTS AND SERVICES 
 
The best and most effective way of marketing in Tanzania is through an 
agent/distributor, a local representative or an existing local 
suppliers.  This mode has three distinct advantages: 
 
  a)    it enables firms to maintain continuity.; 
  b)    it places the task of ensuring payment on the local partner and 
as such, reduces risk and costs; and 
  C)    it provides protection to American suppliers who may be less 
than knowledgeable about Tanzanian business practices. 
 
Distribution and Sales Channels 
 
The following types of distribution and sales channels exist in 
Tanzania: 
 
-      a)  an agent/distributor; 
-      b)  a wholesaler; 
-      c)  retailers; most of whom have small retail shops which 
specialize in one type of product; and, 
-      d)  importers with bonded warehouses who import (mostly cars and 
heavy duty vehicles and buses) to bonded houses until items are 
purchased by convertible currencies (Dollar, Pound sterling, D-Mark, 
Yen). 
 
Use of Agents/Distributors; Finding a Partner 
 
This is increasingly the preferred method of doing business in Tanzania.  
The Embassy will assist where possible in finding agents/distributors 
for U.S. firms interested in a relationship with a local partner. 
 
Franchising 
 
There are a number of local firms with franchising arrangements with 
U.S. firms.  With the change currently underway in Tanzania, this 
trading arrangement is expected to increase significantly. 
 
Direct Marketing 
 
Direct marketing in Tanzania must be conducted with caution, 
particularly when it comes to the question of payment.  The agreement 
must have built in protection to ensure payment.  Tanzania has a poor 
track record when it comes to direct marketing and U.S. firms interested 
in pursuing this type of venture should do so with extreme caution. 
 
Joint Ventures/Licensing 
 
With the advent of privatization and commercialization of parastatals, 
opportunities abound for joint ventures/licensing arrangements.  As 
Tanzania is possibly the most stable nation in East Africa and has 
access to Kenya, Uganda, Rwanda, Burundi, Zaire, Zambia, Malawi and 
Mozambique markets, through its membership in the Preferential Trade 
Area (PTA), The Southern African Development Community (SADC), and the 
Common Market for East & Southern Africa (COMESA), Tanzania remains a 
viable option for firms interested in establishing a physical presence 
in East Africa. 
 
Steps to Establish an Office 
 
U.S. firms wishing to establish offices in Tanzania have two choices, 
namely, establishing a joint venture company or a wholly-owned U.S. 
subsidiary. 
 
A joint venture operation offers unique advantages and disadvantages.  A 
firm wishing to establish a joint venture in Tanzania can benefit from 
the advice and knowledge of a local partner who can provide unique and 
often critical information on the best way to navigate the confusing mix 
of governmental regulations and Tanzanian business customs.  Corporate 
tax for joint ventures and wholly owned foreign firms operation solely 
in Tanzania are subject to a 35 percent corporate tax.  International 
firms which have branch operations in Tanzania will also be accountable 
for a 20 percent withholding tax.   
 
The drawback to joint venture operations are that Tanzanian business 
practices are radically different from those of the United States.  This 
on occasion has led various joint venture operations into trouble as 
partners sometimes have difficulty bridging the cultural gap.  In 
addition, while joint venture partners can assist in navigating the 
sometimes confusing business waters of Tanzania, they can also create 
problems as Tanzanian businessmen have a reputation for less than 
ethical business practices.   
 
At present there are no major wholly owned subsidiary operations in 
Tanzania; however one major U.S. manufacture is in the process of 
setting up such an operation. 
 
For both types of operations, the firms would need the services of an 
attorney to draw up the articles and memorandum of associations, a 
necessary document for registration by the Registrar of Companies.  
Trading licenses have to be obtained separately through entirely 
different procedures.  American companies which have been most 
successful at establishing themselves in Tanzania have used expatriate 
managers to oversee their operations and to help move the start-up 
process along. 
 
Selling Factors/Techniques 
 
Selling factors/techniques in Tanzania depend on the customers as 
follows: 
 
    - Government/parastatal:  These are dependent on issuance of tenders 
either annually or for specific goods and services.  The procurement 
under this arrangement is by central tender boards.  On certain 
unspecified occasions, procurement could be on direct solicitation. 
 
    - Private companies/firms:  Selling factors/techniques would be by 
direct solicitation or traditional sources of supplies. 
 
    - Private organizations/NGO's:  They tend to utilize foreign 
institutions which are either associated with or are based in their 
countries of origin. 
 
Advertising and Trade Promotion (Including Listing of Major Newspapers 
and Business Journals) 
 
Advertising 
 
The following media can be utilized for advertising: 
 
Media Advertising Company Limited, P.O. Box 6905, Dar es Salaam, 
Tanzania, (Phone 255-51-36150/46339). 
 
The Advertising Manager, Daily and Sunday News, P.O. Box 9033, Dar es 
Salaam, Tanzania, (Phone 255-51-29881/2/3/4, Fax 255-51-46227 Telex 
41071 NEWSTA-TZ). 
 
The Managing Editor, Business Times, P.O. Box 7125, Dar es Salaam, 
Tanzania. 
 
The Managing Editor, Change, P.O. Box 7125, Dar es Salaam, Tanzania. 
 
The Executive Director, Tanzania Chamber of Commerce, Industry and 
Agriculture, P.O. Box 9713, Dar es Salaam, Tanzania, (Phone: 255-51-
31421/31947 Fax 255-51-30898 Telex 41424 MICONSULT-TZ). Their Commercial 
Newsletter. 
 
Radio Tanzania Dar es Salaam, P.O. Box 9191, Dar es Salaam, Tanzania. 
 
Radio Tumaini, P.O. Box 167, Dar es Salaam, Tanzania. 
 
The Board of External Trade, P.O. Box 5402 Dar es Salaam, Tanzania, 
(Phone: 255-51-35609; Fax: 255-51-46240)--Their "Trade Currents" 
Journal. 
 
