The most significant transformative factor on the economy of Tanzania is the large natural gas reserves that were recently discovered. Dar es Salaam is one of the fastest growing cities on earth yet infrastructure to support this growth is poor.

1. Tanzania – Battling for Attention in
East Africa
An Introduction, May 2015

2. Contact information
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www.amatka.com
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Amatka – Insight Africa Services
Amatka (Pty) Ltd is a South African company founded and owned by Finnish entrepreneurs based in
Cape Town. Amatka provides knowledge and views of business opportunities in Africa with focus on
Southern and Eastern Africa. Insight Africa also supports networking in these countries.
Tekes – the Finnish Funding Agency for Innovation
Tekes is the main public funding organisation for research, development and innovation in Finland.
Tekes funds wide-ranging innovation activities in research communities, industry and service sectors
and especially promotes cooperative and risk-intensive projects. Tekes’ current strategy puts strong
emphasis on growth seeking SMEs.

3. Contents
Introduction...........................................................................................................2
Background .......................................................................................................2
Purpose.............................................................................................................2
Recommended Use and Liability Disclaimer ......................................................2
Tanzania in a Nutshell .......................................................................................3
Political Economic Climate: Business Point of View...............................................5
Trade and Investments ......................................................................................5
Growth: Drivers and Challenges ........................................................................6
Political Economy: Supporting Factors and Challenges......................................7
Key Areas of Potential Growth ...........................................................................8
Innovation Ecosystems .......................................................................................10
Innovation Hubs...............................................................................................10
Research.........................................................................................................10
Large Companies ............................................................................................11
Sectors in Focus .................................................................................................13
Energy and Environment .................................................................................13
Healthcare and Wellbeing................................................................................15
Education ........................................................................................................16
ICT, Digitalisation and Mobile Solutions ...........................................................17
Future.................................................................................................................20
SWOT: Tanzania.............................................................................................20
Scenarios ........................................................................................................21
Information Sources............................................................................................22
Front cover picture: Traffic on the Maktaba Street/Azikiwe Street in Dar es Salaam.
The white tower on the left belongs to the St. Alban Angican Church by Jojona
(Wikipedia)

4. 2
Introduction
Background
This report provides, in a nutshell, facts of Tanzania and insights into future business
opportunities. The report is based on statistics, recent articles and publications, and
expert views.
The report has been prepared by an international team coordinated by Amatka (Pty)
Ltd, a private company owned by Finnish entrepreneurs, based in Cape Town, South
Africa. The report is part of Team Finland’s Future Watch Program in Africa, called
“Strategic Partners for Innovation Actives Africa Services”, and coordinated by Tekes,
the Finnish Funding Agency for Innovation.
The focus of the process is on the four most promising (defined by size, growth and
ease of doing business) Sub-Saharan African countries: Kenya, Nigeria, South Africa
and Tanzania. Sectors in focus are: ICT, mobile & digitalisation, education, health &
wellbeing, energy & environment.
Elements of Strategic Partners for Innovation Activities Africa Services are: Continent
Report Sub-Saharan Africa, Country Reports (Kenya, Nigeria, South Africa,
Tanzania), Alerts: arising signals for the future, Updates: frequent summaries of
alerts and Contact Database.
Purpose
The reports, and this service, focuses on issues, facts, signals and insights that are
likely to play a role in doing business in, for example, Tanzania’s medium term future
(2-5 years). This report DOES NOT provide sales leads or provide a picture of how to
establish operations in Tanzania.
Using present facts and information, combined with future insights, signals, and
scenarios, the report suggests possible futures and the related implications for
Finnish SMEs interested in doing business in Tanzania.
Recommended Use and Liability Disclaimer
Before reading this report, it is recommended to get familiar with the Sub-Saharan
Africa Continent report. Additionally, it is strongly recommended that the readers
always check the latest information; situations in Africa can change overnight.
Amatka has made every attempt to ensure the accuracy and reliability of the
information provided in this report. However, the information is provided "as is"
without warranty of any kind. Amatka does not accept any responsibility or liability for
the accuracy, content, completeness, or reliability of the information contained in this
report. No warranties, promises and/or representations of any kind, expressed or
implied, are given as to the nature, standard, accuracy or otherwise of the information
provided in this report nor to the suitability or otherwise of the information to any
particular circumstances. Amatka shall not be liable for any loss or damage of
whatever nature (direct, indirect, consequential, or other), which may arise as a result
the use of this report, or from use of the information in this report.

