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FACT SHEET TANZANIA

Netherlands-African Business Council

www.nabc.nl

Januari 2012

This factsheet has been produced with regard to the outgoing trade mission to Tanzania fro the meat

and poultry sector. This trade mission will take place from 3 -8 June 2012 and will be organized on

behalf of EVD International. The mission is meant to bring Dutch companies in the meat and poultry

sector in contact with Tanzanian counterparts, trade partners, distributors and customers.

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CONTENTS

1. Quick Facts – p.4

2. General Overview – p.5

2.1 Economy

2.2 Politics

2.3 Infrastructure

3. Livestock in Tanzania – p.7

3.1 Meat Production

3.2 Beef Production

3.3 Sheep and Goat meat production

3.4 Poultry meat Production

3.5 Pig meat production

3.6 Hides and Skins

3.7 Processing, Marketing and Consumption

4. Starting a business in Tanzania – p. 11

5. Relevant contacts – p.13

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1 Quick Facts (index mundi)

Population 43,188,000 (2010 estimate)

Population density 46.3 per km2

Area Total: 945,203 km2

water: 6,2 %

Coastline 1,424 km

Terrain plains along coast; central plateau; highlands in north, south

Location Borders Kenya to the North East, Uganda, Rwanda en Burundi in the North West, Lake Tanganyika in the West, Zambia in the South West, Malawi and Lake Malawi in the South, Mozambique in the South East and the Indian ocean in the East.

Land use Land use: arable land: 4.23% permanent crops: 1.16% other: 94.61% (2005)

Irrigated land 1,840 km2

Population 43.19 miljoen

Population growth rate 2.002

Agriculture coffee, sisal, tea, cotton, pyrethrum (insecticide made from chrysanthemums), cashew nuts, tobacco, cloves, corn, wheat, cassava (tapioca), bananas, fruits, vegetables; cattle, sheep, goats

Natural resources gold, diamonds, coal, iron, uranium, nickel, chrome, tin, platinum, coltan, niobium, and other minerals.

Livestock 3rd largest livestock flock of Africa; approximately 18 million cattle, 13 million goats, 2.5 million sheep and 50 million poultry

Exports commodities gold, coffee, cashew nuts, manufactures, cotton

Imports commodities consumer goods, machinery and transportation equipment, industrial raw materials, crude oil

Industries

agricultural processing (sugar, beer, cigarettes, sisal twine); diamond, gold, and iron mining, salt, soda ash; cement, oil refining, shoes, apparel, wood products, fertilizer

Export partners China 15.6%, India 11%, Japan 6.1%, UAE 5%,

Germany 4% (2010)

Import partners China 17.3%, India 15.4%, South Africa 7.9%, Kenya 7%, UAE 4.8%, Japan 4.2% (2010)

GDP (2010 est.) $23,056,530,000 (2010)

GDP per capital (2010 est.) $1,400 (2010 est.) $1,300 (2009 est.) $1,300 (2008 est.)

GDP growth rate 6.5% (2010 est.) 6.7% (2009 est.)

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7.3% (2008 est.)

2 General Overview

As of 2010, the estimated population is 43,188,000. Population distribution is extremely uneven, with density varying from 1 person per square kilometre (3/mi²) in arid regions to 51 per square kilometre (133/mi²) in the mainland's well-watered highlands, to 134 per square kilometre (347/mi²) on Zanzibar.[27] More than 80% of the population is rural. Dar es Salaam is the largest city and is the commercial capital; Dodoma, located in the centre of Tanzania is the new capital and houses the Union's Parliament. The African population consists of more than 120 ethnic groups, of which the Sukuma, the Nyamwezi, the Chagga, the Nyakyusa, the Haya, the Hehe, the Bena, the Gogo and the Makonde all have more than 1 million members. 2.1 Politics The President of Tanzania, and the members of the National Assembly, are elected concurrently by direct popular vote for five-year terms. The president appoints a prime minister who serves as the government's leader in the National Assembly. The president selects his Cabinet from among the National Assembly members. The Constitution also empowers him to nominate ten non-elected members of Parliament, who are also eligible to become cabinet members. Elections for president and all National Assembly seats were held in October 2010. Tanzania is a one party dominant state with the Chama Cha Mapinduzi in power. Opposition parties are widely considered to have no real chance of gaining power, though the country remains peaceful. 2.2 Economy For more than a decade now, Tanzania has been knowing rapid and stable economic growth of about 5 % per year, and an average of 7 % growth per year in the period 2000 - 2008. Dar es Salaam used fiscal stimulus and loosened monetary policy to ease the impact of the global recession. Recent banking reforms have helped increase private-sector growth and investment. GDP growth in 2009-10 was a respectable 6% per year due to high gold prices and increased production (indexmundi.com).

