by Valerie Leach

Poverty Reduction
Much of the news about the economy and business suggests fast-mov­ing new developments. Some of them, notably prospects for gas, are reported elsewhere in this journal. Nonetheless, the Tanzanian economy is still characterised as a basic agricultural one, where rural households continue to live in poverty.
In a recent survey of opinions about the challenges they face, Tanzanians said that poverty, health and education remain the biggest challenges, with 63% reporting poverty to be the biggest challenge (up from 49% in 2012). (Twaweza: “Tanzania towards 2015: Citizen Preferences,” Nov 2014).

The recently released report of the 2011/12 Household Budget Survey by the National Bureau of Statistics shows that one third of the rural population live below the poverty line. (NBS, Household Budget Survey, Main Report, October 2014)

Food Poverty
Rural 13.7 (2007) 11.3 (2011/12)
Dar es Salaam 3.2 (2007) 1.0 (2011/12)
Other Urban 8.9 (2007) 8.7 (2011/12)
Tanzania Mainland 11.8 (2007) 9.7 (2011/12)

Basic Needs Poverty
Rural 39.4 (2007) 33.3 (2011/12)
Dar es Salaam 14.1 (2007) 4.1 (2011/12)
Other Urban 22.7 (2007) 21.7 (2011/12)
Tanzania Mainland 34.4 (2007) 28.2 (2011/12)
Percentage of Population Living in Poverty, Tanzania Mainland, 2007 and 2011/12

Income poverty has been reduced in all parts of the country, but particularly in Dar, and the difference in poverty rates between Dar compared with elsewhere is more dramatic than ever. While the reduction in rural income poverty is modest, living conditions and access to communication improved from 2007 to 2011/12. The percentage of households living in homes with a modern roof has risen from 55% to 68% and those with modern walls from 35% to 46%.

Mobile phones
57% of all households now report having a phone, almost all of them a mobile phone. In rural areas, ownership of a mobile phone increased from 14% in 2007 to 45% 2011/12. Mobile phone ownership reached 88% in Dar and 77% in other urban areas in 2011/12. (NBS, Household Budget Survey, Main Report, October 2014)

Macroeconomic developments
GDP growth rates continue to be strong – 7% in 2013 and estimated by the IMF to be at this same rate in 2014. In October 2014 the annual inflation rate was 5.9%, a fall from 6.6% in September 2014. The NBS has revised the estimates of GDP, increasing the overall estimate of GDP in the base year of 2007 by 28%; and of agriculture GDP by 26%. The revisions result in estimated per capita GDP for 2007 at TSh 699,127 compared with the old estimate of TSh 547,081.

Government revenue and expenditure for fiscal 2013/14 was below target and development expenditure will continue to be adversely affected by the withholding by aid donors of general budget support. Recurrent expenditure amounted to TSh 10,085.1 billion, or 91% of target, while development expenditure was 70% of estimate. The shortfall in development expenditure in 2013/14 was on account of lower disbursement of project funds and shortfall in external non-concessional borrowing.
(Bank of Tanzania, Monthly Review, October 2014, www.bot-tz.org)

Annual growth rates of GDP at constant 2001 market prices

An IMF mission to Tanzania in October 2014 concluded that, “Macroeconomic performance has been broadly in line with the pro­gram, although new challenges have emerged during the last three months. Economic growth was strong during the first half of 2014 and is expected to remain close to 7% this year… Despite significant revenue shortfalls in the 2013/14 fiscal year compared to the original budget assumption, the fiscal deficit was contained to 4.4% of Gross Domestic Product (GDP)…. However, reflecting continued weaknesses in the ability to control expenditure commitments, this performance coincided with further accumulation of expenditure arrears… Combined with delays in the disbursement of budget financing from development partners, related to the Independent Power Tanzania Limited (IPTL) case, this has been a challenging backdrop for program implementation. .. The expected implementation of VAT reforms in early 2015 should help bolster the revenue base. The mission welcomes the government’s intention to address comprehensively arrears to suppliers and pension funds. (IMF Press Release No. 14/490, October 29, 2014)