5. 3
Tanzania in a Nutshell
Tanzania’s economy has
continued to perform strongly,
with current growth at around
7%. This is driven largely by
communications, transport,
financial intermediation,
construction, agriculture and
manufacturing. In the medium
term, growth will be supported by
the ongoing investments in
infrastructure and the projected
good weather conditions. Also,
these medium-term growth
projections are backed by
continued investments in the
recently discovered natural gas
reserves in Tanzania and the expansion in public investments, as well as the related
investments aimed at stabilising power generation in the country.
History in Brief
Before Europeans arrived in 1498 (Vasco Da Gama), Bantu people, Persians,
Romans, Arabas and Masai people had migrated to Tanzania. During the 16th
century the Portuguese took control of the coast but in the 17th century they were
driven out by Arabs from Oman. In 1885 the Germans began taking over the region
and the British had taken control of the island of Zanzibar. After the First World War
Tanzania was handed over to the British and it was called Tanganyika.
Tanzania became independent in 1961 with Julius Nyerere as prime minister. In 1962
Tanzania became a republic and Nyerere became president. In 1967 Nyerere
adopted a policy of socialism. The cornerstone of that policy was called Ujamaa
(family hood). Nyerere planned to create huge collective farms. The people were
encouraged to move into large villages in which food and other goods would be
produced collectively for the whole community. However the policy proved disastrous
for Tanzania, agricultural production slumped and the Tanzanian economy was
wrecked. In 1985 Nyerere resigned.
He was replaced by Ali Hassan Mwinyi who privatized business and tried to purge
corruption. He also encouraged foreign investment. As a result, the economy of
Tanzania began to grow steadily. In 1992 Tanzania became a multi-party democracy
and in 1995 Benjamin Mkapa became president. In 2005 Jakaya Kikwete was
elected president of Tanzania. Tanzania is a one party dominant state with the
Chama Cha Mapinduzi (CCM) party in power.
Tanzania Today
While poverty has declined over the past 10 years, Tanzania is still a very poor
country. Approximately 40% of Tanzania’s adult population earns less than $1.25 per
day, while nine out of 10 Tanzanians earn less than $3 per day.

6. 4
Overall, there have been improvements related to the agriculture, construction,
mining and tourism. The overall value of both exports and imports has been
increasing. An increasingly high proportion of capital inflows has been derived from
private capital, with a correspondingly lower proportion from official aid. The most
significant transformative factor on the economy is the large natural gas reserves that
were recently discovered.
The ‘Big Results, Now’ initiative (BRN) took off in 2013. The BRN initiative is inspired
by a similar Malaysian programme with the aim of facilitating the achievement of
Tanzania’s Development Vision 2025. Government is focusing their efforts’ on
accelerating the attainment of results in six priority areas, with emphasis on
leveraging private sector investment through Public Private Partnerships (PPPs).
Figure 1 provides some of the figures at a glance as well as distances between
commercial capital Dar es Salaam and some other cities.
Figure 1. Key Indicators - Tanzania

7. 5
Political
Economic
Climate:
Business
Point of View
Trade and Investments
According to the World Bank the overall value of Tanzania’s exports increased by
9.4% in 2014. Increases in the total value of manufactured exports and service
exports compensated for the decline in the value of traditional agricultural exports.
Over the same period, the total value of imports increased at a similar rate of 9.2%, in
part driven by increases in both oil and construction-related imports.
Tanzania’s largest export partners in 2012 were South Africa, Switzerland, India,
China and Kenya.
Figure 2. Tanzania’s export destinations and import origins 2012 (source:
Observatory of Economic Complexity/United Nations COMTRADE)
Figure 3. Trade between Finland and Tanzania 2012 (source: Observatory of
Economic Complexity/United Nations COMTRADE)
According to the International Monetary Fund (IMF), the slump in oil prices is
expected to further buoy Tanzania's economy in 2015 following a GDP expansion of
more than 7% in 2014.

8. 6
Of the four focus countries (Kenya, Nigeria, South Africa and Tanzania) Tanzania is
the least developed and highly aid dependent. Official development assistance
(ODA) to Tanzania increased from $1.6 billion in 2000 to $3 billion in 2010, which
amounted to 14% of GDP. More than 40 development partners provide support to
Tanzania and aid inflows represented only 40% of total capital inflows.
Growth: Drivers and Challenges
The capital, Dar es Salaam, is rapidly becoming a hub city for businesses, with a
rapidly growing population and market place. Discoveries of significant offshore
natural gas offer huge potential rewards. Dar es Salaam’s port is relatively efficient
but feeling the strain of increased traffic. There are significant transportation and
logistics upgrades to lessen cargo waiting times, including a new port at Bagamoyo,
along with a handful of other similar investments. Infrastructure is critical for Tanzania
and its neighbours: Malawi, Zambia, Democratic Republic of Congo, Rwanda,
Uganda and Burundi. The development of the transport sector will offer new
opportunities for public-private partnerships in the region.
Future economic growth will, as in almost every African country, depend on the ability
of the government to remove existing constraints on businesses. The most significant
constraints are electrical, energy, transport, infrastructure, and economic
diversification.
What Tanzania needs is competitive labour-intensive sectors to absorb the growing
youthful labour force. Growth in employment has so far largely come from
domestically-oriented industries with the exception of tourism. There is a need to
promote competitiveness gains in labour-intensive sectors such as manufacturing
and services. The agricultural sector still contributes to approximately one quarter of
GDP and provides employment to approximately 75% of all Tanzanian workers.
CASE: FIRST TANZANIA-BASED PRIVATE EQUITY FIRM
Private equity flows into East Africa have increased significantly in the last five years.
Some PE funds have sealed deals with Tanzanian companies but they mostly operate
out of Nairobi or Johannesburg. Mkoba was co-founded by a team of Tanzanian
professionals led by former World Bank vice-president Frannie Léautier and
businessman and economist Jitesh Ladwa.
“In Tanzania, and in most post-socialist countries, we are faced with a triple problem
of capital. One is that the state banks, where we used to get money, are gone
because of liberalisation of the banking sector,” says Ladwa. “Foreign banks are
primarily from South Africa and their cultural affinity is to lend money to their own
people. Third is that even European financial institutions don’t give significant
[amounts of] money to African-owned businesses.”
Ladwa explains that business people who did well in the 1970s and 80s in Tanzania
relied on “political patronage” and connections to land their first job, and then earn
enough money to grow their businesses. Mkoba wants to prove business people can
receive funding and support from a PE firm to grow their businesses, based on their
potential and not their social connections.
Although Tanzania has a group of successful family-owned businesses, Ladwa says
most of these were established decades ago and are headed by older businessmen