The economy is predominantly based on agriculture, which accounts for more than 40% of GDP, provides 85% of exports, and employs about 80% of the work force. The government has increased spending on agriculture to 7% of its budget. Topography and climate, though, limit cultivated crops to only 4% of the land area. The nation has many natural resources including several minerals and natural gas. Tourism is also a major source of income

The World Bank, the IMF, and bilateral donors have provided funds to rehabilitate Tanzania's aging economic infrastructure, including rail and port infrastructure that are important trade links for inland countries. Extraction of natural gas began in the 2000s. Gas is drawn into the commercial capital, Dar Es Salaam and exported to various markets overseas. Tanzania has vast amounts of minerals including gold, diamonds, coal, iron, uranium, nickel, chrome, tin, platinum, coltan, niobium, and others. It is the third-largest producer of gold in Africa after South Africa and Ghana.

The country is also known for Tanzanite, a type of precious gemstone that is found only in Tanzania. The mineral sector started to pick-up slowly in the late 90s; major discoveries are announced regularly. However, the mineral sector has yet to start contributing significantly to the overall Tanzanian economy, and industry is still mainly limited to processing agricultural products and light consumer goods. Growth from 1991 to 1999 featured industrial production and a substantial increase in output of minerals, led by gold.

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2.3 Infrastructure The Infrastructure in Tanzania is improving rapidly, but transport can sometimes still be a bit of a challenge. The World Bank, the IMF, and bilateral donors have provided funds to rehabilitate Tanzania's aging economic infrastructure, including rail and port infrastructure that are important trade links for inland countries. The country has 88,200 kilometers (54,684 miles) of highway, although the majority of these highways is unpaved. Paved highways link Dar es Salaam to Tunduru, Dodoma, Tanga, and Arusha. The remaining 84,496 kilometers (52,388 miles) of highway is un-paved, making it difficult to reach certain areas from Dar es Salaam, such as Lindi and Mtwara, during the rainy season. With a combined total of 3,569 kilometers (2,213 miles) of railway track, there are 2 railway systems that operate independently in Tanzania. In addition to operating the internal railway network, the Tanzania Railways Corporation (TRC) connects the country with Uganda, Kenya, Burundi, and Rwanda. The Tanzanian/Zambian Railway Authority (TAZARA), in contrast, connects the port of Dar es Salaam with Zambia.

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3. Livestock in Tanzania

(Main source: Livestock and Dairy Industry development in Tanzania Tanzania is endowed with abundant natural resources which include among others pasture land and a variety of livestock species for the production of a range of livestock products. Out of the total 88.6 million hectares of land resource, 60 million hectares are rangelands suitable for livestock grazing, able to carry up to 20 million Livestock Units. However, due to tsetse infestation and other constraints, only 40% of the rangelands are utilised for grazing 18.5 million cattle; 13.1 million goats and 3.6 million sheep. Other major livestock species kept in the country include 1.2 million pigs and 53 million poultry. More than 90% of the livestock population in the country is of indigenous types, kept in the traditional sector. Characteristically, this livestock has a low productivity, yet it is well adapted to the existing harsh environment, including resistance to diseases. Livestock is among the major agricultural sub-sectors in Tanzania. Out of the 4.9 million agricultural households, about 36% are keeping livestock (35% are engaged in both crop and livestock production while 1% are purely livestock keepers). The industry accounted for 5.9 percent to total GDP in 2006, of which beef, dairy and other stock provided 40%, 30% and 30% respectively. The contribution of livestock is not limited to its share in the total GDP but also plays other important roles such as contribution to national food supply (meat, milk and eggs), and food security. Furthermore, it acts as a source of cash income, employment and an inflation free store of value. It also provides manure and draught animal power thus contributing to sustainable agriculture.

