WHY INVEST IN TANZANIA

Ineke Bussemaker, managing director and CEO of National Microfinance Bank (NMB), reflects on the growth of both the banking and the telecommunications

sectors: “Less than 15 percent of the population have a bank account, and 50 percent have a mobile phone, so there is so much potential here. You need stable banking infrastructure to become a developed country, so NMB is looking to harness this potential.”

In 2014, the economy of Tanzania was US$48 billion, making it the second biggest economy in East Africa. With an average GDP growth rate of 7 percent over the past five years, and projections for a similar growth rate over the next five, it is also one of the fastest growing economies in the world.

In 2014, Tanzania received the third highest amount of FDI in the continent, the US$2.1 billion shows external confidence in the Tanzanian economy.

There are 800,000 youths entering the workforce every year. Tanzania is one of the most resource-rich countries in the world. To add to its abundance of natural resources, there has been a recent find of around 1.5 m3 of natural gas reserves. The Central Bank believes that when work begins on sites of planned LNG, 2 percentage points will be added to Tanzania’s annual economic growth.

It is expected that by 2050, the population of the world will reach 11 billion. The UN believes that half of this amount will be concentrated in just 9 countries - one of these being Tanzania.

A mixture of tight monetary policy, falling import costs and an increase in regional exports, has caused inflation to remain relatively low at 5.6 percent.

President Magufuli plans to use natural gas reserves for revenue - but also to boost electricity generation by at least 3,000 megawatts by 2021.

The United Kingdom, China, South Africa, the European Union, and Canada are the country’s primary investors. Foreign investment is usually directed towards mining, energy, and agriculture.

Tanzania has the world’s most developed rules for mini grids and off-grid power sources, showing the world how to tackle energy poverty. This paves the way for smaller energy companies to take advantage of a growing market, especially renewable energy suppliers.