9. 7
who may not be as innovative and nimble as the emerging crop of entrepreneurs in
their 20s and 30s.
However, he notes a “cultural bias against giving money to locals” is making the entry
into business of young entrepreneurs difficult. “A decade ago we wouldn’t complain
because there was not much economic opportunity in Tanzania. But today Tanzania
is booming. There are a lot of young people with ideas but they can’t get money. We
want to give money to local enterprises. We want to build African equity and African
management experience.”
The fund is focused on various sectors including agribusiness, services and
manufacturing, urban renewal, financial services and innovative ventures in
renewable energy and ICT. Ladwa says Mkoba has already shortlisted more than 20
companies for funding it hopes to start in June 2015. “Surely in a city of five million
people you can find trustworthy young Africans who are enterprising and who will look
after the money and make profits. If we make an example of 20 people whom we
fund, and they grow into something bigger, then other investors will join in and they
will give more money [to local businesses],” he says.
Source: How we made it in Africa
Political Economy: Supporting Factors and Challenges
The ‘Big Results, Now’ initiative (BRN) took off in 2013. The BRN initiative is inspired
by a similar Malaysian program with the aim of facilitating the achievement of
Tanzania’s Development Vision 2025. The government is focusing its efforts on
accelerating the attainment of results in six priority areas, with emphasis on
leveraging private sector investment through PPPs.
Priority areas named in the BNI initiative are:
 Energy and Natural Gas
 Agriculture
 Water
 Education
 Transport
 Mobilization of Resources
The most significant transformative factor on the economy is the large natural gas
reserves that were recently discovered. The most significant impacts of this discovery
on the local economy will not be felt for at least seven to ten years. Careful
management of the revenues derived from these natural resources will be required to
ensure the optimal use of these revenues and to achieve inclusiveness.
However, despite some positive developments, there are a number of challenges to
business that are prohibiting the Tanzanian entrepreneurial environment and activity:
 Insufficient and unreliable infrastructure
 Protectionist economy
 Prohibitive requirements to access capital
 Insufficient supply of equity capital
 Income taxes perceived to be prohibitively excessive

10. 8
Key Areas of Potential Growth
Of the four focus countries (Kenya, Nigeria, South Africa and Tanzania) Tanzania is
by far the least developed. Whereas Kenya has recently gained a lot of attention as
the Eastern African entry hub, Tanzania has drawn only fractions of this. For
instance, Kenya has largely been conquered by foreign investors and large
multinational companies.
Tanzania still has some potential areas of growth. Tanzania may be a good choice
for companies and investors looking for a home base for their Eastern African
operations. For example, a large, underdeveloped formal sector enables small
businesses to pursue new opportunities without being blocked by large, established
firms.
The property market in the capital, Dar es Salaam, is booming with office buildings,
shopping centres and residential buildings. The increasing appetite for real estate in
Tanzania is partly driven by a thriving agricultural industry and recent oil and gas
discoveries that have led to an influx of expatriates into the country. Trade is also a
key driver as traders from Zambia, Nigeria, Congo and Mozambique come to buy
goods.
CASE: SELLING COSMETICS IN TANZANIA
In 2011, when Swedish entrepreneur Marie Englesson approached global cosmetics brands
to distribute their products in Tanzania, many indicated they were not interested in the
market. “Getting suppliers on board was much harder than I thought. They felt it was a little
too early,” she recalls.
Undaunted, she opened the first outlet of her business Atsoko in May 2012 in Dar es Salaam.
The tide is gradually changing and more international brands are now eyeing Tanzania. “One
advantage I have now is being three years ahead of everyone else,” says Englesson.
Englesson attributes the entry of more global brands to rising demand for high-quality make-
up and beauty products among urban women. She notes global brands were initially hesitant
to enter the market because there were few formal retailers. But this too is changing with the
entry of Kenyan supermarket chains Uchumi and Nakumatt, and construction of more
shopping malls. She notes that Mlimani City mall, one of the oldest in Dar es Salaam, is
being expanded, while a new facility, called Mkuki House Shopping Mall, is under
construction close to the city centre.
“Dar es Salaam is still three or maybe five years behind Nairobi, but urban Tanzanian women
are trendy and have an eye of fashion. They are a very into cosmetics.” “The average spend
per client is about US$15 to $20 per occasion for one or two products. But then we have
sometimes women who come in and buy a whole kit for $100 or even $150,” she says.
Englesson attributes the success of Atsoko to the fact that its products are sold at the same
prices as offered in Europe. The stores also have make-up artists who advise and help
clients pick the right products. In fact, one of the critical roles for Atsoko staff is educating
customers. “There is not much knowledge on cosmetics and make-up, so we need to
educate customers on what’s a genuine or a fake product. We have to teach them the
benefits of buying real brands and not going to the Kariakoo [informal] market to buy
something they don’t know what its origins are.”
But, she adds, it’s hard to find staff who have the necessary experience because the formal
retail sector is undeveloped. And another challenge is registering new products with the
Tanzania Food and Drugs Authority (TFDA) – a process that can take six to nine months.