Radio One, P.O. Box 163, Dar es Salaam, Tanzania, (Telex 41133 IPP-TZ, 
Fax 255-51-44460). 
 
Coastal Television Network (CTN), P.O. Box 8983, Dar es Salaam, 
Tanzania, (Phone 255-51-26063/31799/44047). 
 
Independent Television (ITV), P.O. Box 163, Dar es Salaan, Tanzania, 
(Telex 41133 IPP-TZ, Fax 255-51-44460). 
 
Dar es Salaam Television Network, P.O. Box 2122, Dar es Salaam, 
Tanzania, (Telex 41499). 
 
Trade Promotion 
 
Their are two trade fairs held annually in Tanzania: 
 
    A)  The Dar es Salaam International Trade Fair, P.O. Box 5402, Dar 
es Salaam, Tanzania, (Telex 41408 Fax 255-51-46240), which is organized 
by Board of External Trade every July.  This trade fair attracts local 
and foreign participants and is considered the largest and most 
important trade fair in the country.
 
    B)  The Arusha Agricultural Show, P.O. Box 3010, Arusha, Tanzania, 
(Telex 42141 TFAAR-T) which is organized by Tanganyika Farmers 
Association Limited in September.  This trade fair caters to the 
agricultural sector and attracts local and foreign participants. 
 
Pricing Product 
 
In most cases, pricing is determined by market forces.  The Tanzanian 
government has eliminated most price control; however, the government 
still regulates the price of gasoline, diesel fuel and kerosene. 
 
Sales Service/Customer Support 
 
Sales service and customer support are considered crucial to marketing 
success in Tanzania.  These include advertising, training key personnel 
in the product, keeping them abreast of all changes, providing them with 
calendars, diaries, key rings for free distribution to customers and 
maintaining a fairly well trained cadre of servicing technicians capable 
of advising customers, servicing their equipment and repairing it.  Most 
firms in Tanzania do not consider customer support and sales service as 
important and as such, suffer from the lack of customer loyalty. 
 
Selling to the Government 
 
Selling goods and services to the Tanzanian government is through 
tenders which are called or issued annually at the beginning of each 
calendar year. 
 
Protecting Your Product From IPR Infringement 
 
Although trade marks, copyright and patent laws are in the statute 
books, the machinery for its enforcement is nonexistent, and as such, 
depends largely on the aggrieved party pursuing the issue in the courts.  
This process has been known to take years to complete. 
 
Need for a Local Attorney 
 
A local attorney is essential for  the preparation of all the necessary 
legal documents required for registration of company. 


 
CHAPTER V 
 
LEADING SECTORS FOR U.S. EXPORTS AND INVESTMENT 
 
Best prospects for non-agricultural goods and services are as follows: 
 
-    Telecommunication equipment 
-    Agricultural machinery and equipment 
-    Computer software 
-    Construction equipment 
-    Mining industry equipment 
-    Travel/tourism service 
-    Computers/peripherals 
 
Telecommunication Sector in Tanzania Acquires Financing for Improvement 
 
Part 1 
 
Rank of Sector: 1st 
Name of Sector: Telecommunication equipment 
ITA Industry Code: TEL 
 
Part 2 
 
Rehabilitation of the telecommunication sector is being financed by the 
international donor community through the the Tanzania Telecommunication 
Company, Limited (TTCL).  In addition to international financing, the 
Tanzanian government is interested in attracting private investment in 
certain areas of the telecommunications sector, such as the cellular 
communications sub-sector.  This interest will allow for substantial 
investment opportunities. A number of U.S. companies have already 
invested in Tanzania while a number of others are investigating the 
possibility of moving into the market.  Major U.S. competitors for 
supplying the facilities include Japan, Germany and Great Britain.  
Cellular telephones have already been introduced in one of the four 
zones in Tanzania by Millicom Int, a joint venture project based in the 
United States and Europe.  This venture has met with outstanding success 
and as a result the Tanzanian government is looking to expand outside 
investment in this sub-sector.  A joint venture company between Malaysia 
and Tanzania has been licensed to provide similar services for the 
coastal zone.  In addition to private sector development, the 
international donor community is sponsoring a five year, U.S.$ 250 
program to rehabilitate and expand the existing telephone network. 
 
Part 3 
 
(Figures are in Million U.S. Dollars and are unofficial estimates) 
 
Data Table                1994            1995            1996 
 
Total market size         n/a              n/a            n/a 
Total local production    -0               -0             -0 
Total exports             -0               -0             -0 
Total imports            3.061            3.034*          n/a 
Imports from the U.S.     1.2              0.88*          n/a 
 
* Figures are for the first quarter (Jan-Mar) 1995 
 
Tanzania Encourages Importation of Agricultural Equipment 
 
Part 1 
 
Rank of Sector:  2nd 
Name of sector: Agricultural machinery and equipment 
ITA Industry Code: AGM 
 
Part 2 
 
The agriculture sector is considered the backbone of Tanzania's economy.  
Although the sector's growth has remained constant over the past ten 
years, the government places special emphasis in its development and 
modernization.  This is demonstrated by levying low import duties for 
agricultural equipment compared to other sectors.  Major suppliers of 
agricultural equipment to Tanzania include the U.K., Canada and the 
Netherlands. 
 
Part 3 
 
(Figures are in Million U.S. Dollars and are unofficial estimates) 
 
Data Table                1994        1995        1996 
 
Total market size          n/a        n/a         n/a 
Total local production     -0         -0          -0 
Total exports              -0         -0          -0 
Total imports             14.4        31.2         38 
Imports from the U.S.     0.52        0.65        0.8 
 
 
Software Demand to Rise 
 
Part 1 
 
Rank of sector: 3th 
Name of sector: Computer software 
ITA Industry code: CSF 
 
Part 2 
 
The software and computer consultantcy service sector in Tanzania is 
expected to grow substantially over the next few years.  Private 
investment in this area has been limited; however it is expected to grow 
over the next few years as Tanzanian parastatal corporations are 
privatized and computers are introduced to the market place. 
 
