HORTICULTURE INDUSTRY IN TANZANIA
Horticulture is the fastest growing agricultural sub-sector in Tanzania with export growth of 8% per annum. The horticulture industry took root in Tanzania during the 1950’s, perishable horticulture for exports to Europe started in the 1970’s and Tanzania Flowers Ltd (the first cut flower farm) was established in 1987. Vegetable exports began in the 1970’s and, since 2000, emerged as a flourishing export market.
Major Horticultural Production Areas
Horticultural production dominates the Tanzanian landscape and is concentrated in four major growing zones throughout the country. Because the country benefits from a variety of micro-climatic zones, growing conditions are conducive to the bountiful harvest of a wide variety of horticultural products.
Sparsley Vegetated Undetermined (0-30) 30-40 40-60 60 > Water
INVESTMENT PROMOTION
Tanzania has emerged as an important continental player with considerable comparative advantages in the East Africa Region and, the Tanzanian horticultural and floriculture sector is in the global lime light. The Government of Tanzania’s Investment Center, national and international NGO’s, international donors and finance institutions are supporting small, medium and large farm holders, exporters and associated businesses to consistently achieve new levels of success and, actively support foreign investors who are attracted to the positive forecasts for a return investment on this emerging economy.
President Kikwete has established a pro business government showing strong economic performance. The national GDP has been growing more than 8% per year during the past decade; inflation is below 5% today. The World Bank recently identified Tanzania as one of the top 10 countries worldwide for improving the national business environment.
Interest worthy points:
There are three major airports with air cargo infrastructure; Dar Es Salaam, Mwanza and Kilimanjaro airports, Kilimanjaro Airport central to the largest growing region in the country, is increasing weekly international shipments.
Mobile telephone network is available in most areas, even rural, so market information is communicated fast.
Urban centers and markets continue to grow and consequently niche markets for high quality produce is growing.
Presence of micro climates conducive around Mt Kilimanjaro and Mt Meru provide a favorable climate and available water support growth of major horticulture and floriculture export products; tomatoes, cabbage, onions, peas, beans, baby corn, mangoes, oranges, roses, cut flowers, carnations, chrysanthemums, and varieties of other cut flowers.
There is a growing global demand for organically certified product - consumer trends point at further interest in organic and growth of exotic and baby vegetable consumption.
The EU market for exotic fruits and vegetables – including so called baby vegetables will continue to increase over the next 5 years (at approximately 4% according to UK importers).
Consumer demands for “convenient” food products continues to grow; the opportunities for baby vegetables, pre- packed and snack based products represent a growing market in the EU.
Long experience and solid exporter/importer relationships with the UK and EU. Major trading partners: UK, South Africa, India, Japan, China, Kenya, and the UAE.
Growing niche markets in organics and FairTrade; the current size of this market is approximately 50 tons annual.
Retail sales of nuts, seeds and dried fruit in UK exceeded £500 million by the end of 2006. Industry leaders forecast that the major dried fruit and vegetables markets will enjoy a sustainable 10% annual growth rate.
Opportunity for medium sized or large companies to invest in state-of-the-art solar driers various food processing plants, cold storage facilities, packing houses and other value chain enhancements to comply with international hygiene and food safety standards. Less than 10% of fruits and vegetables are processed and 40-60% of the annual crop spoils for lack of processing capacity.
1,204,098 MT of Vegetable imports reported (peas, beans, and sweet corn) during 2004 - 2007 from the EU.
6,738 MT of Roses, carnations, cut flowers, and varieties uprooted cut flowers imports reported during 2004 – 2006 from the EU
Mango production has a comparative advantage to access the Middle East market; by 2004/05 production had increased to 254,550 MT an increase of over 300%; a net margin of between 50% and 100% is possible per mango. Shipping costs are cheaper than from South/Central America.
The domestic market for citrus (60% export to Kenya) is growing and continued growth is expected
Tanzania has the highest average rate of Direct Foreign Investment (32%) in East Africa countries between 2001- 2006. However, the flow of FDI in agriculture stands at only 5% of the total when compared with other sectors.
Banking is deregulated and International Banks are present
Foreign Investment Details for Tanzania
Tariff Rate
Individual Income Tax Rate
Corporate Tax Rate
Inflation (3 year weighted average)
Minimum/Average Wage
Days to Open a Business
8.4
30
30
5.30
0.67
29
Tanzania is one of the most politically stable countries in Africa and the prospects for serious and sustained violence are extremely low. Since gaining independence, Tanzania has enjoyed a remarkable degree of peace and stability and in 1992 the constitution was amended to allow for multiple political parties. In 1995, the first multi-party election took place.