11. 9
Englesson was inspired to start the business after working for telecommunications company
Tigo in Tanzania and Rwanda. “I had a number of female colleagues at Tigo and whenever I
went to Europe they’d ask me to bring them products they couldn’t get hold off,” she recalls.
But she notes that it would probably have been easier to start a business in Sweden because
she knew how things work there compared with Tanzania, and as a result progress has
taken much longer than she expected. “You need to consider five to 10 years before you
have a steady stable business. I am in my third, and only now am seeing things fall to place.
In the first two years we had to formulate the business model and one needs to understand it
takes time to find the right concept.
“The one thing I can say for sure: it is never boring.”
Source: How we made it in Africa

12. 10
Innovation
Ecosystems
Innovation has the potential to be the catalyst to change economic development in
Tanzania. There is a need to increase the quality of services and the quality of
outcomes in order for Tanzania to reduce poverty and further its development.
Compared to the other focus countries in Sub-Saharan Africa, the Tanzanian
ecosystem is lacks private actors and is heavily government and donor managed.
Thus, the innovation ecosystem framework used for the Sub-Saharan Africa
continent and other focus countries cannot be applied to Tanzania as many
framework actors are completely missing. Examples of missing actors include:
private investors including multinational corporations, philanthropists and large scale
events and competitions.
Innovation Hubs
According to IST-Africa (2014) Tanzania’s innovation hubs are:
 Dar Teknohama Business Incubator (DTBi), established in 2011 as a Publi,
Private Partnership between InfoDev and COSTECH.
 Buni Hub (previously known as Innovation Space), established at COSTECH
in October 2011 within the TANZICT, bilateral project between the Finnish
government and Tanzanian government.
 KINU, established in July 2012 as “a Social Enterprise with the mission of
concentrating, growing and accelerating the Tanzanian tech and social
landscape”, founded by individuals (funded by Google and The Indigo Trust)
who started Tanzania’s tech community with events such as BarcampDar,
Hackathon and Apps4Africa.
 University of Dar es Salaam ICT Incubator (UDICTI).
Research
Tanzania has 11 Public Universities, 17 private universities and 26 private institutions
of Higher Education. The list of TOP 10 Tanzanian Universities is presented in
Figure 4.

13. 11
Figure 4. List of TOP 10 Universities in Tanzania (source: Webometrics
Ranking of World Universities)
Large Companies
As of November 2014 there were twenty-two listed companies in the Dar es Salaam
Stock Exchange.
Among notable companies in Tanzania, according to Wikipedia (2015), are:
 Air Tanzania, airline
 MIC Tanzania Limited (Tigo), telecommunications
 Mwananchi Communications, media
 Precision Air, airline
 Quality Group Limited, conglomerate
 Tanga Cement, cement
 Tanzania China Friendship Textile Company, originally founded as
Friendship Textile Mills Limited
 Tanzania Electric Supply Company Limited (TANESCO), electricity supply
utility
 Tanzania Railways Corporation, state-owned enterprise
 Tanzania Telecommunications Company Limited, telecommunications
 Tanzanian and Italian Petroleum Refining Company Limited, refinery
 Vodacom Tanzania, mobile
Additionally there are several large, family-run, conglomerates in Tanzania:
 MeTL (self-declared annual turnover: $1bn): Trading in 200-plus items,
manufacturing of a wide range of goods including bicycles and textiles,
agriculture, insurance, transport and logistics, mobile telephony,
infrastructure and distribution.