Part 3 
 
Figures for this sector are included in the computer/peripherals sector.  
It has been difficult to separate the two for the current data system in 
Tanzania. 
 
Expansion in Construction Industry to Continue 
 
Rank of sector: 4th 
Name of sector: Construction equipment 
ITA Industry Code: CON 
 
Part 2 
 
The construction industry in Tanzania is expected to grow as 
International donors continue to finance major infrastructure renovation 
projects.  Historically, U.S. manufactured equipment has dominated the 
construction market; however, over the last few years, Japanese and 
Swedish manufactured equipment have made significant inroads.  
 
Part 3 
 
(Figures are in Million U.S. Dollars and are unofficial estimates) 
 
Data Table                1994        1995        1996 
 
Total market size         n/a         n/a         n/a 
Total local production    -0          -0          -0 
Total exports             -0          -0          -0 
Total imports              59          66          74 
Imports from the U.S.     0.3        0.45         0.5 
 
 
Contribution of Mining Sector Rises 
 
Part 1 
 
Rank of sector: 5th 
Name of sector: Mining industry equipment 
ITA Industry Code: MIN 
 
Part 2 
 
Policy liberalization in the mining sector has created a great many 
opportunities for interested investors.  Steady growth in the mining 
sector has been noted over the past eight years.  Fast expanding sub-
sectors are gemstones and gold mining.  Major U.S. competitors for 
supplying mining equipment to Tanzania include South Africa and the 
United Kingdom. 
 
Part 3 
 
(Figures are in Million U.S. Dollars and are unofficial estimates) 
 
Data Table                1994        1995        1996 
 
Total market size          n/a        n/a         n/a 
Total local production     -0         -0          -0 
Total exports              -0         -0          -0 
Total imports              5.1        4.9        5.5 
Imports from the U.S.     0.02       0.025      0.03 
 
 
The Tourist Board Aims at Revitalizing the Industry 
 
Part 1 
 
Rank of sector: 6th 
Name of sector: Travel/tourism service 
ITA Industry Code: TRA 
 
Part 2 
 
Despite the fact that Tanzania already has a well developed tourism 
sector, the potential for continued growth remains high.  While 
Tanzania's northern safari circuit is rather well developed, the 
Tanzanian government is interest in developing the southern circuit, 
too.  Historically, the southern circuit has remained underdeveloped 
because of the lack of infrastructure; however, international donor 
financing of infrastructure rehabilitation projects has breathed new 
life in the Tanzanian governments initiative to develop the southern 
circuit.  In addition, over the last few years the Tanzanian government 
has renounced its previous position that the government should control 
the tourist market.  As such, the tourism sector remains an open and 
viable option for serious investors. 
 
Part 3 
 
Statistics for this sector are unavailable.  Ranking has been done on 
estimation of the sector's potential. 
 
Computerization Grows in Tanzania 
 
Part I 
 
Rank of Sector: 7th 
Name of Sector: Computers/peripherals 
ITA industry code:    CPT 
 
Part II 
 
Most institutions in Tanzania are just starting to use computers.  While 
U.S. manufactured computers have already been introduced to the market, 
room for expansion is increasing.  Major supplying competitors are from 
the  U.K. and Japan. 
 
Part III 
 
(Figures are in Million U.S. Dollars and are unofficial estimates) 
 
Data Table                1994        1995        1996 
 
Total market size         n/a         n/a         n/a 
Total local production    -0          -0          -0 
Total exports             -0          -0          -0 
Total imports              15          17          20 
Imports from the U.S.     0.5         0.8         1.2 
 
 
Significant Investment Opportunities 
 
Three main sectors are noted to have significant investment 
opportunities: 
1. 
    A)  Mining.  Establishing U.S. company or joint venture concerns 
with Tanzania companies in the gemstones, gold, ferrous metals and 
petroleum gas mining has been identified by the international investment 
community as having good potential. 
 
      B)  Tourism:  Over the last few years, outside investment in the 
tourism sectors seems to have increased greatly as a result of a 
concerted effort by the Tanzanian government to lure potential 
investors.  Returns on investment remain high and Tanzania's reputation 
as an outstanding vacation spot for European vacationers remains strong. 
 
      C)  Fishing.  Shrimp farming along the coastal zone is one of 
several promising export oriented projects.  Deep sea tuna fishing is 
also another area of investment with high export potentials. 
 
The Government of the United States acknowledges the contribution that 
foreign direct investment makes to the U.S. economy.  U.S. Foreign 
Direct Investment is increasingly viewed as a complement or even a 
necessary component of trade.  For example, roughly 60 per cent of U.S. 
exports are sold by American firms that have operations abroad.  
Recognizing the benefits that American outward investment brings to the 
U.S. economy, the Government of the United States undertakes 
initiatives, such as Overseas Private Investment Corporation (OPIC) 
programs, investment treaty negotiations and business facilitation 
programs, that support U.S. investors. 


 
CHAPTER VI 
 
TRADE REGULATIONS AND STANDARDS 
 
Trade regulations in force include the requirement for pre-shipment 
inspections for goods whose value exceeds U.S. dollar 5,000.00 at the 
point of origin to determine value and the payable duty and tax. 
 
Recent trade reforms have abolished import and export licenses  except 
for goods deemed sensitive for health and security reasons. 
 
There are no specific standard requirements other than those normally 
expected of different types of products. 
 
Tariff and Import Taxes 
 
All imports into mainland Tanzania are liable to payment of import duty 
and sales tax.  Imports for members of diplomatic corps and specified 
U.N. agencies are exempted. 
 
For Zanzibar, only commercial imports are subjected to duty and tax.  
For the purposes of determining payable duty and tax, the value of goods 
exceeding U.S. dollar 5,000.00 will be assessed by either SGS or ITS.  
On the mainland, pre-shipment inspection companies determine the value 
of goods for purposes of duty and tax assessment.  On Zanzibar, the 
government is proposing that a post-shipment inspection be performed to 
determine tax and tariff rates; however, this proposal has yet to be 
finalized and implemented. 
 
