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INTRODUCTION OF THE TANZANIA MARKET, ECONOMOC AND COMMERICIAL POTENTIALS

INTRODUCTION OF THE TANZANIA MARKET, ECONOMOC AND COMMERICIAL POTENTIALS. INTRODUCTION. Tanzania Vision 2025. Tanzania Five Years Development Plan 2016/17 to 2020/21 Flagship Projects for the Development Plan Investment and Commercial Opportunities in Tanzania in specified areas

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INTRODUCTION OF THE TANZANIA MARKET, ECONOMOC AND COMMERICIAL POTENTIALS

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  1. INTRODUCTION OF THE TANZANIA MARKET, ECONOMOC AND COMMERICIAL POTENTIALS

  2. INTRODUCTION • Tanzania Vision 2025. • Tanzania Five Years Development Plan 2016/17 to 2020/21 • Flagship Projects for the Development Plan • Investment and Commercial Opportunities in Tanzania in specified areas [1] Energy Sector [2] Industry Sector [3] Energy Sector [4] Agricultural Sector [5] Infrastructure Sector, Railways, Ports, Airports and roads [6] Tourism [7] Water and sanitation [8] Education Sector

  3. Five Year Development Plan 2016/17 to 2020/21 • The objective of the Vision 2025 is to transform Tanzania into a Middle Income Country. • The Vision 2025 is being implemented through a series of 5 Years Development Plans. The main objective of the Development Plan 2016/17 to 2020/21 is Nurturing Industrialisation for Economic Transformation and Human Development, that is to build an industrial economy. Some other objectives are:- [a] Increase economic growth from 7% in 2015 to 10% in 2020 [b] Increase per capita income from USD1,006 in 2015 to USD 1500 in 2020 [c] Attract FDI from USD2.14 Billion in 2014 to USD 5 Billion in 2020 [d] Increase Government revenue from 12.1% of GDP in 2014/15 to 17.1% in 2020 [e] Reduce poverty from 28.2 in 2011/12 to 16.7 in 2020 • Financing of the Development Plan, it is estimated that USD107 billion will be required for the period of 5 years. • On average USD21.4 billion will be needed each year, Government contribution will be USD 59 billion and the rest is expected to come from the private sector.

  4. Flagship Projects for the Development Plan In order to achieve the implementation of the Development Plan, the Government is to ensure the implementation of the following Flagship Projects:- • Muchuchuma Coal Project • Liganga Iron Project • Developing Special Economic Zones • Construction of Kurasini Trade and Business Service Centre • Construction of New Standard Gauge Railways connecting neighbouring countries of Burundi, Rwanda, Uganda and DRC • Establishment of Agriculture Town at Mkulazini • Revamping the National Airline and • Training of Youth on Vocational Training in priority areas

  5. Investment and Commercial Opportunities INDUSTRIAL SECTOR (a) Soda Ash Project – Engaruka Valley in Arusha Investment is needed in this project, Soda Ash available is estimated at cubic meters 4.68 Billion, with an annual increase of cubic meters 1.9 million. • Project execution will involve construction of soda ash factory, estimated to produce 1 million tons annually for industrial use especially in medicines, glass and soap. • The project once completed is estimated to generate USD400 million annually. (b) Construction of Tyre Factory The Government intends to construct a tyre factory in partnership with the private sector. • In 2016/17 Budget, the Government has set aside approximately USD75 million for the feasibility study and procuring of new machines. • This project is based on the previous intention of the Government to revamp General Tyre Factory based in Arusha region. (c) TAMCO Industrial Estate in Kibaha • The Government intend to revamp TAMCO Industrial Estate in Kibaha by attracting investors to establish factories in this areas, it will start with the construction of tractors assembly factory after securing soft loan from the Government of Poland. • TAMCO is covering an area of 94 hectares, in 2016/17 budget the Government has set aside USD million for construction of power station and building supportive infrastructures.