14. 12
 Bakhresa Group (self-declared annual turnover: more than $600m):
manufacturing and distributing dozens of products, from ice-cream and
biscuits to fizzy drinks and flour, trading agricultural commodities, ferrying
passengers, and fuel distribution.
 Sumaria Group (self-declared annual turnover: $130m): At least 25
companies since 1975, in plastics manufacturing, cotton ginning, drinks
bottling, food processing, pharmaceuticals, soaps, cement, flour and, more
recently real estate, biogas and finance.
 MAC Group: growing and processing tea and sisal; manufacturing cosmetics,
toiletries, electrodes, detergents, slippers, pharmaceuticals and more;
shipping, mining and insurance. It is expanding in east and southern Africa.
 MM Integrated Steel Mills, Motisun Holdings Industrial manufacture of steel
sheeting and pipes, rubber, paint, fizzy drinks and hotel operator.

15. 13
Sectors in
Focus
Energy and Environment
Tanzania has a wide variety of energy resources, which include natural gas,
biomass, hydropower, geothermal, coal, solar and wind power. Much of this energy
potential remains unexploited. The vast majority of people do not have access to
electricity. The rural population is nearly completely excluded from this source of
modern energy: 2% of rural people and 39% of urban people have access to
electricity while 94% of the rural population use biomass. Only 10% of households
have access to the national grid, and only 1% is able to use electricity for cooking.
According to the United Nations Development Programme (UNDP), petroleum,
hydropower, and coal are the major sources of commercial energy in the country.
Electricity generation, transmission and distribution in Tanzania have been through
the Tanzania Electric Supply Company (TANESCO). The company is wholly
Government-owned and is responsible for 98% of the country's electricity supply.
Two-thirds (381 MW) of Tanzania's installed capacity is hydro-powered.
Blackouts and power rationing as a result of low water levels in the hydro dams have
forced TANESCO to rely on gas-powered generators and to look increasingly at
thermal and gas projects for future capacity increases. Hence, the government is
encouraging investment to expand generating capacity, distribution systems and
developing indigenous sources of energy. The electricity generation system contains
two private independent power projects (IPPs), which are connected to the
TANESCO grid: Independent Power Tanzania Ltd (IPTL) and Songo Gas
(SONGAS).
Opportunities in the energy sector include:
1. Wind energy. This is used to pump water for irrigation and to meet domestic
and livestock water needs. There are two project developers planning to
establish 50 MW and 200 MW projects in Makambako and Singida areas
respectively.
2. Solar energy. This is a proven technology and various actors have been
trying to commercialize the technology in rural areas. Solar photovoltaic (PV)
systems have been used for telecommunication, lighting, refrigeration, water
pumping and powering electronic equipment at individual residences,
schools and health centres/rural dispensaries.
3. Biomass. The country has considerable resources from forest and
agricultural residues with an economic possibility of establishing CDM project
activities, by producing electricity for industrial and cooking for domestic
purposes.
4. Micro/mini hydro. Tanzania has an estimated 3,800 MW of economic hydro
potential capacity. Only 15% of installed capacity has been developed. The
country's hydro potential is estimated at 4,500 MW of which only around 563
MW is developed. It is estimated that 100 GWh/yr could be produced from
micro/mini systems. Currently only around 32 GWh/yr is produced from these
smaller systems, many of which are private schemes run by religious
missionaries.

16. 14
5. Solid Waste. Urban waste is a fast growing problem driven by rapid urban
population growth. This is generally at least twice rate of national population
growth. This is evidenced by the increasing illegal dumpsites, irregular
collection of garbage, and rising garbage piles and dumps in city alleys,
streets and residential areas. Most cities and municipalities have failed to
cope with the increasing growth of waste production.
In early 2015, the Tanzanian national government announced, "One Million Solar
Homes," an energy commitment to ensure that a million Tanzanian homes have
access to solar electricity by the end of 2017. This project is expected to provide
solar electricity for 10% of the nation's population and generate over 15,000 solar
jobs. Currently, 86% of Tanzanians depend on kerosene and candles for light, which
are known to be inefficient, dangerous and polluting. The plan sets a model for other
nations working towards the Power Africa initiative announced by President Obama
in 2013. This Initiative aims to double the number of people with access to electricity
in sub-Saharan Africa. The One Million Solar Homes initiative will be implemented by
Off Grid Electric Ltd., a rapidly growing solar company in the developing world.
Known in Tanzania as "M-POWER," Off Grid is leveraging the leasing model of their
equity investor, and the largest US solar provider, SolarCity, is bringing families in the
developing world solar at radically affordable costs. Monthly payments are as little as
twenty cents per day.
CASE: SOLAR PIONEER ON ADAPTING ENERGY MODELS TO MEET RURAL NEEDS
In 2014 Tanzanian solar solutions company Rex Energy launched a solar powered charger
for mobile phones to address the needs of people living off the grid.
Depending on the package, the solar chargers can cost between US$15 and $50, but Rex
Energy believes the way forward is to allow flexible payment plans. “We know capital is
always a challenge for rural villages, but if we give them renting charges where a person
can pay a few cents of a dollar a day, or even say $1 a week, then they can afford it
because we spread the cost over a length of time.”
The system is portable and can also charge laptops and other appliances in remote areas
not linked to the national grid. “We have a number of solutions, including for fishermen who
can use a solar powered system instead of kerosene lanterns. We have a solar lantern that
even attracts fishes to the nets… which besides cutting fuel costs also helps them catch
more fish, and at the same time helps reduce carbon emissions.”
The company also has a mini-grid, pay-as-you go energy solution where a solar system is
installed in a community. Households can pre-set a time to access electricity and thus only
pay for the electricity they use.
“We actually learnt about this from what is happening in Bangladesh. There they have quite
good models and we are working with them to see how we can bring it to Africa, in
particular Tanzania. Instead of people having to buy big solar panels, they only pay for
electricity… at a very affordable cost.”
Source: How we made it in Africa