Effective January 1995, custom duty and sales tax base was changed as 
follows: 
 
Customs:  Old base:  0, 10, 20 and 40 percent 
          New base:  5, 25, 30 and 50 percent 
 
Sales tax:  Old base:  0, 10, 20 and 30 percent 
            New base:  0, 25 and 30 percent 
 
Trade barriers 
 
Previously, Tanzania used non-tariff trade barriers to protect local 
industries and its internal market.  However, after liberalization of 
trade, tariff barriers have been adjusted to serve this purpose.  
Exceptions are on explosives, army goods, and other articles deemed to 
be sensitive to the security and health of Tanzania citizens. 
 
Despite the existence of regulations and laws, the customs department is 
the greatest hindrance to importers throughout Tanzania.  Clearance 
delays and extra-legal levies are commonplace when dealing with the 
Tanzanian Customs Department.  These hindrances can cause undetermined 
delays when importing goods into the country and should be considered 
when deciding how best to bring products into the country. 
 
Customs Valuation 
 
Effective April 1, 1994, customs valuation is based on the findings of 
the inspecting firm which is required to undertake pre-shipment 
inspections on all imported goods whose value exceeds U.S. dollar 
5,000.00.  The Tanzanian government has contracted the Swiss firm SGS 
and ITS, to perform its pre-shipment inspections. 
 
Import Licenses 
 
Import licenses have been abolished except for goods which have to be 
monitored for health and security reasons. 
 
Export Controls 
 
There are no export controls other than for protected wild animals. 
 
Import/Export Documentation 
 
The documentation for imports is specified, Import Declaration Forms 
(IDF) while CD3 forms are the documentation for exports. 
Temporary Entry 
 
The Customs Department permits entry of machinery, equipment and 
vehicles on temporary entry.  Prior permission must, however be obtained 
upon providing customs with a written request and a proof that the 
product in question will be taken out or duty and tax paid in case it is 
sold.  Bonds and bank guarantees are required for most transit trade. 
 
Labelling, Marking Requirement 
 
Standard labeling and marking currently in force are acceptable. 
 
Prohibited Imports 
 
There are none. 
 
Standards (e.g. ISO 9000 Usage) 
 
There are none. 
 
Free Trade Zones/WareHouses: 
 
A)    Free Trade Zones.  Zanzibar, a part or the United Republic of 
Tanzania, has established a Free Trade Zone. 
 
B)    Warehouses.  A number of warehouses are available in Dar es Salaam 
and these are used as transit depots for the land-locked countries of 
Uganda, Rwanda, Burundi, eastern Zaire, Zambia, Malawi and Mozambique. 
 
Bonded warehouses are also available and are currently in use by 
importers who want to hold products and goods until duty and tax is paid 
by the buyers. 
 
Special Import Provisions 
 
Zanzibar allows specified imports onto the island duty free.  Importers 
interested in doing business on Zanzibar should 
 
contact the Zanzibar Customs department for further details.  Diplomats, 
diplomatic missions and certain NGO's are allowed duty free import 
provisions.  
 
Membership in Free Trade Arrangements 
 
Tanzania is a member of SADC and PTA/COMESA. 

 
 
CHAPTER VII 
 
INVESTMENT CLIMATE 
 
Tanzania enjoys the reputation of welcoming foreign and local 
investments and in August 1990, it promulgated the National Investment 
Promotion and Protection Act (NIPPA), which established the Investment 
Promotion Center (IPC).  The IPC was designed to seek out, direct, 
assist, monitor and regulate foreign investment in Tanzania.  NIPPA 
provided for priority investment areas, conferred qualified investors 
with generous incentives and attractive benefits and spelled out 
guarantees against nationalization, as well as, provided assurances for 
disputes settlement. 
 
During 1985-1991 Tanzania underwent an intensive structural adjustment 
program initiated by IMF and World Bank.  This program was largely 
successful in bringing about a real gross domestic product growth of 
about 5 per cent.  Unfortunately, four years of successive drought have 
dampened the GDP growth rate, which during 1993 was estimated to grow at 
3.2 per cent.  Hardest hit has been the agricultural sector, from which 
over 83 per cent of Tanzania's 28 million people derive employment, 
sustenance, and is responsible for nearly 48% of foreign exchange 
earnings. 
 
Openness to Foreign Investment 
 
Tanzania is formally open to all foreign investment; however, many 
procedural barriers must be overcome by the successful investor.  The 
IPC plays a role in promoting and supporting outside investment.  A 
recent policy decision to tax imported capital equipment at a uniform, 
low rate of 5 percent is calculated to enhance Tanzania's attractiveness 
to investors. 
 
Conversion and Transfer Policies 
 
Although Tanzania continues to be plagued by intermittent shortages of 
foreign exchange, the advent of Bureau de Change shops in 1993, was 
designed to help facilitate the conversion and transfer of profits, 
dividends and other investment returns.  Repatriations and 
externalizations which were held up for years, can now, in principal 
take place in weeks.  Unfortunately, bureaucratic infighting and 
corruption can adversely affect the amount of time it takes to obtain 
official permission to transfer/remit funds. 
 
Expropriation and Compensation 
 
Expropriation 
 
Tanzania's history of expropriation culminated in 1973 with the 
nationalization of European firms in the Arusha and Kilimanjaro regions.  
That expropriatory action took place under then President Julius 
Nyerere, a long time advocate of socialism, who believed it was the 
government's responsibility to manage the market place.  Under Tanzanian 
President Ali Hassan Mwinyi, Tanzania has committed itself to free 
market reforms.  During President Mwinyi's 10 year tenure, the 
government has taken no action that leads the international community to 
believe that Tanzania will return to its policies of expropriating 
foreign interests. 
 
Compensation 
 
While there have been no recent cases of expropriation by the Tanzanian 
Government, the government does have a record of dealing fairly with 
compensation issues.  It also has a reputation of being extremely slow 
and ponderous when it comes to these issues. 
 