Investment and Business
Within the East African Community, Tanzania recorded the highest Foreign Direct Investments (FDI) in 2013, according to the UN Conference on Trade and Development (UNCTAD) World Investment Report 2014. Tanzania’s inflows stood at $1.872 billion followed by Uganda at $1.146 billion. Direct investment from UK was the largest share, at 23% of the total. Recently discovered gas reserves in Tanzania are propelling investor interest. The report also noted that underdeveloped infrastructure has made the country a high-cost location for doing business. (The East African, 27 September 2014)

Tanzania is determined to float a planned $700 million bond in the international market. The government is hoping to capitalise on the investor appetite and stable markets that saw Kenya raise $2 billion in June at fairly affordable terms. Tanzania intends to fund the $1.23 billion Mtwara gas-pipeline project, a $10 billion port at Bagamoyo, new roads, railways and power plants. (The East African, 20 September 2014)

In August, the government announced that a project to construct a major centre to serve as a common entry point for imports from China will start before the end of this year. The centre will be run under a Public Private Partnership (PPP) arrangement with China represented by Yiwu Pan-Africa International Investment Corporation and Tanzania represented by EPZA. (The Citizen, 21 August 2014)

Trade Agreements
In September 2014, Tanzania joined Kenya, Uganda and Rwanda in rolling out the clearance of goods under the East Africa Community Single Customs Territory (SCT).The system seeks to eliminate dumping of goods in countries of transit, thus protecting industries and jobs. (The East African, 13 September 2014)

East Africa and the European Union (EU) have agreed on an Economic Partnership Agreement (EPA). As well as dropping customs duties, the agreement covers free movement of goods and cooperation on customs and taxation. More than half of the imports the EAC has agreed to liberalise are currently duty-free under the EAC Customs Union. Those subject to duty will be liberalised over a period of 25 years, with most of the cuts within 15 years. (The Citizen, 18 October 2014)

Free Trade Area
In December, the heads of state from 26 Eastern and Southern African countries are due to sign an agreement for a free trade area (FTA). Encompassing member states of the East African Community (EAC), Common Market for Eastern and Southern Africa (COMESA) and Southern African Development Community (SADC), the FTA will cre­ate a market of over 800 million people. The EAC, which is already a common market, has four member states in COMESA and one member — Tanzania— is in SADC. Ten countries in the region are already members of customs unions. (The Citizen, 19 November 2014)

Rural Communications and Access to Finance
An investment by a Vietnamese firm, Viettel, estimated to be of TSh 1.7trn will connect at least 4,000 villages, about 40% of the country’s total number, to a 3G communication network by 2017. The launch of the project in Coast Regions came after President Kikwete visited the company in Vietnam. The firm has been contracted to connect all dis­trict hospitals, police stations, post offices and District Commissioners’ offices, plus three government schools in every district. (The Guardian, 14 November 2014)

Improved telecommunications are expected to help farmers’ access to finance. At a conference in Arusha in November, Vice President Mohamed Gharib Bilal said that poverty cannot be seriously addressed without removing constraints on productivity, including financing of smallholder agriculture and agribusiness. Governor of the Bank of Tanzania Benno Ndulu, said over two-thirds of the working population derived its livelihood from agriculture. Limited access to finance was an impediment to farmers in adopting better technologies. Developments in communication technology are improving the situation; 57% of adults currently have access to formal financial services compared to barely 15% in 2009.

A new study by the Economist Intelligence Unit confirms that Tanzania has the most conducive conditions in sub-Saharan Africa for expanding access to financial services for under-served populations. The use of mobile technology facilitates payment services, including those who have been under-served or unbanked, with the adoption of compre­hensive and conducive regulation of e-money and mobile payments.
(The Citizen, 20 and 24 November 2014)

by Ben Taylor

Mobile money has revolutionised financial services in East Africa, starting with M-Pesa in Kenya and spreading from there. All Tanzania’s major mobile phone networks offer similar services, through which users can send money at very low cost to anyone in the country using a standard mobile phone.