17. 15
Healthcare and Wellbeing
Tanzania’s health system can be described “complex and pluralistic”. It’s
comprised of public, private, and donor stakeholders, operating at several different
levels including national, regional, district and community levels. According to the
latest National Health Accounts report, 8.2% of the GDP is invested in health care
and 6.5 % of government expenditure is spent on health. Donor dependency for
health care financing typifies Tanzania’s health system.
Tanzania mainland has approximately 237 public and private hospitals, of these, 57
are district hospitals owned by the government and 35 are designated district
hospitals, owned by faith based organisations.
Statistics show that qualified health workers in the health sector fill only 35% of
positions. This leaves the country with a severe human resources crisis. This crisis,
together with other challenges facing the sector, has led to formulation and
implementation of an eHealth strategy as a way of supporting progress. As a result,
in 2013 Tanzania launched an eHealth Strategy (2013-2018). There are many
eHealth and mHealth projects in Tanzania, most of them under the umbrella of Public
Private Partnership (PPP).
The country's health sector is characterised by a fragmented landscape of ICT pilot
projects and numerous data and health information system silos. There are
significant barriers to the effective sharing of information between healthcare
participants.
The challenges with eHealth adoption include:
 low ICT budgets
 poor infrastructure to support health services
 unreliable electricity supply
 lack of ICT skills
CASE: WAZAZI NIPENDENI (parents, love me): AN SMS SERVICE PROVIDING
INFORMATION FOR PROSPECTIVE PARENTS
Through the innovation, more than 125,000 pregnant mothers have had access throughout
the country. “More than five million messages have been sent under the initiative, which
began in 2012,”
“Messages include time sensitive reminders for such events as antenatal clinic visits and
taking of malaria prevention medication. The system also sends health tips when the
information is relevant to the subscriber,” The text messages incorporate a broad range of
complementary topics, including prevention of Mother to Child Transmission of HIV/Aids,
antenatal care; family planning, malaria prevention and nutrition.
A new mother says the text messages she kept receiving from her mobile phone were her
lifeline during the entire pregnancy. “I enrolled to the service (when I was one month
pregnant after hearing it advertised on the radio”. “I only sent a message titled, mtoto, (child)
to the number 15001 as per the advert instructions and after giving details on my pregnancy,
I started getting short messages first on a daily basis and later at least four times a week on
my pregnancy status and advice on nutrition, when to go for my antenatal clinic visits, when

18. 16
to take my malaria prevention drugs, and general health care.”
Juanita Ferentinos, Partnership Director mHealth Tanzania Partnership CDC Foundation
says that providing high quality antenatal care information during pregnancy to keeping
mothers and babies healthy has had a tremendous impact on reducing maternal and new
born mortality rates in Tanzania.
Source: The East African, 2014
Education
According to UNICEF, USAID and Borgen Project, Tanzania has seen tremendous
growth and progress in the education sector over the last decade. However, despite
rapid expansion in primary and secondary school enrolment, the country’s education
system continues to struggle to deliver quality education and to keep its children in
school.
Below are some facts about education in Tanzania:
 Growth in Education. According to a census report, 94% of children aged 7 to
13 were enrolled in primary school in 2011. Only 59% of children were
enrolled in primary school in 2000.
 No Fees. This jump in enrolment is due in part to Tanzania’s abolition of
primary school fees in 2001.
 Class Size. Due to rapid enrolment numbers, Tanzania faces extreme
overcrowding within its classrooms. The average government primary school
classroom holds 66 pupils. In some areas of the country, there can be as
many as 200 pupils in a single classroom.
 Student: Teacher Ratio. While the number of enrolled students continues to
grow, a corresponding increase in qualified teachers does not.
 Student: Latrine Ratio. The pupil to latrine ratio is an even larger culprit when
it comes to factors that hinder Tanzanian children’s education, for girls,
especially.
 Drop Out Rates. In 2010, 68,000 children dropped out of primary school.
 Pregnancy. In 2010, 7000 girls dropped out of primary and secondary
schools due to pregnancy.
 Exams. Only 53% of students passed the primary school’s leaving
examination in 2010; the majority of children who passed the examination
were boys.
Though the statistics that reflect the enrolment growth are impressive, the system
supporting education in Tanzania is decrepit, if not dysfunctional.
CASE: HOW TANZANIA’S UBONGO MEDIA BUILT A BUSINESS BY MAKING MATHS
COOL
A Tanzania social enterprise is changing perceptions by helping children in East Africa
improve their understanding of the subject through an interactive educational cartoon show
that combines mathematical concepts with fun animated and catchy songs.
Established mid-2013, Ubongo Media produces a 30-minute cartoon series called Ubongo