Disputes Settlement 
 
There have been no recent disputes for settlement involving U.S. firms 
in Tanzania. 
 
Tanzania is a member of both ICSID and MIGA. 
 
Political Violence 
 
Under one-party democracy, Tanzania has enjoyed political peace and 
tranquility for nearly 30 years.  With the introduction of political 
pluralism in 1991, the question of religious and ethnic conflict has 
been raised.  Most political observers believe that the chance for 
internecine conflict in Tanzania is minimal. 
 
Performance Requirements/Incentives 
 
The Tanzanian Government has not instituted business, work, or 
investments incentives or performance requirements. 
 
Right to Private Ownership and Establishment 
 
The right to private ownership and establishment in Tanzania, is 
guaranteed by law and the Union Constitution.  This right includes 
freedom to establish a company, to own property both movable and 
immovable, acquire property and dispose of property including business 
enterprises and intellectual property.  However, access to land is 
difficult to obtain, costly, and with few exceptions, will be on the 
basis of leasehold rather than freehold. 
 
Protection of Property Rights 
 
The laws in Tanzania protect property rights, and facilitate the 
acquisition and disposal of property, including intellectual property.  
However, it is very difficult to obtain affective protection under these 
laws. 
 
Regulatory System:  Laws and Procedures 
 
Tanzania has in place an extensive set of policies, regulations and 
procedures that greatly influence trade, commerce, employment and 
resource utilization.  Many of these provisions are outdated and reflect 
conditions in the colonial era; many others reflect socialist-era 
circumstances and have yet to be adjusted to serve the needs of a 
liberal market based economy.  Also, the justice system functions slowly 
and imperfectly and is easily influenced or manipulated by unscrupulous 
individuals.  These factors increase the cost and difficulty of doing 
business in Tanzania, but can be overcome by diligence and on the ground 
knowledge. 
 
Bilateral Investment Agreements 
 
According to the Ministry of Justice and Constitutional Affairs, 
Tanzania has a bilateral investment agreement with the United Kingdom. 
 
OPIC and Other Investment Insurance Programs 
 
OPIC Insurance Program is available to Tanzania and currently several 
projects are under consideration for OPIC Insurance.  The biggest OPIC 
insured project is the Dar es Salaam Sheraton Hotel project, where 
construction is scheduled for completion in October, 1995.  OPIC is 
currently trying to revive and update an incentive agreement with the 
Tanzania government on foreign government approvals. 
 
Labor 
 
Although labor is plentiful in Tanzania, it is unskilled and there is a 
dearth of people with management skills. 
 
Foreign Trade Zones/Free Ports 
 
A free port is in the process of being established in Zanzibar.  Free 
economic zones have been established in three places in Zanzibar and 
Pemba islands. 
 
Capital Outflow Policy 
 
Tanzania, a third world country and according to the World Bank the 
second poorest county in the world, does not encourage capital outflow. 
 
Major Foreign Investors 
 
Since the establishment of the Investment Promotion Center in 1990, the 
institution has approved about 600 projects worth approximately U.S.$ 
1.5 billion.  Investors from the United Kingdom, Thailand, India and 
Pakistan constitute more than 80 per cent of the total new investments 
in Tanzania.  Sectors which have attracted foreign investors are 
manufacturing, tourism, agriculture, transport, mining and construction. 

 
 
CHAPTER VIII 
 
TRADE AND PROJECT FINANCING 
 
Trade and Project Financing is provided by the following financial 
institutions: 
 
Tanganyika Development and Finance Company Limited (TDFL) 
Tlx: 41153 DEVFIN-TZ 
Fax: 255-51-46145 
P.O. Box 2478 
Dar es Salaam, Tanzania 
(Project financing) 
 
Tanzania Investment Bank (TIB) 
Tlx: 41259 
Fax: 255-51-46235 
P.O. Box 9373 
Dar es Salaam, Tanzania 
(Project financing) 
 
National Bank of Commerce (NBC) 
Tlx: 41581 NATCMD-TZ 
Fax: 255-51-46235 
P.O. Box 1255 
Dar es Salaam, Tanzania 
(Trade and project financing) 
 
Tanzania Venture Capital Company 
P.O. Box 2535 
Dar es Salaam, Tanzania 
(Project financing) 
 
The Co-operative and Rural Development Bank 
Phone: 255 51 46614/46239 
Fax:   255 51 26518 
P.O. Box 268 
Dar es Salaam 
 
Private Banks 
 
Stanbic Bank 
Fax:  255-51-44553 
P.O. Box 72647 
Dar es Salaam, Tanzania 
(Trade financing) 
 
Standard Chartered Bank 
Tlx:  41079 
Fax:  255-51-44594 
P.O. Box 9011 
Dar es Salaam, Tanzania 
(Trade financing) 
 
Citibank 
Phone: 255-51-36222/44763 
NIC Life House 
7th Floor 
P.O. Box 71625 
Dar es Salaam, Tanzania 
 
Trust Bank 
Phone: 255-51-29185/44969 
Fax:   255-51-44062 
P.O. Box 9302 
Dar es Salaam, Tanzania 
 
Brief Description of Banking System 
 
After nearly 25 years of government monopoly, the Tanzanian government 
passed legislation in August 1991 which allowed private banks back into 
Tanzania.  As of June 1995, 5 private banks have registered with the 
Tanzanian government, three are fully operational; Standard Charter 
Bank, Stanbic bank and Citibank.  Three more private banks are expected 
to be operational by the end of the year-Trust Bank, First Adili Bank, 
and Akiba Bank. 
 
Foreign Exchange Controls Affecting Trading 
 
There are no foreign exchange controls affecting trade.  Export and 
import trade have been streamlined, import and export licenses have been 
abolished and exporters are now allowed to utilize all of their export 
earnings. 
 
