Direct investment in Tanzania

By Linda Findlay

An international client looking to set up a major manufacturing facility in Tanzania approached BVA BDRC Africa to conduct a feasibility study on their behalf.  The aims of the study were to achieve a thorough understanding of the local environment, including potential opportunities and threats to the business venture, the regulatory framework for product manufacturing and distribution as well as an indication of the costs involved in setting up a new manufacturing business from scratch.

The natural approach for this type of study is to use desk research, as far as possible, to build up a picture of the local environment, supported by primary research in the local market.  However, traditional desk research is somewhat challenging in the Tanzanian context.  Much of the information publicly available is outdated and inaccurate, necessitating a more direct, interactive method of data gathering, in the form of visits and telephone calls to various government departments responsible for everything from foreign direct investment and customs and excise to environmental management, transportation and labour relations.

Additionally, primary interviews were conducted with local competitors, importers, distributors and potential local suppliers to gain an aerial view of the market size and structure, and to inform key areas of the business plan, including potential manufacturing sites, building and infrastructure costs, human resource management, machinery and raw materials sourcing, distribution strategies and product pricing.

The output from the research provided our client with the confidence to make the business investment in Tanzania and provided a ‘blue print’ for the initial stages of the development process.