1 Meat production Meat production is an important industry within the livestock sub sector and to date most of the meat consumed in the country is locally produced. Main livestock species that are used for meat production are cattle, goats, sheep, poultry and pigs. More than 90% of these animals are indigenous types found in the traditional sector. Regions which have large numbers of livestock include Shinyanga, Mwanza, Arusha, Tabora, Singida, Manyara, Mara, and Dodoma while regions which have relatively low populations include Lindi, Mtwara, Ruvuma and Coast. However currently these regions have become major recipients of the livestock that had been evicted from the Usangu wetlands (commonly known as Ihefu) in Mbarali district. 2 Beef production Of the meat producing animals, cattle are the most important as they produce most of the red meat and contribute to 53% of total meat production. Indigenous cattle dominated by the Tanzania Short horn Zebu (TSZ) and Ankole breeds are the main source of beef in the country. About 80% of the indigenous animals are kept in the agro-pastoral system, while 14% are in the pastoral system. The remaining 6% constitute beef breeds and their crosses come from commercial ranches and the dairy herd. Over the years, Tanzania’s National Ranching Company (NARCO), with its initial 15 ranches and a total land holding of 630, 000 ha, has remained to be the major commercial beef cattle producer in the country. Apart from these government owned ranches, presently there are also some private investors and smallholder farmers who are engaging in ranching and feedlotting business. These include Glienshils ranch and Mtibwa Feedlot (Morogoro), Sumbawanga Agricultural and Animal Feeds Industries (SAAFI - Rukwa), Manyara Ranch (Arusha), Kisolanza farm (Iringa) and small scale Livestock farmers in Arusha, Mwanza, Shinyanga na Mara regions. In addition, through a government initiative of promoting private ranching, NARCO has subdivided some of its ranches into 124 small and medium scale ranches (2000- 4000 hectares) capable of holding over 120,000 beef cattle and subleased to Tanzanian investors, while retaining 20,000

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hectares in 8 ranches, in addition to Ruvu and Kongwa which have been left as disease free ranches under NARCO management. This initiative is a potential additional source of quality beef for the domestic and export market. Factors that constrain development of the beef industry include low genetic potential of the existing stock, inadequate infrastructure, inadequate marketing systems, prevalence of animal diseases, inadequate technical support services and weak livestock farmers’ organizations. 3.3 Sheep and Goat Meat Production Small ruminants (sheep and goats) contribute about 22% to the national meat supplies. Sheep and goat meat production is being practiced by about 30% of the agricultural households in Tanzania. As is for cattle, the national sheep and goat flock is mainly composed of indigenous strains which are widely distributed and adapted to a range of agro-ecological zones. Their ability to multiply and grow faster than cattle at a relatively low cost make sheep and goats more attractive to small-scale farmers. Despite these attributes, their production is constrained by poor nutrition, prevalence of diseases, low genetic potential and poor marketing infrastructure. The annual off-take rates are estimated at 29% and 28% and average carcass weight of 12 and 15 kilograms for sheep and goats respectively. Development related interventions have included introduction and use of improved breeds such as Malya blended Goat and Boer goat and Blackhead Persian sheep, that have fast growth rate and high prolificacy. Additionally, extension programmes with emphasis on management (nutrition, housing, disease control and controlled breeding) have been implemented. A notable example in this regard is the Newala goat extension project which later on came to be known as the Lindi Mtwara goat Extension project under the financial assistance of the Finish government, which strived to increase both the number of goats and goat keeping households. The current objective is to promote commercial and sustainable production of sheep and goats to satisfy the domestic demand and penetrate the large and unexploited export markets. 3.4 Poultry meat production With regard to the poultry industry, this is divided into traditional and commercial production systems. Indigenous chickens are the main types found in the traditional system and comprise over 70% of the national flock, supplying most of the poultry meat and eggs consumed in rural areas and about 20% in urban areas. The traditional production system is performed by almost every rural household. On the other hand commercial poultry production is mostly practiced in urban and peri-urban areas and productivity levels are relatively higher. The majority of commercial poultry farms are found in Dar es Salaam, the coastal region, Arusha, and Kilimanjaro. The production of day old chicks on the other hand is carried out in hatcheries most of which are located in Dar es Salaam and the coastal regions. A total of 28.7 million Day Old Chicks were produced in 2006/07 compared to 26.8 million in 2005/2006. As production of day old chicks does not satisfy demand, importation becomes inevitable. In this regard about 782,550 chicks were imported in 2006/07 compared to 2.1 million which were imported the previous year. Moreover, 3.1 million eggs for hatching were imported in 2006/2007 compared to 8.4 million of 2005/2006. The decline in the number of imported chicks and eggs is attributed to the imposition of an import ban as a result the of the Bird flu threat. Factors constraining development of the poultry industry are prevalence of diseases, poor quality feeds, inadequate technical support services, low genetic potential of the local breed and weak farmer organizations. Strategies to improve the poultry industry have included use of improved breeds for crossbreeding purposes, implementation of programmes to control diseases such as Newcastle Disease, promotion for the establishment of breeding farms and hatching facilities. The current objective is to increase quantity and improve quality of poultry and its products to meet domestic demand and export surplus to external markets.