The global association of mobile phone network operators, GSMA, has recently published a report on mobile money in Tanzania, with a chart showing the total value of mobile money transactions since 2007:

Two points are worth highlighting here. First, though Kenya was undoubtedly the trendsetter, Tanzania is fast catching up, and looks set to overtake Kenya during 2014.

Second, take a look at the Y-axis label on the left. These figures are in billion US$. In other words, the total value of mobile money transactions in Tanzania in 2013 was US$17.7 billion. This is a huge amount – equivalent to over half (54%) of Tanzania’s GDP*. Which means in one sense Tanzania has already overtaken Kenya, where the value of mobile money transactions in 2013 was “only” 49% of GDP*:

This raises the question: is Tanzania the first country in the world where mobile money transactions are worth more than half the country’s GDP? Quite possibly it is.

* GDP Estimates are from IMF (2013): Tanzania US$32.5bn, Kenya US$45bn

by Paul Gooday

Municipalities in Dar and Tanga to raise capital through DSE
Dar es Salaam Stock Exchange (DSE) Chief Executive Moremi Marwa has said that the time has come for the municipalities intending to implement various economic projects to raise capital through stock market. The Capital Markets and Securities Authority (CMSA) initiated and supported the move and according to the Chief Executive officer of CMSA, Nasama Massinda, municipal bonds are soon to be a reality in three councils.

The government through the assistance of the World Bank sponsored a two-phase municipal bonds study. The study brought to light the fact that the prevailing government policy would not support efficient issuing of bonds by Local Government Authorities (LGAs) for public subscription.

The first phase of the project strived to establish the feasibility and required policy changes for a thriving municipal bonds market in Tanzania. The second phase was to develop the legal and operational framework for the municipal bond markets in the country.

The former Dar es Salaam City Council director, Bakari Kingobi, was quoted as saying that the municipalities now qualify to issue loans. “Although we have not received the official go ahead from the Bank of Tanzania (BoT), the signs are promising,” he said adding that according to experts, it will help raise resources for development of schools, airports, hospitals and other facilities. Presently, all local authorities depend largely on subventions from the central government and taxation to raise revenue for their expenditures. (The Guardian)

Tanzania urges Chinese to build factories
The Minister for Industry and Trade, Dr Abdallah Kigoda, called on the Chinese business community to build manufacturing industries in the country to mutually benefit both nations. The call was made at the launch of Brands of China African Showcase 2014. The event brought over 100 Chinese companies showcasing products. Products displayed range from machinery, vehicles, home appliances, electronics and solar energy products, consumer goods, building materials, chemical, medical and comprehensive products.

Dr Kigoda said it is time for the Chinese nation to invest in the manufacturing sector which would add value to the country’s profile by reducing the exporting of raw materials which adversely affects the economy. “A great part of our exports are raw materials which after being processed outside, are then sold back to us. We are acting as a global supermarket for goods made from materials produced in our country,” said Dr Kigoda.

He said this has to change because it has adverse impacts on employment and the economy. He suggests that one way of addressing the challenge is through promoting value addition in the country. Dr Kigoda acknowledged the Chinese interest in doing business and investing in the country in different area such as a TSh16 trillion ($10 billion) investment in Bagamoyo Export Processing Zone. He also said the current efforts of laying down infrastructure in Kigoma Region will be an area that Chinese communities can invest in. (The Citizen)

by Paul Gooday

China biggest foreign investor in Tanzania
China’s total direct investment in Tanzania increased from US $700 million in 2011 to US $2.1 billion last year, becoming the biggest foreign investor in the country. Bilateral trade has soared in the same period, reaching over US $2.5 billion by the end of 2012.

