According to Tanzania Investment Centre records, from 1990 to June 2016, the Centre had registered a total of 442 investment projects with Indian interest valued at USD2.122bn/-. Large inflows were recorded in the industrial sector which accounted for almost 53 per cent of registered projects during the period.
Special economic zones (SEZ) development programme is a purpose-designed policy tool of the government industrialisation strategy to realise the strategic objectives of Tanzania development vision 2025. Benjamin William Mkapa Special economic Zone (BWM SEZ) has already been implemented and operates as a “Proof-of-Concept” model SEZ; the Bagamoyo SEZ is the strategic flagship SEZ project for Tanzania with multiple opportunities.
Speaking in Dar es Salaam last week during the occasion of the state visit by the Indian Prime Minister, Narendra Modi to Tanzania, the Director General of the EPZA Joseph Simbakalia said that there were several motivational factors that could trigger Tanzania-India in SEZ.
He mentioned those factors as relative geographic location of India and Tanzania with the Indian Ocean acting both as trading highway and natural control for immigration; the coastline of Tanzania as gateway of choice to the hinterland of Africa which is served from the Eastern seaboard of Africa; India is one of Tanzania’s leading trading partners.
Others are the imperative for Tanzania to move trade with India up the value chain; historic political and cultural links; and the opportunities offered by SEZ regime in Tanzania with favourable investment climate.
He also mentioned the investment opportunities in special economic zones of Tanzania as: Development of comprehensive special economic zones to supply serviced land using PFIs or PPPs; investments in production enterprises to supply export and domestic markets; Supply of various economic services in special economic zones; Transit trade logistics, warehousing and distribution to regional and global markets such as Mtwara Free Port Zone for oil and gas industry.
Simbakalia also pointed out some of the testimonial investments in Tanzania special economic zones being the Flagship Bagamoyo Special Economic Zone as PPP of government (acting through EPZA and TPA), CMHI (China) and SGRF (Sultanate of Oman) to develop a seaport and linked portside industrial zone.
Mtwara Free Port Zone under construction as a PPP of government (acting through EPZA and TPA) and Private Sector (Domestic and Foreign) to develop a super base that will support oil and gas industry; the Morogoro Star City Special Economic Zone being developed as a comprehensive zone through 100 per cent private finance initiatives of Tanzania (51 per cent), and Singapore (49 per cent); and the Bagamoyo Kamal Industrial Park being developed through 100 per cent private finance initiatives.
According to the DG the priority industries for SEZ development programme are such as food agro processing; for example grains, pulses, edible oils, fruits, nuts, vegetables, meat, dairy products and fish; textiles and apparel from cotton; leather and leather goods; building materials supplyindustry; electrical and electronics goods production/assembly; fertilizers and petrochemicals from natural gas.
Others are minerals beneficiation; steel and metal alloys production from iron, titanium, nickel and copper; farm equipment and construction equipment; lapidary and jewelry; gas-to-liquids; and coal-to-liquids.
For his part, Head New Initiatives, Tata Housing Development Company Ltd, Sumit Sapru said that the current lack of formal affordable housing was leading to large unfulfilled housing gap in urban areas.
Rapid urbanisation propels growing residential market
He said that 70 percent of the urban population lives in unplanned, un-serviced informal settlements. For example, current housing deficit stands at over 3 million units. Lack of capacity for housing development both at national and local levels with private developers market aimed at premium development.
Sapru further noted that 31.6 per cent of the total population (~51million) currently lives in urban areas with high urbanisation rate of over 5.36 per cent annually. Rental yields are as high as 9-12 per cent due to low availability of good rental units.
Areas of improvement
Nascent capital market with poorly developed housing finance offerings; poor infrastructure development that adversely affects the supply chain efficiencies; no financial or non-financial incentives currently exist from government to enter affordable housing market; legal framework for property rights, titling and registration constraints are not adequately governed.
Impetus for housing development in Tanzania includes infrastructure Development, PPP Projects / special development projects with government; housing finance / mortgage, single window clearance for all approvals.
Affordable housing dynamics in India
Shortage of 18.7 million units and is growing, especially in the lower income segments.
Challenges in achieving scale
Commercial viability due to turnaround time, cost of funds and lower margin; lack of Infrastructure development to support the customer in a non-prime location; technology upgradation; and cost of funds for end customer
According Sapru, Tata’s mission is to delight their customers by providing quality life spaces through continuous. While its vision is Tata Housing to be the most preferred brand in the premium housing segment. Tata Value Homes is to be India’s largest home provider.
Sapru said that Tata’s values include: Customer focus; innovation, agility, integrity, leadership, and quality. TATA Housing has been growing at the rate of over 50 per cent over the last 5 years. “We are working towards bringing a positive change in the real estate industry through 3 pillars, namely customer focus, positive ecosystem development, and innovation.
He further said that Tata was also focusing on driving sustainable construction practices to benefit the environment.
The occasion of the state visit by the Indian Prime Minister, Narendra Modi, to Tanzania, which discussed among others the Tanzania-India Business and Investment Forum, was organised by the Tanzania Investment Centre (TIC) in collaboration with Tanzanian Private Sector Foundation (TPSF), together with the India Business Forum Tanzania (IBF), and Federation of Indian Chambers of Commerce and Industry (FICCI).
The Indian delegation comprised of 50 businessmen who were interested to meet Tanzanian businessmen engaging in agriculture, manufacturing, infrastructure, health, education, energy and water sectors.
India has a total of 51 million industries, adding that small-scale industries in India contribute 38 per cent of GDP to the Indian economy, noting that Tanzania has so far got at least 40,000 industries. 45 per cent of Indian exported products are produced from small-scale industries.
Prime Minister Narendra Modi was in Tanzania as part of his four-nation Africa tour aimed at enhancing ties with the continent, particularly in the economic sphere.
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