  6. Investment and Commercial Opportunities Energy Sector (a) Kiwira Coal Main • Project to generate MW 200 of electricity using coal at Kiwira in Mbeya region • The project is divided into 4 phases • Underground mine with capacity to produce from 150,000 tons to 300,000 tons of coal annually • Open cast, with estimated annual capacity of 1,200,000 tons • Construction coal fired power plant with capacity to generate 200 MW of electricity • Construction of power transmission line with KV400 from Kiwira to Mbeya • The estimated cost of this project is approximately USD 498 million • The project is estimated to be implemented under the Public Private Partnership – PPP, with STAMICO the Government agency taking the lead.

  7. Investment and Commercial Opportunities [b]The Government intends to implement the following projects in partnership with the private sector – PPP • Kinyerezi IV – 330MV combined cycle gas-fired plant, to be implemented as PPP project. • SingidaGeowind Phase I – MW 50 wind plant, in Singida Region • Kilwa Energy Phase I – 210 MW gas-fired plant, at SomangaFungu, Kilwa. • 200 MW Coal fired power plant – Kiwira in Mbeya region, state agency STAMICO is undertaking a feasibility study • Ngaka 400 MW coal fired power plant – in Ngaka Ruvu, • Need a feasibility study for 200 MW phase I and 220 KV transmission from Ngaka to Songea, NDC and TANCOAL are mobilising funds, with possible PPP framework • Development of Geothermal and Ngozi 200 MW Geothermal plant at Ngozi – Mbeya, looking for private sector financing under the PPP framework.

  8. Investment and Commercial Opportunities [d] Project to Distribute Natural Gas in Piped Natural Gas Distribution in Dar es Salaam City and in Lindi and Mtwara Towns. • The feasibility studies to connecting houses with Piped Natural Gas in the city of Dar es salaam, Lindi and Mtwara have been undertake. • The Government intends to implement these projects under the PPP frameworks

  9. Commercial and Investment Opportunities Agro-Industries and Agro-processing: • Adding value to agricultural, livestock, forestry and fisheries products depends on the existence of agro-processing industries in Tanzania. • The Government earmarks the following interventions in collaboration with the private sector: - Revamping the textile, - garment and clothing industries; - establishing leather industries in Dodoma, Geita, Shinyanga, Kibaha and Singida and developing edible oils industries, especially Sunflower Oil production and packaging. • More specifically, the Government also targets palm oil production at KimalaMisale, Coastal Region; construction of Metal Silos for small holder farmers; establishment of food processing training cum production centres in Morogoro and Dar es Salaam; and sisal processing in Morogoro and Tanga.

  10. Commercial and Investment Opportunities Agriculture (a) Sugar and rice industry: • Tanzania produces about 300,000 tonnes of raw sugar annually, (2014/2015 figures) leaving a demand gap of about 220,000 tonnes to be met through imports. Although there is potential to double production in the medium to long term. • Challenges of the industry includes addressing low cane yield due to short growing period and over- reliance on rainfall; poor harvesting logistics and governance issues, especially involving out-growers, low priced sugar imports which distort the domestic market thus reducing profitability of millers and out-growers. • The Government intend to increase cultivation of sugar and rice in 25 plantations located in Katavi, Kigoma, Rukwa, Tabora, Ruvuma and Lindi. • The project is to enable the country to increase production of rice by 290,000 tons and sugar by 150,000 tons annually to meet the demand and exports. (b) Construction of Silos for storage • The Government intend to implement the project of constructing 5 silos to increase the storage capacity from 246,000 tons to 496,000 tons of grains. • The silos will be constructed in Arusha (Babati), Dodoma, Makombako, Shinyanga and Sumbawanga. • In 2016/17 the Government has budgeted approximately USD61.75 million for this purpose.

  11. Commercial and Investment Opportunities Edible Oil • Tanzania spends more that US$ 150,000 annually to import edible oil. Lack of modern mechanical extraction equipment and ineffective way to increase productivity in agriculture has situated Tanzania to rely on imported edible oil. Tanzania has sunflower, cotton, groundnuts, soya beans, and palm, which, with increased production, and productivity can be used to anchor a competitive edible oil industry in the country and regional market. • In 2015, the country required 300,000 tonnes of edible oil; 40 percent of which was sourced from within and the rest was imported. The focus in FYDP II is to reduce dependence on imports by increasing domestic edible oil production. This can be achieved through increasing utilization of existing capacity, estimated at 376,000 tonnes per year in 2015 (cotton and sunflower only). The amount of edible oil produced is below 100,000 tonnes annually. Government interventions include increased research, availability of quality seeds, incentives to attract private investors in processing in order to deepening of potential value chain on oil seeds.