The Government of Tanzania has taken significant steps to encourage foreign investment by creating an attractive package of incentives for investors and easing bureaucratic requirements. As a result, Foreign Direct Investment (FDI) in Tanzania has increased steadily in the last five years. Tanzania is formally open to foreign investment in all sectors, although a successful investor must overcome many procedural barriers.
As the country makes the transition from a socialist to a democratic entity, occasional conflict is possible, particularly during election campaigns. In 2001, demonstrators clashed with police officials on Pemba (Zanzibar) during a protest against the official outcome of the October 2000 elections. The 2005 elections, however, were primarily peaceful and marked by an absence of major violence. Most political observers believe further clashes on Zanzibar are unlikely and the chance for conflict on the mainland remains remote.
The Tanzania Investment Center (TIC), established by the Tanzania Investment Act of 1997, is a focal point for all investors and performs all liaison work such as answering inquiries and facilitating project start-up. Tanzania was named Africa’s best investment promoter at the Africa Investment Promotion Agencies 2004 competition, where the TIC received the first prize among 48 African countries that took part. The TIC provides certificates of incentives on approved projects that have a minimum investment of US $300,000 if foreign owned and US $100,000 if locally owned. In 2004, TIC registered 454 investment projects (worth over US $1 billion), up from 372 in projects in 2003.
The priority sectors for investment, as identified by TIC, are: mining, petroleum and gas, tourism, infrastructure development, aviation, agriculture, construction, financial services, and manufacturing. Investment in other sectors is not restricted. Foreign firms can participate in privatization programs without restriction. There is no limit on foreign ownership or control, though land ownership remains restricted. TIC services are provided to local and foreign investors without discrimination, though a variety of regulatory fees are higher for foreign firms than for local firms. Remaining obstacles to foreign investment include bureaucratic intransigence, corruption and poor infrastructure.
Zanzibar, consisting of two islands off the coast of Tanzania with a semi-autonomous government, controls its own investment policies and maintains the Zanzibar Investment
Promotion Agency (ZIPA). Like the mainland, Zanzibar aims to create a welcoming environment for foreign investors and provides similar incentives.
Conversion and Transfer Policies: Regulations continue to permit the unconditional transfer through any authorized bank in freely convertible currency of net profits, repayment of foreign loans, royalties, fees, charges in respect of foreign technology, and remittance of proceeds. The only official ceiling on transfers of foreign currency applies to cash carried by individuals traveling abroad, which should not exceed US$ 10,000 over a period of forty days. Tanzania occasionally experiences shortages of foreign exchange, but this problem has been eased considerably by the growth of Bureau de change returns. Bureaucratic hurdles continue to impact the length of time it takes to process and effect a transfer, which can range from days to weeks.
Right to Private Ownership and Establishment: Tanzania observes the right of foreign and domestic private entities to establish and own business enterprises and engage in legal forms of remunerative activity. The Business
Registration and Licensing Act provides the right of any local or foreign investor to freely establish private entities; to own property both movable and immovable; to acquire and dispose of property including interest in business enterprises and intellectual property.
The Act stipulates that no business entity can enter into business activities in Tanzania before getting a business license through the Business Registration and Licensing Agency (BRELA). Registration fees for foreign companies are significantly higher than for local companies.
Competitive equality is applied and embedded in the Tanzanian National Trade Policy of February 2003 as a standard. The Tanzanian competition policy aims at perpetuating freedom of trade, freedom of choice and access to markets. It prohibits firms (both private and public enterprises) from engaging in anti-competitive behavior and abuse of dominant market position. Tanzania has established the Fair Competition Commission (FCC) to oversee compliance with competitive equality standards.
Under Tanzanian law, non-citizens or foreign companies cannot own land, which continues to be a significant barrier to foreign investment. Land in Tanzania is government property and can only be leased from the government for 33, 66, or 99 years, depending on its use. Occupation of land by non-citizens is restricted to lands for investment purposes, as approved by the TIC. Under this arrangement, known as
Derivative Title, Tanzanian tenants sub-lease their land to a TIC-approved foreign investor. The TIC has designated specific plots of land (a land bank) to be made available to foreign investors. Foreign investors may also enter into joint ventures with
Tanzanians, in which case the Tanzanian provides the use of the land (but retains ownership, i.e. the leasehold).