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3.5 Pig meat production Pig production for meat is currently becoming popular in many parts of the country. Most pigs are kept in Mbeya, Iringa, Ruvuma Kilimanjaro, Rukwa, Morogoro and Manyara regions. The majority of pigs are kept in the traditional sector under a free-range system and only few are kept under an improved management system. Small-scale subsistence farmers keep the majority of pigs as a backyard activity in mixed farming systems, mainly depending on forages and supplements. The performance of pigs in this system is generally low, as exemplified by the average slaughter weight of 50 – 70 kg at the age of one year. Commercial pig production is limited to a few farmers with a regular income, mainly to meet the high cost of concentrate feeds among other requirements. Inbreeding and lack of proper recording has caused problems within the existing pig population. Inadequate support services, poor slaughter and marketing infrastructure, diseases prevalence and cultural and religious taboo also affect the development of the pig industry. Strategies implemented over the years have included promotion on the use of improved breeds, crossbreeding and selection through Extension Services. The development objective is to promote pig production in order to contribute towards food security, improve nutritional requirements, and increase incomes while conserving the environment. 3.6 Hides and Skins Hides and Skins are important byproducts from cattle, sheep and goats and for many years they have been the only significant foreign exchange earner from the livestock sector. Hides and skins are also important raw materials for the tanning industry and for the manufacturing of finished leather and leather products/goods such as shoes, hand bags, belts etc. With an off-take rate of 10-15% for cattle, 28% for goats and 29% for sheep the potential annual production of raw materials is estimated at 2.8 million hides, 3.8 million goat skins and 1.0 million sheep skins. Despite this huge hides and skins production potential, in practice only relatively low recovery rates are realized amounting to 58 – 60 percent. For instance in the year 2006/07 a total of 1.98 million hides, 1.52 million goat skins and 1.22 million sheep skins were collected. Of these about 1.7 million hides, 1.05 million goat skins 928.000 sheep skins worth US$ 13.0 million were exported, 80% being in raw form and 20% in semi processed form. The most important constraint that impedes development of this sub-sector is poor quality of the hides and skins. The problem of quality caused by defects extends to each of the subsequent stages of processing of the leather. This calls for intervention options or ‘damage control’ as early as possible in the value chain, preferably the pre-slaughter stage. A notable recent intervention to revitalise the industry is the preparation and implementation of a leather development strategy which includes an imposition of a 20% export levy (increased to 40% recently) as a measure to discourage export of raw hides and skins and encourage local processing. Proceeds of this levy will be utilized to address problems in the whole supply chain and facilitate improvement of the quality of raw materials among others. 3.7 Processing, marketing and consumption Production of livestock and livestock products in the country has mainly been for the domestic market. In order to facilitate the marketing of livestock and livestock products Tanzania has developed strategically domestic and export trade facilitating infrastructure. These include primary , secondary and border markets, holding grounds, veterinary checkpoints and slaughter facilities including abattoirs. In addition there is a well-structured Veterinary Service that facilitates compliance with OIE and WTO/SPS measures. With regard to livestock markets, there are over 300 primary, 13 secondary and 6 border markets in the country. While primary markets are run by respective district councils, border and secondary