  12. Commercial and Investment Opportunities Ports • Construction of 24m deep Mwambani –Port – Kigombe area, in Tanga region. • Fund for construction approximately USD1,580 million is allocated in 2016/17 budget for feasibility study and the construction funding is expected to be sourced from the private sector • Construction of Mtwara Port, involving construction 4 new gates to increase its capacity given the discovery gas, iron ore and coal in surrounding areas. In 2016/17, Tanzania Ports Authority will construct gate 1, with depth of 300 metres. • The other gates will be constructed in phases in collaboration with the private sector. Maritime Transport Strategies • Procurement of 7 new lake vessels and rehabilitation of 8 existing vessels for lake Victoria, Tanganyika and Nyasa

  13. Commercial and Investment Opportunities Roads • Construction of Dar es salaam-Chalinze-Morogoro Express way, 200 km • The project is expected to implemented under the public private partnership framework • The feasibility study is underway by the Cheil Engineering company from Korea • In 2016/17 budget the Government has allocated USD7.5 million

  14. Commercial and Investment Opportunities Railway Strategic projects • Construction of Dar es Salaam-Isaka-Rusimo-Tabora (1,341Kms) central railway system to Standard Gauge • Construction of 1,220 Km of Railway line from Tabora-Kigoma, Isaka-Mwanza, Uvinza-Musongati, and Kaliua-Mpanda-Karema • Construction of Railway line from Mtwara-Mbambabay with branches to Liganga and Mchuchuma to Standard Gauge, 1,000KM

  15. Commercial and Investment Opportunities Petro and Chemical Industries • Liquidation of Natural Gas (LNG), to facilitate TEMDO to develop and commercialize suitable technologies/processes for the manufacture of gas equipment and devices. • LNG Plant in Lindi, construction and operation of a joint onshore LNG plant and associated infrastructure • MtwaraPetro Chemical Industries Complex, construction of offsite and onsite infrastructure facilities, especially utilities like water, electricity and gas. Develop the complex

  16. Commercial and Investment Opportunities Leather Industry • Establishment of leather industrial park in Dodoma and Singida in partnership with the private sector. • Meat, hides and skin processing industry at Ruvu, to involves the following - Construction of modern abettor at Ruvu ranch - Leather tanning facility - Animal fattening system and - Waste management facilities

  17. Commercial and Investment Opportunities Tourism • Construction of THEME PARK in the Dar es Salaam City. • This project intends to provide an exclusive centre for tourism attraction in Dar es Salaam with 5 Stars Hotels, Shopping Centres, zoo, climbing walls, sky coasters, tower swing and chess playing areas. • It is estimated to cover 10,000 hk along the Indian ocean in Dar es salaam city • In 2016/17 Budget, the Government has allocated approx. USD250 million for project feasibility study.

  18. Commercial and Investment Opportunities Airports • The Government intend to construct a new airport Msalato International Airport in Dodoma, the Capital City of Tanzania. • In 2016/17 Budget, the Government has allocated approximately USD50.5 million for the project feasibility study.

  19. Conclusion • Commercial and investment opportunities are also available in the following sectors water, education, health and ICT. • Detailed information about these sectors are available in attachment to the Tanzania Five Years Development Plan 2016/17 – 2020/21. • Information about the tendering and procurement processes are normally provided in the Central Tender Portal of the Government, www.ppra.go.tz or tenders.ppra.go.tz • Public Procurement Regulatory Authority (PPRA), a Government agency regulating public procurement.

  20. Conclusion • To ensure the smooth participation of the private sector the Government is implementing the following strategies, namely • Developed the Public Private Partnership policy • Enacted the Public Private Partnership Law • Ensuring the availability of electricity, waters and other supportive infrastructure like roads, railway, airports and expansion of ports • Developed policy and established private sector support organs like the Tanzania Private Sector Foundation • Established Tanzania Investment Centre (TIC) to coordinate and promote private sector investment in the country.

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