Movable Property and Land Rights: Secured interests in property, both movable and real, are recognized and enforced in Tanzania under an evolving set of laws, some of which appear contradictory. Land in Tanzania is technically owned only by the government and is leased for periods of up to 99 years. Recent reforms have tried to establish a reliable system of transferable property rights, with titles representing leaseholds. The Ministry of Lands and Human Settlements Development deals with the registration of mortgages and rights of occupancies. The Office of the Registrar of Titles within the Ministry is responsible for issuing the pertinent title and registered mortgage deeds. Under the recent Land Act (1999), such title deeds can now be used for securing loans from banks. However, the concept of a mortgage is very new, and the system to register such security interests remains unreliable. In practice, banks only issue mortgage loans on capital improvements on the land, and not on the value of the land itself.
The establishment of both the Commercial Court of Tanzania and a special Land Court as special divisions of the High Court has been a tremendous step towards protection and effective enforcement of property rights. The new Land Act, the Ministry of Lands registration offices and the Land Court comprise a legal system that will potentially protect and facilitate the acquisition and disposition of land, buildings, and mortgages, but the system is still in its infancy.
Intellectual Property Rights: Adherence to key international agreements on intellectual property rights in Tanzania began only in recent years. In 1999, Tanzania passed the Copyright and Neighboring Rights Act Number 7 of 1999, which deals with the protection of intellectual property rights (IPR) and also protects expressions of folklore. This legislation conforms to international copyright and property rights conventions, including the WTO TRIPS agreement, and provides adequate protection for intellectual property, patents, copyrights, trademarks and trade secrets. The Act also establishes the Copyrights Society of Tanzania (COSOTA), which has the duty and authority to promote and enforce intellectual property rights; collect and distribute royalties on behalf of its members; maintain registers of works, productions and association of its members; and identify, publicize and defend the rights of copyright owners. Despite the recent legislation, enforcement of intellectual property rights remains ineffective. Violations are not seriously investigated, and the courts lack experience and training in IPR issues.
Labor: The Government of Tanzania has a progressive, pro-labor policy and laws. The Government of Tanzania raised, with effect from1 January 2008, the minimum wages to between TSh65,000 and TSh350,000 a month, depending on the category of the private sector concerned: minimum wages of Sh80,000 for workers in the medium-size industries and Sh150,000 for those in the large industries. The prevailing minimum wages, set in June 2002, were TSh35,000 a month for rural areas and Sh48,000 for urban areas in the private sector.
GOVERNMENT OF TANZANIA AGRICULTURE POLICY STATEMENT
Non-Traditional Export Crops
General Policy Statements
Private sector initiatives are critical for the development of these crops into dependable sources of foreign exchange earnings. Government responsibility will therefore, include the creation of an environment that will facilitate the private sector to invest in these crops through:
Establishment of a good marketing system
Carrying out market surveys to identify products with export potential
Some of these crops, particularly perishables, require an efficient system of transport and telecommunication. The Ministry will advocate for the enhancement of these critical support services.
Further measures to promote export will include streamlining legal and administrative obstacles.
The Ministry shall establish a mechanism for quality control.
Fruits, Vegetables and Flowers
Policy Statements
To enhance production of high yielding and disease resistant varieties of these items, the Government will give high priority to the strengthening of research, extension and small scale irrigation;
The Government will assist the private sector to organize domestic as well as export markets for these crops. Government responsibilities will be in the areas of quality control, advocating for acquisition by the private sector of capital for storage, packaging and transport facilities, transportation net works and providing market information services.
For export of fresh fruits, vegetables and flowers, the Government will support a programme of breeding, distribution and production jointly between the private sector and Government, of varieties, which are popular on the external markets.
The Government will continue to streamline export procedures in order to encourage the private sector to export greater quantities of the popular varieties to overseas markets.
The Government will facilitate negotiations with both regional and overseas airlines for increased cargo space to accommodate Tanzania's produce.
Background: Shortly after achieving independence from Britain in the1960s, Tanganyika and Zanzibar merged to form the nation of Tanzania in1964. One-party rule came to an end in 1995 with the first democratic elections held in the country since the 1970s. Zanzibar's semi-autonomous status and popular opposition have led to two contentious elections since1995, which the ruling party won despite international observers' claim of voting irregularities.