According to Imara Equity Research, this investment is focused on railways, ports, road construction, gas pipelines and wind power farms. It has not only boosted economic growth but also created more than 150,000 direct jobs. Up to 19 projects worth billions of dollars include construction of the new port at Bagamoyo, set to be the largest and most modern in Africa. The harbour is expected to be in operation by 2017 and will handle 20 times more cargo than the Dar es Salaam, which is Tanzania’s current major import and export gateway in East Africa. Additionally, a Chinese US $1.2 billion soft loan for a 523km pipeline connecting Dar es Salaam and the Mtwara gas field was endorsed in September 2012 between the Tanzanian government and the Exim Bank.
(The Citizen)

Single Currency and Monetary Union
The East African Community (EAC) Monetary Union Protocol was signed in December 2013 by the five heads of state in Kampala, kicking off ambitious plans to have a common currency within 10 years. The single currency is aimed at enhancing trade in the region.

A few weeks later, however, the Managing Director of the International Monetary Fund (IMF), Christine Lagarde, cautioned EAC member states against rushing the Monetary Union. Addressing the Kenya private sector she said the EAC was not yet ready for the move and needed to address key issues before uniting their currencies. The challenges include increasing non-tariff barriers, varying economies and different tax regimes. She added: “As a member of the European Monetary Union, I have to tell you that it is a very exciting and ambitious project. … make sure you learn from our mistakes, so that the East African Monetary Union can even teach the Europeans how to do it right.” (The Citizen)

Mobile Payment Transactions
Mobile money platforms offer instant money transfer using phones, which helps cut costs and saves time as compared to physically transporting money. The value of mobile payment transactions jumped more than three times in the twelve month period ended December 2013. This was due to increased use of mobile phones in payment of services such as utility bills. Further, several banking institutions have formed partnerships with mobile network operators to facilitate customer transactions, according to the regulator in its latest Banking Supervision report.
(The East African)

Debt dilemma
Tanzania faces a new debt crisis unless government moves fast to contain its current borrowing, which has seen national liabilities more than double in less than 10 years. Until around 2006, the public debt as a percentage of GDP was almost 70%. Debt forgiveness brought that ratio down to about 21% the following year, but since then it has been growing at an alarming rate.

“The national debt as a percentage of GDP is now about 38%. That is a manageable debt ratio,” said Prof Richard Mshomba, a Tanzanian economist based in the US. “However, what is alarming is that hat ratio has been steadily growing and Tanzania could find itself in a debt crisis.”

Some see that happening as early as next year, when the debt may hit TSh30 trillion, about three times what it was when the current government assumed power in December 2005. They warn that the crisis would derail economic prospects in the wake of huge gas discoveries and undermine efforts to alleviate poverty. (The Citizen)

by Ben Taylor

Though Tanzania has posted some enviable rates of economic growth in recent years – averaging around 7% in recent years – a new Africa-wide survey shows that Tanzanians are unconvinced by the state of the economy. The report, from Afrobarometer, found that Tanzanians were consistently much less positive about their country’s economic situation than people elsewhere on the continent.

Fewer Tanzanians (8%) were positive about the current state of the economy than in any other country. Twice as many Tanzanians said that they thought the economy had got worse in the past twelve months (51%) as said it had got better (25%). Fewer Tanzanians (22%) said that they expected the economy to improve in the coming twelve months than in any other country.

1) How would you describe the present economic condition of this country?

2) Looking back, how do you rate economic conditions in this country compared to one year ago?

3) Looking ahead, do you expect the economic conditions in this country in 12 months time to be better or worse?

by Ben Taylor

Prime Minister Pinda with Justine Greening (extreme right), British High Commissioner Dianna Melrose and the head of DfID Marshall Elliott

The British International Development Secretary, Justine Greening, signalled a shift towards a more pro-business approach for British aid in Tanzania while visiting the country in November. She was accompanied by representatives of 18 British and international business and social enterprises, including Unilever, JCB (construction equipment), Mott Macdonald (engineering consultants), Diageo and SABMiller (brewers), and Swire Pacific Offshore (oil and gas services). It is the first time DfID has hosted such a delegation.