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markets are under control of the Ministry. Currently only a few primary markets are functioning while most of them are in poor condition. Under the Tanzania Livestock Marketing Project activities implemented included rehabilitation of marketing infrastructures north of the central railway line. The infrastructure includes 56 Livestock Markets, 13 holding grounds, 15 Veterinary check points, 90 night camps 890 kms of stock routes, 60 railway wagons, construction of the Dodoma Modern Abattoir and a Meat Industry Training centre currently operating under VETA. In addition a marketing information system was developed in collaboration with the Local Indigenous Technical Knowledge system (LINKS) Programme which generates marketing information for use by stakeholders. This programmes opeates in 14 primary secondary livestock markets. Processing of livestock products in Tanzania is generally limited. To date production of meat in the rural areas as well as urban centers is carried out in slaughter slabs using simple and basic slaughtering facilities (with basically no cold storage) or in the few existing abattoirs. Currently there are only 6 small scale meat processing plants and 7 modern abattoirs in the country. Average annual slaughters include 1,500,000 cattle; 2,500,000 goats; and 550,000 sheep and the current per capita consumption of meat is 11 kg per year which is very low, compared to FAO recommendation of 50 kg. Trade in livestock and livestock products has restarted, but is still in an infancy stage. Official exports of live animals to Comoro and Burundi in 2006/07 totalled 2,542 cattle and 1,852 goats valued at TShs 1.03 billion compared to 1,706 cattle and 800 goats valued at Tshs 675.9 million in 2005/2006. Furthermore, 92 tonnes of meat (goat, sheep and cattle) worth Tshs.352 million were exported to Kuwait, Oman and United Arab Emirates (Dubai) countries in 2006/2007 compared to 6.8 tonnes in 2005/2006. Apart from this official trade there is also a cross border informal trade in livestock and livestock products whereby approximately 300,000 heads of cattle are reported to cross into neighbouring countries (Kenya) informally annually. There is therefore a great need to strengthen monitoring of this trade in order to facilitate its formalisation. Processing, marketing and consumption of quality meat and meat products is limited by inconsistent supply of quality animals , inadequate market information, inadequate research and training in meat technology, low awareness of consumers on meat quality and lack of capital for investment in meat processing plants. Due to these deficiencies, some commercial companies import meat and meat products into the country to supply to niche markets in tourist hotels, supermarkets and mining centres. There is need to collaborate with other stakeholders in promoting processing, marketing and consumption of quality meat and meat products in order to meet nutritional requirements and increase exports.

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Starting a Business in Tanzania (Source: http://www.doingbusiness.org)

The challenges of launching a business are shown below. Included are: the number of steps entrepreneurs can expect to go through to launch, the time it takes on average, and the cost and minimum capital required as a percentage of gross national income (GNI) per capita.

DB 2012 RANK 123

No. Procedure Time to Complete Associated

Costs

1

Apply for clearance of the proposed company name at

the Business Registration and Licensing Authority

"BRELA"

1 day no charge

2 Apply for a certificate of incorporation and of

commencement to Registrar of Companies 7 days TZS 206,200

3 Apply for taxpayer identification number (TIN) with the

Tanzania Revenue Authority 2 days no charge

* 4 Income tax officials inspect the office site of the new

company

1 day, simultaneous

with procedure 3 no charge

* 5 Apply for PAYE with the Tanzania Revenue Authority 1 day, simultaneous

with procedure 4 no charge

6 Apply for business license from the regional trade officer

(depending on the nature of business) 6 days TZS 1,000

* 7 Receive a land and town inspection of the premises 1 day, simultaneous

with procedure 6

transport cost,

trivial

* 8 Have the health officer inspect the premises and obtain

his signature

1 day, simultaneous

with procedure 6

transport cost,

trivial

9 Apply for VAT certificate with the Tanzania Revenue

Authority 4 days no charge

*

10 Reveive VAT/stamp duty inspection

1 day, simultaneous

with procedure 9 no charge

11

Register for the workmen’s compensation insurance at

the National Insurance Corporation or other alternative

insurance policy

1 day no charge

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No. Procedure Time to Complete Associated

Costs

12 Obtain registration number at the National Social Security

Fund (NSSF) 7 days no charge

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Relevant contacts

Netherlands Embassy Dar es Salaam

Umoja House, 4th floor

Garden Avenue

Dar es Salaam

Telefoon(+255) 22 2110000 / 2110045/47

Fax(+255) 22-2110044|

National Ranching Company

2nd Floor, Mavuno House

P.O.Box 9113,

Dar es Salaam

John Mbogoma

john.mbogoma@narco.co.tz

+255 22 2111393 / +255 22 2111956

http://www.narco.co.tz

Tanzania Chamber of Commerce, Industry & Agriculture (TCCIA)

21 Ghana Avenue,

Dar es Salaam

T : (22) 211-9436/ 212-8136

F : (22) 211-9437

E : info@tccia.com

Website: www.tccia.com