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Kids which uses stories to help learners understand basic maths concepts as opposed to
memorising the methodology.
The series is based on three kids who attempt to solve problems in their community using
their maths skills. The three get help from talking, and singing, animal friends. The edu-
cartoon series airs every weekend on the national TV station TBC, and across the region via
Chinese Pay TV company, Star Times.
“Maths is seen by many children as a boring, hard subject. This attitude has a lot to do with
how teachers teach maths. We wanted to make it cool and easier to understand,” says
Cleng’a Ng’atigwa, co-founder of Ubongo Media.
The Tanzanian artist started working on the concept a few years ago after studying animation
at a local college. He partnered with a maths teacher to produce one animated story that was
viewed by children in his community. When he met Thai-American documentary filmmaker,
Nisha Ligon, they decided to set up Ubongo and scale their reach to a wider audience.
Every Saturday about 600,000 watch the show in Tanzania. “Our research shows there is a
4% improvement in maths among kids who watch compared with those who don’t,” says
Doreen Kessy, chief operations officer at Ubongo Media.
The company makes revenues from corporate sponsorships, licensing to broadcasters and
SMS interaction with kids. “We also realise the potential in licensing characters’ rights. For
instance, Mama Ndege is very popular. We could make money by giving licences to
companies that would want to use those characters,” says Kessy.
Kessy says Ubongo receives positive feedback from children and parents with demands for
longer episodes. However, doing business in Tanzania is “not easy,” she adds. “There is a lot
of corruption and bureaucracy. For example, children have been asking for Ubongo Kids
DVDs. So we manufactured DVDs in Thailand because it was more affordable. We shipped
10,000 copies and they arrived at the port last August. “They were released six months later,
because of bureaucracy. Obviously we will never do that again. It has been a time-
consuming process with people asking for bribes every step of the way.”
Ubongo Media sees growth potential for its cartoon series across the continent. “We now
have Ubongo Kids in Swahili and English available to viewers in East Africa. And we intend
taking the English version across the continent. There are 440 million children in Africa and
we are bringing them a fun new way to learn. And that opens the door to a future of digital
learning,” says Kessy.
The company is also developing a new edutainment show targeted at learners aged seven
and below. It will focus on teaching English as a second language.
Source: How we made it in Africa
ICT, Digitalisation and Mobile Solutions
Tanzania recognises the importance of ICT and Innovation to support socio-
economic development as part of the realisation of Development Vision 2025. Two of
the three main policies supporting innovation and entrepreneurship are currently
(2015) under revision: the updated Science Technology and Innovation (STI) Policy
will incorporate Entrepreneurship and the National ICT Policy of 2003 is under review
as part of the development of a new implementation strategy.

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The digital infrastructure in Tanzania has improved with the fibre-optic network,
investment in local Internet Exchange Points, migration to IPv6, and construction of
the National ICT Backbone (NICTBB). The eGovernment Strategy was put in place in
September 2012.
National Priorities (source: IST-Africa 2014) include:
 eInfrastructures
 Cloud Computing/ High Performance Computing
 Cyber Security
 Mobile Computing
 ICT for Creativity and Learning
 eHealth
 eAgriculture
CASE: PROVIDING SOFTWARE SOLUTIONS IN TANZANIA
Fayaz Valli, 25, is the founder of Tanzania-based software development company GetCore
Group. The business provides solutions such as web designing, mobile applications,
software development and graphic designing.
Valli started his business while studying software engineering at a Tanzanian college. Initially
he developed mobile apps for businesses, government agencies and NGOs. In 2013
GetCore formally began operations.
Elevator pitch
Our goal is to enable businesses to trade efficiently using technology. We have built a web-
based point of sale product called GetPOS, after conducting research in areas like Dar es
Salaam’s bustling central market Kariakoo, where thousands of businesses operate. The
system is simple to use and affordable compared to software which comes with a hardware
terminal. We have a lot of power outages in Dar es Salaam, and when they occur terminals
don’t work. So most traders now use my software as back-up since it’s accessible, even on
their phones.
Finance
I saved money from small jobs I did while still in college. Last year I got US$14,000 funding
from Tanzania Commission for Science and Technology (COSTECH). Looking for investors
here can be tough. It is difficult to convince them to invest in a start-up. Any investor would
ask you to show them your three year financials. Now, where would I get that?
Risks
The biggest risk is that Tanzania is not tech-savvy yet. Most business owners prefer face-to-
face trading and will need a while to get used to e-commerce. Although smartphone usage is
increasing, people’s knowledge in technology is still low.
Most successful form of marketing
I tried using flyers but it just did not work. From my experience what’s best is when I
demonstrate to a potential client how the service works. I joined the global business
networking organisation BNI through which I have met many other businesses who are now
our clients. I also attend many networking sessions where I meet potential clients.
Most exciting entrepreneurial moment