“The Chinese government has invested and it’s time the British government makes sure we’re helping British businesses have that advantage to invest in Africa too,” Ms Greening said.

Investments in agriculture
The Department for International Development (DfID) will invest £20m in four new partnerships with businesses and not-for-profit organisations working in Tanzania. DfID will collaborate with social enterprise and business with loans and equity, generating a return that can be reinvested. The largest partnership is with Unilever, the Wood Family Trust and the Gatsby Foundation.

DfID will invest £7.5m in “a major new tea plantation” in the southern highlands. A second investment in tea production will go to the Tanzania Tea Packers (TATEPA) Wakulima Tea Factory in Rungwe district. DfID will provide up to £2.5m to fund a hydro-power plant that will reduce energy costs and increase the factory’s productivity. Further investments are to Kilombero Plantations Ltd (£6.7m) to finance a rice husk gasification plant and £3.3m to Equity for Tanzania, to enable small agri-businesses and farmers to access finance for agricultural equipment.

These investments were announced by Ms Greening at the launch of a new High Level Prosperity Partnership (HLPP), which was attended by the Tanzanian Prime Minister, Mizengo Pinda. Tanzania is one of five countries to be part of the partnership, alongside Angola, Ghana, Ivory Coast and Mozambique.

DfID hope that the partnership will see the UK and Tanzania create even closer commercial links and will “double the number of UK companies doing business in Tanzania in the renewable energy and agriculture sectors by 2015.” The partnership will focus primarily on four sectors: oil and gas, renewable energy, agriculture and strengthening business environment. The London Stock Exchange Group will provide training to financial professionals, regulators and government officials in Tanzania. Prime Minister Pinda expressed his hope “that this Partnership will open a new window of opportunity to these important areas of cooperation”.

Transport and trade
Later in her visit, Ms Greening announced initiatives aimed at reducing transport costs within East Africa. Following a visit to the Dar es Salaam port, she launched a £10.5m fund to support a scheme run by TradeMark East Africa, called the Logistics Innovation For Trade (LIFT) fund. The LIFT fund will provide match grants to encourage private sector investment in freight and other logistics technologies and busi­ness processes in East Africa. The aim is to reduce transport time along the main transport corridors in East Africa, stimulate further research and create systems for tracking industry performance and efficiency.
East Africa currently has some of the highest freight and transport costs in the world.

A new direction
Justine Greening was keen to emphasise that this initiative represents a change of direction for DfID. “For too long the development world has seen the skills and potential of the private sector as something separate to its own efforts,” she said. “I want to take a different approach. The only way for developing countries to end their dependency on aid is to create more jobs, growth and tax receipts. In the end, for individuals too, a job is the only sustainable route out of poverty. Business can bring much needed investment and innovation at a scale that can be transformational, providing prospects and economic opportunities for communities. It is sensible for us to work with business to make sure their plans help local communities. This is also firmly in our own interest, as we are helping to open up markets for British goods.”

The new approach has attracted criticism that it would benefit the wealthy more than the poor. Christine Haigh, from the World Development Movement said: “It’s clear that this initiative is very much about finding new markets for UK companies and very little about reducing poverty for the majority of Tanzanians”.

The move is the latest evolution of British aid policy in Tanzania since the Conservative-led coalition took office in 2010. There was a reduction in the aid provided as General Budget Support (from 66% in 2010/11 to less than 30% in 2013/14), but an overall increase in total aid linked to the promise to spend 0.7% of British GDP on aid. In 2010/11, DfID spent £150m in Tanzania and this will rise to £192m in 2014/15.

When Chinese President Xi Jinping visited Tanzania earlier in 2013, he signed a $500m bilateral trade deal with Tanzania and agreed a $10bn investment in a new port in Bagamoyo.

by Paul Gooday

Economic update
According to the International Monetary Fund, the Tanzanian economy grew at 6.9% in 2012, and is projected to achieve an over 7% growth rate in 2014.