General Financing Availability 
 
While NBC, CRDB, Stanbic and Standard Chartered Banks will provide 
financial resources for exports to qualified firms.  Donor agencies also 
provide funding for imports.  Availability of local financing is limited 
due to high interest rates and lower producer prices. 
 
How to Finance Exports/Methods of Payment 
 
While NBC, CRDB, Stanbic and Standard Chartered Banks provide export 
financing, high interest rates have impeded export businesses. 
 
Normally, NBC, CRDB, Stanbic and Standard Chartered provide overdraft 
facilities to exporters to be repaid in 30 to 90 days and the interest 
rates (ranging from 13-39 per cent) depend on  the number of days and 
the extent of the risk involved. 
 
Types of Available Export Financing and Insurance 
 
Local banks provide overdraft facilities to local exporters which are 
repayable between 30 to 90 days.  OPIC insurance is available to 
Tanzania.  EXIMBANK has suspended its activities in Tanzania.  A 
parastatal insurance company provides cover against  loss, damage and 
destruction.  It does not provide financing for exports or imports. 
 
Project Financing Available, Including Lending from Multilateral 
Institutions and Types of Projects Supported 
 
Project financing is available from TDFL, TIB, NBC, Tanzania Venture 
Capital, East African Development Bank, African Development Bank and 
International Finance Corporation 
 
Multilateral Development Banks 
 
1.  The International Bank for Reconstruction and Development (IBRD), a 
member of the World Bank group makes long-term loans at market-related 
rates primarily to developing nations.  The International Development 
Agency (IDA), the soft loan window of the World Bank, lends to the 
poorest of the developing countries.  Both the IBRD  and IDA work to 
promote broadly based economic growth and frequently focus on structural 
adjustment, sectoral reform and individual project lending.  Typically 
the World Bank does not finance the entire cost of a project.  Rather, 
it finances the components of a project purchased with foreign exchange, 
which on average is about 40 per cent of the total project cost.  Each 
project may cover a wide variety of sectors and can involve anywhere 
from one to hundreds of separate contracts providing export business 
opportunities for suppliers world wide. 
 
Contacts 
 
U.S. Department of Commerce 
Liaison to the U.S. Executive Director's Office 
International Bank for Reconstruction and Development 
1818 H. St., NW 
Washington D.C. 20433 
Telephone: (202) 458-0118 
Fax:       (202) 477-2967 
 
Office of Multilateral Development Banks 
U.S. Foreign Commercial Service 
U.S. Department of Commerce 
Room H-1107 
Washington D.C. 20230 
Telephone: (202) 482-3399 
 
2. The African Development Bank (AFDB), headquartered in Abidjan, Cote 
d'Ivoire, is an international financial institution created by Africans 
in 1963 to promote the economic and social development of its member 
African countries.  Founded with initial capital resources of USD 250 
million, it has authorized capital today of over USD 22.3 billion.  The 
bank belongs to the African Development Fund (ADF) and the Nigerian 
Trust Fund (NTF).  The AFDB makes loans to development projects in 51 
countries in Africa.  The ADB provides development 
 
financing on concessionary terms to the poorer African member countries.  
The NTF was established by the Government of Nigeria in 1976 to assist 
in the development efforts of the poorer ADB members.  The ADFB has 21 
non-regional members.  The United States joined in 1982. 
 
Contacts 
 
U.S. Department of Commerce 
Liaison Office to the U.S. Executive Director's Office 
African Development Bank 
Ave. Joseph Anoma 
01 B.P. 1387 Abidjan 01 
Acote D'Ivoire 
Telephone: (225) 21-46-16 
Fax:       (225) 22-24-37 
 
Office of Multilateral Development Banks 
U.S. & Foreign Commercial Service 
U.S. Department of Commerce 
Room H-1107 
Washington, D.C. 20230 
Telephone: (202) 482-3399 
Fax:       (202) 273-0927 
 
List of Banks with Correspondent U.S. Banking Arrangements 
 
The National Bank of Commerce (NBC) has correspondent arrangements with 
Chase Manhattan Bank, Morgan Trust Guarantee and Citibank.  Foreign 
banks like Trust Bank (T) Ltd. and Citibank have similar correspondent 
arrangements with U.S. banks. 
 

 
CHAPTER IX 
 
BUSINESS TRAVEL 
 
Business Customs 
 
Tanzanians are generally polite, helpful and warm-hearted.  The private 
sector is slowly growing and maturing.  Patience, specificity and 
flexibility are essential for success. 
 
Travel Advisory and Visas 
 
The Department of State's consular information sheet on Tanzania 
reflects current information on Tanzania entry requirements, areas of 
instability, medical facilities, crime, photography restrictions, air 
transport, drug penalties and  information concerning the U.S. Embassy ; 
including telephone, telex and fax numbers.  Airport visas are not 
issued routinely.  All visitors should obtain visas in advance. 
 
Holidays 
 
In 1996, Tanzania will observe the following official holidays: 
 
January 1 (New Year), January 12 (Zanzibar Revolutionary Day), January 
20 and 21 (Idd-El-Fitr*), April 05 (Good Friday), April 08 (Easter 
Monday) April 10 (Idd El Hajj*) April 26 (Union Day) May 1 
(International Worker's Day), July 29 (Maulid Day*), August 8 (Peasants 
Day),  December 9 (Independence Day), December 25 (Christmas Day) and 
December 26 (Boxing Day). 
 
Those days marked with an asterisk are subject to the sighting of the 
moon. 
 
Business Infrastructure 
 
Transportation.  Many of Tanzania's urban centers are accessible by road 
transportation except during the rainy season (October to December in 
Western parts of Tanzania, and March to May for the rest of the 
country).  Many of the primary roads are in poor condition.  The roads 
from Dar es Salaam to Tunduma, Dodoma, Tanga and Arusha are paved.  
Dodoma to Iringa, Dodoma to Mwanza, Mwanza to Bukoba and Arusha to 
Dodoma are not paved.  The road from Dar es Salaam to Lindi and Mtwara 
is not paved making it extremely difficult to reach those areas by 
vehicle during the rainy seasons.  Rural and feeder roads are virtually 
impassable during the rainy season. 
 