Geography: Eastern Africa, bordering the Indian Ocean, between Kenya and Mozambique. Kilimanjaro is highest point in Africa; bordered by three of the largest lakes on the continent: Lake Victoria (the world's second-largest freshwater lake) in the north, Lake Tanganyika (the world's second deepest) in the west, and Lake Nyasa in the southwest.
Geographic coordinates: 6 00 S, 35 00 E Area: 945,087 sq km (slightly larger than twice the size of California) Land: 886,037 sq km (includes the islands of Mafia, Pemba, and Zanzibar) Climate:Varies from tropical along coast to temperate in highlands Water: 59,050 sq km Land boundariess: 3,861 km Coastline: 1,424 km< Maritime claims boundariess: territorial sea: 12 nm
Border countries: Burundi 451 km, Democratic Republic of the Congo 459 km, Kenya 769 km, Malawi 475 km, Mozambique 756 km, Rwanda 217 km, Uganda 396 km, Zambia 338 km.
Terrain: Plains along coast; central plateau; highlands in north, south
Elevation extremes: lowest point: Indian Ocean 0 m; highest point: Kilimanjaro 5,895 m Natural resources: hydropower, tin, phosphates, iron ore, coal, diamonds, gemstones, gold, natural gas, nickel.
Irrigated land: 1,840 sq km (2003) Natural hazards: flooding on the central plateau during the rainy season; drought.
Environment:Soil degradation; deforestation; desertification; destruction of coral reefs threatens marine habitats; recent droughts affected marginal agriculture; wildlife threatened by illegal hunting and trade, especially for ivory.
International environment agreements: party to: Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Hazardous Wastes, Law of the Sea, Ozone Layer Protection, Wetlands signed, but not ratified: none of the selected agreements
People of Tanzania
Population: 40,213,162.
Ethnic groups: Mainland- African 99% (of which 95% are Bantu consisting of more than 130 tribes), other 1% (consisting of Asian, European, and Arab); Christian 30%, Muslim 35%, indigenous beliefs 35%
Zanzibar - Arab, African, mixed Arab and African; more than 99% Muslim.
Languages: Kiswahili or Swahili (official), Kiunguja (name for Swahili in Zanzibar), English (official, primary language of commerce, administration, and higher education), Arabic (widely spoken in Zanzibar), many local languages note: Kiswahili (Swahili) is the mother tongue of the Bantu people living in Zanzibar and nearby coastal Tanzania; although Kiswahili is Bantu in structure and origin, its vocabulary draws on a variety of sources including Arabic and English; it has become the lingua franca of central and eastern Africa; the first language of most people is one of the local languages.
Literacy: 69.4% over age 15 and over can read and write Kiswahili (Swahili), English, or Arabic total. Total population: male: 77.5% female: 62.2% (2002 census).
Government of Tanzania - United Republic of Tanzania: conventional short form: Tanzania
Executive branch chief of state and head of government: President Jakaya KIKWETE (since 21
December 2005); Vice President Dr. Ali Mohammed SHEIN (since 5 July 2001); Vice President Dr. Ali Mohammed SHEIN (since 5 July 2001); Zanzibar elects a president who is head of government for matters internal to Zanzibar; Amani Abeid KARUME was reelected to that office on 30 October 2005.
Cabinet: Cabinet appointed by the president from among the members of the National Assembly.
Capital: Dar es Salaam; Legislative Capital: Dodoma.
Independence: 26 April 1964; Tanganyika became independent 9 December 1961 (from UK-administered UN trusteeship); Zanzibar became independent 19 December 1963 (from UK); Tanganyika united with Zanzibar 26 April 1964 to form the United Republic of Tanganyika and Zanzibar; renamed United Republic of Tanzania 29 October 1964.
Elections: President and vice president elected on the same ballot by popular vote for five-year terms (eligible for a second term); election last held 14 December 2005 (next to be held in December 2010); prime minister appointed by the president.
Suffrage: 18 years of age; universal.
National holiday: Union Day (Tanganyika and Zanzibar), 26 April (1964), Constitution: 25 April 1977; major revisions October 1984.
Legal system: Based on English common law; judicial review of legislative acts limited to matters of interpretation; has not accepted compulsory ICJ jurisdiction.