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I get excited when I face new challenges. I like to build software that solves a particular
problem then move on to the next challenge. I have found this journey in entrepreneurship
very inspiring. I am a very technical person but am now looking to invest in businesses
outside the IT industry. I recently went into agribusiness. I have a 10 acre farm in Morogoro
where I am growing oil seeds, and am looking to go large-scale with additional crops such as
sisal and cashew nuts.
Biggest mistake, and key learnings
When I started the business I trained three junior developers with the hope they’d improve
their skills and eventually work with the company for a couple of years. But they all gave up
at some point and I’d spent a lot of time training them. Human resources is challenging here,
but I have learned how to operate within the environment. When I get large projects now I
sub-contract to people in both India and China who have better expertise and good work
ethics.
Source: How we made it in Africa

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Future SWOT: Tanzania
The services sector is likely to continue to be a major driver of Tanzania’s economic
expansion, and communications and banking are expected to do particularly well.
Further, the completion of the pipeline transporting gas from Mtwara to Dar es
Salaam should ease electricity constraints.
Tanzania’s economic policy is centred on its Poverty Reduction Strategies, namely
MKUKUTA II in Mainland and MKUZA II in Zanzibar. The broad goal of the 2025
Development Vision is to become a middle-income country by the end of this period.
The MKUKUTA document is highly ambitious and has a wide range of objectives.
However actual implementation has been disappointing. Partly in response to this,
the ‘Big Results Now’ initiative was launched in 2013, modelled on the Malaysian
development model.
Tanzania is in many ways lagging behind Kenya, which is in the same region.
However prices (e.g. property) have skyrocketed in Nairobi (Kenya). Dar es Salaam
(Tanzania) – has become one of the fastest growing cities in the world – and could
reasonably be an alternative point-of-entry for newcomers in the Eastern African
region.
This SWOT matrix below provides an investors’ viewpoint of Tanzania.
Strengths Weaknesses
 Strong economic growth performance
over the past decade, and good
prospects for future growth.
 Relatively cheap (in a regional context) to
start and do business.
 Healthy levels of foreign direct investment
(FDI) and a continued good outlook for
this indicator, capital market is gradually
being liberalised.
 Rich in minerals, significant amount of
natural gas reserves.
 Political risk is relatively low in an African
context.
 One of the top tourist destinations in
Africa.
 The level of socio-economic
development is very low.
 Very small middle class.
 Development very aid-dependent.
 Struggles with the basic infrastructure
related challenges (schools, healthcare
etc.) that are necessity for economic
growth.
 Small-scale agriculture prevailing – to
large degree substance farming.
 Government’s national development
plans are (too) ambitious and execution
can be described as disappointing.
Opportunities Threats
 Tourism sector has significant room for
expansion, especially if tourism
infrastructure is improved.
 Benefiting from the concerns about terror
attacks in Kenya.
 “Big Results Now” initiative, or parts of it,
become reality.
 Niche industries: as small economy is
able focus and attract investments.
 Finds synergies with the regional
“powerhouse” Kenya and is able to
benefit from Kenya’s success.
 Poor governance, red tape and
corruption hinder development and keep
private investors away.
 Ease of doing business remains weak.
 No improvement in education.
 Dar es Salaam is one of the fastest
growing cities on earth yet infrastructure
to support this growth is poor.
 Gas turns into curse.

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Scenarios
Figure 5 provides four potential scenarios for Tanzania 2020. These are based on
various sources of information and signals and information available. The two main
components of the scenarios are:
1. Level of economic diversification
2. Openness of the economy
Any of the scenarios, or combinations of the scenarios, could come true. Much
depends on local government policies and actions of international players, and other
uncontrollable factors.
Figure 5. Scenario framework
The scenarios for Tanzania in more detail are described in Figure 6.

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Figure 6. Four Scenarios for Tanzania 2020

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Information
Sources
Publications:
African Development Bank: Tracking Africa’s Progress in Figure 2014
African Development Bank, Development Centre of the Organisation for Economic Co-
Operation and Development, United Nations Development Programme: African Economic
Outlook 2014, Global Value Chains and Africa’s Industrialisation
The Economist: Africa is the horizon 2015 African Business Outlook Survey
KPGM: Tanzania Snapshot 2014
International Energy Association: Africa Energy Outlook, 2014
World Bank: World Development Report 2015
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