Rental cars are available in all of Tanzania's urban centers including, 
Arusha, Dar es Salaam, Dodoma, Morogoro, Mwanza, Moshi, Mbeya, Tabora 
and Tanga. 
 
Railway transport links Dar es Salaam to Kigoma (Central Line), Dar es 
Salaam to Mwanza via Morogoro, Dodoma, Tabora, Shinyanga (Central Line), 
Dar es Salaam to Tanga (Tanga Line) and Dar es Salaam to Arusha via 
Mombo, Same and Moshi (Tanga Line).  Tanzania Zambia Railway Authority 
(TAZARA) links Dar es Salaam to Kapiri Mposhi (Zambia) via Iringa and 
Mbeya. 
 
Dar es Salaam International Airport, Kilimanjaro International Airport 
and the Zanzibar Airport handle international air traffic. Current 
international carriers are KLM, Swiss Air, British Airways, Air France, 
Alitalia, Egypt Air, Ethiopian Airways, Royal Swazi, Kenya Airways, Air 
Zimbabwe, Gulf Air, Air India, Air Malawi, and Uganda Airways. 
 
Air Tanzania has international routes to Djibouti and Saudi Arabia.  Its 
regional routes include Kenya, Burundi, Malawi, Zambia, Zimbabwe and 
recently, South Africa.  Domestic routes include Kilimanjaro, Mwanza, 
Mtwara, Songea, Tabora, Kigoma, Tanga and Zanzibar.  Ferry boats from 
Dar es Salaam to Zanzibar operate daily. 
 
Boat Transportation.  Lake Victoria has services between Mwanza, Bukoba 
and Musoma.  Lake Tanganyika has services to Bujumbura, Eastern Zaire 
and Zambia.  Lake Nyasa has services to Malawi. 
 
Freight is carried largely by trains and heavy duty vehicles between 
most of Tanzania's towns and Malawi and Zambia, and by heavy duty 
vehicles to Burundi and Rwanda. 
 
Language.  The official languages in Tanzania are Kiswahili and English.  
Virtually all major businessmen speak English, though once outside the 
business community, English is spoken less frequently. 
 
Communication.  Tanzania's telecommunications infrastructure within the 
country is poor and overburdened.  International communications by 
phones, fax and telex are generally reliable, though they can be 
difficult to get hold of. 
 
Housing.  There are critical shortages of housing in all urban centers 
of Tanzania.  Most visitors to urban centers stay in tourist hotels, 
although the amenities and comfort levels fall below U.S. standards.  
The expatriate communities in Arusha, Dodoma, Mwanza, Morogoro, Tanga 
and Dar es Salaam live in modern housing.  Water and power is generally 
available but liable to frequent interruptions. 
 
Health.  The health services in Tanzania are inadequate.  Tropical 
diseases and HIV are prevalent in the country.  Malaria prophylaxis is 
strongly recommended. 
 
Food.  Food is available and plentiful in all the urban centers of 
Tanzania including an assortment of fresh fruits and vegetables.  
Certain urban centers, such as Arusha, Moshi, Dar es Salaam and Tanga, 
carry imported goods from Kenya, Europe, South Africa and the United 
States. 
 

 
CHAPTER X 
 
APPENDICES 
 
APPENDIX A 
 
COUNTRY DATA 
 
Country Profile 
                   1994        1995        1996 
 
Population:        27.3        28.1        28.9 
(millions) 
 
Growth Rate:        2.8         2.8         2.8 
(Percentage) 
 
Religions:  Christianity, Islam, Animist. 
 
Government System:  Multiparty Democracy with Executive Presidency. 
 
Language:  Kiswahili and English (Official Languages.) 
 
Work Week: Monday to Friday. 
 
Sources:  Central Statistics. 
 
 
APPENDIX B 
 
DOMESTIC ECONOMY 
 
                               1994          1995          1996 
 
GDP Growth                  3,326.0       3,419.0       3,521.6 
GDP Growth Rate                 4.1           3.0           3.5 
GDP per capita (USD)          135.4         138.7          140.0 
Gov. Spending % as of GDP      31.5          31.5           30.0 
Inflation                      20.0          50.0           40.0 
Foreign Exch. Reserves        220.2         216.5          205.0 
Average Exch. Rate $ 1.00     400.0         600.0          800.0 
Foreign Debt                7,415.6       8,618.2        9,817.0 
Debt Service Ratio            281.3         290.1          300.0 
U.S. Economic Assistance       28.0          22.0           30.0 
U.S. Military Assistance          -             -              - 
 
Note:   Figures for 1995 are estimates. 
        Figures for 1996 are projections. 
 
 
Sources:  Planning Commission 
          Bank of Tanzania 
          U.S. AID 
 
Figures for 1994 are estimates. 
Figures for 1995 are projections. 
 
 
 APPENDIX C 
 
TRADE FIGURES 
 
                            1994         1995                      1996 
                                           (In Million of U.S. Dollars) 
 
Exports (fob)              519.0        600.7                     669.0 
Imports (cif)            1,500.2      1,592.0                   1,800.0 
U.S. Exports (fas)          39.2         42.8                      45.0 
U.S. Imports (cif)          32.2         38.6                      40.0 
U.S. Share of Tz Emports (%) 6.9          7.2                       6.7 
U.S. Share of Tz Imports (%) 2.5          2.9                       2.2 
 
Figures for 1995 are estimates. 
Figures for 1996 are projections. 
Principal U.S. Exports (in thousands of U.S. dollars) 
 
Commodity                        1992        Jan-Jun 1993 
 
Corn                            2,138               3,957 
Used merchandise                7,325               3,122 
Manufacturer commodity          4,269               1,458 
Construction equipment            847               1,038 
Farm machinery & equips           525                 944 
Petroleum refinery prod         1,115                 903 
Aircraft equipment                654                 408 
Internal Combus. engine           161                 307 
Radio, TV, B/cast. equip          738                 250 
Fabricated rubber prods.          793                 191 
Aircraft                        3,805                  81 
Railroad equipment                 91                  91 
 
Principal U.S. Imports (in thousands of U.S. dollars) 
 
Commodity                    1992        Jan-Jun 1993 
 
Cordage                     3,014               1,728 
Fruits and tree nuts          797               1,484 
Forestry products           1,249                 560 
Jewelry & Lapidary Work                           239 
Broad woven fab. cotton                           156 
Salted and roasted nuts     3,327                  82 
 
Source: U.S. Department of Commerce. 
 