Economy: Tanzania is one of the poorest countries in the world. The economy depends heavily on agriculture, which accounts for more than 40% of GDP, provides 85% of exports, and employs 80% of the work force. Topography and climatic conditions, however, limit cultivated crops to only 4% of the land area. Industry traditionally featured the processing of agricultural products and light consumer goods. The World Bank, the IMF, and bilateral donors have provided funds to rehabilitate Tanzania's out-of-date economic infrastructure and to alleviate poverty. Long-term growth through 2005 featured a pickup in industrial production and a substantial increase in output of minerals led by gold. Recent banking reforms have helped increase private-sector growth and investment.
Continued donor assistance and solid macroeconomic policies supported real:
GDP growth of nearly 7% in 2007
GDP (purchasing power parity):$43.49 billion (2007 est.)
GDP (official exchange rate):$14.11 billion (2007 est.)
GDP - real growth rate: 6.9% (2007 est.)
GDP - per capita (PPP):$1,100 (2007 est.)
GDP - composition by sector: (2007 est.)
Industries: Agricultural processing (sugar, beer, cigarettes, sisal twine); diamond, gold, and iron mining, salt, soda ash; cement, oil refining, shoes, apparel, wood products, fertilizer.
Exports: $2.119 billion f.o.b. (2007 est.)
Export commodities: gold, coffee, cashew nuts, manufacturers, cotton
Exports partners: China 8.8%, India 8.8%, Netherlands 6.2%, Japan 5.3%,
UAE 4.2%, Germany 4.2% (2006)
Imports: $4.591 billion f.o.b. (2007 est.)
Imports commodities: consumer goods, machinery and transportation equipment, industrial raw
materials, crude oil
Import partners: South Africa 9.8%, China 9.4%, Kenya 7.8%, India 6.7%,
UAE 5.9%, Zambia 5.7% (2006)
Economic aid recipient: $1.505 billion (2005)
Reserves of foreign exchange and gold: $2.441 billion (31 December 2007 est.)
Debt - external: $4.984 billion (31 December 2007 est.)
Currency (code): Tanzanian shilling (TZS)
Communications:
Telephones - main lines in use: 169, 135 (2007)
Telephones - mobile cellular: 6.72 million (2007)
Telephone system: telecommunications services are inadequate; system operating below capacity
and being modernized for better service; small aperture terminal (VSAT) system under construction
domestic: fixed-line telephone network inadequate with less than 1 connection per 100 persons; mobile-cellular service, aided by multiple providers, is increasing; trunk service provided by open-wire, microwave radio relay, tropospheric scatter, and fiber-optic cable; some links being made digital
International: country code - 255; satellite earth stations - 2 Intelsat (1 Indian Ocean, 1 Atlantic Ocean)
Radio broadcast stations: AM 12, FM 11, shortwave 2 (1998)
Radios: 8.8 million (1997) Television broadcast stations: 3 (1999)
Televisions: 103,000 (1997)
Internet country code:. tz
Internet hosts: 20,757 (2007)
Internet Service Providers (ISPs):6 (2000)
Internet users: 384,300 (2005)
Transportation:
Airports: 124 (2007)
Airports - with paved runway: 10 total: (2007)
Airports - with unpaved runway: 114 total: (2007)
Pipelines: gas 287 km; oil 891 km (2007)
Railways: 3,690 km total
Waterways: Lake Tanganyika, Lake Victoria, and Lake Nyasa principal avenues of commerce with neighboring countries; rivers not navigable (2005) Merchant marine: 9 ships total (1000 GRT or over) 24,801 GRT/31,507 DWT by type: cargo 1, passenger/cargo 4, petroleum tanker 4
registered in other countries: 2 (Honduras 1, St Kitts and Nevis 1) (2007)
Ports and terminals: Dar es Salaam
Disputes - internationa: Tanzania still hosts more than a half-million refugees, more than any other African country, mainly from Burundi and the Democratic Republic of the Congo, despite the international community's efforts at repatriation; disputes with Malawi over the boundary in Lake
Nyasa (Lake Malawi) and the meandering Songwe River remain dormant.
Refugees and internally displaced persons (country of origin): 393,611 (Burundi), 150,112
(Democratic Republic of the Congo) (2006)
Illicit drugs: Growing role in transshipment of Southwest and Southeast Asian heroin and South American cocaine destined for South African, European, and US markets and of South Asian methaqualone bound for Southern Africa; money laundering remains a problem.
Sparsley Vegetated 
Undetermined (0-30) 
30-40 
40-60 
60 > 
Water