The National Bureau of Statistics announced that in the second quarter of 2013, Tanzania’s economy grew 6.7% (compared to 6.4% in the same period of 2012). The sectors that grew markedly included agriculture, electricity, construction, transport and communication.

Dr Honest Ngowi, business economics lecturer at Mzumbe University, commented that there were more indicators of growth than setbacks currently in Tanzania, that at 6.1% inflation was decreasing and that oil and gas licensing may stimulate further growth. (Tanzania Invest)

Tanzania and China promote partnership
On a recent visit to China, the Tanzanian Prime Minister signed five Memorandums of Understanding in Beijing with his Chinese equivalent. The agreements include partnerships in science and technology, tourism, textile manufacture, cotton production, and the construction of a new Chinese Embassy in Dar es Salaam.

The Prime Minister expressed his gratitude to the Chinese government for the ‘soft’ loans provided to Tanzania, explaining that in comparison to loans from other countries, the terms have been easier. Tanzania would begin to pay China back a US $24.6 million loan that was used to renovate the Tanzania-China Friendship Mills.

Tanzania and China have also signed seven contracts, totalling US $1.7 billion, for investments in electricity, construction, and research. These include a renewable energy research centre and construction of residen­tial housing and business centres throughout Tanzania. (Tanzania Invest)

Bank of Tanzania treasury bond
The Bank of Tanzania has for the first time floated 15-year treasury bonds with a 13.5 % coupon aimed at further development of the country’s financial markets. This will raise funds for long term development projects and also be a point of comparison with market instruments such as mortgage financing and corporate bonds. (The Guardian / IPP)

Protests against Electronic Fiscal Devices
The government continued to pursue its policy of insisting on the use of Electronic Fiscal Devices (EFDs) by traders although businesses had objected to the tax recording machines. Traders in Kariakoo and elsewhere closed their business for several days in protest. The Ministry of Finance and the Tanzania Revenue Authority (TRA) said they were looking into reducing the cost of the device, but reiterated that businesses could not avoid using the EFD system as it was the best way to get accurate tax calculations and keep records.

Traders are against the EFDs, explaining that the device is too costly at TSh 800,000 per piece. The TRA said the actual price ranges between TSh 600,000 and TSh 778,000, depending on the model and type. The Deputy Minister for Finance noted that these are cheaper in comparison to other countries and were made specifically for Tanzania.

The parliamentary economic and trade committee has proposed a joint committee with traders to address the problem. The House team asked that the taxman raise public awareness, and the option of paying for EFDs in instalments was also proposed. The committee requested the government to remove import duty on the devices so as to lower costs. (Citizen)

Rapid rise on Dar es Salaam Stock Exchange
Data from the Dar es Salaam Stock Exchange in late November shows that the value of all 12 local listed companies – as measured by the domestic market capitalization – more than doubled to TSh 5.96 trillion (US $3.7 billion) at the close of trading from TSh 2.94 trillion (US $1.87 billion) at the close of last year.

The Dar es Salaam bourse said market activity was skewed towards foreign investors, with local investors making a minimal contribution focused on the National Microfinance Bank (NMB) and the CRDB Bank (formerly the Cooperative Rural Development Bank).

by Paul Gooday

Overall economic outlook
Tanzania continues to do well in maintaining overall macroeconomic stability. Along with institutional and policy reforms, this has been a fundamental factor behind the strong economic growth rates. The main drivers of growth have been agriculture, manufacturing, wholesale and retail trade, transport and communication activities. Tanzania has also continued to record strong export growth and the country’s medium-term growth prospects are around 7%, significantly boosted by natural gas discoveries. (African Economic Outlook)