 
APPENDIX D 
 
INVESTMENT STATISTICS 
 
The following investment information covers the period between 
September, 1990 to February, 1994; 
 
Sector                  Approved        New        Exp/Reh        Local 
 
Agric. & Livestock        58            38           27            14 
Natural Resources         43            34            9            17 
Tourism                   93            75           18            35 
Manufacturing            229           142           84           145 
Petroleum & Mining        21            17            4             3 
Construction              15            14            1             5 
Transport                 41            28           13            14 
Services                   6             3            3             3 
Computers                  2             1            1             - 
Decontrolled areas 
(financial)                4             4            -             - 
 
Grand Total              512           352          160           236
 
Sector                Foreign       Joint      Total             Total 
                                  Venture      Employment     Investment 
Agric. & Livestock      15          29           22656          43282.3 
Natural Resources        7          19            5790          16692.2 
Tourism                 19          39           10353         105670.3 
Manufacturing           21          63           24291         178415.9 
Petroleum & Mining       2          16            2157          24349.2 
Construction             1           9             754           6677.2 
Transport                6          21            2901          27702.1 
Services                             1            1319          2824.0 
Computers                1           1              20           281.0 
Decontrolled areas 
(financial)              2           2             158          7789.0 
 
Grand Total             76         200           70399        413683.7 
 
APPENDIX E 
 
U.S. AND COUNTRY CONTACTS 
 
Country Government Agencies 
 
Organization:  Investment Promotion Center 
Contact name:  Mr. C. G. Kahama 
Title:         Director General 
Address:       P.O. Box 938 
               Dar es Salaam, Tanzania 
Phone:         255-51-46848/46850 
Fax:           255-51-46851 
 
Country Trade Associations/Chamber of Commerce 
 
Organization:  Dar es Salaam Merchants Chamber 
Contact:       The Chairman 
Address:       P.O. Box 12 
               Dar es Salaam, Tanzania 
Phone:         255-51-22267 
 
Organization:   Dar es Salaam Chamber of Commerce 
Contact name:   Mr. Emilio Mzena 
Title:          Chairman 
Address:        P.O. Box 14 
                Dar es Salaam, Tanzania 
Phone:          255-51-21893/23759 
Telex:          41628 CHEMCO-TZ 
 
Organization:  Tanzania Chamber of Commerce, Industry and Agriculture 
Contact name:  Mr. M.M. Kalanje 
Title:         Executive Director 
Address:       P.O. Box 9713 
               Dar es Salaam, Tanzania 
Phone:         255-51-46624/46625 
Fax:           255-51-37371 
Telex:         41424 MKONSULT 
 
Organization:        Confederation of Tanzania Industries 
Contact name:        Mr. Iddi Simba 
Title:               Chairman 
Address:             P.O. Box 7125 
                     Dar es Salaam, Tanzania 
Phone:               255-51-30292/30844 
Telex:               41587 INTERF-TZ 
 
Country Market Research Firms 
 
Organization:  Tanzania Industrial Studies and 
               Consulting Organization (TISCO) 
Contact Title: Director General 
Address:       P.O. Box 2650 
               Dar es Salaam, Tanzania 
Phone:         255-51-46164/46933 
Fax:           255-51-46164 
Telex:         41182 TISCO-TZ 
 
Country Commercial Banks 
 
Bank Name:        National Bank of Commerce 
Address:          P.O. Box 1255 
                  Dar es Salaam, Tanzania 
Phone:            255-51-46100 
Fax:              255-51-46235 
Telex:            41581-NATCMD-TZ 
 
Bank Name:        Cooperative and Rural Development Bank 
Address:          P.O. Box 268 
                  Dar es Salaam, Tanzania 
Phone:            255-51-46614/46239 
Fax:              255-51-26518 
 
Bank Name:        Standard Chartered Bank 
Address:          P.O. Box 9011 
                  Dar es Salaam, Tanzania 
Phone:            255-51-44593 
Fax:              255-51-44594 
Telex:            41079 
Bank Name:        Stanbic Bank Tanzania Limited 
Address:          P.O. Box 72647 
                  Dar es Salaam, Tanzania 
Phone:            255-51-26251/4 44573/44574 
Fax:              255-51-44553 
Telex:            41415 
 
U.S. Embassy Trade Personnel 
 
Contact:        Commercial Officer 
Address:        P.O. Box 9123 
                255-51-66010/1/2/3/4/5 
Fax:            255-51-66701 
Telex:          41250 USA-TZ 
 
Washington-Based USG Country Contacts 
 
Contact:        Tanzania Desk Officer 
Address:        U.S. Department of Commerce 
                Washington, D.C. 20008 
Phone:          202-939-6125 
 
Contact:        Finn Holm-Olsen 
Address:        Desk Officer for Southern Africa 
                U.S. Department of Commerce 
                International Trade Administration 
                Washington, D.C. 20230 
Phone:         (202) 482-4228 
Fax:           (202) 482-5198 
 
 
APPENDIX F 
 
TRADE EVENT SCHEDULE 
 
Dar es Salaam Annual International Trade Fair: July, 1996. 
 
Arusha Agricultural Show: September, 1995. 
 
Probable 1996 Trade Events 
 
 
  i)         Textile and Apparel Exhibition. 
 ii)         Information Management Technology. 
iii)         Arts and Crafts Exhibition. 
 iv)         Tourism Exhibition.
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