Banking on trade with China
Tanzanians doing business with China can now pay for their supplies using the Chinese Yuan Renminbi (CNY), thanks to an initiative by the National Bank of Commerce (NBC). The bank’s initiative enables Tanzanian traders and businesses to pay for goods and services sup­plied by Chinese firms directly by using the Yuan, thereby reducing the costs incurred through exchange rates from purchasing other cur­rencies. A recent survey released by, HSBC (based in Hong Kong) has stated that by 2015, one-third of China’s international business transac­tions will be made in Chinese Yuan. (The Citizen)

Bank of Tanzania (BoT) figures indicate that Tanzania’s exports to China, the world’s second largest economy, increased by nine times between 2005 (Tsh101 billion) and 2010 (Tsh908 billion). The total trade volume between the two countries reached USD 2.15 billion in 2011 and USD 2.5 billion in 2012. Analysts project that trade between China and Tanzania will continue to grow at more than 15 per cent annually. The BoT attributes the increase in trade volumes to receipts from travel and manufactured goods as well as traditional exports.

Chinese investment in Africa generally increased from USD900 million in 2000 to USD68 billion in 2010 aided by its ‘China-Africa’ policy – trading with Africa without any conditions.

Transport/Infrastructure
The African Development Bank (AfDB) has approved two loans totaling USD232.5 million for the 157.5-kilometre road project from Arusha to Taveta and Voi in Kenya, crossing the border at Holili (Tanzania), This aims to reduce the cost of transport and enhance access to agricul­tural inputs, larger markets and social services within the East Africa Community. Tanzania will be awarded USD120 million. The project, which is expected to be completed by December 2018, is also jointly financed by the Governments of Kenya and Tanzania. The Africa Trade Fund has extended a grant for a small component for trade facilitation at the Namanga border, bringing the total cost of the project to USD 262.2 million.

AfDB’s Regional Director for the East Africa Resource Centre confirmed that the road had been identified in the East African Regional Integration Strategy Paper (RISP 2011-2015) and the East African Transport Strategy and Regional Road Sector Development Programme of November 2011 as a priority. The East African Community (EAC) seeks to improve regional transport infrastructure to encourage economic and social development in the region, promote tourism and foster regional inte­gration, while reducing the cost of doing business by supporting cross-border and international trade.

The Arusha-Holili/Taveta-Voi Road is one of the transport corridors of the EAC region meant to increase competitiveness of the region on the global market and at the same time promote regional integration. The project road links the Northern Corridor to the Central Corridor across the common border of Tanzania and Kenya through Arusha, Minjingu (Lake Manyara) and Babati to Singida and Dodoma. The corridor at completion will link the port of Mombasa to northern and northwestern Tanzania and the landlocked countries of Uganda, Rwanda, Burundi and the Democratic Republic of Congo. (African Development Bank)

Tanzania becomes Japanese investment hub
The Japanese Minister for Economy, Trade and industries, Toshimitsu Motegi, announced that Japan had nominated Tanzania to be a major economic hub for business and investment in the African continent. The business community in the country have welcomed this development as a real opportunity to transform Tanzania into an industrial economy.

Among the projects lined up for implementation include the replace­ment of the central line railway network with the international gauge, and expansion of the port at Dar es Salaam to increase efficiency in service delivery. With the implementation of the plan, Minister Motegi said the industrial sector contribution to GDP, now below 20%, would more than double.

The Confederation of Tanzania Industries (CTI) chairman, Felix Mosha, stated that the governments’ efforts to improve the energy and infra­structure sectors were commendable but not enough. He reiterated that the budget increments in the energy and infrastructure sectors are welcome but remain small compared to the mounting demand for the services to reduce the cost of doing business. The sudden increases in certain charges and duties by regulatory authorities could discourage some potential investors.

If Tanzania is to achieve the Development Vision 2025, there would have to be improvements in the rules and regulations. Vision 2025 is aimed at developing the nation from an LDC (Lesser Developed Country) to a Middle Income Country. The Vision matches well with the Japanese plan to make the country a major economic hub for business and invest­ment throughout the continent. The CTI believes the Japanese plan will enhance the growth of local businesses and encourage economic development. (Daily News)